Notice of Convocation
The 60th Ordinary General Meeting of Shareholders

The following is an English translation of the Notice of Convocation of the60th Ordinary General Meeting of Shareholders of SECOM CO., LTD. to beheld on June 25, 2021, 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]
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Table of Contents
Notice of Convocation of The 60th 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]
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Stock Exchange Code: 9735
June 3, 2021

Notice of Convocation of
The 60th Ordinary General Meeting of Shareholders
Dear Shareholders:
Secom Co., Ltd. (the “Company”) hereby notifies you as follows that the60th Ordinary General Meeting of Shareholders of the Company will be held as
described below.
After careful consideration from the perspective of avoiding the riskof COVID-19 infections, we have decided to hold the General Meeting of
Shareholders with adequate infection prevention measures.
We strongly recommend that shareholders exercise their voting
rights in advance by mail or via the Internet instead of attending the meetingin person.
For those who do not attend the General Meeting of Shareholders inperson, a live streaming of its proceedings will be available on the Internet(for more information, please refer to the attachment).
Please exercise your voting rights by mail or via the Internet on or
before 6:00 p.m. (JST) June 24, 2021 (Thursday) after studying theReference 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
your approval or disapproval to the proposals on the agenda, and returnthe 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 thedisplay 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[English Translation]
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(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]
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PARTICULARS
1.

Date and Time of the Meeting:
Friday, June 25, 2021 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 60th Fiscal Year (from April 1, 2020 to March
31, 2021) 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 60th
Fiscal Year (from April 1, 2020 to March 31, 2021).
Matters to be Resolved upon:First Item of Business:
Second Item of Business:
Third Item of Business:

4.

Proposed Distribution of Surplus
Election of Eleven (11) Directors
Revision of Remuneration Payable
to Directors Enabling Restricted
Stock to be Granted to Directors

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 three (3) days prior to thedate of the General Meeting of 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.

[English Translation]
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(Internet disclosure)
Following matters are made available on the Company’s website
pursuant to the relevant laws and ordinances, and Article 16 of the
Articles of Incorporation of the Company and are not included in the
Attached Documents.
1) “Notes to Consolidated Financial Statements” in theConsolidated Financial Statements2) “Notes to Non-Consolidated Financial Statements” in
the Non-Consolidated Financial Statements
The Company’s Website: https://www.secom.co.jp/english/ir/(on the “Investor Relations” section)

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 the Notes to Consolidated Financial
Statements and the Notes to Non-Consolidated Financial Statements
available on the Company’s Website.
(Note)
1) If you plan to attend the Meeting, please submit the enclosed
Voting Rights Exercise Form to the receptionist at the Meeting.
2) In order to avoid the risk of COVID-19 infections at the meeting,
we will take the following measures at the General Meeting of
Shareholders. Your understanding and cooperation will be greatly
appreciated.
・Our administrative staff of the General Meeting of Shareholders
will make sure that they will be in good health condition by, forexample, measuring their body temperature and wearing masks whileworking.
・We will measure your body temperature near the entrance to thevenue, and alcohol disinfectant will be available near the reception
desk. You are also asked to bring and wear a mask.
・If you have a fever (37.5ᵒC or higher) or otherwise appear to befeeling unwell, you may be asked by the administrative staff to refrainfrom entering the venue.
・Regarding the filming of the proceedings of the meeting for live
streaming, the staff will make efforts to avoid filming the appearanceof the attending shareholders, but these efforts may not always be
successful. In addition, if you make a comment, your voice will berecorded and streamed. Your understanding is requested in advance.
・If we decide to change the infection prevention measures outlined
above due to the status of the spread of infection or the announcementof the government through the date of the General Meeting of[English Translation]
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Shareholders, the change will be notified on the website of theCompany on the Internet.

(Notice)
If there are any amendments to the contents of the Reference
Document Concerning the General Meeting of Shareholders, theBusiness Report, the Consolidated Financial Statements and the NonConsolidated Financial Statements, the Company will announce such
amendments on the “Investor Relations” section of the Company’s
website:(https://www.secom.co.jp/english/ir/).

[English Translation]
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Reference Document Concerning the General Meeting of Shareholders
Proposal and Reference Items
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 85 per share. A total amount of dividend per share,
together with the interim dividend of YEN 85 per share, will be YEN 170.
Matters related to the year-end dividend:(1)
Kind of assets distributed:
Cash(2)Matter related to distribution of cash and total amount:
YEN 85 per share of common stock of the Company
The total amount:
YEN 18,552,215,685(3)Effective date for distribution of surplus:
June 28, 2021

[English Translation]
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Second Item of Business:

Election of Eleven (11) Directors

The term of office of all of the eleven (11) Directors will expire at theclose of this Meeting. In connection therewith, we would like to ask shareholders
to elect eleven (11) Directors.
The candidates are as follows:
No.

