Exhibit 20  TAYLOR DEVICES,
INC.ANNUAL REPORT 2007 President's Letter Dear Shareholder, Taylor Devices has just completed a
record-setting 2007 fiscal year.  Sales increased to $16,501,400, the
highest in our 52-year corporate history, and 11% above our 2006 sales of
$14,750,699.  Operating income was $1,343,441, an increase of 46% from
$917,563 recorded in 2006.  Net income after taxes was $619,273, an
increase of 27% from last year's $485,793. All market sectors and major product
lines achieved increases from the previous year: Asian construction market sales continue to increase.U.S. construction market sales reflect an improving
  economy.Long-term defense and aerospace sales increased
  substantially.New aerospace/defense research contracts reflect long-term
  market growth for Taylor Devices' products. The Company's backlog of orders at year's
end was $12.5 million, up from the $12.4 million reported at the end of
2006.  The ability of the Company to maintain its order backlog while
recording increased sales is indicative of a robust market for our
products. Our strongest market sector continues to
be the booming Asian economy and its ever-increasing need for seismic and wind
dampers.  The Company has worked very hard to combine cutting-edge
technology with competitive prices to offer our customers maximum overall
product value.  It is vitally important that we develop and implement
technical improvements as quickly as possible in these products so that they
continuously increase in value relative to the more mature construction designs
that we most often compete with. The featured projects in this Annual
Report reflect the Company's success in Asia: The futuristic Beijing 7 Star Morgan Plaza, to be completed
  in time for the 2008 Olympic Games -This project combines 100 of Taylor's Seismic
  Dampers with eight unique spring-damper elements, a recent design spin-off
  from defense technology developed by the Company after the first Gulf
  War.The gigantic Sutong Suspension Bridge that will traverse
  China's Yangtze River -The
  Sutong Bridge will be the world's largest cable stayed bridge and will use the
  largest dampers ever built by Taylor Devices.  In fact, the dampers may
  well be the largest ever built.  These are also of the unique new
  spring-damper style.The Shinjuko 3 Building in Tokyo -This building represents an exciting integration
  of large dampers into the interior design of the entrance lobby to a theater
  complex.  Our engineers and production staff worked very closely with the
  Japanese design and construction team to produce a design for the dampers and
  their long attachment braces that was architecturally acceptable to the
  building's owner. The biggest challenge facing the Company
today is to grow our capabilities and facilities to match expected long-term
growth in worldwide demand.  This must be done carefully to maintain the
Company's overall profitability.  Taylor Devices looks forward to 2008 as
having the potential to be another successful year. Sincerely, TAYLOR DEVICES, INC. /s/Douglas P. TaylorDouglas P. TaylorPresident  Status Report From The Vice
President The past year was another year of growth
at Taylor devices.  Shipments increased significantly with a substantial
increase in productivity yielding improved profits.  This, along with a
sales backlog that has remained at a high level, has produced a year that
brought very positive changes to Taylor Devices.  They have come in the
form of additional manufacturing facilities; increased employment and additional
equipment that will aid us in continued growth and improved profitability. 
There have also been challenges encountered and overcome. In the past year the analysis of the
workflow indicated a bottleneck in the production process during the final
stages of Seismic Product assembly.  An expansion was configured that would
triple our final processing capability.  Facilities were located and
equipment purchased and installed.  This facility was brought on line at
mid-year and has proved to be very successful. Taylor Devices continues to evaluate our
present manufacturing equipment for productivity and suitability.  New
technologies are continuously being evaluated.  The past year brought the
addition of new turning equipment that increased our ability to efficiently
produce larger products.  This equipment replaced existing machines
yielding improved flexibility and productivity.  This was done in direct
response to our customer demands for larger products. Taylor Devices' four axis machining
capability, which was added in early 2006, has met with great success.  The
demand is such that the company is presently negotiating for additional
equipment that will double our capacity.  We expect to have the new
machines on line in the third quarter of the upcoming year. The company also designed, developed and
produced the first of a series of machines that will automate one of the
proprietary processes used during manufacturing.  This has proved very
successful and reduced cost dramatically. Taylor's workforce continues to
grow.  Taylor Devices recognizes the need for all employees to continuously
improve to stay competitive.  This need to improve plus the addition of new
employees requires on-going training.  In the past year the company
received assistance in our effort from New York State in the form of a training
grant.  This training is presently being implemented.  As the company
continues to expand, new positions are created and we are continuously searching
for people to fill those positions. The demand for products and the
