Notice of Convocation
The 62nd Ordinary General Meeting of Shareholders

The following is an English translation of the Notice of Convocation of the
62nd Ordinary General Meeting of Shareholders of SECOM CO., LTD. to beheld on June 27, 2023, except for the translation of the INSTRUCTION ON
ONLINE VOTING and the ACCESS MAP FOR THE PLACE OF THE
MEETING in the Notice. The Company provides this translation for yourreference and convenience only and without any warranty as to its accuracy orotherwise.

[English Translation]
1

Table of Contents
Notice of Convocation of The 62nd Ordinary General Meeting of Shareholders ····
Reference Document Concerning the General Meeting of Shareholders ···············
Business Report ·····················································································
Consolidated Financial Statements ······························································
Non-Consolidated Financial Statements ·······················································
Auditors’ Reports ···················································································(Note) This Table of Contents is for this abridged English translation only, and not the same asthat in the original Japanese documents.

[English Translation]
2

3
7
32
65
68
72

Stock Exchange Code: 9735
June 5, 2023
(Electronic Provision Measures Commencement Date: June 2, 2023)

Notice of Convocation of
The 62nd Ordinary General Meeting of Shareholders
Dear Shareholders:
Secom Co., Ltd. (the “Company”) hereby notifies you as follows that the62nd Ordinary General Meeting of Shareholders of the Company will be held as
described below.
The Company has taken measures for electronic provision about the
information that is the content of Reference Document Concerning the General
Meeting of Shareholders, etc. (“the Electronic Provision Measures Matters”) toconvene this General Meeting of Shareholders. “Notice of Convocation of the
62nd Ordinary General Meeting of Shareholders” and “the Electronic Provision
Measures Matters (the Matters Omitted from the Document for Delivery)” areavailable on the websites set forth below.
[Website of the Company]
https://www.secom.co.jp/english/ir/stockinfo06.html[Website of Tokyo Stock Exchange, Inc. (Listed Company Search)]https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
When you use the website of Tokyo Stock Exchange, Inc., please findthe relevant information by inputting either the Company name in the “Issuename” box or the security code “9735” in the “Code” box and then by clicking“Basic information” and “Documents for public inspection/PR information.”
If you do not attend the meeting in person, please exercise your voting
rights by mail or via the Internet on or before 6:00 p.m. (JST) June 26, 2023
(Monday) after studying the Reference Document Concerning the General
Meeting of Shareholders attached below:[In case of exercising voting rights by mail]Please indicate on the Voting Rights Exercise Form enclosed herewith yourapproval or disapproval to the proposals on the agenda, and return the form
to the Company by mail on or before the time limit stated above.
[In case of exercising voting rights via the Internet]
Please access the website for the exercise of voting rights(https://www.evote.tr.mufg.jp/). Please indicate whether you approve ordisapprove the items on the agenda by following the instructions on the[English Translation]3

display screen by the time limit stated above.
(Platform for Electronic Exercise of Voting Rights)
Institutional shareholders may use the platform for the electronic exercise of
voting rights that is operated by ICJ Inc.
Yours very truly,
SECOM CO., LTD.
5-1, Jingumae 1-chome, Shibuya-ku,
Tokyo, JapanBy: ICHIRO OZEKI
President and Representative Director(Note) Please note that shareholders with addresses outside Japan may notthemselves use these voting procedures. For these shareholders, please consult theircustodian in Japan as to the exercise of voting rights.

[English Translation]
4

PARTICULARS
1.

Date and Time of the Meeting:
Tuesday, June 27, 2023 at 10:00 a.m.

2.

Place of the Meeting:Bersarle Hanzomon, Sumitomo Fudosan Hanzomon-Ekimae Building 2F,
6-4, Kojimachi 1-chome, Chiyoda-ku, Tokyo

3.

Matters to be dealt with at the Meeting:
Matters to be Reported:
1. Report on the Business Report, the Consolidated Financial
Statements for the 62nd Fiscal Year (from April 1, 2022 to March
31, 2023) and the Results on the Audits of Consolidated Financial
Statements by the Accounting Auditor and the Audit &Supervisory Board.
2. Report on the Non-Consolidated Financial Statements for the
62nd Fiscal Year (from April 1, 2022 to March 31, 2023).
Matters to be Resolved upon:<The Company Proposals (from the First Item to the Third Item)>First Item of Business:
Proposed Distribution of Surplus
Second Item of Business:
Election of Eight (8) Directors
Third Item of Business:
Election of Five (5) Audit &Supervisory Board Members<The Shareholder Proposals (from the Fourth Item to the Sixth Item>
Fourth Item of Business:
Repurchase of the Company’s own
sharesFifth Item of Business:
Amendments to the Articles ofIncorporation regarding the handlingof shares held by Directors
Sixth Item of Business:
Amendments to the Articles ofIncorporation regarding thecomposition of Outside Directors

4.

Matters related to Exercise of Voting Rights:
1) In the event that a shareholder wants to exercise non-uniform
voting, he/she shall notify the Company to make non-uniform
voting and the reason thereof in writing or by electromagnetic
means three (3) days prior to the date of the General Meeting of[English Translation]5

Shareholders.
2) In the event that a shareholder exercises voting rights both via
return mail (Voting Rights Exercise Form) and the Internet, theCompany will consider the exercise of voting rights via theInternet to be valid.
3) In the event that a shareholder exercises voting rights via theInternet more than once, the Company will consider the last
exercise of voting rights to be valid.
4) In the event that there is no indication of approval or disapprovalof the proposals in the returned Voting Rights Exercise Form, it istreated as an indication of “approval” of the Company Proposals
and “disapproval” of the Shareholder Proposals.
・With regard to this Notice of Convocation, the document, which issent to shareholders who requested the issuance of such a document
pursuant to the relevant laws and ordinances and the Articles ofIncorporation of the Company, is to be sent to all shareholders.
・Following matters of the Electronic Provision Measures Matters are
not stated in this Notice of Convocation pursuant to the relevant laws
and ordinances, and Article 16, Paragraph 2 of the Articles ofIncorporation of the Company. We ask that you use either website on
page 3 of this Notice.
1) “Notes to Consolidated Financial Statements” in theConsolidated Financial Statements2) “Notes to Non-Consolidated Financial Statements” in
the Non-Consolidated Financial Statements

The Consolidated Financial Statements and Non-Consolidated
Financial Statements audited by the Accounting Auditor and the
Audit & Supervisory Board consist of each document attached to the
Notice of Convocation of the Ordinary General Meeting of
Shareholders, as well as 1) and 2) set forth above.
・In the event of any amendment to the Electronic Provision Measures
Matters, the Company will post such amended items on the websites
set forth above.
(Note)
If you plan to attend the Meeting, please submit the Voting Rights
Exercise Form enclosed in the Notice of Convocation posted toshareholders to the receptionist at the Meeting.
(Notice)This Meeting will be made available as live streaming on the Internet.
(Please refer to the document enclosed in the Notice of Convocation
posted to shareholders.)[English Translation]
6

Reference Document Concerning the General Meeting of Shareholders
Proposal and Reference Items<The Company Proposal>
First Item of Business: Proposed Distribution of Surplus
The Company considers the return of profit to shareholders as one of theimportant managerial issues, and the Company has determined a dividend payout
ratio on a consolidated basis and the level of internal reserves after making an
overall judgment on the expansion of the Company’s business and trends offuture revenues and profits of the Company on a consolidated basis whileconsidering the Company’s basic policy that ensures the payment of continualand steady dividends. The Company has made it a basic rule to distribute a
dividend twice a year, as the interim dividend whose record date is September 30
each year, and the year-end dividend whose record date is March 31 each year.
The interim dividend is determined by the Board of Directors and the year-end
dividend is determined by the General Meeting of Shareholders. Furthermore, theCompany will utilize internal reserves for investments required for increased newcustomers, research and development and investments and the like for strategic
businesses so that the Company will exert its efforts to reinforce the corporate
structure and to expand its business.
Based on the aforesaid basic policy for cash dividends and to reward
shareholders’ continued support, it is proposed that the year-end dividend for the
fiscal year under review is YEN 95 per share. A total amount of dividend per share,
together with the interim dividend of YEN 90 per share, will be YEN 185, YEN
5 higher than YEN 180 for the previous year.
Matters related to the year-end dividend:(1)
Kind of assets distributed:
Cash(2)Matter related to distribution of cash and total amount:
YEN 95 per share of common stock of the Company
The total amount:
YEN 20,380,994,860(3)Effective date for distribution of surplus:
June 28, 2023

[English Translation]
7

<The Company Proposal>
Second Item of Business: Election of Eight (8) Directors
The term of office of all of the nine (9) Directors will expire at the closeof this Meeting. In connection therewith, we would like to ask shareholders toelect eight (8) Directors.
The candidates are as follows:
No.

Name

GenderCurrent
Position at theCompany
Chairman and
Representative
Director
President andRepresentative
Director

1

Re-election

Yasuo Nakayama

Male

2

Re-election

Ichiro Ozeki

Male

3

Re-election

Yasuyuki Yoshida

Male

Senior Executive
Director

4

Re-election

Tatsuro Fuse

Male

Executive
Director

5

Re-election

Tatsushi Kurihara

Male

Director

6

Re-election

Takaharu Hirose

OutsideDirector

Independent
Officer

Male

Outside Director

7

Re-election

Hajime Watanabe

OutsideDirector

Independent
Officer

Male

Outside Director

8

Re-election

Miri Hara

OutsideDirector

Independent
Officer

FemaleOutside Director[English Translation]
8

Candidate
Number1

Yasuo Nakayama*

Re-election(Date of birth: November 1, 1952)

Brief History, Position, Responsibility, and Important Position of Other Organizations
Concurrently Assumed, if any
Jul 2003
Branch Manager, Nagoya Branch, The Bank of Japan
Jul 2005
Director-General, Secretariat of the Policy Board, The Bank of JapanMay 2007 Advisor, SECOM Co., Ltd.
Jun 2007
Executive Director
May 2016 President and Representative Director
May 2017 Chairman, Tokyo Security Service Association
Jun 2019 Chairman, All Japan Security Association (currently)
Jun 2019 Chairman and Representative Director (currently)

Number of Sharesof the Company
Owned
7,044 shares<Important Position of Other Organizations Concurrently Assumed>
Chairman, All Japan Security Association
Reasons for Election
Mr. Yasuo Nakayama has assumed the office of Chairman and Representative Directorof the Company since June 2019, after President and Representative Director in May
2016. Following the assumption of the office of Representative Director, he has
contributed to steady growth of the Company from a viewpoint of mid- and long-termtime span. Additionally, as Chairman of All Japan Security Association, he has made acontribution to foster the development of the industry. In the light of continuous
enhancement of the corporate value, we would like to ask shareholders to elect him as
Director.
Candidate
Number2

Ichiro Ozeki*

Re-election(Date of birth: March 1, 1961)

Brief History, Position, Responsibility, and Important Position of Other Organizations
Concurrently Assumed, if any
Apr 1983 Joined Sumitomo Bank, Ltd. (presently Sumitomo Mitsui Banking
Corporation)
Apr 1992 Joined Tokyo Steel Manufacturing Co., Ltd.
Jan 2001
Joined SECOM Co., Ltd.
Jun 2001
Director, Secom General Insurance Co., Ltd.
Apr 2010 President and Representative Director, Secom General Insurance Co., Ltd.
Apr 2015 Executive Officer
Jun 2016
Chairman and Director, Secom General Insurance Co., Ltd.
Jun 2016
Director
Jun 2017
Chairman and Representative Director, Secom General Insurance Co., Ltd.
Jun 2017
Executive Director
Jun 2019
President and Representative Director (currently)
Reasons for Election
Following the assumption of the office as Director of the Company, Mr. Ichiro Ozeki has
led the sales and operation divisions and he holds a high level of knowledge and experiencein overall management of the security services business. Following the assumption of theoffice of President and Representative Director in June 2019, he worked to strengthen thebusiness of the entire SECOM Group including the security services business, overseas
business, and ICT business, while focusing on group-wide cost reduction and productivity
improvement to achieve steady growth for the Company with his strong leadership andmanagement ability. He also has carried out steadily management reformation from aviewpoint of mid- and long-term targets. In the light of continuous enhancement of thecorporate value, we would like to ask shareholders to elect him as Director.

[English Translation]
9

Number of Sharesof the Company
Owned
301,807 shares

Candidate
Number3

Yasuyuki Yoshida*

Re-election(Date of birth: March 28, 1958)

Brief History, Position, Responsibility, and Important Position of Other Organizations
Concurrently Assumed, if any
Mar 1980 Joined SECOM Co., Ltd.
Feb 1997 Associate General Manager, Strategic Planning DivisionSep 1998 Director, Toyo Fire and Marine Insurance Co., Ltd. (presently Secom
General Insurance Co., Ltd.)Jun 2002
President and Representative Director, Secom General Insurance Co., Ltd.
Apr 2010 Executive Officer
Jun 2012
Director
Jun 2016
Executive Director
Jun 2017
Senior Executive Director (currently)

Number of Sharesof the Company
Owned
4,578 shares

Reasons for Election
Mr. Yasuyuki Yoshida has served as Director of the Company in charge of overallbusiness planning including the security services business and overall management
planning including risk management and governance of the SECOM Group.
Accordingly, he holds a high level of knowledge and experience in the management of
the SECOM Group. In the light of continuous enhancement of the corporate value, wewould like to ask shareholders to elect him as Director.
Candidate
Number4

Tatsuro Fuse*

Re-election(Date of birth: September 9, 1957)

Brief History, Position, Responsibility, and Important Position of Other Organizations
Concurrently Assumed, if any
Mar 1982 Joined SECOM Co., Ltd.
Mar 2002 Director, Secom Medical System Co., Ltd.
Jun 2009 President and Representative Director, Secom Medical System Co., Ltd.
Apr 2010 Executive Officer
Jun 2013 Director (retired in Jun 2016)
Apr 2016 Chairman and Representative Director, Secom Medical System Co., Ltd.
Jun 2016 Managing Executive Officer
Jun 2017 Chairman and Director, Secom Medical System Co., Ltd. (currently)
Jun 2017 Executive Director (currently)<Important Position of Other Organizations Concurrently Assumed>
Chairman and Director, Secom Medical System Co., Ltd.
Reasons for Election
Mr. Tatsuro Fuse has been engaged in medical services business as well as corporate
communication & marketing division as Director of the Company. He holds affluent
management experience at SECOM group and a high level of knowledge and experiencein external business activities such as corporate communication & marketing, and in
overall management including medical service business. In the light of continuous
enhancement of the corporate value, we would like to ask shareholders to elect him as
Director.

[English Translation]
10

Number of Sharesof the Company
Owned
4,418 shares

Candidate
Number5

Tatsushi Kurihara*

Re-election(Date of birth: June 5, 1961)

Brief History, Position, Responsibility, and Important Position of Other Organizations
Concurrently Assumed, if any
Jul 2008
Branch Manager, Niigata Branch, The Bank of Japan
Jul 2010
Deputy Director-General, Financial System and Bank Examination
Department, The Bank of JapanJun 2014
Director-General and Internal Auditor, Internal Auditors’ Office, The
Bank of JapanMay 2016 Advisor, SECOM Co., Ltd.
Jun 2016
Director (currently)
Reasons for Election
After working for the Bank of Japan for many years, Mr. Tatsushi Kurihara has served
as Director of the Company in charge of the general affairs and human resources
divisions among others. He has a high level of knowledge in overall administrative
business and corporate management. In the light of continuous enhancement of thecorporate value, we would like to ask shareholders to elect him as Director.

[English Translation]
11

Number of Sharesof the Company
Owned
1,527 shares

Candidate
Number6

Re-election

Takaharu Hirose

Candidate for Outside Director(Date of birth: October 25, 1944)

Candidate for Independent Officer

Brief History, Position, Responsibility, and Important Position of Other Organizations
Concurrently Assumed, if any
Sep 1965 Founded Fuji Vending Co., Ltd., and assumed Representative Director
Apr 1972 Founded Food & Beverage Vending Association, and assumed Chairman
Apr 1987 Founded Japan Automatic Merchandising Association (presently a generalincorporated association), and assumed Chairman
Apr 2003 Advisor and Director, GAIN Inc. (presently Monitas, Inc.)
May 2008 President and Representative Director, GAIN Inc.
May 2011 Chairman and Representative Director, GAIN Inc. (currently)
Jun 2013 Director, SECOM Co., Ltd. (currently)<Important Position of Other Organizations Concurrently Assumed>
Chairman and Representative Director, Monitas, Inc.
Reasons for Election and Outline of Expected Role
Mr. Takaharu Hirose established and managed venture business and made efforts toestablish and operate industry groups so that he contributed to development of businessand industry. He holds affluent experience and a high level of knowledge in IT
enterprises. As a member of the Board of Directors, he has provided advice andrecommendations in many occasions from a high-level perspective on key directions ofmanagement including the future of SECOM that capitalizes on technology. As he has
played an appropriate role as Outside Director including the supervision of businessexecution, in the light of continuous enhancement of the corporate value, we would liketo ask shareholders to elect him as Outside Director. After the election, he is expected tocontinue to play the role mentioned above.

[English Translation]
12

Number of Sharesof the Company
Owned
0 sharesCandidate
Number7

Re-election

Hajime Watanabe

Candidate for Outside Director(Date of birth: November 18, 1951)

Candidate for Independent Officer

Brief History, Position, Responsibility, and Important Position of Other Organizations
Concurrently Assumed, if any
Mar 1975 Joined Watanabe Pipe Co., Ltd.
Apr 1978 Executive Director, Watanabe Pipe Co., Ltd.
Apr 1983 Senior Executive Director, Watanabe Pipe Co., Ltd.
Jun 1985
Vice President and Representative Director, Watanabe Pipe Co., Ltd.
Nov 1991 President and Representative Director, Watanabe Pipe Co., Ltd.
Jun 2016 Director, SECOM Co., Ltd. (currently)
Apr 2022 Chairman and Representative Director, Watanabe Pipe Co., Ltd.(currently)<Important Position of Other Organizations Concurrently Assumed>
Chairman and Representative Director, Watanabe Pipe Co., Ltd.
Reasons for Election and Outline of Expected Role
Mr. Hajime Watanabe has engaged in management of Watanabe Pipe Co., Ltd. for many
years. He holds rich experience and a high level of knowledge accumulated through his
career in the management of the company that has a national network. As a member ofthe Board of Directors, he has provided effective advice and recommendations in manyoccasions on key directions of management as well as on the execution and risk
management of business in general and other matters including work site operations andemployee management. As he has played an appropriate role as Outside Director
including the supervision of business execution, in the light of continuous enhancementof the corporate value, we would like to ask shareholders to elect him as Outside Director.
After the election, he is expected to continue to play the role mentioned above.

[English Translation]
13

Number of
Shares of theCompany
Owned
1,700 shares

Candidate
Number8

Re-election

Miri Hara

Candidate for Outside Director(Date of birth: December 20, 1961 )Candidate for Independent Officer

Brief History, Position, Responsibility, and Important Position of Other Organizations
Concurrently Assumed, if any
Jun 1988
Joined Hara Jisho Co., Ltd.
Jun 1988
Director, Hara Jisho Co., Ltd. (currently)
Oct 2017
Founded Tax Corporation Yokohama Benten Accounting, Inc. andassumed Representative Certified Public Tax Accountant (currently)
Jun 2020
Director, SECOM Co., Ltd. (currently)
Jun 2021
Outside Director, Nippon Sanso Holdings Corporation (currently)

Number of
Shares of theCompany
Owned
0 shares<Important Position of Other Organizations Concurrently Assumed>
Representative Certified Public Tax Accountant of Tax Corporation Yokohama Benten
Accounting, Inc.
Outside Director, Nippon Sanso Holdings Corporation
Reasons for Election and Outline of Expected Role
Ms. Miri Hara has been gaining experience as director of a real estate managementcompany for a long period of time and possesses rich experience and considerable insightaccumulated through her career on tax affairs, corporate accounting, etc., at a tax
accountant corporation. As a member of the Board of Directors, she has provided usefuladvice and recommendations on key directions of management as well as on services forhouseholds and female employees’ active engagement. As she has played an appropriaterole as Outside Director including the supervision of business execution, in the light ofcontinuous enhancement of the corporate value, we would like to ask shareholders to electher as Outside Director. After the election, she is expected to continue to play the rolementioned above.
(Notes)
1.
2.
3.

4.

5.

6.

7.

8.

There is no particular interest between the Company and each of the said candidates.
Candidates with * are Executive Officers currently in office.
Based on the nomination policy that the Board of Directors established, thenomination of candidates for Directors are decided after discussion at the Boardof Directors. The Board of Directors decides the candidates for Directors after the
discussion process of the Nomination and Compensation Committee comprising amajority of Outside Directors.
Messrs. Takaharu Hirose, Hajime Watanabe and Ms. Miri Hara are candidates for
Outside Directors. The designation of Messrs. Takaharu Hirose, Hajime Watanabe
and Ms. Miri Hara as Independent Officers has been filed with Tokyo Stock
Exchange, Inc.
The number of years during which Mr. Takaharu Hirose is in the office of Outside
Director of the Company will have been for ten (10) years at the close of this
General Meeting of Shareholders.
The number of years during which Mr. Hajime Watanabe is in the office of Outside
Director of the Company will have been for seven (7) years at the close of this
General Meeting of Shareholders.
The number of years during which Ms. Miri Hara is in the office of Outside
Director of the Company will have been for three (3) years at the close of this
General Meeting of Shareholders.
Pursuant to Article 427, Paragraph 1 of the Companies Act, the Company hasentered into a liability limit agreement limiting a compensation liability provided[English Translation]14

9.

for in Article 423, Paragraph 1 of the Companies Act with each of Messrs.
Takaharu Hirose, Hajime Watanabe and Ms. Miri Hara. In case each of them is reelected, it is scheduled that the liability limit agreement will continuously be made.
Furthermore, the limited amount of compensation liability is the minimum liability
limit provided for in Article 425, Paragraph 1 of the Companies Act.
The Company has entered into an officers’ liability insurance contract with aninsurance company. A summary of the contents of the insurance policy is given on
page 48 of this Notice of Convocation ("3. Description of the Officers’ Liability
Insurance Contract"). Each of the candidates is currently a director of the Company
and therefore is insured under the relevant insurance contract. If each candidate isreappointed, he or she will continue to be insured under the insurance contract. The
Company intends to renew the insurance policy for the same terms during their termof office.

[English Translation]
15

<The Company Proposal>
Third Item of Business: Election of Five (5) Audit & Supervisory Board Members
The term of office of all of the five (5) Audit & Supervisory Board Members
will expire at the close of this Meeting. Accordingly we would like to ask
shareholders to re-elect four (4) Audit & Supervisory Board Members and to electone (1) new Audit & Supervisory Board Member.
With respect to this item of business, the Audit & Supervisory Board has
given consent.
The candidates for Audit & Supervisory Board Members are as follows:
Candidate
Number1

Takayuki Ito

Re-election(Date of birth: January 2, 1954)

Brief History, Position, and Important Position of Other Organizations Concurrently
Assumed, if any
Jul 2002
Branch Manager and General Manager, Corporate Sales Department,
Muromachi Branch, UFJ Bank, Ltd. (presently MUFG Bank, Ltd.)Jun 2005 Advisor, SECOM Co., Ltd.
Jun 2006 Executive Officer
Jun 2007 Director (retired in Jun 2012)
Jul 2010
Vice President and Representative Director, Secom Home Life Co., Ltd.
(presently ANABUKI HOMELIFE Co., Ltd.)Sep 2010 President and Representative Director, Secom Home Life Co., Ltd.
(presently ANABUKI HOMELIFE Co., Ltd.)Jun 2015 Audit & Supervisory Board Member (currently)
Reasons for Election
Mr. Takayuki Ito has served in key positions at a bank, and for many years as a Director
at the Company primarily in management and control. He has also served as President
and Representative Director of a Group Company. He possesses affluent experience anda high level of knowledge in financial and legal affairs, acquired through these positions.
The Company expects he will supervise overall management, and give effective advice
from his wide insight. We would like to ask shareholders to elect him as Full-time Audit& Supervisory Board Member.

[English Translation]
16

Number of Sharesof the Company
Owned
1,900 shares

Candidate
Number2

Yasuhiro Tsuji

New Candidate(Date of birth: January 29, 1963)

Brief History, Position, and Important Position of Other Organizations Concurrently
Assumed, if any
Mar 1985 Joined SECOM Co., Ltd.
Apr 2006 General Manager, Corporate Planning Department, Secom Home Life
Co., Ltd. (presently ANABUKI HOMELIFE Co., Ltd.)Jun 2012 Executive Officer, Secom Home Life Co., Ltd. (presently ANABUKI
HOMELIFE Co., Ltd.)
Nov 2012 Director, The Windsor Hotels International Co., Ltd.
Nov 2012 President and Representative Director, The Windsor Hotels International
Co., Ltd.
Apr 2015 General Manager, Group Governance Department (currently)
Jun 2015 Audit & Supervisory Board Member, Secom Joshinetsu Co., Ltd.
(currently)
Jun 2018 Audit & Supervisory Board Member, Toyo Tec Co., Ltd. (currently)
Reasons for Election
Mr. Yasuhiro Tsuji has for many years served in control of the SECOM Group
companies and served as President and Representative Director of a Group company. He
possesses affluent experience and a high level of knowledge acquired in these positions.
The Company expects he will supervise overall management, and give effective advice
from his wide insight. We would like to ask shareholders to elect him as Full-time Audit& Supervisory Board Member.

[English Translation]
17

Number of Sharesof the Company
Owned
0 sharesRe-election

Candidate
Number3

Candidate for Outside Audit &Supervisory Board Member

Hideki Kato
(Date of birth: January 5, 1950)

Candidate for Independent Officer

Brief History, Position, and Important Position of Other Organizations Concurrently
Assumed, if any
Apr 1973 Joined the Ministry of FinanceJul 1990
Director, Planning Office, Secretariat, the Fair Trade Commission
Sep 1996 Retired from the Ministry of FinanceApr 1997 Professor, Faculty of Policy Management, Keio University
Apr 1997 Founded Japan Initiative, a policy think tank, (presently a generalincorporated association) and assumed Representative (currently)
Apr 2006 Chairman, the Tokyo Foundation, an incorporated foundation (presently apublic interest incorporated foundation)Oct 2009 Member and Director-General, Government Revitalization Unit, Cabinet
OfficeJun 2012 Audit & Supervisory Board Member, SECOM Co., Ltd. (currently)
Oct 2014 Member of Administrative Council, National University Corporation,
Kyoto University
Apr 2015 Specially Appointed Professor, Graduate School of Economics, National
University Corporation, Kyoto University
Jun 2016 Outside Director, SMBC Nikko Securities Inc. (currently)<Important Position of Other Organizations Concurrently Assumed>
Outside Director, SMBC Nikko Securities Inc.
Reasons for Election
Mr. Hideki Kato has served for many years in key positions at the Ministry of Finance,
the Japan Fair Trade Commission, a national university corporation and at various public
interest incorporated associations and foundations. He holds affluent experience and ahigh level of knowledge based on the implementation of national policy and numerous
achievements at policy think tanks. The Company expects he will supervise overallmanagement, and give effective advice from his wide insight. We would like to ask
shareholders to elect him as Outside Audit & Supervisory Board Member.

[English Translation]
18

Number of Sharesof the Company
Owned
0 sharesRe-election

Candidate
Number4

Candidate for Outside Audit &Supervisory Board Member

Makoto Yasuda(Date of birth: November 7, 1937)

Candidate for Independent Officer

Brief History, Position, and Important Position of Other Organizations Concurrently
Assumed, if any
Apr 1960 Joined Yamatake Corporation (presently Azbil Corporation)
Aug 1968 Resigned from Yamatake Corporation
Feb 1969 Joined Private Investment Company for Asia (PICA) S.A.
Feb 1977 Executive Vice President and Director, PICA S.A.
May 1987 President and Representative Director, Elders and Yasuda (presently
Yasuda Makoto & Co., Ltd.) (currently)
Jun 2000 Audit & Supervisory Board Member, Azbil Corporation
May 2001 Director, Li & Fung Ltd.
Jun 2006 Director, Azbil Corporation
Jun 2014 Outside Director, Sanwa Holdings Corporation
Jun 2015 Audit & Supervisory Board Member, SECOM Co., Ltd. (currently)<Important Position of Other Organizations Concurrently Assumed>
President and Representative Director, Yasuda Makoto & Co., Ltd.
Reasons for Election
Mr. Makoto Yasuda, in addition to managing global companies for many years, hasserved as Director and Audit & Supervisory Board Member of numerous companies. He
possesses affluent experience and a high level of knowledge acquired in these positions.
The Company expects he will supervise overall management, and give effective advice
from his wide insight. We would like to ask shareholders to elect him as Outside Audit& Supervisory Board Member.

[English Translation]
19

Number of Sharesof the Company
Owned
1,000 sharesRe-election

Candidate
Number5

Candidate for Outside Audit &Supervisory Board Member

Setsuo Tanaka(Date of birth: April 29, 1943)

Candidate for Independent Officer

Brief History, Position, and Important Position of Other Organizations Concurrently
Assumed, if any
Apr 1966 Joined National Police Agency
Aug 1991 Chief, Miyagi Prefectural Police
Aug 1993 Director of Traffic Bureau, National Police Agency
Jan 2000
Commissioner General, National Police Agency
Aug 2002 Retired from National Police Agency
Sep 2002 Non-regular Staff, Dai-ichi Mutual Life Insurance Company (presently
Dai-ichi Life Holdings, Inc.)Jun 2006 President, Japan Automobile Federation
Jun 2007 Outside Audit & Supervisory Board Member, NGK Insulators, Ltd.
Jun 2011 Outside Audit & Supervisory Board Member, KONAMICORPORATION (presently KONAMI GROUP CORPORATION)
Jun 2013 President & Representative Director, Japan Federation of Authorized
Drivers School Associations
May 2018 President & Representative Director, Public Interest Incorporated
Foundation, Japan Police Scholarship Association (currently)
May 2018 President & Representative Director, Public Interest Incorporated
Foundation, Japan Police Support Association (currently)
Jun 2019 Audit & Supervisory Board Member, SECOM Co., Ltd. (currently)<Important Position of Other Organizations Concurrently Assumed>
Representative Director, Public Interest Incorporated Foundation, Japan Police
Scholarship Association
Representative Director, Public Interest Incorporated Foundation, Japan Police Support
Association

Number of Sharesof the Company
Owned
200 shares

Reasons for Election
Mr. Setsuo Tanaka, in addition to serving in key positions at the National Police Agency
for many years, has served as Audit & Supervisory Board Member and Board Director
at various companies and general / public interest incorporated associations. He
possesses affluent experience and a high level of knowledge acquired in these positions.
The Company expects he will supervise overall management, and give effective advice
from his wide insight. We would like to ask shareholders to elect him as Outside Audit& Supervisory Board Member.
(Note)
1. The Company pays a membership fee (under 10 million YEN) to forums that are held by Japan Initiative(a general incorporated association), a non-profit independent policy think tank, the president of whichis Mr. Hideki Kato. In addition, the Company makes a donation (each under 10 million YEN) to the
Public Interest Incorporated Foundation, Japan Police Scholarship Association and to the Public Interest
Incorporated Foundation, Japan Police Support Association, each of which Mr. Tanaka is President &Representative Director. There is no particular interest between the Company and the other candidates.
2. Messrs. Hideki Kato, Makoto Yasuda and Setsuo Tanaka are candidates for Outside Audit &Supervisory Board Member. The designation of Messrs. Hideki Kato, Makoto Yasuda and Setsuo
Tanaka as Independent Officers has been filed with Tokyo Stock Exchange, Inc.
3. Mr. Hideki Kato has no direct experience of corporate management, but in addition to his experience infinance from his time in office at the Ministry of Finance, Mr. Kato possesses expertise in finance andaccounting from policy presentations made in regard to the public accounting system, which reviewed
public administrative services from the viewpoint of their balance sheets, one of the activities of theabove think tank. The Company expects that he will appropriately execute his duties as Outside Audit& Supervisory Board Member.
4. Mr. Setsuo Tanaka has no direct experience of corporate management, but possesses affluent experience[English Translation]
20

and achievements, having served as Commissioner of the National Police Agency and as Outside Audit& Supervisory Board Member of numerous companies. The Company expects that he will appropriately
exercise his duties as Outside Audit & Supervisory Board Member.
5. In November 2019, a former employee of the Company was arrested on suspicion of theft, and breaking andentering, with the subsequent discovery of multiple additional offenses. In March 2020, the former employee
was sentenced to one year and ten months in prison by the Kobe District Court. The three Outside Audit &Supervisory Board Members – Messrs. Hideki Kato, Makoto Yasuda, and Setsuo Tanaka were not aware ofthis incident until such fact came to light but they have always been making recommendations at meetings ofthe Board of Directors, etc. from the standpoint of compliance with laws and regulations. Furthermore, after
becoming aware of this incident, they have been fulfilling their responsibilities by seeking thoroughinvestigations of the incident and making recommendations for the formulation of measures to prevent
recurrences, among others.
6. In October 2022, when Mr. Hideki Kato was in office as Outside Director of SMBC Nikko Securities
Inc., the said company was issued a Business Suspension Order and a Business Improvement Order by
the Financial Services Agency of Japan, on suspicion of violating the Financial Instruments andExchange Act, for conducting illegal purchases, etc., for the purpose of stabilizing the market prices oflisted shares. Mr. Hideki Kato did not have prior knowledge of this incident, but he had always beenraising awareness of the importance of compliance with laws and regulations. After this incident cameto light, he has been making necessary responses as an Outside Director, including confirming the detailsof various initiatives to prevent recurrences and making recommendations for the prevention ofrecurrences at meetings of the Board of Directors, etc.
7. Mr. Hideki Kato will have been in office of Outside Audit & Supervisory Board Member for eleven(11) years at the close of this General Meeting of Shareholders.
8. Mr. Makoto Yasuda will have been in office of Outside Audit & Supervisory Board Member for eight(8) years at the close of this General Meeting of Shareholders.
9. Mr. Setsuo Tanaka will have been in office of Outside Audit & Supervisory Board Member for four (4)years at the close of this General Meeting of Shareholders.
10. The Company has entered into, with each of Messrs. Takayuki Ito, Hideki Kato, Makoto Yasuda and
Setsuo Tanaka, an agreement limiting their liabilities as prescribed by Article 423, Paragraph 1 of theCompanies Act, pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act. If they
are re-elected and assume office as Audit & Supervisory Board Member, the Company is scheduled tocontinue their agreements for limitation of liability with them. If Mr. Yasuhiro Tsuji is elected andassumes office as Audit & Supervisory Board Member, the Company is scheduled to enter into the same
agreement as those for four other candidates. The maximum amount of the liabilities under thisagreement which they incur is equal to the lowest amount of liabilities stipulated in Article 425,
Paragraph 1 of the Companies Act.
11. The Company has entered into an officers’ liability insurance contract with an insurance company. A
summary of the contents of the insurance policy is given on page 48 of this Notice of Convocation ("3.
Description of the Officers’ Liability Insurance Contract"). Each candidate for re-election is currently an
Audit & Supervisory Board Member of the Company and is insured under the relevant insurance contract.
If each candidate is re-elected, he will continue to be insured under the insurance contract. If the candidate
for new election is elected, he will be insured under the insurance contract. The Company intends to renew
the insurance policy for the same terms during their term of office.