increasing cost of raw material has been a challenge that has been met with
partnerships with our vendors and establishment of yearly needs for critical
items.  This has allowed us to meet the needs of our customers in a timely
and cost effective manner. Taylor Devices in-house computer system
has gone received several upgrades in the past twelve months improving
productivity and expanding the capabilities of the company.  The
information technology required to support our customers is continuously
expanding and the improvement in our computer systems has met these
demands. Taylor Devices is an ISO 9002 certified
manufacturer.  As such periodic audits are required.  This involves a
third party review of our business process.  This audit occurred in the
last year and the company and it's employees successfully proved the company in
complete compliance. The past year has been a great success
and we look forward to the challenges of the future. Status Report From The Chief
Financial Officer Fiscal 2007 saw modest gains across the
board at Taylor Devices. Overall sales increased by 11% over last year to set an
  all-time corporate record.  This increase was primarily from a rise in
  demand for our products in the aerospace and defense
  markets.Gross profit as a percentage of sales increased by over five
  percentage points to 35%.  This was the result of the combination of
  improvements in design and production of some of our more popular units along
  with higher sales  prices for our highly engineered units used in the
  aerospace and defense markets.Net income per share of 20 cents improved from 16 cents last
  year. Heading into fiscal 2008, our sales order
backlog has a good mix of products going to the aerospace and defense customers
along with customers building or retro-fitting bridges and buildings across
North America and Asia.  Sales orders from customers in South America are
up as well.  Based on this sales order backlog at year end and new order
activity in the early stages of the new year, we are optimistic that our
profitable growth will continue through fiscal 2008. Investment in new processes and new
machinery, increased training of employees, expanding our global supplier base
and redesigning of certain products have allowed us to produce our products more
efficiently.  Our continual improvement program did not end with 2007 as we
have prepared for more investments in these areas for 2008. Increased regulatory requirements are now
a way of life for small business filers with the SEC.  They are here to
help ensure that accurate, reliable financial and business information is
provided to investors and other users of this annual report and our interim
reports.  We will continue to work with our advisors to keep abreast of
changes in the regulations and to remain in compliance with them. Aerospace/Defense Products
Report Financial results for defense products
and services surpassed those of FY07.  Shipments exceeded the previous year
by a considerable margin with excellent profitability.   This can be
attributed to the transition from low rate and prototype stages of product
development to quantity production rates. We continued full rate production on two
applications for the M777 Light Howitzer Program.  Full funding has been
appropriated for over 600 Howitzers.  Production should continue through
the foreseeable future to satisfy U.S. military requirements. Many NATO
countries have expressed strong interest in procuring the weapon because of its
success in Afghanistan. The Striker AGL (Advanced Grenade
Launcher) is now in its third year of production and has seen considerable
action with Special Operation Forces in the combat zones.  Our contribution
to the program is a double-ended recoil buffer that acts as a shock absorber and
a secondary timing device.  Initial reports regarding effectiveness and
maintainability have been excellent, and production should continue for at least
ten years. New orders continue for the MK 21 VLS
Canister Shock Absorbers for the SM3 SAM (Surface to Air Missile).  We have
also completed preliminary engineering efforts on the SM6 SAM that will
compliment the SM3 on-board U.S. Navy ships.  A foreign market also exists
for both systems. Development hardware for use on the
arresting gear was completed for the X-47C Unmanned Combat Aircraft
System.  This aircraft will be a technology demonstrator for the U.S. Navy
and could begin the era of combat aircraft without onboard aircrew, saving costs
and eliminating risk to human assets.  Hardware was delivered during
FY07. Another program contributing to Taylor
Devices' sales is the Virginia Class Submarine.  We completed the
manufacture of six shipsets of special dampers for delivery during FY07.  A
total of 30 ships are planned to be delivered for this program in the next two
decades.  Our products contribute to the survivability of these submarines
that are designed for both littoral and deep water operations.  Their
missions include torpedo and missile launching capabilities as well as
reconnaissance and deployment of Special Operations personnel. Shock and vibration products for
shipboard navigation and electronics systems are still in demand and our backlog
for this market remains at a high level.  There are a number of new combat
ship programs throughout the world that require protection for critical systems
subject to shock and vibration.  The retrofit of older ships and submarines
is a market at least equaling the size of new construction. The future for Taylor Devices as a
developer and supplier for military applications remains strong.  We are