[English Translation]
21

〈Reference〉
Knowledge and experiences possessed by each candidate for Director and Audit &Supervisory Board Member (Skills Matrix)
Current Positionat the Company

Corporate
Management

Finance andAccounting

Yasuo
Nakayama

Chairman and
Representative
Director●●

Ichiro Ozeki

President andRepresentative
Director●●

Yasuyuki
YoshidaSenior Executive
Director●●

Tatsuro Fuse

Executive
Director●

Tatsushi
Kurihara

Director●

Takaharu
HiroseOutside Director●

HajimeWatanabeOutside Director●●

Miri Hara

Outside Director●●

Takayuki Ito

Audit &
Supervisory
Board Member●●

Yasuhiro Tsuji

General Manager,
Group
Governance
Department

Hideki Kato

Name

Legal,
Complianceand Risk

Sustainability
and ESG

Security
Services
Industry

●

●
●

●

●

●

●

●

●

●

●

●

●

●
●
●

●

●

●

Outside Audit &Supervisory
Board Member●●

Outside Audit &Makoto Yasuda Supervisory
Board Member●

Outside Audit &Supervisory
Board Member

●

●

●
●

●

●
●

●

*Up to four (4) knowledge and experiences possessed by each candidate are marked.
*The above list does not represent all the knowledge and experiences of each candidate.

[English Translation]
22

ICT andTechnology●●

Setsuo Tanaka

GlobalBusiness●

<The Shareholder Proposal>
Fourth Item of Business: Repurchase of the company’s own shares(1) Summary of the agenda
Pursuant to the provisions of Article 156, paragraph 1 of the Companies Act, the repurchase of
the company’s common stock up to a total of 21,500,000 shares or up to the total amount of
180,000,000,000 yen, in cash, within one year from the conclusion of the Ordinary General
Meeting of Shareholders, is proposed.
(2) Reasons for the proposal
We have held Secom’s shares for over ten years and we would like to pay our respects to the
management team for their business operations that have enabled a high level of Return on
Invested Capital (ROIC) as well as stable and sustained growth. However, in contrast to thehigh ROIC, Return on Equity (ROE) has continued to deteriorate as a result of the accumulationof cash assets in recent years and has become a factor in the lackluster stock price.
It is commendable that Secom resolved at a Board of Directors meeting held on February 9,2023 to repurchase its own shares up to a total of 4,500,000 shares or 2.08% of total shares
outstanding (excluding treasury shares) or up to the maximum amount of 25 billion yen during
the period from February 10, 2023 to May 31, 2023, and is taking measures to enhanceshareholder returns and improve capital efficiency. However, taking into consideration thecurrent deterioration of ROE due to the accumulation of cash assets, even when we take into
account future M&A’s, capital investments, R&D expenses, and business operation funds
which are necessary to prepare for unforeseen risks, the current levels of cash assets areexcessive. The accumulation of cash assets in excess of necessary funds will lead to a decline
in capital efficiency and damage to corporate value. Given the fact that Secom is engaged insuperior businesses with a high ROIC and that ROE is deteriorating due to the increase in cash
assets, Secom should aim to improve ROE by further enhancing shareholder returns.
Accordingly, we believe that to further enhance shareholder returns and improve capitalefficiency Secom should adopt measures to repurchase approximately 10% of its shares
outstanding (excluding treasury shares) as treasury shares.

[English Translation]23

<Opinion of the Board of Directors>

The Board of Directors opposes this Shareholder Proposal
In May 2017, the Company formulated the “SECOM Group’s Vision for 2030” andannounced that it would continue to achieve sustainable growth by striving to resolve social
issues and enhance corporate value at the same time through the creation of the “ANSHIN
Platform,” which continues to provide an unwavering peace of mind in changing society.
In order to realize the “SECOM Group’s Vision for 2030,” the Company has newly
formulated the “SECOM Group Road Map 2027,” to clarify the direction of the SECOM
Group toward 2027 that it will provide safe and secure, comfortable and convenientservices one after another by further evolving and developing the existing priority strategies
while placing further emphasis on stakeholder returns, in order to continue to provide safety
and peace of mind to customers in changing society.
As per the priority strategies set forth in the “SECOM Group Road Map 2027,” we haveidentified (a) providing innovative security-focused services and solutions, (b)strengthening overseas operations, aiming to boost revenue generated overseas to 10% of
the consolidated total in the future, (c) building business infrastructures to support thecustomers’ business operations in BPO and ICT services, to be firmly implemented, and at
the same time, (d) enhancing productivity by maximizing service value and improving
operational efficiency. In addition, we have clearly stated that we would (e) invest in
securing and developing human resources on an ongoing basis and accelerate theintegration of management and sustainability strategies in order to promote structuring theCompany that continues to be selected and trusted by all stakeholders.
In order to implement these priority strategies and realize them, the Company believes
that it is extremely important to allocate cash flow from operating activities to growthinvestments, funds for business operation and shareholder returns, while considering thebalance among them.
As a result of social changes and the rapid evolution of technology, our businesses
including security services are approaching a period of major transformation. The Company
believes that all of the priority strategies outlined in “SECOM Group Road Map 2027” will
yield appropriate returns as growth investments to enhance corporate value by expanding
earnings and improving productivity. The Company also intends to actively pursue
domestic and overseas M&A opportunities necessary to realize the “SECOM Group’s
Vision for 2030” as one of growth investments, while carefully monitoring investment
efficiency.
In addition, as the Company is responsible for providing safety and peace of mind, wemust properly maintain the necessary funds for business operation to provide uninterrupted
services and continue our businesses regardless of changes in the external environment.
We have been always placing the provision of shareholder returns as a crucial
management task. The Company returns profits that continue to expand through growthinvestments to shareholders stably and continuously as dividends, in line with a certain
level of the consolidated dividend payout ratio.
Following the repurchase of the Company’s own shares totaling approximately 30 billion
yen from February to June 2022, the Board of Directors approved a resolution on February
9, 2023, to repurchase its own shares up to 25 billion yen, and the Company has continued[English Translation]24

to conduct share repurchases, amounting to some 18 billion yen by the end of April andfurther in May.
In the aforementioned “SECOM Group Road Map 2027”, we have set ROE of 10% as
one of the expected numerical targets by expanding revenues through the implementationof the priority strategies and by achieving improvement of productivity. As a means toachieve the target, we will naturally promote measures to increase net income, and we havealso announced that we will repurchase its own shares in a timely manner. This, together
with a dividend payout ratio of around 45%, which we have also set as a target, will
enhance the Company's shareholder returns more than ever.
On the other hand, the size of the repurchase of the Company’s own shares as per the
Shareholder Proposal would be excessive as it would be nearly twice the consolidated net
income of 96.1 billion yen for the fiscal year ended March 31, 2023 and exceed 80% of
non-consolidated cash and deposits of 214.3 billion yen of the Company, which is the entity
to carry out repurchases, and, besides that, the Shareholder Proposal requires
implementation within a short period of one year from the conclusion of the Ordinary
General Meeting of Shareholders. If such a proposal is adopted, the balance among growthinvestments, funds for business operation, and shareholder returns will be distorted
significantly, and medium- to long-term growth and sustainable enhancement of corporate
value of the Company may be jeopardized. Consequently, we judge that such a proposal
will not be beneficial to shareholders.
Therefore, the Board of Directors of the Company opposes the Shareholder Proposal.
(Reference) Shareholder returns to date
FY2020

FY2021

FY2022

FY2023

Annual dividend per share
(Yen)

170

180

185

190

Total repurchase amount(Billions of yen)

-

11.23

29.78

6.99
(as at the endof April)(Note) 1. The annual dividend per share for FY2022 is subject to approval of the Ordinary
General Meeting of Shareholders.
2. The annual dividend per share for FY2023 shown above is an estimate.

[English Translation]
25

<The Shareholder Proposal>
Fifth Item of Business: Amendments to the Articles of Incorporation regarding thehandling of shares held by directors(1) Summary of the agenda
Article 10 of Secom’s Articles of Incorporation shall be amended to establish provisions for thehandling of shares held by the Directors of Secom, as described below.

Current Articles of Incorporation(Handling of Matters relating to Shares)
Article 10 Matters concerning thehandling of shares and charges therefor
and procedure, etc. for exercise of rights
of shareholders shall be governed by the
Share Handling Regulations to beestablished by the Board of Directors, inaddition to laws and regulations, or the
Articles of Incorporation.
2 (Newly established)(The amended sections are underlined）
Amended Articles of Incorporation(Handling of Matters relating to Shares)
Article 10 Matters concerning thehandling of shares and charges therefor
and procedure, etc. for exercise of rights
of shareholders shall be governed by the
Share Handling Regulations to beestablished by the Board of Directors, inaddition to laws and regulations, or the
Articles of Incorporation.
2 The handling of shares held byDirectors shall be governed by the ShareOwnership Guidelines established by the
Board of Directors.

(2) Reasons for the proposal
We believe the greatest weakness of the Board of Directors in Japan is the limited holding ofshares by each director and the lack of a shareholder perspective as a result. At Secom, also,with the exception of those executives who are related to the founding family, the greater partof the economic benefits bestowed upon the directors are linked to basic compensation andshort-term performance, and the correlation with medium- to long-term improvement ofcorporate value seems to be insufficient.
At almost all of the major listed companies in Europe and the US, share ownership guidelines
have been adopted that stipulate continuous holding of a certain volume of shares over a certain
period of time, which are thought to be required to share common value with the shareholders.
In the majority of cases, after a grace period of several years, senior management is required tohold shares equivalent to three to five times that of basic compensation, while even outside
directors are required to hold the same amount of shares as compensation.
We propose that directors and other senior members of management of Secom, unconstrainedby past norms, aim for stock ownership comparable to global levels, demonstrate theircommitment through appropriate disclosures, and establish share ownership guidelines.

[English Translation]
26

<Opinion of the Board of Directors>

The Board of Directors opposes this Shareholder Proposal
The Company has established a policy for determining the contents of remuneration ofindividual Directors by resolution of the Board of Directors, and the remuneration of
Directors shall consist of pecuniary remuneration (fixed monthly remuneration and bonus)
and share-based remuneration.
Share-based remuneration is to be paid to Directors excluding Outside Directors (the“Subject Directors”), and it was resolved at the 60th Ordinary General Meeting of
Shareholders held on June 25, 2021 that (a) the total amount of monetary claims to beprovided to grant restricted stock shall not exceed 100 million yen per year, which isseparate from pecuniary remuneration, and that the number of common stock shares to beissued or disposed as restricted stock shall not exceed 20,000 shares per year (the numberof Subject Directors pertaining to this resolution was seven (7)); (b) the Non-transferable
period shall be the period from the date on which the Subject Director receives the issuanceor disposition of the common stock shares of the Company until the day on which the
Subject Director resigns or retires from the office and ceases to be any of Director,
Executive Officer, Audit & Supervisory Board Member, and employee of the Company(“Directors, etc.”) (including resignation or retirement due to death, the “Retirement, etc.”);(c) upon the expiration of the Non-transferable Period, the Company shall acquire all suchcommon stock shares held by such Subject Director free of charge as a matter of course
unless the Retirement, etc. of a Subject Director from the office of Director, etc. isdetermined by the Board of Directors of the Company to be due to a reasonable cause, suchas expiration of the term of office, mandatory retirement due to age, or death. Based on thisresolution of the general meeting of shareholders, the Board of Directors, based on the
result of deliberation by the Nomination and Compensation Committee, shall determine theshare-based remuneration of each director within the limit of the maximum amount andnumber mentioned in (a) above.
The relative proportion of fixed monthly remuneration, bonus, and share-based
remuneration in the total amount of remuneration of the Subject Directors shall be roughly
80:15:5.
To strengthen the independence and objectivity of the functions of the Board of Directors
and its accountability concerning the nomination and remuneration of Directors, theCompany has established the Nomination and Compensation Committee. The Committee
submits a proposal on the election and removal of Directors to the Board of Directors anddetermines and reports on the remuneration of Directors.
We believe that the remuneration system of the Company outlined above supports therecruitment and retention of competent human resources who can put management
philosophy into practice and meet the expectations of shareholders and a broad range ofother stakeholders and has led to sustainable enhancement of its corporate value.
On the other hand, the Shareholder Proposal only proposes to add the following
provision to the Articles of Incorporation without prescribing specific contents: “Thehandling of shares held by Directors shall be governed by the Share Ownership Guidelines
established by the Board of Directors.” In our opinion, under the current system of theCompany in which remuneration of each director is determined by the resolution of the[English Translation]27

Board of Directors, both pecuniary remuneration and share-based remuneration areapproved by the General Meeting of Shareholders, and remuneration of Directors isdetermined and reported by the Nomination and Compensation Committee in order tostrengthen the independence and objectivity of the functions of the Board of Directors andits accountability, there is no need to prescribe in the Articles of Incorporation theestablishment of the guidelines that only provides for share-based remuneration inparticular.
Therefore, the Board of Directors of the Company opposes the Shareholder Proposal.

[English Translation]
28

<The Shareholder Proposal>
Sixth Item of Business: Amendments to the Articles of Incorporation regarding thecomposition of outside directors(1) Summary of the agenda
Article 21 of Secom’s Articles of Incorporation shall be amended to ensure that outside directors
make up the majority of directors, as described below.
（The amended sections are underlined）
Current Articles of Incorporation
Amended Article of Incorporation(Number of Directors)(Number of Directors)
Article 21 The Company shall have
Article 21 The Company shall havenot more than twenty (20) Directors.
not more than twenty (20) Directors.
2 (Newly established)
2 As long as it remains a listedcompany, the majority of Directors of
the Company shall be outside
directors as stipulated in Article 2,
Paragraph 1, Item 15 of theCompanies Act.
(2) Reasons for the proposal
We believe that the diversity and independence of the board are indispensable to the corporate
management of today’s listed companies. A diverse board signifies a board capable of making
management decisions from a wide-ranging perspective including skills, experience, age,nationality, gender, etc., while an independent board refers to a board comprising at least amajority of independent outside directors.
Principle 4.8 of the Corporate Governance Code stipulates, “Independent directors should fulfill
their roles and responsibilities with the aim of contributing to sustainable growth of companies
and increasing corporate value over the mid- to long-term. Companies listed on the Prime
Market should therefore appoint at least one-third of their directors as independent directors(two directors if listed on other markets) that sufficiently have such qualities. Irrespective of theabove, if a company listed on the Prime Market believes it needs to appoint the majority of
directors as independent directors based on a broad consideration of factors such as the industry,company size, business characteristics, organizational structure and circumstances surrounding
the company, it should appoint a sufficient number of independent directors.” Additionally,
Principle 4.7 of the Corporate Governance Code lists, “Appropriately representing the views ofminority shareholders and other stakeholders in the boardroom from a standpoint independentof the management and controlling shareholders,” as one of the roles and responsibilities of
independent outside directors.
Three of Secom’s nine directors are outside directors and thus the company satisfies therequirements of the Corporate Governance Code but we believe that, by making the majorityof the directors outside more aggressively, Secom will be able to put in place a governancestructure that would improve capital efficiency, enhance shareholder returns, and contribute toits sustained growth and the medium- to long-term improvement of corporate value.
Moreover, in terms of not only the number of outside directors but also their credentials, Secom[English Translation]29

requires talent capable of contributing to its sustained growth and the medium- to long-term
improvement of corporate value, and in this regard, Secom should consider appointment of
woman and talent with abundant experience and skills as analyst.
The appointment of “talent with abundant experience and skills as analyst” will bring in theperspective of outside investors and shareholders to the board, and at the same time it will bean effective means that will contribute to the improvement of corporate value through soundrisk-taking. Intrinsically, the board of directors of listed companies and investors/shareholders
share the common goal of improving corporate value in the long term. Unfortunately in Japan,
however, the two parties are often understood to be in a confrontational relationship. The
participation of directors equipped with the experience and skills described above into
discussions and decision-making of the board will enable sound risk-taking and capital
allocation, and better communications with the market, all of which elevate the relationshipbetween the board and the stock market to the constructive level it ought to be. Companies often
explain that former bankers and accountants are responsible for the finance portion of the skill
matrix but expertise in accounting and the debt market is not enough from the standpoint of
encouraging “sound risk-taking” and in such cases an expert on the equity market would havea significance.

[English Translation]
30

<Opinion of the Board of Directors>

The Board of Directors opposes this Shareholder Proposal
The independence of the Board of Directors of the Company has been sufficiently
ascertained by the current membership consisting of the candidates proposed by theCompany and its composition is optimal as it has sufficient qualifications and diversity to
decide overall management policies and monitor the execution of duties of Directors
toward the achievement of the “SECOM Group’s Vision for 2030” and the “SECOM
Group Road Map 2027”. Therefore, we believe that the current composition will lead to thesustainable enhancement of the corporate value of the Company and the furtherance of theinterest of shareholders.
The Company’s current corporate governance system is based on a company with an
Audit & Supervisory Board. The Board of Directors determines overall management andbusiness execution policies. Executive officers, led by the President and Representative
Director, are responsible for business execution. The Audit & Supervisory Board, which
includes three (3) Outside Members, and the Board of Directors coordinate with theInternal Audit Department to audit and supervise execution of duties of Directors andExecutive Officers. Under this system, the Company proposes three (3) candidates for
Outside Directors out of eight (8) candidates at the Ordinary General Meeting of
Shareholders to incorporate a broad range of external perspectives not constrained by theinternal circumstances and to ensure the legality and objectivity of management. We
believe that the composition of the Board of Directors consisting of the internal Directors
with deep understanding of SECOM’s businesses and diverse insights, and of several
Outside Directors with extensive knowledge about corporate management and other areas,
is appropriate to ensure diversity in terms of gender and international experience, and to
facilitate substantive discussions and resolutions. We will continue to consider further
diversity and the appropriate size of the Board.
The Company has established the Nomination and Compensation Committee as adiscretionary committee of the Board of Directors with a majority of Outside Directors, andbelieves that it has an appropriate process for presenting candidates for the position of
Director to the Board of Directors.
On the other hand, establishing such a provision as proposed by the Shareholder Proposal
may limit the scope for choice of candidates for Directors, the flexibility in the operation of
the Board of Directors, and the effectiveness of the Board of Directors, and as a result may
prevent the Board of Directors from forming a structure that can appropriately represent theopinions of stakeholders including minority shareholders.
Therefore, the Board of Directors of the Company opposes the Shareholder Proposal.

[English Translation]
31

[Attached Documents]

Business Report (Fiscal Year Ended March 31, 2023)
I. Outline of the Group’s Business1. The Current Business Development and Results of Operations

During the fiscal year ended March 31, 2023 (“the current fiscal year”), theJapanese economy showed movements of a gradual recovery in some areas suchas corporate earnings and private consumption, as economic and social activities
continued moving toward normalization under the “new normal”. On the other
hand, continual attention has been required to downside risks in the economy due
to the unstable international situation, supply-side constraints, rising prices andthe global monetary tightening, as well as the trends of fluctuations in thefinancial and capital markets.
Under these circumstances, we have been actively working to implement
initiatives to achieve the SECOM Group’s Vision for 2030, formulated with an
aim to establish the “Social System Industry,” which delivers safety and peace ofmind, as well as makes life more comfortable and convenient.
In June 2022, we started providing cocobo, a security robot that makes use of AI
and 5G technologies to conduct monitoring and patrol services as well as security
inspections at Narita International Airport and a large-scale complex. In July, we
made Senon Ltd., which provides a wide range of services nationwide, including
static guard services, electronic security services, airport security services, andvehicle fleet operation services, our subsidiary. In March 2023, we alsoannounced the launch of a new service in April to help seniors relieve lonelinessthrough the use of a communication robot. With this service, we aim to reduce
the risk of a decline in cognitive and physical functions among seniors while
relieving their loneliness by providing them with a sense of security that they arealways connected to someone.
In the period under review, we continued to provide meticulous and seamlessservices through various initiatives to satisfy the increasingly diversified andsophisticated needs of our customers for their safety and peace of mind.
As a result, consolidated revenue for the current fiscal year increased by 4.9% to1,101.3 billion yen compared with the previous fiscal year, mainly owing to thecontribution of Senon Ltd., which became a consolidated subsidiary in July.
Consolidated operating profit decreased by 4.7% to 136.7 billion yen, largely
attributable to the effect of decreases in operating profit in security services, fire
protection services and BPO and ICT services. Consolidated ordinary profit
increased by 1.9% to 156.1 billion yen, mainly due to the increase in net gains on
private equity investment in the U.S. etc. by 4.6 billion yen. Consolidated net
income attributable to owners of the parent increased by 1.9% to 96.0 billion yen.

[English Translation]
32

Revenue, ordinary profit and net income attributable to owners of the parent forthe current consolidated financial year reached a record-high.
（Millions of Yen）
Revenue

Operating profit

Ordinary profit

Net income
attributable toowners ofthe parent

Current fiscal
year (FY2022)

1,101,307

136,700

156,124

96,085Previous fiscal
year (FY2021)

1,049,859

143,499

153,186

94,273

By business segment, in the security services segment, we provided mainly
centralized monitoring services (on-line security systems) for commercial andresidential clients, as well as static guard services, armored car services andmerchandises.
For our commercial security services, we offer System Security AZ, an all-in-one
system that accommodates a variety of functions that benefit customers’ business
operations, including security and fire protection, as well as work efficiency
solutions such as employee attendance management. In the period under review,
we launched System Security AZ-Air for small and medium-sized commercial
facilities and offices, which was developed to provide more customers with thesuperior safety and various functions of AZ, and worked to expand their sales.
For our residential security services, we provide SECOM Home Security NEO,a flexible system suited to modern lifestyles that can expand its services beyond
crime prevention and fire protection by linking with various devices. During thecurrent fiscal year, we actively worked to expand SECOM Home Security thatenhanced its convenience by linking with SECOM Cantabile, an app for Apple
Watch and iPhone, which enables more comfortable and pleasant use of thesystem.
Outside Japan, we promoted our “SECOM-style” security services, characterized
by its emergency response services, mainly in economically developing areas,such as Southeast Asia and the People’s Republic of China. We accelerated
efforts to develop and introduce security systems adapted to the local market
while advancing initiatives for the digital transformation of on-line security
systems by incorporating the latest technologies.
As a result, revenue increased by 4.5% to 583.3 billion yen, mainly owing to thecontribution of Senon Ltd., which became a consolidated subsidiary, and theincrease in sales of large-scale security systems in overseas market. Operating
profit decreased by 4.0% to 111.5 billion yen, attributable to the inclusion ofrelatively profitable projects in the previous fiscal year and the increase in selling,
general and administrative expenses owing to the investments for future growth.

[English Translation]
33

In the fire protection services segment, we provided a broad range of fire
protection systems such as high-quality fire alarm systems and fire extinguishingsystems that respond to customers’ needs to a wide variety of facilities such as
office buildings, production facilities, tunnels, cultural properties, ships andresidences. In the current fiscal year, two major fire protection companies, Nohmi
Bosai Ltd. and Nittan Co., Ltd., promoted various fire protection systems basedon each company’s business infrastructure and product development expertise.
Revenue decreased by 2.1% to 145.6 billion yen, mainly attributable to theinclusion of large projects in the previous fiscal year. Operating profit decreased
by 22.3% to 11.4 billion yen, chiefly owing to the concentration of projects withrelatively high profitability in the previous fiscal year.
In the medical services segment, we provided various medical services such as
our core home medical services, including home nursing services andpharmaceutical dispensing and home delivery services, operation of residences
for seniors, sales of electronic medical report systems, sales of medical equipment
and pharmaceutical products, personal care services, and the leasing of real estate
for medical institutions.
Revenue increased by 4.1% to 77.6 billion yen, mainly due to the increase inrevenue in Takshasila Hospitals Operating Pvt. Ltd., a general hospital operatingcompany in India and the brisk sales of medical equipment. Operating profit
increased by 3.7% to 5.8 billion yen.
In the insurance services segment, we expanded marketing efforts for our uniquenon-life insurance offerings, including Security Discount Fire Policy forcommercial facilities that offers discounts on premiums to customers who haveinstalled on-line security systems, recognizing such systems as a risk-mitigating
factor; SECOM Anshin My Home, the comprehensive fire insurance policy forresidences that offers a variety of compensation plans and discount policies;
MEDCOM, an unrestricted cancer treatment policy that offers compensation of
the actual cost of medical treatment; and SECOM Anshin My Car, acomprehensive automobile insurance policy that offers on-site support services
provided by our emergency response personnel in the event of an accident.
Revenue increased by 5.4% to 55.5 billion yen, mainly due to the increase ininvestment income and the firm rise in sales of MEDCOM, an unrestricted cancer
treatment policy provided by Secom General Insurance Co., Ltd. Operating profit
increased by 2.9% to 1.0 billion yen.
In the geospatial information services segment, we collected geographic datafrom aerial photography, vehicle/ground surveying systems and satellite images,
which we integrated, processed, and analyzed to provide geospatial information
services to domestic national and local governmental agencies, private sectors,
and foreign governmental agencies including emerging and developing countries.

[English Translation]
34

Revenue increased by 10.1% to 62.0 billion yen, owing to the rise in revenue
from domestic public sector division and the international division. Operating
profit increased by 66.0% to 6.7 billion yen, largely attributable to the cost ratio
improvement in the domestic public sector division.
In the BPO and ICT services segment, our distinctive portfolio includes business
continuity planning (BCP) support, teleworking support, information security
services and a variety of cloud-based services, centering on the data centers, aswell as BPO related services including operation of contact center services.
Revenue increased by 10.7% to 128.0 billion yen, chiefly owing to the increases
in revenue in TMJ, Inc., a provider of BPO services including contact centers andback office services, and data center business. Operating profit was down 11.7%
to 11.6 billion yen, attributable to the rise in cost mainly due to the increase in thefuel cost adjustment unit price in data center business.
Other services segment comprises real estate leasing and construction andinstallation services.
Revenue increased by 12.2% to 48.9 billion yen. Operating profit increased by
11.6% to 6.6 billion yen.

[English Translation]
35

Results by Business Segment (62nd Fiscal Year – current fiscal year)(Millions of Yen)
OperatingprofitCustomers

Revenue
Intersegment

Security services

583,338

11,988595,327

111,501

Fire protection services

145,662

3,124

148,787

11,497

Medical services

77,623239

77,862

5,873

Insurance services

55,5603,012

58,573

1,037

Geospatial information
services

62,085226

62,312

6,781

BPO and ICT services

128,082

10,789138,871

11,643

Other services

48,953

1,560

50,514

6,666

1,101,307

30,9401,132,248

155,000-(30,940)(30,940)(18,299)

1,101,307-

1,101,307

136,700

Business segment

Total
Eliminations andcorporate items
Consolidated revenue

Total

With respect to the results by geographical segments, in Japan, revenue
increased by 4.1% to YEN 1,042.6 billion. Overseas revenue increased by
21.8% to YEN 58.6 billion.
Revenue by business segment, excluding intersegment transactions (Millions of Yen)

[English Translation]36

2. Issues the Group Has to Cope with

The circumstances surrounding the SECOM Group pose certain challenges to beaddressed, including the evolution of technology, a decrease in the working
population, the deterioration of public safety experienced by citizens, an aging
population, more frequent and severer natural disasters. Under suchcircumstances, the SECOM Group promotes the following initiatives in order tocontribute to solving these challenges:(1) Capitalizing on advanced technologies and expertise
Amid ongoing technological evolution, we will proactively collect and deploy
information on advanced technologies and know-how, in order to achieve thecreation of added value, the improvement of service quality, etc., through theeffective use of digitalization and cutting-edge technologies. Based on these
efforts, we will work diligently to create products and services in Japan andoverseas that fuse advanced technologies with human capability.
(2) Domestic businesses (Increasing the competitiveness of our services andproducts)
For domestic businesses, we will improve our competitiveness by boosting thequalities and functionality of our services and products for commercial clients,
and also focus on further cultivating individual consumer markets, through theprovision of new services, including care for seniors. We will make the best useof the business resources of the SECOM Group, in order to offer high valueadded services that meet diversified customer needs, thereby aiming to establish
a society that enjoys “safety, peace of mind, comfort and convenience.”(3) Strengthening overseas businesses
For overseas businesses, while making progress in sales promotion including
advertisement, we will proactively adopt cutting-edge technologies andstrengthen our business development with increasing security needs in mind,
including business planning and product development targeted at overseas local
markets suitable for local needs, in addition to services for large-scale properties.
Furthermore, we will promote active local hiring, and improve the quality ofservices in overseas operations by fortifying education and training.
(4) Improving operating efficiency and quality
As part of efforts to address the manpower reduction resulting from thedecreasing labor force population, we will promote operational efficiency
through system investments to improve functionalities, thereby improving
productivity, profitability, and service quality. At the same time, we will review
operational processes and internal operational procedures to promote cost
reduction.
(5) Securing human resources that will increase competitiveness[English Translation]
37

Human resources with IT and global skills are indispensable for the SECOM
Group to utilize cutting-edge technologies and to expand overseas businesses. It
is also necessary to secure sufficient workforce to further improve our services inthe domestic businesses. We will make progress in enhancing recruitment tosupport our business development even under the decreasing working population.
We will also accelerate organizational strategies to strengthen growing sectors,
including the reallocation of human resources. In addition, we will continue tocultivate existing employees, to educate/train them for improving their abilities
to adapt to change, and to develop pleasant work environment.
(6) Strengthening compliance and governance systems
In promoting the efforts described above, securing and maintaining customer
trust through compliance with laws and the spirit of the law, is one of the mostimportant management issues for the SECOM Group, which aims to provide“safety and peace of mind.” The SECOM Group has been making efforts tofurther strengthen its compliance system, based on SECOM’s Philosophy, which
has been passed down since the establishment of the business. It has also beenworking to ensure business management that gives consideration to stakeholders
through the development of the governance system.
We look forward to the support from our shareholders in these and all of ourendeavors.
3. Capital Expenditures

Capital expenditures for the current fiscal year totaled YEN 73.8 billion (abreakdown is given below). A major portion was for system investments(including those for security equipment and control stations) etc. in the security
services segment, which totaled to YEN 38.6 billion.
(Millions of Yen)
Business segment

AmountSecurity services

38,652

Fire protection services

3,314

Medical services

2,074

Insurance services

3,132

Geospatial information services

2,600

BPO and ICT services

20,944

Other services

2,884
Subtotal

Eliminations and corporate items

73,604262

Total

73,866

4. Fund Raising

During the current fiscal year, no funds were raised by the Group in capital[English Translation]
38

markets through the issuance of corporate bonds or new shares.

5. Trends in Earnings and Assets of the Group(Millions of Yen except for net income per share)
62nd fiscal year
Fiscal years 59th fiscal year 60th fiscal year 61st fiscal year
(current fiscal year)(4/1/2019–(4/1/2020–(4/1/2021–
Category(4/1/2022–
3/31/2020)
3/31/2021)
3/31/2022)
3/31/2023)
Revenue
1,060,070
1,035,898
1,049,859
1,101,307
Operating profit
142,858
136,925
143,499
136,700
Ordinary profit
151,356
138,990
153,186
156,124
Net income
attributable to89,08074,681
94,27396,085owners of theparent
Net income per342.17431.27445.02408.14
share (Yen)
Return on Equity
Total assets
Net assets

8.8%
1,815,121
1,172,494

7.1%
1,864,179
1,229,824

8.6%
1,907,755
1,256,036

8.4%
1,989,062
1,316,047(Note)
From the beginning of the 61st fiscal year, we have applied “Accounting Standard for Revenue Recognition” (ASBJ
Statement No.29, March 31, 2020).

[English Translation]
39

6. Trends in Earnings and Assets of the Company(Millions of Yen except for net income per share)

398,929
76,877
90,53865,808394,389
75,54189,301
59,960395,181
78,70395,09469,88562nd fiscal year
(current fiscal year)(4/1/2022–
3/31/2023)
391,570
74,61593,25568,651301.51274.72319.70317.95

8.2%
947,194
812,878

7.3%
971,493
838,562

8.2%
993,501
859,950

8.0%
992,881860,308

Fiscal years 59th fiscal year 60th fiscal year 61st fiscal year
(4/1/2019–(4/1/2020–(4/1/2021–
Category
3/31/2020)
3/31/2021)
3/31/2022)
Revenue
Operating profit
Ordinary profit
Net income
Net income pershare (Yen)
Return on Equity
Total assets
Net assets(Note)
From the beginning of the 61st fiscal year, we have applied “Accounting Standard for Revenue Recognition” (ASBJ
Statement No.29, March 31, 2020).