fortunate to enjoy an enviable reputation in the defense market that is ideal
for our capabilities.   Our success proves that we are regarded as a
company with a determination to successfully satisfy the most difficult
technical challenges. Industrial Products
Report Sales of Taylor Devices' Industrial
Product Lines have continued to surge during the past twelve months, reaching an
all-time high this year.  Sales have increased for our Fluid Viscous
Dampers and specialized devices used for structural protection against
earthquake shaking, wind buffeting, and pedestrian vibrations.  With a much
better US economy at the present time, and more funding available for civil
engineering projects, we continue to obtain and fulfill new orders from within
North and South America, and from overseas.  Crane buffer sales have also
continued to improve and have always provided steady short-term workload for the
company.  This industrial product diversity, mixed with our other product
lines, keeps us going strong when the economy is poor and has our company
soaring during the peak times. Some of the most significant building
projects secured during FY07 include the 7 Star Morgan Plaza in Beijing, China,
the KDDI Tama Fourth Network Center 1st Station project in Tokyo,
Japan, The Criminal Investigation Bureau Building in Taichung, Taiwan, the 131
South Rodeo Drive (at Wilshire) Office Building in Beverly Hills, California,
and the Sutter Gould Medical Office Building in Modesto, California.  Some
of the notable hospital projects include the Mills Peninsula Hospital in
Burlingame, California, the Saitama Citizens Medical Center in Tokyo, Japan, and
the Timpanogos Regional Hospital in Orem, Utah, which is undergoing a
significant addition of floor levels in this retrofit/addition project. Many
other smaller building orders were also received during the past year, a number
of them being residential building projects located in Taiwan. The special viscous dampers with high
force end-of-travel springs for the Sutong bridge  (when complete, this
bridge will be the World's longest cable-stayed bridge) were completed and
shipped to the jobsite this fiscal year, marking the largest devices the company
has ever made and tested to date.  This project involved a substantial
upgrade effort to our already massive test facilities to bring the capabilities
into the 10,000kN (1125 ton) range.  We have also received orders for
dampers on many other Chinese Bridge projects, including the Xihoumen Bridge,
the Yuzui River Bridge, Jingtang Bridge, and the Jiangjin Guanyinyan
Bridge.  Several other bridge damper projects were also received in
FY07. Taylor Devices has been awarded a
contract to design, evaluate, and supply Tuned Mass Dampers (TMDs) for the
Cumberland River Bridge in Nashville, Tennessee. The TMDs, specially customized
to suit the size and needs of this bridges' bathtub shaped deck structure are
used to mitigate both horizontal and vertical pedestrian vibrations.  The
lateral (horizontal) TMDs consist of three large blocks of steel hung from
pendulums and controlled by fluid viscous dampers.  The two vertical TMDs
are each supported by a bed of springs and use fluid viscous dampers to control
the motion.  This is an application of a fully customized damping system
for specific vibration needs, and was developed by a joint interaction between
Taylor Devices and a key consultant firm that is a premier world expert in the
field of vibration mitigation analysis. New and retrofit construction projects in
current development throughout the World, coupled with a high backlog of
projects at the current time, provides an exceptionally good outlook for our
FY08 expectations.  Our continued ability to suit the customer's needs with
special products and the flexibility to adapt to the requirements of the market
continue to be our most valuable assets. Corporate
Data OFFICERS AND DIRECTORS Douglas P. Taylor, President and DirectorRichard G. Hill, Vice
President and DirectorReginald B. Newman II, Secretary and
DirectorRandall L. Clark, DirectorJohn Burgess, DirectorMark V.
McDonough, Chief Financial Officer INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRMLumsden & McCormick, LLP403 Main StreetSuite 430Buffalo,
NY 14203 GENERAL COUNSELHiscock and Barclay,
LLP1100 M&T Center 3 Fountain PlazaBuffalo, NY
14203-1486 MANAGERSGuy Fortunate, Purchasing
ManagerAlan Klembczyk, Chief EngineerJohn Metzger, Engineering Manager
Special ProjectsJohn Mayfield, Aerospace/Defense Sales ManagerRobert
Schneider, Industrial/Seismic Products Sales ManagerCraig Winters,
Industrial/Seismic Products Sales ManagerJames Dragonette, Quality Assurance
ManagerCharles Ketchum III, Quality Control ManagerBenjamin Kujawinski,
Production ManagerGreg Hanson, Machine Shop SupervisorLorrie Battaglia,
Human Resources Manager TRANSFER AGENT AND REGISTRARKathleen
NicosiaTaylor Devices, Inc.90 Taylor DriveP.O. Box 748North
Tonawanda, NY 14120-0748716-694-0800 A copy of the financial report on form 10-KSB can be obtained
  free of charge by written request to the attention of Kathleen Nicosia, IR, at
  the Company's address indicated above. Exhibits to the reports on 10-KSB can
  be obtained for a postage and handling fee. Market Information The Company's Common Stock trades on the
Small Cap Market tier of the National Association of Securities Dealers
Automated Quotation (NASDAQ) stock market under the symbol TAYD. The following quarterly high and low
market prices during fiscal years ended May 31, 2007 and 2006 were obtained from
NASDAQ. Fiscal
      2007
    