[English Translation]40

7. Matters Concerning Principal Subsidiaries(As of March 31, 2023)
Company name

Issued capital(Millions of Yen)

Secom Joshinetsu Co., Ltd.

3,530
(Millions of Yen)

Asahi Security Co., Ltd.
100
(Millions of Yen)

Nohmi Bosai Ltd.
13,302(Millions of Yen)

Nittan Co., Ltd.
2,302
(Millions of Yen)

Secom Medical System Co.,Ltd.
Secom General InsuranceCo., Ltd.

100(Millions of Yen)

16,808(Millions of Yen)

Pasco Corporation
8,758(Millions of Yen)

Secom Trust Systems Co.,
Ltd.

1,468
(Millions of Yen)

At Tokyo Corporation

13,378(Millions of Yen)

TMJ, Inc.
100
(US$)

The Westec Security Group,
Inc.

301
(Thousands of UK
Pounds)Secom Plc

44,126(Millions of Rupee)

Takshasila Hospitals
Operating Pvt. Ltd.

5,926

[English Translation]
41

Percentage ofownership(Percentage ofvoting rights)(%)
100.00(100.00)(%)
100.00(100.00)(%)
50.36(50.71)(%)
100.00(100.00)(%)
100.00(100.00)(%)
97.20(97.91)(%)
71.55(72.17)(%)
100.00(100.00)(%)
50.88(50.88)(%)
100.00(100.00)(%)
100.00(100.00)(%)

Principal business activities

Security and safety services

Cash collection and delivery
services
Comprehensive fire protection
services
Comprehensive fire protection
services
Home medical services andremote image diagnosis
support services
Non-life insurance

Surveying, measuring andgeospatial information systemservices
Information security services andsoftware development

Data center business

BPO business including contact
center businessHolding company in the U.S.

100.00(100.00)(%)

Security business in the U.K.

60.00
(60.00)General hospital operatingcompany in India

(Thousands ofSingapore Dollars)(%)

107,159

100.00(100.00)

Secom Medical System(Singapore) Pte. Ltd.

Holding company in Singapore(Notes)1. The percentages of ownership (percentages of voting rights) are truncated to two
decimal places.
2. The percentages of ownership (percentages of voting rights) for Nohmi Bosai Ltd.,
Takshasila Hospitals Operating Pvt. Ltd. and Secom Medical System (Singapore)
Pte. Ltd. include those indirectly owned by the Company.

8. Principal Business of the GroupThe Group consists of the Company, 158 consolidated subsidiaries and 16
affiliated companies accounted for under the equity method. The principal
business activities of the Group are as follows: Security Services centering oncontracted security services; Fire Protection Services centering on comprehensive
fire protection services; Medical Services focusing on home medical services andmanagement of residences for seniors; Insurance Services consisting mainly of
non-life insurance; Geospatial Information Services that mainly entails theprovision of surveying and measuring operations; BPO and ICT Services
centering on information security services, large-scale anti-disaster operations,
datacenter and BPO business; and Other Services centering on real estate leasing
and construction and installation services and other services.
9. Principal Offices of the Group(i) Headquarters of the Company:
5-1, Jingumae 1-chome, Shibuya-ku, Tokyo(ii) Regional Headquarters:
Hokkaido (Sapporo City), Tohoku (Sendai City), West Kanto (Saitama City),
East Kanto (Chiba City), Tokyo (Minato-ku, Tokyo), Metropolitan Static
Guard Service (Shibuya-ku, Tokyo), Metropolitan Armored Car Service(Shibuya-ku, Tokyo), Kanagawa (Yokohama City), Shizuoka (Shizuoka
City), Chubu (Nagoya City), Kinki (Kyoto City), Osaka (Osaka City), Hyogo(Kobe City), Chugoku (Hiroshima City), Shikoku (Takamatsu City), Kyushu(Fukuoka City).
(iii) Domestic Subsidiaries:
Secom Joshinetsu Co., Ltd. (Niigata City), Asahi Security Co., Ltd. (Minatoku, Tokyo), Nohmi Bosai Ltd. (Chiyoda-ku, Tokyo), Nittan Co., Ltd.
(Shibuya-ku, Tokyo), Secom Medical System Co., Ltd. (Shibuya-ku, Tokyo),
Secom General Insurance Co., Ltd. (Chiyoda-ku, Tokyo), Pasco Corporation(Meguro-ku, Tokyo), Secom Trust Systems Co., Ltd. (Shibuya-ku, Tokyo),
At Tokyo Corporation (Koto-ku, Tokyo), TMJ, Inc. (Shinjuku-ku, Tokyo),
Arai & Co., Ltd. (Shibuya-ku, Tokyo).
(iv) Overseas Subsidiaries:
The Westec Security Group, Inc. (Dover, Delaware, USA), Secom Plc(Kenley, Surrey, UK), Secom (China) Co., Ltd. (Beijing, China), Takshasila[English Translation]
42

Hospitals Operating Pvt. Ltd. (Bengaluru, Karnataka, India), Secom Medical
System (Singapore) Pte. Ltd. (Singapore).
10. Matters Concerning Employees of the Group and the Company(1) Matters Concerning Employees of the Group
Number of employees

Increase from the end of
the previous fiscal year

65,0875,342(2) Matters Concerning Employees of the Company
Number of
employees

Decrease from the end of
the previous fiscal year

Average age

Average years of service

15,923
356
44.0
17.6
(Note)The number of employees refers to the number of full-time employees.

11. Principal Lenders(Millions of Yen)

Lenders

Balance

MUFG Bank, Ltd.

10,914

Mizuho Bank, Ltd.

8,111

Sumitomo Mitsui Banking Corp.

3,899

Resona Bank Ltd.

3,331

12. Other Important Matters Concerning the Group

There is no matter applicable.

[English Translation]
43

II. Matters Concerning the Company’s Shares and Shareholders
1. Total Number of Shares to be Issued:

900,000,000

2. Total Number of Issued Shares:

233,299,898(including 18,763,110 shares of treasury stock held by the Company)

3. Number of Shareholders at the End of the Fiscal Year:
4. Number of Shares Constituting a Unit of Shares:

24,202100 shares

5. Major Shareholders (Top 10)
Name of Shareholders

Number of shares held(Thousands of Shares)

Percentageof ownership(%)

The Master Trust Bank of Japan,
Ltd. (Trust Account)

48,392

22.55

Custody Bank of Japan, Ltd.
(Trust Account)

18,8008.76

JP MORGAN CHASE BANK 380055

9,621

4.48

STATE STREET BANK WEST
CLIENT-TREATY 505234

4,666

2.17

Makoto Iida

4,242

1.97

Secom Science and Technology
Foundation

4,025

1.87

2,575

1.20

SSBTC CLIENT OMNIBUS
ACCOUNT

2,536

1.18

The Master Trust Bank of Japan, Ltd.
(Retail Trust Account 820079272)

2,500

1.16

GOVERNMETNT OF NORWAY

2,475

1.15

JP MORGAN CHASE BANK 385781(Note)
1. Although the Company holds treasury stock of 18,763,110 shares, it is not included in thetable above. The percentage of ownership is calculated on the basis of the total number ofshares outstanding excluding treasury stock. The percentage of ownership is truncated totwo decimal places.
2. Although Mr. Makoto Iida has passed away on January 7, 2023, his name is recorded asabove in the shareholder register since the procedure of the transfer of his holding has notbeen completed as of March 31, 2023.

[English Translation]
44

6. Shares Granted to Officers of the Company for Their Business Execution during
Current Fiscal Year
Number of shares
1,849

Directors (excluding Outside Directors)[English Translation]
45

Number of
Grantees6III. Directors and Audit & Supervisory Board Members
1.

Names and Titles of Directors and Audit & Supervisory Board Members
PositionName(As of March 31, 2023)
Field of responsibility andimportant position of otherorganization
concurrently assumed
Executive Officer
Chairman, All Japan Security
Association

Chairman and
Representative Director

Yasuo Nakayama

President andRepresentative Director

Ichiro Ozeki

Executive Officer

Yasuyuki Yoshida

Executive Officer (in charge ofplanning administration, groupcompanies supervisor and risk
control)

Senior Executive
Director

Executive Officer (head of corporate
communication & marketing
division)
Chairman and Director of Secom
Medical System Co., Ltd.
Executive Officer (in charge of BPO
and ICT)

Executive Director

Tatsuro Fuse

Director

Tatsuya Izumida

Director

Tatsushi Kurihara

Executive Officer (head of generalaffairs & human resources division)

Director

Takaharu Hirose

Chairman and Representative
Director of Monitas, Inc.

Director

Hajime Watanabe

Director

Miri Hara[English Translation]
46

Chairman and Representative
Director of Watanabe Pipe Co., Ltd.
Representative Certified Public Tax
Accountant of Tax Corporation
Yokohama Benten Accounting, Inc.
Outside Director, Nippon Sanso
Holdings Corporation

Position

Field of responsibility and important
position of other organization
concurrently assumed

Name

Audit & Supervisory
Board Member

Takayuki Ito

Full-time Audit & Supervisory Board
MemberAudit & Supervisory
Board Member

Koji Kato

Full-time Audit & Supervisory Board
MemberAudit & Supervisory
Board Member

Hideki Kato

Outside Director of SMBC Nikko
Securities Inc.

Audit & Supervisory
Board Member

Makoto Yasuda

President and Representative Directorof Yasuda Makoto & Co., Ltd.,

Setsuo Tanaka

Representative Director of Public
Interest Incorporated Foundation Japan
Police Support Association
Representative Director of Public
Interest Incorporated Foundation Japan
Police Scholarship Association

Audit & Supervisory
Board Member(Notes)
1. Mr. Takaharu Hirose, Mr. Hajime Watanabe and Ms. Miri Hara are Outside
Directors as stipulated in Article 2, Item 15 of the Companies Act.
2. Messrs. Hideki Kato, Makoto Yasuda and Setsuo Tanaka are Outside Audit &Supervisory Board Members as stipulated in Article 2, Item 16 of the Companies Act.
3. The Audit & Supervisory Board Member, Mr. Takayuki Ito has long-term
experience working at a financial institution and has considerable knowledge offinance and accounting matters.
4. There are no particular interests between the Company and other corporations
employing Outside Director, Mr. Takaharu Hirose, Mr. Hajime Watanabe and Ms.
Miri Hara.
5. There are no particular interests between the Company and other corporations
employing Outside Audit & Supervisory Board Member, Messrs. Hideki Kato and
Makoto Yasuda.
6. The Company made donation to two foundations which Outside Audit & Supervisory
Board Member Mr. Setsuo Tanaka concurrently assumes positions. However, theamounts of donation were less than 10 million yen, respectively. Moreover, both offoundations are certified as designated public interest corporations to contribute topromote public interest so that it is unlikely that independency between both foundations
and the Company, also between him and the Company would be suspicious, nor conflictof interest as to ordinary shareholders would be endangered.
7. The notice of Outside Directors, Mr. Takaharu Hirose, Mr. Hajime Watanabe andMs. Miri Hara being independent officers was submitted to Tokyo Stock Exchange,Inc.
8. The notice of Outside Audit & Supervisory Board Members, Messrs. Hideki Kato,
Makoto Yasuda and Setsuo Tanaka being independent officers was submitted toTokyo Stock Exchange, Inc.
9. Changes in Directors during the current fiscal year
① Director, Mr. Makoto Iida retired at the close of the 61st Ordinary General
Meeting of Shareholders held on June 28, 2022.
② Outside Director, Mr. Hirobumi Kawano retired as he passed away on November
5, 2022. He was concurrently serving as Outside Audit & Supervisory Board
Member at SAN-AI OBBLI Co., Ltd., but resigned on September 26, 2022. There
are no particular interests between SAN-AI OBBLI Co., Ltd. and the Company.

[English Translation]
47

〈Reference〉
Executive Officers who are not Directors are as follows:(As of May 1, 2023)
Title
Managing Executive
Officer

Executive Officer

Name
Kenichi Furukawa, Osamu Ueda, Yoshinori Yamanaka, Yoichi
Sugimoto, Sumiyuki Fukumitsu, Osamu Nagai, Sadahiro Sato
Kensuke Shindo, Yasufumi Kuwahara, Noriyuki Fukuoka,
Takeshi Akagi, Seiya Nagao, Noriyuki Uematsu, Atsushi
Komatsu, Takehiko Senda, Takashi Nakada, Michiyoshi
Morita, Makoto Inaba, Toshinori Sugimoto, Satoshi Araki,
Satoshi Takizawa, Izumi Sawamoto, Akira Kubota, Masahiko
Naito, Shinji Kiren, Minoru Takezawa(Notes)
1. Mr. Sadahiro Sato was appointed to Managing Executive Officer as of April 1, 2023.
2. Messrs. Akira Kubota, Masahiko Naito, Shinji Kiren and Minoru Takezawa wereappointed to Executive Officer as of April 1, 2023.

2. Description of the Agreement Limiting Liabilities
The Company has entered into with each of the Directors (excluding Executive
Directors) and each of the Audit & Supervisory Board Members an agreement
limiting their liabilities as prescribed by Article 423, Paragraph 1 of theCompanies Act, pursuant to the provisions of Article 427, Paragraph 1 of theCompanies Act.
The maximum amount of the liabilities under this agreement is equal to thelowest amount of liabilities stipulated in Article 425, Paragraph 1 of theCompanies Act.
3. Description of the Officers’ Liability Insurance Contract
The Company has entered into an officers’ liability insurance contractprescribed in Article 430-3, Paragraph 1 of the Companies Act with aninsurance company to compensate the insured persons for any damage thatthey may incur when a claim for damages is made against them, including
damages and litigation cost.
The insured persons of this insurance contract are main business executives of
the Company, including Directors, Audit & Supervisory Board Members, andExecutive Officers.
However, if the insurance policy provides for a deductible amount and does
not cover damage that does not reach the deductible amount, or if certain
exemptions apply, such as when an act is committed with the knowledge thatit violates laws and regulations, the insurance policy shall not cover thedamage to ensure that the appropriateness of the performance of duties bydirectors and officers is not impaired.
The insurance premiums are paid by the Company, including those for special
clauses such as the special clause on indemnity for shareholder representative
lawsuits, and the insured does not bear the actual cost of the premiums.

[English Translation]48

4. Remuneration of Directors and Audit & Supervisory Board Members
Breakdown of total amount of remuneration etc.
(Millions of Yen)
Total amount of
Basic
Performance-based Non-pecuniary No. of
remuneration etc. remuneration
remuneration
remuneration entitled(Millions of Yen)
officers
Stock
Restricted
Fixed
Bonus
optionstock
Directors (excluding
Outside Directors)

323

262

-

45

16

7

Audit & Supervisory
Board Members(excluding Outside
Audit & Supervisory
Board Members)

46

46

-

-

-

2

Outside Directors

37

37

-

-

-

4

Outside Audit &Supervisory Board
Members

27

27

-

-

-

3

Total
435
374
45
16
16
(Notes)
The remuneration described above is in accordance with the policy for determining thecontent of individual remuneration for Directors, which was established in advance by the
Board of Directors.
With regard to the above performance-based remuneration, the target of consolidated
operating profit for the fiscal year under review was 134,000 million yen, and the actual result
was 136,700 million yen.

5. Policy for Determining the Amount of Remuneration of Directors andAudit & Supervisory Board Members(1) Remuneration of Directors
The Company has established a policy for determining the contents ofremuneration of individual directors (hereinafter referred to as the“Determination Policy”), and its outline is as follows:
The remuneration of Directors shall consist of pecuniary remuneration (fixedmonthly remuneration and bonus) and share-based remuneration. Outside
Directors shall be entitled only to fixed monthly remuneration. In the case of adeath of an incumbent Director of the Company (excluding Outside Directors),
officer condolence money shall be paid to the bereaved family of the deceased
Director in accordance with the Regulations on the Provision of Officer
Condolence Money established by the resolution of the Board of Directors
subject to the approval of the General Meeting of Shareholders.
Regarding pecuniary remuneration (fixed monthly remuneration and bonus), it
was resolved at the 44th Ordinary General Meeting of Shareholders held on
June 29, 2005 that the total amount shall not exceed 600 million yen per year(the number of Directors pertaining to the resolution was eleven (11)).
Additionally, with regard to the share-based remuneration to be paid to
Directors excluding Outside Directors (hereinafter the “Subject Directors”), it
was resolved at the 60th Ordinary General Meeting of Shareholders held on[English Translation]
49June 25, 2021 that (a) the total amount of monetary claims to be provided to
grant restricted stock shall not exceed 100 million yen per year, which isseparate from pecuniary remuneration, and that the number of common stock
shares to be issued or disposed as restricted stock shall not exceed 20,000 shares
per year (the number of Subject Directors pertaining to this resolution wasseven (7)); (b) the Non-transferable period shall be the period from the date on
which the Subject Director receives the issuance or disposition of the common
stock shares of the Company (hereinafter the “Grant Date”) until the day on
which the Subject Director resigns or retires from the office and ceases to be
any of Director, Executive Officer, Audit & Supervisory Board Member, andemployee of the Company (hereinafter the “Directors, etc.”) (including
resignation or retirement due to death, hereinafter the “Retirement, etc.”); (c)upon the expiration of the Non-transferable Period, the Company shall acquire
all such common stock shares held by such Subject Director free of charge asa matter of course unless the Retirement, etc. of a Subject Director from theoffice of Director, etc. is determined by the Board of Directors of the Company
to be due to a reasonable cause, such as expiration of the term of office,mandatory retirement due to age, or death; and (d) upon the expiration of the
Non-transferable Period, notwithstanding the determination by the Board of
Directors that the Retirement, etc. of a Subject Director from the office of
Director, etc. is due to a reasonable cause, such as expiration of the term ofoffice, mandatory retirement due to age, or death, if the Retirement, etc. occurs
before the close of the first Ordinary General Meeting of Shareholders held
after the Grant Date, except for a certain number of such common stock shares
determined in accordance with the reasonable standard set out in advance by
the Board of Directors of the Company among such common stock shares heldby such a Subject Director, the Company shall acquire the rest of such common
stock shares held by such Subject Director free of charge as a matter of course.
Based on this resolution of the general meeting of shareholders, the Board of
Directors, based on the result of deliberation by the Nomination andCompensation Committee, shall determine the share-based remuneration ofeach director within the limit of the maximum amount and number mentionedin (a) above.
The amount of fixed monthly remuneration (pecuniary remuneration) of each
Director and the amount of share-based remuneration (the amount of monetaryclaims provided to grant restricted stock) of each Director (excluding Outside
Directors) shall be determined in comprehensive consideration of the job
responsibility and the number of years of office of each Director as well as thefinancial performance of the Company. The amount of bonus of each Director(excluding Outside Directors) shall be determined in comprehensive
consideration of consolidated operating profit, which is one of the key
management targets of the Company, as well as the job responsibility and thenumber of years of office of each Director.
The relative proportion of fixed monthly remuneration, bonus, and share-based
remuneration in the total amount of remuneration of each Director (excluding
Outside Directors) shall be roughly 80:15:5. Fixed monthly remuneration ispaid every month. Bonus for each fiscal year is paid in July of the following[English Translation]
50

fiscal year. Share-based remuneration for each fiscal year is paid in July of thesame year subject to the Non-transferable Period above.
As the remuneration of each Director for the current fiscal year has been
determined in accordance with the procedure outlined above, the Board of
Directors has determined that the contents of the remuneration are in line with
the Determination Policy.
To strengthen the independence and objectivity of the functions and theaccountability of the Board of Directors concerning the nomination andremuneration of Directors, the Company has established a Nomination andCompensation Committee. The Committee submits a proposal on the election
and removal of Directors to the Board of Directors and determines and adviseson the remuneration of Directors. The Nomination and Compensation
Committee for this business year consisted of the following seven (7) members
in total (including four (4) Outside Directors): Makoto Iida (Chairperson,
Supreme Advisor and Director), Yasuo Nakayama (Chairman and
Representative Director), Ichiro Ozeki (President and Representative Director),
Takaharu Hirose (Outside Director), Hirobumi Kawano (Outside Director),
Hajime Watanabe (Outside Director), and Miri Hara (Outside Director).
However, Mr. Makoto Iida retired on June 28, 2022, and Mr. Yasuo Nakayama
was appointed to Chairperson of the aforesaid Committee on the same date. Mr.
Hirobumi Kawano retired as Outside Director on November 5, 2022.
(2) Remuneration of Audit & Supervisory Board Members
The remuneration of Audit & Supervisory Board Members of the Company
consists of pecuniary remuneration. It was resolved at the 50th Ordinary
General Meeting of Shareholders held on June 24, 2011 that the total amountof remuneration of Audit & Supervisory Board Members shall not exceed 80
million yen per year (the number of Audit & Supervisory Board Members
pertaining to the resolution was five (5)). The amount of remuneration of each
Audit & Supervisory Board Member shall be determined by consultation
among Audit & Supervisory Board Members based on the job responsibility ofeach Audit & Supervisory Board Member within the limit of the maximum
amount of such remuneration resolved at the General Meeting of Shareholders.

No performance-based remuneration has been introduced as remuneration of
Audit & Supervisory Board Members.

[English Translation]51

6. Outside Directors and Outside Audit & Supervisory Board Members

Activities of Outside Directors and Outside Audit & Supervisory Board
Members during the current fiscal year

Category

Name

Attendanceof theMeetings ofthe Board of
Directors

Attendance ofthe Meetings of
the Audit &Supervisory
Board

OutsideDirector

Takaharu
Hirose12(out of 12)-

OutsideDirector

Hirobumi
Kawano3(out of 7)-[English Translation]
52

Main Activities

He offered advice andrecommendations at the meetings ofthe Board of Directors by making
use of his extensive experience andinsight gained through thefoundation and the management ofmany enterprises and industry
organizations. He also served as amember of the Nomination andCompensation Committee toparticipate in deliberations.
Through these activities, he has
performed the supervisory function
adequately and has played an
appropriate role as an Outside
Director.
He offered advice andrecommendations at the meetings ofthe Board of Directors by making
use of his extensive experience andinsight gained through holding
important positions in government
as well as in industry. He also
served as a member of theNomination and Compensation
Committee to participate indeliberations. Through these
activities, he has performed thesupervisory function adequately andhas played an appropriate role as an
Outside Director.
With regard to the meetings of theBoard of Directors that he did notattend, he received explanations of
the resolutions of the meetings fromthe person responsible for operationof the meeting and made efforts tounderstand the contents of themeetings.

Category

Name

Attendance ofthe Meetings ofthe Board of
Directors

Attendance of the
Meetings of the
Audit &
Supervisory
Board

OutsideDirector

HajimeWatanabe

12(out of 12)-

OutsideDirector

Miri Hara

12(out of 12)-

OutsideAudit &
Supervisory
Board
Member

Hideki Kato

12
(out of 12)

12(out of 12)[English Translation]
53

Main Activities

He offered advice andrecommendations at the meetings ofthe Board of Directors by making
use of his extensive experience andinsight gained from many years of
involvement in corporate
management. He also served as amember of the Nomination andCompensation Committee toparticipate in deliberations.
Through these activities, he has
performed the supervisory function
adequately and has played an
appropriate role as an Outside
Director.
She offered advice andrecommendations at the meetings ofthe Board of Directors by making
use of her extensive experience andinsight gained from her experience
as a corporate officer and a tax
accountant. She also served as amember of the Nomination andCompensation Committee toparticipate in deliberations.
Through these activities, she has
performed the supervisory function
adequately and has played an
appropriate role as an Outside
Director.
He offered advice and suggestions
at the meetings of the Board of
Directors by making use of his
experience in the execution ofnational policies and insight gained
through many accomplishments at apolicy think tank. He also asked
questions and stated opinions inorder to clarify unclear issues.

Category

Name

Attendance ofthe Meetings ofthe Board of
Directors

Attendance of the
Meetings of the
Audit &
Supervisory
Board

OutsideAudit &
Supervisory
Board
MemberMakotoYasuda12(out of 12)

12(out of 12)

OutsideAudit &
Supervisory
Board
MemberSetsuoTanaka11(out of 12)

11(out of 12)

Main Activities

He offered advice and suggestions
at the meetings of the Board of
Directors by making use of his
experience and insight gained
through serving as a management of
global enterprise. He also asked
questions and stated opinions inorder to clarify unclear issues.
He offered advice and suggestions
at the meetings of the Board of
Directors by making use of his
experience and insight gained
through the important positions ingovernment. He also asked
questions and stated opinions inorder to clarify unclear issues.
With regard to the meeting of theBoard of Directors and the meetingof the Audit & Supervisory Board
that he did not attend, he received
explanations of the resolutions of
the meetings from the person
responsible for operation of themeeting of the Board of Directors
and the full-time Audit &Supervisory Board Members, andmade efforts to understand thecontents of the meetings.

(Note)
Main activities of Mr. Hirobumi Kawano, Outside Director, stated above are those until his
retirement on November 5, 2022.

[English Translation]
54

IV. Accounting Auditor
1. Name of Accounting Auditor

KPMG AZSA LLC
2. Remuneration of Accounting Auditor
Previous Fiscal Year
Category(Millions of Yen)
Current Fiscal Year

Audit certificationwork

Non-audit work

Audit certificationwork

Non-audit work

Company

186

16

204

146

Consolidated
Subsidiaries

364

96

461

76

Total

550

112

666

222

(Notes)1. Based on the audit contract between the Company and the Accounting Auditor, theremuneration paid to the auditor is not distinguished between that which relates to theaudits under the Companies Act and that which relates to the audits under Financial
Instruments and Exchange Act as they cannot be distinguished. Therefore, the amountgiven in the Company shown above is the combined total of these amounts.
2. Of the major subsidiaries of the Company, the Westec Security Group Inc. is audited
by WEAVER AND TIDWELL LLP, Secom Plc is audited by KPMG LLP, Takshasila
Hospitals Operating Pvt. Ltd. is audited by BSR & Co. LLP and Secom Medical
System (Singapore) Pte. Ltd. is audited by KPMG Services Pte. Ltd.

3. Consent for the Amount of Remunerations for Accounting Auditor
Audit & Supervisory Board consents under Article 399, Paragraph 1 of theCompanies Act for the amount of remunerations for Accounting Auditors uponverifying the basis for calculation of remunerations of Accounting Auditors,
including contents of audit plan prepared by the Accounting Auditors, the statusof implementation of accounting audits, etc.
4. Non-Audit Duties
The Company pays consideration to the Accounting Auditor for services as
non-audit duties including financial due diligence work, etc. Consolidated
subsidiaries pay consideration to the Accounting Auditor for services as nonaudit duties, including verifying work for the status of preparedness on internal
control system, in accordance with Auditing and Assurance Practice Committee
Practical Guideline No 86, “Assurance Reports on Controls at a Service
Organization.”
5. Policy for Decision for Dismissal or Non-reappointment
When it is deemed that the Accounting Auditor has come to fall within thepurview of Article 340, Paragraph 1 of the Companies Act, the Audit &Supervisory Board will hold Meeting of Audit & Supervisory Board Members,
and, when all Audit & Supervisory Board Members have consented thereto, theAudit & Supervisory Board Member will take action for the dismissal of the[English Translation]55

subject Accounting Auditor or the subject firm of the Accounting Auditor. In
such case, the Audit & Supervisory Board will make decision on appointmentof a temporary Accounting Auditor or a substitute Accounting Auditor and willsubmit a proposal of the appointment of a substitute Accounting Auditor to thegeneral meeting of shareholders convened for the first time after such decision.
The Audit & Supervisory Board Member selected by the Audit & Supervisory
Board will also report the reasons for the dismissal at the general meeting ofshareholders.
Aside from the above, when there exists any situations from the view point ofexecution of duties and audit system, etc. where it is acknowledged that the
Accounting Auditor is not fit to act as Accounting Auditor, the Audit &Supervisory Board will make decision on non-reappointment of the subject
Accounting Auditor and appointment of a substitute Accounting Auditor, with amajority approval, and will submit a proposal to the general meeting ofshareholders.
V. System under which the Company’s Business is Ensured to be Properly
Executed
1. Basic Policy and Overview of the Status of Operation Regarding
Internal Control System

Outline of the “system under which the execution of duties by Directors is
ensured to comply with laws and regulations and the Articles of Incorporation,and the system under which the Company’s business and the group of enterprises
consisting of the Company and subsidiaries is ensured to properly execute its
business” (so-called the basic policy regarding the internal control system) of theCompany, which the Board of Directors’ Meeting resolved, is as follows. (Thelatest revision was made on February 9, 2023.)(1) General

This resolution manifests the basic policy regarding the internal control
system of the Company resolved by the Board of Directors based on Article
362, Paragraph 5 of the Companies Act, and the policy shall be constantly
reviewed and improved.
(2) System under which the execution of duties by Directors and employees
is ensured to comply with laws and regulations and the Articles ofIncorporation[Basic Policy]
From the start, compliance with laws and regulations and the Articles ofIncorporation has been an indispensable requirement of our business, andwe have always sought to operate in strict adherence to this spirit.
Compliance is a part of the Company’s daily routines, and the Company
places emphasis on the system that each executive and employee maintains
a high level of awareness of compliance and promotes that.
(i) Executives and employees act in accordance with the “SECOM
Group Code of Employee Conduct,” which sets behavioral standards[English Translation]
56

for the execution of duties, including compliance with laws andregulations, and the Article of Incorporation. They also conductbusiness operations based on the “Constitution of SECOM’s
Business and Operation.”(ii) The Executive Officers in charge of each area are responsible forhaving thorough knowledge of regulations related to their duties andthe relationships of such regulations with their own operations. They
are responsible for proposing responses to any revisions of laws to
the President and Representative Director. They are also responsible
for responding appropriately to issues and problems. The Legal
Affairs Department and other relevant departments and sections
support them, providing cross-organization coordination. President
and Representative Director reports them to the Board of Directors
as necessary.
(iii) Following the orders of the President and Representative Director,
the Internal Audit and Compliance Department provides crossorganizational inspection in a timely manner over the execution ofduties, praises the observance of laws and regulations and theCompany’s rules, and at the same time points out matters that needcorrection. The Internal Audit and Compliance Department reports
the findings of the inspection to the President and Representative
Director and the Audit & Supervisory Board Members.
(iv) When executives and employees of the Company become aware ofunethical actions, they have the obligation to report such actions tothe superior. A “Hot Helpline” is established to facilitate directcontact with the Internal Audit and Compliance Department if
corrective actions are not taken even after reporting to superiors or itis difficult to report. Pursuant to the “Basic Policy of the SECOM
Group for Compliance” and the “Internal Reporting Rules,” theCompany will keep the reported matters confidential, and takenecessary investigation and appropriate measures. The reporter will
suffer no disadvantage on the grounds of such report.
(v) The Company establishes a standing Organizational Culture
Committee, chaired by the President and Representative Director.
The Organizational Culture Committee determines important official
commendations and dispositions as well as measures to foster the
open organizational culture. Revisions of the “SECOM Group Codeof Employee Conduct” and/or critical compliance-related matters areundertaken after discussion with the Organizational Culture
Committee and subject to the approval of the Board of Directors after
obtaining the opinions of the Audit & Supervisory Board Members.

[Status of Operation]
The Company promotes to instill and entrench the “SECOM Group Codeof Employee Conduct” and the “SECOM’s Philosophy” via trainings, inhouse activities, e-learnings among others.
With regard to compliance-related problems, the Company has developeda system with which each executive and employee can respond
appropriately. Important issues of them are handled by each regional
Control Center and such information is brought together to the Central
Control Center of the Headquarters. The Central Control Center
communicates that to the relevant departments and reports to the President[English Translation]
57

and Representative Director when necessary.
The Internal Audit and Compliance Department conducts operational audits
based on the audit plan, reports the audit results to the President andRepresentative Director and the Audit & Supervisory Board Members on amonthly basis, and makes proposals to departments in charge to takecorrective measures necessary to solve any issues identified. The President
and Representative Director instructs departments in charge to correct such
issues when necessary.
There were 93 reports made through “Hot Helpline” and the Organizational
Culture Committee meetings were held for 9 times for the current fiscal
year.
(3) System under which information regarding execution of business byDirectors shall be maintained and controlled[Basic Policy]
Information regarding the execution of duties of Directors shall be properly
maintained and administered pursuant to the rules of the Company, which
will be amended upon reviewing the operating conditions when necessary.
[Status of Operation]
Information regarding the execution of duties of Directors such as minutesof the meetings of the Board of Directors and decision-making documents
are stored and managed in a proper manner in conformance with the “Basic
Policy of the SECOM Group for Information Security.”(4) System regarding control of risk of loss and other system[Basic Policy](i) The Company’s overall risk management is, with acknowledgementthat risk management itself is the Company’s business, supervised by
the President and Representative Director. Executive Officers incharge and department managers analyze and assess business risk andfraud risk in the operational areas for which they are responsible. On
this basis, the system is reviewed to respond to changes in businessenvironment and important issues are reported to the Board of
Directors and the Audit & Supervisory Board.
(ii) In order to grasp company-wide risks and consider necessary measures,a Risk Committee, which is chaired by the Director responsible for risk
management, shall be convened and report as necessary to the
President and Representative Director and the Board of Directors.
(iii) Any important changes of the Company’s risk control system shall be
subject to the approval of the Board of Directors after obtaining theopinions of the Audit & Supervisory Board Members.
[Status of Operation]
Each Executive Officer and department manager properly analyzes andassesses risks in the operational areas for which he/she is responsible andreports the results to the President and Representative Director. They also
respond appropriately to the revealed risks. The Risk Committee meetings
were held for 4 times for the current fiscal year. The Risk Committee grasps[English Translation]
58

company-wide risk and considers necessary measures.
The analysis and assessment is conducted under the classification of risks
as below.
① Large-scale calamity risk
③ System risk
⑤ Administrative work andaccounting risk
⑦ Infection risk

② Compliance risk
④ Service providing risk
⑥ Supply chain risk
⑧ SDGs related risk(5) System by which efficient execution of duties of Directors shall beensured[Basic Policy](i) The Board of Directors consists of Directors including Outside
Directors in an independent position. Based on the “Rules of the Boardof Directors,” the Board determines important matters stipulated in therelevant laws and regulations and makes decisions on corporate
management. The Board also oversees appropriate executions of theduties by Directors.
(ii) The Company introduces the system of Executive Officers aiming to
implement the execution of Directors’ duties efficiently.
(iii) The Company utilizes the information systems and secures its businessexpansion and stable and efficient operations.
(iv) The Company will share the medium and long-term business vision,and for the purpose of the accomplishment thereof, the Board of
Directors will design an annual business plan and deliberate theprogress of the plan.
[Status of Operation]
The Board of Directors consists of 9 Directors including 3 Outside
Directors. As a general rule, a meeting of the Board of Directors is held
once a month with the attendance of Directors as well as 5 Audit &Supervisory Board Members including 3 Outside Audit & Supervisory
Board Members. At a meeting of the Board of Directors, importantmanagement matters are deliberated and the status of execution of duties byDirectors is reported, based on the “Business Vision” of the Company, andthe Board of Directors strives for accurate and prompt decision-making. 28
Executive Officers including 6 Directors are making efforts to makedecisions and to execute their duties in a more expeditious manner. (Theabove officer structure is as of March 31, 2023.)
The Company conducts measures against cyberattacks, monitoring, regularinspections and reviews for stable operations of the information systems.