    Fiscal
      2006High
    
    Low
    
    High
    
    LowFirst Quarter
    7.110
    
    5.270
    
    3.750
    
    2.630Second Quarter
    6.140
    
    4.310
    
    4.680
    
    2.838Third Quarter
    6.640
    
    5.050
    
    6.200
    
    3.080Fourth Quarter
    5.940
    
    4.780
    
    8.250
    
    5.000
 As of May 31, 2007, the number of issued
and outstanding shares was 3,145,130 and the approximate number of record
holders of the Company's Common Stock was 849.  Due to a substantial number
of shares of the Company's Common Stock held in street name, the Company
believes that the total number of beneficial owners of its Common Stock exceeds
2,000.  No cash or stock dividends have been declared during the fiscal
year ended May 31, 2007. Taylor Devices, Inc. is an
electronic filer.  The SEC maintains an Internet site that contains
reports, proxy and information statements, and other information regarding its
issuers that file electronically with the SEC (http://www.sec.gov). Notice of Annual
Meeting The annual meeting of the shareholders of
the Company will be held on Friday, November 2, 2007 at 10:00 a.m.  This
year's meeting will be held at the Holiday Inn, 1881 Niagara Falls Boulevard,
Amherst, New York.  Shareholders desiring accommodations may call the
Holiday Inn at 716-691-8181.  Board of Directors and
Executive Officers DOUGLAS P. TAYLORBoard Member and
PresidentTaylor Devices, Inc. Mr. Taylor holds a B.S. degree in
Mechanical Engineering from the State University of New York at Buffalo, awarded
in 1971.  He has been employed by Taylor Devices, Inc. since 1971, and was
appointed President in April 1991.  Mr. Taylor is also President of Tayco
Developments, Inc., an affiliate of Taylor Devices, where he has been employed
since 1966.  He is inventor or co-inventor on 32 patents in the fields of
energy management, hydraulics and shock isolation. Mr. Taylor is widely published within the
shock and vibration community.  His technical papers have been published by
the American Society of Civil Engineers, the Applied Technology Council, the
Association of Iron and Steel Engineers, the Journal of Shock and Vibration, the
National Fluid Power Foundation, the National Science Foundation, the New York
State Science and Technology Foundation, the Shock and Vibration Symposium, the
Society of Automotive Engineers, the U.S. Air Force and the U.S. Marine
Corps.   Since 1988, Mr. Taylor has hosted internship programs for
engineering students, affiliated as an industrial sponsor with the State
University of New York at Buffalo, the Erie County State of New York Board of
Co-operative Educational Services, and the North Tonawanda, New York Public
School System. Since 1991, Mr. Taylor has participated
in research projects in the field of earthquake protection, in association with
the University at Buffalo's Civil, Structural and Environmental Engineering
Department and the Multidisciplinary Center for Earthquake Engineering
Research.  As a result of this research, military technology from the Cold
War era is now being used worldwide for seismic and high wind protection of
commercial building and bridge structures. In 1994, Mr. Taylor was named to the
American Society of Civil Engineers' Subcommittee on the Seismic Performance of
Bridges.  In 1998, Mr. Taylor was appointed to an Oversight Committee of
the U.S. Department of Commerce, developing guidelines for the implementation of
damping technology into buildings and other structures, as part of the U.S.
National Earthquake Hazard Reduction Program.  In 1998, Mr. Taylor was
awarded the Franklin and Jefferson Medal for his commercialization of defense
technology developed under the U.S. Government's Small Business Innovation
Research Program.   In 1999, Mr. Taylor was awarded the Clifford C.