[English Translation]59

(6) System under which the group of enterprises consisting of theCompany and subsidiaries is ensured to properly execute its business(6-1) System under which the execution of duties by Directors, etc. andemployees of subsidiaries is ensured to comply with laws andregulations and the Articles of Incorporation[Basic Policy](i) Abiding by the “Constitution of SECOM’s Business and Operation,”each of the subsidiaries shares the “SECOM Group Code of Employee
Conduct,” which applies to all executives and employees. United bythese guidelines, the executives and employees work to accomplish thecorporate goals in an appropriate manner.
(ii) Each of the subsidiaries carries out IT controls in conformance withthe “Basic Policy of the SECOM Group for Information Security.” The
Company’s ICT Executive Officers conduct timely inspections
covering the IT management of major subsidiaries.
(iii) The “SECOM Group Management Committee,” which is chaired by
the Company’s President and Representative Director and whose
members are composed of the presidents of major subsidiaries andother parties appointed by the chairperson, works to ensure thatappropriate operations are carried out. It accomplishes this goal by
conducting discussions of issues related to the internal controls in aneffort to share Group information and operating philosophy. Where
necessary, the President and Representative Director reports the results
to the Board of Directors and the Audit & Supervisory Board.
(iv) The President and Representative Director of the Company issues
orders to the internal audit departments (Internal Audit andCompliance Department and Group Governance Department) toinspect subsidiaries, if necessary. The subsidiaries accept theinspection by the Company, and at the same time promote theunderstanding and improvement of compliance-related issues byexchanging information with the Company. Furthermore, theCompany establishes the whistle-blowing system “Group Head Office
Helpline” which enables executives and employees of subsidiaries todirectly report to the Company’s Group Governance Department,
whenever they become aware of any non-compliance. Pursuant to the“Basic Policy of the SECOM Group for Compliance” and the “Internal
Reporting Rules,” the Company will keep the reported mattersconfidential, and take necessary investigation and appropriate
measures. The reporter will suffer no disadvantage on the grounds ofsuch report.
(v) The Audit & Supervisory Board Members of the Company visit
major subsidiaries and conduct audits regarding internal controls.
(vi) The Company establishes a liaison meeting with Group Audit &Supervisory Board Members after discussion with its Audit &Supervisory Board in an attempt to share information.
(6-2) System under which the matters related to the execution of duties by[English Translation]
60

Directors, etc., of subsidiaries are reported to the Company[Basic Policy]
The Company establishes and implements the “Basic Rules for SECOM
Group Corporate Management,” which clarify the guidelines for the items
to be approved by the Company in advance and the items to be reported to
the Company.
(6-3) Rules and other systems for controlling risks of loss of subsidiaries[Basic Policy]
Pursuant to the “Meaning of the Risk Control and Risk Control Basic Policy
for SECOM and SECOM Group,” the subsidiaries develop risk control
systems. Furthermore, upon the occurrence of important events, thesubsidiaries will take appropriate measures under the Company’s control.
(6-4) System which ensures that Directors, etc., of the subsidiaries execute
their duties efficiently[Basic Policy](i) All Directors of the subsidiaries will efficiently carry out the operationand execution of business on the basis of the “Constitution of
SECOM’s Business and Operation.”(ii) The Company and the subsidiaries will formulate the annual businessplans based on the “Business Vision” of the SECOM Group, andconfirm the progress of the plans.

[Status of Operation]
Information on important compliance-related issues is brought together tothe Central Control Center. The Central Control Center communicates thatto the relevant departments and reports to the President and Representative
Director when necessary.
The President and Representative Director of the Company convened the“SECOM Group Management Committee Meetings” twice for the current
fiscal year and confirmed the progress of the business plans of thesubsidiaries. To enhance the subsidiaries’ corporate governance, Audit &Supervisory Board Members visited and interviewed the Group subsidiaries.
Also, to enhance the integration with the Group Audit & Supervisory Board
Members, etc., they held the “Liaison Meetings with Group Audit &Supervisory Board Members and the Internal Audit Departments of
SECOM Group” and the “Information Exchange Meetings.” Internal audit
departments inspect the subsidiaries as needed, and take appropriate steps
in collaboration with relevant sections and the subsidiaries in response to
any internal reports made through the “Group Head Office Helpline.”(7) Matters related to employees to assist duties of Audit & Supervisory
Board Members when Audit & Supervisory Board Members requests
to do so and matters related to the independence of such employees
from Directors and ensuring the effectiveness of the instructions of the
Audit & Supervisory Board Members[English Translation]
61

[Basic Policy](i) The Company establishes the system to assist audit duties, by
establishing the Office of Audit & Supervisory Board staffed by atleast two employees with the exclusive duties.
(ii) The assistants for the Audit & Supervisory Board Members may
conduct investigations necessary for the audit by the Audit &Supervisory Board Members, following the instructions of the Audit& Supervisory Board Members.
(iii) Transfer and evaluation of the assistants for the Audit & Supervisory
Board Members shall be determined upon the approval of the Audit &Supervisory Board. The assistants who received necessary instruction
on audit duties by Audit & Supervisory Board Members shall not be
subject to any instruction or order from Directors and Executive
Officers and employees with respect to the subject audit duties, nor be
obligated to report to them.
[Status of Operation]
The Company has established the Office of Audit & Supervisory Board
staffed by at least three designated employees who are familiar with theCompany’s internal affairs. The assistants for the Audit & Supervisory
Board Members carry out their duties following the instructions of the
Audit & Supervisory Board Members, and transfer and evaluation of theassistants shall be determined upon the approval of the Audit & Supervisory
Board.
(8) System under which any report is made to Audit & Supervisory Board
Members and system which ensures that the persons who made thereports will not be treated disadvantageously on the grounds of suchreports(8-1) System under which Directors and Accounting Advisors andemployees make any reports to the Audit & Supervisory Board
Members[Basic Policy](i) Upon discussion with the Audit & Supervisory Board, the following
matters shall be considered as the matters to be reported by Directors
to the Audit & Supervisory Board Members.
(1) matters resolved by the Organization Culture Committee andother committees;(2) matters likely to be materially harming the Company;(3) important matters relating to monthly business conditions;(4) important matters relating to internal audit and risk management;(5) material violation of laws and regulations or the Articles ofIncorporation; and(6) important matters from viewpoint of compliance.
(ii) Notwithstanding (i) above, the Audit & Supervisory Board Members
may, where necessary and in a timely manner, request that Directors
and employees make a report.

[English Translation]
62

(iii) The matters reported to the “Hot Helpline” will be reported to the Audit& Supervisory Board Members from the Internal Audit andCompliance Department.
(8-2) System under which persons executing duties as the subsidiary’s
Directors, Accounting Advisors, Audit & Supervisory Board Members,
Executive Officers, members who execute the business, etc., otherpersons equivalent to such persons, and employees, or any persons
receiving reports from these persons, make reports to the Audit &Supervisory Board Members[Basic Policy]
The matters reported to the “Group Head Office Helpline” will be reported
to the Audit & Supervisory Board Members from the Group Governance
Department.
(8-3) System which ensures that the persons who made the reports to Audit& Supervisory Board Members will not be treated disadvantageouslyon the grounds of such reports[Basic Policy]
Pursuant to the “Basic Policy of the SECOM Group for Compliance” andthe “Internal Reporting Rules,” the Company will keep the reported mattersconfidential, and promptly take necessary investigation and appropriate
measures, while the reporter will suffer no disadvantage on the grounds ofsuch report.
[Status of Operation]
Audit & Supervisory Board Members receive from the internal audit
departments, in addition to the matters to be reported by Directors to Audit& Supervisory Board Members pursuant to the basic policies of internal
control system, any matter internally reported through the whistle-blowing
system, namely, “Hot Helpline” and “Group Head Office Helpline,”appropriately. A system under which a person who made a report is nottreated disadvantageously has been complied with during the current fiscal
year.
(9) Matters regarding the policies for the procedures of the advancepayment or reimbursement of expenses incurred for the execution ofduties by the Audit & Supervisory Board Members and otherprocessing of expenses or debts incurred for the execution of suchduties[Basic Policy]
The Company bears the expenses incurred for the execution of duties by
the Audit & Supervisory Board Members.
[Status of Operation]
Budget for expenses that will arise in relation to the execution of duties by
Audit & Supervisory Board Members are determined by resolution of the
Audit & Supervisory Board and reported to the Board of Directors. These
expenses are paid by the Company.

[English Translation]63

(10) System under which audit by Audit & Supervisory Board Members is
ensured to be performed efficiently[Basic Policy](i) The Company establishes the system under which the Audit &Supervisory Board shall regularly hold meetings with the President andRepresentative Director and the Accounting Auditor, to exchange
opinions so that audits shall be performed efficiently.
(ii) The Audit & Supervisory Board Members attend the meetings of theBoard of Directors, attend important meetings to exchange opinions
regarding overall management-related matters, if necessary, andconduct periodical interviews with Directors and employees of theCompany and the subsidiaries.
(iii) The Company ensures that the Audit & Supervisory Board may retain
attorneys-at-law at its discretion and, if necessary, have opportunities
to retain and consult professional accountants with respect to theiraudit duties.
[Status of Operation]
During the current fiscal year, Audit & Supervisory Board Members held
10 meetings with the President and Representative Director and 16
meetings with Accounting Auditors to exchange opinions. In addition,
Audit & Supervisory Board Members attend meetings of the Board of
Directors and other important meetings to exchange opinions, and conduct
interviews with Directors and employees of the Company and its
subsidiaries on a regular basis.
2. Result of Evaluation of the Board of Directors

The Company has conducted the evaluation of the Board of Directors through thequestionnaires to Directors and Audit & Supervisory Board Members. As a result,it was confirmed that the diversity of the Board of Directors is secured in terms
of appointment of a female Director among others and the Board has appropriate
number of Directors, and also the Outside Directors are actively expressing theiropinions and thus the business execution and the oversight of the management
are well-balanced. Meanwhile, there were constructive suggestions prompting
further development of debate from a medium- to long-term perspective on
subjects including specific discussion on major direction of business strategy inconsideration of changes in the social environment, changes in the businessenvironment resulting from technological innovations as well as a decrease in theworking-age population and the risks associated therewith.

[English Translation]64

Consolidated Balance Sheet(As of March 31, 2023)(Millions of Yen)ITEM
ASSETSAMOUNT

Current assets:
Cash on hand and in banks
Cash deposits for armored car services
Notes and accounts receivable - tradeand contract assets
Due from subscribers
Short-term investments
Lease receivables and investment in leased
assetsMerchandise and products
Real estate inventories
Work in process
Raw materials and supplies
Short-term loans receivable
Other
Allowance for doubtful accounts

1,007,547
522,396
135,459
157,475

Fixed assets:
Tangible assets:
Buildings and improvements, net
Machinery and equipment andAutomobiles, net
Security equipment and control stations, net
Tools, furniture and fixtures, net
LandConstruction in progress

981,515
403,837
150,733
9,374

Intangible assets:
Software
Goodwill
Other132,772
21,01970,496
41,256

Investments and others:
Investment securities
Long-term loans receivable
Lease deposits
Long-term prepaid expenses
Net defined benefit asset
Deferred income taxes
Other
Allowance for doubtful accounts

444,905
298,364
25,692
18,57916,45055,551
27,426
13,740(10,900)

TOTAL ASSETS

43,503
26,325
41,12017,361
4,146
5,707
18,482
2,408
35,324(2,163)75,65024,219123,358
20,502

1,989,062[English Translation]
65

ITEM
LIABILITIESCurrent liabilities:
Notes and accounts payable, trade
Bank loans
Current portion of straight bonds
Lease obligations
Payables – otherAccrued income taxes
Accrued consumption taxes
Accrued expenses
Deposits received for armored car services
Deferred revenue
Accrued bonuses
Provision for losses on construction
contracts
Other

Long-term liabilities:
Straight bonds
Long-term loans
Lease obligations
Guarantee deposits received
Deferred income taxes
Accrued retirement benefits for
directors and audit and supervisoryboard members
Net defined benefit liability
Long-term deferred revenue
Investment deposits by policyholders,
unearned premiums and other insurance
liabilities
Other

Total liabilities
NET ASSETS
Shareholders’ equity:
Common stock
Capital surplus
Retained earnings
Common stock in treasury, at cost
Accumulated other comprehensive income(losses):
Unrealized gains on securities
Deferred losses on hedges
Foreign currency translation
adjustments
Remeasurements of defined benefit plans,
net of taxes
Noncontrolling interests:
Total net assets
TOTAL LIABILITIESAND NET ASSETSAMOUNT
377,482
46,98529,085407
4,704
44,551
22,762
8,549
11,312
118,943
37,73019,6532,312
30,482295,533
3,081
12,34914,657
23,662
10,906829

23,935
16,121
186,033

3,955

673,015
1,128,343
66,42770,3491,100,791(109,224)
36,081
18,771(3)
10,497
6,815
151,621
1,316,047
1,989,062

Consolidated Statement of Income(Fiscal Year from April 1, 2022 to March 31, 2023)(Millions of Yen)ITEM

AMOUNT

Revenue
Costs of revenue
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income:Interest income
Dividends income
Gain on sales of investment securities
Net gains from investment in affiliated companies
accounted for under the equity method
Gain on private equity investments
Other
Non-operating expenses:
Interest expenses
Loss on sales of investment securities
Loss on sales and disposal of fixed assets
Provision of allowance for doubtful accounts
Other
Ordinary profit
Extraordinary profit:
Gain on sales of fixed assets
Gain on sales of investment securities
Other
Extraordinary losses:
Impairment losses on fixed assets
Loss on revaluation of investment securities
Net losses on disposal of fixed assets
Loss on sales of investment securities
in subsidiaries and affiliates
Other
Income before income taxes
Income taxes - current
Income taxes - deferred
Net income
Net income attributable to noncontrolling interests
Net income attributable to owners of the parent[English Translation]
66

1,101,307
758,850
342,456
205,756
136,700
1,595
783
1,567
7,886
7,508
3,985

23,326

869
202
1,596
11
1,222

3,903
156,124

2,045
341
87

2,474

3,182
506
323
223
995
44,7502,490

5,230
153,367
47,241
106,126
10,04096,085

Consolidated Statement of Changes in Net Assets(Fiscal Year from April 1, 2022 to March 31, 2023)(Millions of Yen)
Shareholders’equityCommon stock

Capitalsurplus

CommonTotal

Retainedstock inshareholders’earnings

treasury, at

equitycost
Balance at the beginning of the
fiscal year
Changes during the fiscal year:
Issuance of new stocks
Cash dividends
Net income attributable toowners of the parent
Purchase of treasury stock
Disposal of treasury stock
Changes in shares of parent
arising from transactions
with non-controllinginterest
Net changes of items otherthan shareholders’equityTotal changes during the fiscal
year
Balance at the end of the fiscal
year

66,41970,3357

7

1,043,766(79,436)

1,101,084(39,060)

15(39,060)

96,08596,085(29,788)00
6(29,788)
0
6

7

14

57,025(29,788)

27,25866,42770,3491,100,791(109,224)

1,128,343(Millions of Yen)
Accumulated other comprehensive income (losses)
Total
Unrealized gains Deferred gains

Balance at the beginning of the
fiscal year
Changes during the fiscal year:
Issuance of new stocks
Cash dividends
Net income attributable toowners of the parent
Purchase of treasury stock
Disposal of treasury stock
Changes in shares of parent
arising from transactions
with non-controllinginterest
Net changes of items otherthan shareholders’ equity
Total changes during the fiscal
year
Balance at the end of the fiscal
year

Foreign

Remeasure-accumulated

currency

ments of definedother(losses) on(losses) on

translation

benefit plans,

comprehen-securities

hedgesadjustments

net of taxes

sive income(5,627)

6,865

21,451

20,220(6)

Noncontrolling interests Total net assets

133,499

1,256,036
15(39,060)
96,085(29,788)0
6(1,448)3

16,125(49)

14,62918,12132,751(1,448)3

16,125(49)

14,62918,12160,01018,771(3)

10,497

6,815

36,081

151,621

1,316,047[English Translation]67

Non-Consolidated Balance Sheet(As of March 31, 2023)(Millions of Yen)ITEM
ASSETSAMOUNTITEM
LIABILITIESAMOUNT

Current assets:
Cash on hand and in banks
Cash deposits for armored car
services
Notes receivable
Due from subscribers
Accounts receivable-trade andcontract assets
Receivables – other
Merchandise
Supplies
Prepaid expenses
Short-term loans receivable
Other
Allowance for doubtful accounts

316,931 Current liabilities:
214,287
Accounts payable
32,088Bank loans
Lease obligations
388
Payables – other
18,722
Payables – construction
11,934
Accrued income taxes
Accrued consumption taxes
4,479
Accrued expenses
7,265
Deposits received for armored car
2,263
services
9,521
Deferred revenue
13,786
Accrued bonuses
2,232
Allowance for loss on contracts
(38)
Other

106,060
4,183
16,180284
16,719
4,749
9,973
2,898
753
15,907

Fixed assets:
Tangible assets:
Buildings and improvements
Automobiles
Security equipment and control
stations
Machinery and equipment
Tools, furniture and fixtures
Land
Construction in progress
Other

675,949 Long-term liabilities:
117,703
Lease obligations
15,569
Guarantee deposits received
589
Long-term deferred revenue
69,670Accrued pension and severance
costs
121
Other
3,776
22,1594,398
Total liabilities
1,419
NET ASSETS
12,316
7,104 Shareholders’ equity:
Common stock
5,211
Capital surplus:
Additional paid-in capital
545,929
Other capital surplus
26,762Retained earnings:
420,624
Legal reserve
Other retained earnings:
2,179
Reserve for systemdevelopments
32,483General reserve
7,578
Accumulated earnings carried
11,562
forward34,006
Common stock in treasury, at cost
3,849
4,298 Valuation, translation
adjustments and others:
3,244
Unrealized gains on securities(660)

26,512
3,543
15,823
6,138
687

Intangible assets:
Software
Other
Investments and others:
Investment securities
Investment securities insubsidiaries and affiliates
Investments in subsidiaries andaffiliates
Long-term loans receivable
Lease deposits
Long-term prepaid expenses
Prepaid pension and severance
costs
Deferred income taxes
Insurance funds
Other
Allowance for doubtful accounts

TOTAL ASSETS

992,881[English Translation]
68

Total net assets
TOTAL LIABILITIESAND NET ASSETS

22,615
6,299
1,141
4,352

320

132,572

853,718
66,42786,536
83,1033,432
809,979
9,028
800,951
800
2,212
797,939(109,224)
6,589
6,589

860,308
992,881Non-Consolidated Statement of Income(Fiscal Year from April 1, 2022 to March 31, 2023)(Millions of Yen)ITEM

AMOUNT

Revenue
Costs of revenue
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income:Interest income
Dividends income
Other
Non-operating expenses:
Interest expenses
Loss on sales and disposal of fixed assets
Payment for disaster
Other
Ordinary profit
Extraordinary profit:
Gain on sales of investment securities
Reversal of allowance for doubtful accounts
Other
Extraordinary losses:
Loss on revaluation of investment securities insubsidiaries and affiliates
Other
Income before income taxes
Income taxes - current
Income taxes - deferred
Net income[English Translation]
69

391,570
232,887
158,683
84,067
74,615546
19,832
507
118
1,348
305
476

242
213
8

20,887

2,247
93,255

463

2,029
154
21,421
1,462

2,184
91,53422,88368,651

Non-Consolidated Statement of Changes in Net Assets(Fiscal Year from April 1, 2022 to March 31, 2023)(Millions of Yen)
Shareholders’ equity
Capital surplus
Common stock Additional paidin capital
Balance at the beginning of the
fiscal year
Changes during the fiscal year:
Issuance of new stocks
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Net changes of items otherthan shareholders’ equity
Total changes during the
fiscal year
Balance at the end of the
fiscal year

66,41983,095

7

7

Other capitalsurplus

Total capitalsurplus3,432

86,528

7

0

0

7

7

0

7

66,427

83,103

3,432

86,536(Millions of Yen)
Shareholders’ equity
Retained earnings
Other retained earnings

Balance at the beginning of
the fiscal year
Changes during the fiscal year:
Issuance of new stocks
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Net changes of items otherthan shareholders’ equity
Total changes during the
fiscal year
Balance at the end of the fiscal
year

Legal
reserve

Reservefor systemdevelopments

Generalreserve

Accumulated Total retained
earnings
earnings
carriedforward

9,028

800

2,212

768,348780,388(39,060)
68,651(39,060)
68,651---

29,59029,590

9,028

800

2,212

797,939809,979[English Translation]
70

(Millions of Yen)
Shareholders’ equity

Valuation, translation
adjustments and others

Common stock
Total
Unrealizedin treasury, at shareholders’ gains (losses)
costequityon securities

Balance at the beginning of the
fiscal year
Changes during the fiscal year:
Issuance of new stocks
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock(79,436)

853,900(29,788)0

15(39,060)
68,651(29,788)0

Net changes of items otherthan shareholders’ equity
Total changes during the fiscal
year(29,788)

Balance at the end of the fiscal
year(109,224)[English Translation]
71

6,049

Total
valuation,translation
adjustments
and others

Total net
assets6,049

859,950
15(39,060)
68,651(29,788)
0

539

539

539

(181)

539

539

358

853,718

6,589

6,589

860,308

Accounting Auditor’s Report (Consolidated)
Independent Auditor’s Report
May 19, 2023
The Board of Directors of SECOM Co., Ltd.:KPMG AZSA LLC
Tokyo Office, Japan
Michitaka Shishido(Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Takashi Hasumi(Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Shuji Ezawa(Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the consolidated financial statements, which comprise the consolidatedbalance sheet, the consolidated statement of income, the consolidated statement ofchanges in net assets and the related notes of SECOM Co., Ltd. (“the Company”) andits consolidated subsidiaries (collectively referred to as “the Group”), as at March 31,
2023 and for the year from April 1, 2022 to March 31, 2023 in accordance with Article
444-4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, inall material respects, the consolidated financial position and the results of operations of
the Group for the period, for which the consolidated financial statements were prepared,in accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted inJapan. Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Consolidated Financial Statements section of ourreport. We are independent of the Group in accordance with the ethical requirementsthat are relevant to our audit of the consolidated financial statements in Japan, and wehave fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

[English Translation]
72

Other Information
The other information comprises the business report and its supplementary schedules.
Management is responsible for the preparation and presentation of the otherinformation. Corporate auditors and the board of corporate auditors are responsible foroverseeing the directors’ performance of their duties with regard to the design,
implementation and maintenance of the reporting process for the other information.
Our opinion on the consolidated financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of Management and Corporate Auditors and the Board of
Corporate Auditors for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with accounting principles generally accepted inJapan, and for such internal control as management determines is necessary to enable
the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible forassessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern in accordance with accounting principles generally
accepted in Japan.
Corporate auditors and the board of corporate auditors are responsible for overseeing
the directors’ performance of their duties with regard to the design, implementation andmaintenance of the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated
financial statements as a whole are free from material misstatement, whether due tofraud or error, and to issue an auditor’s report that includes our opinion. Misstatements
can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan,
we exercise professional judgment and maintain professional skepticism throughout theaudit. We also: Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The selection and application of audit procedures[English Translation]73

depends on the auditor’s judgment.
 Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, while the objective of theaudit is not to express an opinion on the effectiveness of the Group’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s
ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
 Evaluate whether the presentation and disclosures in the consolidated financial
statements are in accordance with accounting standards generally accepted in Japan,
the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial
statements represent the underlying transactions and events in a manner that achieves
fair presentation.

 Obtain sufficient appropriate audit evidence regarding the financial information of
the entities or business activities within the Group to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervisionand performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with corporate auditors and the board of corporate auditors regarding,among other matters, the planned scope and timing of the audit, significant audit
findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide corporate auditors and the board of corporate auditors with a statementthat we have complied with relevant ethical requirements regarding independence, andcommunicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the
Company and its subsidiaries which are required to be disclosed pursuant to theprovisions of the Certified Public Accountants Act of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent
Auditor’s Report as required by the Companies Act for the conveniences of the reader.

[English Translation]74

Accounting Auditor’s Report (Non-Consolidated)
Independent Auditor’s Report
May 19, 2023
The Board of Directors of SECOM Co., Ltd.:KPMG AZSA LLC
Tokyo Office, Japan
Michitaka Shishido(Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Takashi Hasumi(Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Shuji Ezawa(Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the financial statements, which comprise the balance sheet, thestatement of income, the statement of changes in net assets and the related notes, andthe accompanying supplementary schedules (“the financial statements and theaccompanying supplementary schedules”) of SECOM Co., Ltd. (“the Company”) as at
March 31, 2023 and for the year from April 1, 2022 to March 31, 2023 in accordancewith Article 436-2-1 of the Companies Act.
In our opinion, the financial statements and the accompanying supplementary schedules
referred to above present fairly, in all material respects, the financial position and theresults of operations of the Company for the period, for which the financial statements
and the accompanying supplementary schedules were prepared, in accordance withaccounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted inJapan. Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements and the Accompanying
Supplementary Schedules section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the financial
statements in Japan, and we have fulfilled our other ethical responsibilities inaccordance with these requirements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

[English Translation]
75

Other Information
The other information comprises the business report and its supplementary schedules.
Management is responsible for the preparation and presentation of the otherinformation. Corporate auditors and the board of corporate auditors are responsible foroverseeing the directors’ performance of their duties with regard to the design,
implementation and maintenance of the reporting process for the other information.
Our opinion on the financial statements and the accompanying supplementary schedules
does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements and the accompanying
supplementary schedules, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with thefinancial statements and the accompanying supplementary schedules or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Corporate Auditors and the Board of
Corporate Auditors for the Financial Statements and the Accompanying
Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial
statements and the accompanying supplementary schedules in accordance withaccounting principles generally accepted in Japan, and for such internal control as
management determines is necessary to enable the preparation of financial statements
and the accompanying supplementary schedules that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements and the accompanying supplementary schedules,
management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern in accordance withaccounting principles generally accepted in Japan.

Corporate auditors and the board of corporate auditors are responsible for overseeing
the directors’ performance of their duties with regard to the design, implementation andmaintenance of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements and the
Accompanying Supplementary Schedules
Our objectives are to obtain reasonable assurance about whether the financial statements
and the accompanying supplementary schedules as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial
statements and the accompanying supplementary schedules.
As part of our audit in accordance with auditing standards generally accepted in Japan,
we exercise professional judgment and maintain professional skepticism throughout the[English Translation]76

audit. We also: Identify and assess the risks of material misstatement of the financial statements andthe accompanying supplementary schedules, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The selection andapplication of audit procedures depends on the auditor’s judgment.
 Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, while the objective of theaudit is not to express an opinion on the effectiveness of the Company’s internal
control.
 Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements and the accompanying supplementaryschedules or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’sreport. However, future events or conditions may cause the Company to cease tocontinue as a going concern.

 Evaluate whether the presentation and disclosures in the financial statements and theaccompanying supplementary schedules are in accordance with accounting standards
generally accepted in Japan, the overall presentation, structure and content of thefinancial statements and the accompanying supplementary schedules, including thedisclosures, and whether the financial statements and the accompanying
supplementary schedules represent the underlying transactions and events in amanner that achieves fair presentation.
We communicate with corporate auditors and the board of corporate auditors regarding,among other matters, the planned scope and timing of the audit, significant audit
findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide corporate auditors and the board of corporate auditors with a statementthat we have complied with relevant ethical requirements regarding independence, andcommunicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the
Company which are required to be disclosed pursuant to the provisions of the Certified
Public Accountants Act of Japan.
Notes to the Reader of Independent Auditor’s Report:
This is an English translation of the Independent Auditor’s Report as required by theCompanies Act of Japan for the conveniences of the reader.

[English Translation]
77

Audit & Supervisory Board’s Report
Audit Report
Mr. Ichiro Ozeki
President and Representative Director
SECOM Co., Ltd.

May 19, 2023

Audit & Supervisory Board of
SECOM Co., Ltd.
Takayuki Ito (Seal)
Audit & Supervisory Board
Member (Full-time)
Koji Kato (Seal)
Audit & Supervisory Board
Member (Full-time)
Hideki Kato (Seal)
Outside Audit & Supervisory
Board Member
Makoto Yasuda (Seal)
Outside Audit & Supervisory
Board Member
Setsuo Tanaka (Seal)
Outside Audit & Supervisory
Board Member

The Audit & Supervisory Board has received the audit reports of theperformance of duties of the Directors during the 62nd business term from April
1, 2022 through March 31, 2023 from each of the Audit & Supervisory Board
Members. After deliberating such reports, we have prepared this Audit Reportand report as follows:
1. Method and Details of Audit Performed by Audit & Supervisory Board

Members and the Audit & Supervisory Board(1) The Audit & Supervisory Board has established the audit policy and audit
plan for the current fiscal year, received reports on the status and results ofaudits from each Audit & Supervisory Board Member, received reports on
the status of execution of duties from Directors, etc. and the Accounting
Auditor, and requested explanations when necessary.

[English Translation]78

(2) Each of the Audit & Supervisory Board Members, in accordance with the
Audit & Supervisory Board audit standards determined by the Audit &Supervisory Board, and following the audit policy, audit plan, etc. worked tocommunicate with Directors, the internal audit division and other employees,
etc., and along with making efforts to gather information and establish theaudit environment, performed the audit using the following methods.
(i) Each Audit & Supervisory Board Member attended the meetings of theBoard of Directors and other important meetings, received reports fromthe Directors and other managers, etc. on their duties, requested
explanations when necessary, inspected documents concerning matterssuch as important decisions, and investigated the conditions of thebusiness and financial conditions at the head office and the principal
offices. Also, each Audit & Supervisory Board Members worked tocommunicate and exchange information with Directors and Audit &Supervisory Board Members of subsidiaries, receiving reports fromsubsidiaries when necessary.
(ii) The Audit & Supervisory Board Members, on a regular basis, received
reports from Directors and employees, etc. on the establishment andoperation of the system (internal control system) based on the resolutionof the Board of Directors as stipulated in Article 100, Paragraph 1 orParagraph 3 of the Companies Act Enforcement Order to ensure thesystem under which the execution of duties by Directors is ensured tocomply with laws and regulations and the Articles of Incorporation andto ensure the system under which the group of enterprises consisting of
the Company and its subsidiaries is ensured to properly execute its
business, both of which are on the Business Report, obtained explanationfrom them, and expressed opinions when necessary.
(iii) The Audit & Supervisory Board Members received reports from Directors,
etc. and the Accounting Auditor on the status of discussions between themand the status of evaluation and audit of the internal control on financial
reporting, and requested explanations as necessary.
(iv) In addition to monitoring and examining whether the Accounting Auditor
maintained independence and performed auditing appropriately, theAudit & Supervisory Board Members received reports from the
Accounting Auditor on the execution of their duties and requested
explanations when necessary. The Audit & Supervisory Board received
notice from the Accounting Auditor that “The systems for ensuring theproper execution of duties” (set forth in each Item of Article 131 of theOrdinance for Corporate Accounting) is organized in accordance with the“Standards for Quality Control of Audit” (Business Accounting Council,
October 28, 2005) and other relevant standards, and sought explanations
when necessary.

[English Translation]
79

Based on the above methods, the Audit & Supervisory Board has
considered the Business Report and its supplementary schedules, the financial
statements (balance sheet, statement of income, statement of changes in net assets
and related notes) and its supplementary schedules, and the consolidated financial
statements (consolidated balance sheet, consolidated statement of income,consolidated statement of changes in net assets and related notes) for the current
fiscal year.
2. Result of audit(1) Result of audit of business report etc.
i)The Business Report and supplementary schedules fairly represent thecondition of the Company in accordance with laws and regulations and the
Articles of Incorporation of the Company.
ii) We have determined that there were no serious occurrences of misconduct
or violations of any laws or regulations or the Articles of Incorporation of
the Company by any of the Directors in carrying out their duties.
iii) We believe the contents of the resolution of the Board of Directors
regarding the internal control system are appropriate. We found no mattersto note regarding the execution of duties of Directors regarding the internal
control system, as well as the internal control system regarding financial
reporting.
(2) Result of audit of financial statements and supplementary schedules

In our opinion, the audit procedures and audit results of the Accounting
Auditor KPMG AZSA LLC are appropriate.
(3) Result of audit of consolidated financial statements

In our opinion, the audit procedures and audit results of the Accounting
Auditor KPMG AZSA LLC are appropriate.
Notes to the Reader of Audit Report:
This is an English translation of the Audit Report as required by the Companies Act ofJapan for the conveniences of the reader.

End[English Translation]
80