Furnas Memorial Award by the Alumni Association of the University at Buffalo for
his accomplishments in the field of engineering. In 2006, Mr. Taylor was named
to the American Society of Civil Engineers' Blast Protection of Buildings
Standards Committee.  In 2006, Mr. Taylor was the recipient of the Dean's
Award for Engineering Achievement by the School of Engineering and Applied
Sciences at the State University of New York at Buffalo.  Also in 2006, Mr.
Taylor was named Structural Engineer of the Year (2006) by the Engineering
Journal, "The Structural Design of Tall and Special Buildings."   Mr.
Taylor is a founding member of the International Association on Structural
Control. RICHARD G. HILLBoard
Member and Vice PresidentTaylor Devices, Inc. Mr. Hill holds a B.S. degree in
Electrical Engineering from the Rochester Institute of Technology, awarded in
1973.  In November 1991, Mr. Hill was appointed Vice President of Taylor
Devices, Inc. by the Board of Directors.  He had been employed previously
by Taylor Devices, Inc. since 1978 as Vice President of Production.  In
addition, he has held key project management positions with the Company on major
aerospace and defense contracts.  In April of 1991, Mr. Hill was appointed
to the Board of Directors of Taylor Devices, Inc.  From 1973 to 1978, Mr.
Hill was employed by the Alliance Tool and Die Company of Rochester, New York as
a Project Leader and Design Engineer.  From 1970 to 1973, he was employed
by the same firm as an Engineer in Training, through a co-op program with the
Rochester Institute of Technology. Mr. Hill has served on the Founding Board
of Directors of the Center for Competitiveness of the Niagara Region and the
Advisory Board to The Center for Industrial Effectiveness.  Mr. Hill also
served as Chairman for the Manufacturers Council of the Buffalo Niagara
Partnership, and also served on the State University of New York at Buffalo's UB
Business Alliance Advisory Board, as well as holding the seat of
Secretary. REGINALD B. NEWMAN,
IIBoard Member and SecretaryTaylor Devices, Inc. Mr. Newman holds a B.S. degree in
Business Administration from Northwestern University, awarded in 1959.  He
has been employed by NOCO Energy Corp., a diversified distributor and retailer
of petroleum and other energy related products, since 1960, attaining the
position of Chairman in 1998.  Having retired in late 2002, he remains
Non-Executive Chairman.  NOCO Energy Corp., founded by Mr. Newman's father
in 1933, currently employs more than 700 with operations in five northeastern
States and two Canadian Provinces.  Present NOCO operations range from
petroleum terminalling to gasoline retailing to development of renewable energy
sources. From 1959 to 1960, Mr. Newman was
employed by the Ford Motor Company of Dearborn, MI in the product planning
department. Mr. Newman is currently a director of the
M&T Bank Corporation, the Rand Capital Corporation and the Dunn Tire
Corporation.  He is also the Chair of the Board of Trustees of the
University of Buffalo Foundation, Inc. Mr. Newman received the 1997 Executive of
the Year, awarded by the State University of New York at Buffalo.  In 1998
Mr. Newman received the Walter P. Cooke Award for Notable and Meritorious
Service to the University presented by the University at Buffalo Alumni
Association.  He received the President's Medal from U.B. in 2003, as well
as their highest honor, the Norton Medal in 2006.  He is a former member of
the Buffalo Niagara Partnership and was Chairman from 1996 through
1998. RANDALL  L. 
CLARKBoard MemberTaylor Devices, Inc. Mr. Clark holds a B.A. degree from the
University of Pennsylvania, and earned his M.B.A. from the Wharton School of
Finance and Commerce.  He is and has been the Chairman of Dunn Tire LLC
since 1996.  From 1992 to 1996, Mr. Clark was Executive Vice President and
Chief Operating Officer of Pratt & Lambert, until it was purchased by
Sherwin Williams. Mr. Clark has been employed in the tire
industry for many years.  He was named President of the Dunlop Tire
Corporation in 1980, was appointed to the Board of Directors in 1983, and named
President and Chief Executive Officer in 1984.  He was one of seven chief
executives of operating companies appointed to the Group Management Board of
Dunlop Holdings, plc., and was Chairman of the Board and Chief Executive Officer
of Dunlop Tire Corporation in North America from 1985 to 1991. From 1977 to 1980, Mr. Clark was Vice
President of Marketing for the Dunlop Tire Division.  From 1973 to 1977, he
was employed by Dunlop as Director of Marketing at the company's Buffalo, NY
headquarters.  From 1968 to 1973, Mr. Clark was employed by the B.F.
Goodrich Company. Mr. Clark is currently a Director of
Computer Task Group, Lifetime Healthcare Companies, Merchants Mutual Insurance
Company and HSBC-WNY.  He is the past President of the International Trade
Council of Western New York, Chairman of the Buffalo Niagara Enterprise, a
Director of the Buffalo Niagara Partnership and the Amherst Industrial
Development Agency.  He serves on the Board of Trustees of the American
Heart Association, and is past Chairman and a Director of AAA of Western and
Central New York.  Mr. Clark was appointed by Governor George Pataki to
serve on the Council for the State University of New York at Buffalo. JOHN BURGESSBoard MemberTaylor
Devices, Inc. Mr. Burgess gained his international
strategy, manufacturing operations and organizational development expertise from
his more than 35 years experience with middle market public and privately-owned
companies. Mr. Burgess served as President and CEO of Reichert, Inc. a leading
provider of ophthalmic instruments, and spearheaded the acquisition of the
company from Leica Microsystems in 2002 and led the company until its sale in
January 2007.  Prior to the acquisition, Mr. Burgess served as President of
Leica's Ophthalmic and Educational Divisions before leading the buyout of the
Ophthalmic Division and formation of Reichert, Inc.From 1996 to 1999, Mr. Burgess was CEO of International Motion
Controls (IMC), a $200 million diversified manufacturing firm. During his tenure
there, he led a significant acquisition strategy that resulted in seven
completed acquisitions and 16 worldwide businesses in the motion control market.
Previously, Mr. Burgess operated a number of companies for Moog, Inc. and
Carleton Technologies, including six years as President of Moog's Japanese
subsidiary, Nihon Moog K.K. located in Hiratsuka, Japan. Moog, Inc. is the
global leader in electro-hydraulic servo control technology with focus on the
aerospace and defense sectors and was recognized as one of The 100 Best
Companies to Work For in America.Mr. Burgess earned a BS in Engineering
from Bath University in England, and a Masters in Business Administration from
Canisius College. Currently Mr. Burgess is an Operating
Partner of Summer Street Capital LLC, and serves as a consultant and Director of
Reichert Inc. MARK V. MCDONOUGHChief
Financial OfficerTaylor Devices, Inc. Mr. McDonough is a Certified Public
Accountant in New York State and holds a BBA degree from Niagara University,
awarded in 1982.  He has been with the Company since 2003 and in financial
management with various Western New York manufacturing organizations for the
prior fourteen years.  His background in international operations, coupled
with experience in implementing systems of internal controls, should prove most
valuable to the Company as it continues to grow.  From 1986 to 1989, he was
an auditor with the Buffalo office of Ernst & Young, LLP. Mr. McDonough is a member of the New York
State Society of Certified Public Accountants and the American Institute of
Certified Public Accountants.