Name

GenderCurrent
Position at theCompany
Supreme Advisorand Director

1Re-election

Makoto Iida

Male

2

Re-election

Yasuo Nakayama

Male

3

Re-election

Ichiro Ozeki

Male

4

Re-election

Yasuyuki Yoshida

Male

Senior Executive
Director

5

Re-election

Tatsuro Fuse

Male

Executive
Director

6

Re-election

Tatsuya Izumida

Male

Director

7

Re-election

Tatsushi Kurihara

Male

Director

8

Re-election

Takaharu Hirose

OutsideDirector

Independent
Officer

Male

Outside Director

9

Re-election

Hirobumi Kawano

OutsideDirector

Independent
Officer

Male

Outside Director

10

Re-election

Hajime Watanabe

OutsideDirector

Independent
Officer

Male

Outside Director

11

Re-election

Miri Hara

OutsideDirector

Independent
Officer

FemaleOutside Director[English Translation]
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Chairman and
Representative
Director
President andRepresentative
Director

Candidate
Number1

Makoto Iida

Re-election(Date of birth: April 1, 1933)

Brief History, Position, Responsibility, and Important Position of Other Organizations
Concurrently Assumed, if any
Jul 1962
President and Representative Director (Founder)
Feb 1976 Chairman and Representative Director
Jun 1997 Supreme Advisor and Director (currently)
Reasons for Election
Mr. Makoto Iida established the current SECOM group as the founder of the Company,and gives guidance and advice on overall management from the long-term and wide rangeof viewpoints. In the light of continuous enhancement of the corporate value, we would
like to ask shareholders to elect him as Director.

Candidate
Number2

Yasuo Nakayama*

Number of Sharesof the Company
Owned
4,242,238
sharesRe-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)<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 Director of
the Company since June 2019, after President and Representative Director in May 2016.
Following the assumption of the office of Representative Director, he has achieved steady
growth for the Company from a viewpoint of mid- and long-term time span. Additionally,as Chairman of All Japan Security Association, he has made a contribution to foster thedevelopment of the industry. In the light of continuous enhancement of the corporate
value, we would like to ask shareholders to elect him as Director.

[English Translation]
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Number of Sharesof the Company
Owned
5,827 shares

Candidate
Number3

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)

Number of Sharesof the Company
Owned
300,965 shares

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 holds a high level of knowledge andexperience in overall management of the security services business. Following theassumption of the office of President and Representative Director in June 2019, heworked to strengthen the business 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 and management ability. He also has carried out steadily
management reformation from a viewpoint of mid- and long-term targets. In the light ofcontinuous enhancement of the corporate value, we would like to ask shareholders toelect him as Director.
Candidate
Number4

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)
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.

[English Translation]
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Number of Sharesof the Company
Owned
3,805 shares

Candidate
Number5

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)

Number of Sharesof the Company
Owned
3,806 shares<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.

Candidate
Number6

Tatsuya Izumida*

Re-election(Date of birth: November 3, 1960)

Brief History, Position, Responsibility, and Important Position of Other Organizations
Concurrently Assumed, if any
Mar 1986 Joined SECOM Co., Ltd.
Jun 2003
Executive Director, Secom Information System Co., Ltd. (presently
Secom Trust Systems Co., Ltd.)Jul 2009
General Manager, Training Department
May 2010 General Manager, Human Resource Department
Oct 2012 Executive Officer
Jun 2014
President and Representative Director, Secom Trust Systems Co., Ltd.
Dec 2015 Managing Executive Officer
Jun 2016 Director (currently)
Reasons for Election
Mr. Tatsuya Izumida, as Director of the Company, has broad and longstanding businessexperience in the security services business and has engaged in the BPO and ICT services
business of the SECOM Group. Thus, he possesses an abundance of experience and ahigh level of knowledge in overall management of our business including the security
services business and the BPO and ICT services business. In the light of continuous
enhancement of the corporate value, we would like to ask shareholders to elect him as
Director.

[English Translation]
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Number of Sharesof the Company
Owned
1,658 shares

Candidate
Number7

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)

Number of Sharesof the Company
Owned
1,058 shares

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 overall administrative business including thegeneral affairs and human resources divisions. He also has a high level of knowledge inoverall management including sustainability, ESG and SDGs of the SECOM group. In
the light of continuous enhancement of the corporate value, we would like to ask
shareholders to elect him as Director.

Candidate
Number8

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, and assumed
ChairmanApr 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]
13

Number of Sharesof the Company
Owned
0 sharesCandidate
Number9

Re-election

Hirobumi Kawano

Candidate for Outside Director(Date of birth: January 1, 1946)

Candidate for Independent Officer

Brief History, Position, Responsibility, and Important Position of Other Organizations
Concurrently Assumed, if any
Jul 1969
Joined Ministry of International Trade and Industry (MITI) (presently
Ministry of Economy, Trade and Industry (METI))
Jun 1995
Director-General, Petroleum Department, Agency for Natural Resources
and Energy, MITI
Aug 1996 Deputy Director-General, Machinery Information Industries Bureau, MITI
Jun 1998
Director-General, Basic Industries Bureau, MITI
Sep 1999 Commissioner, Agency for Natural Resources and Energy, MITI
Sep 2002 Advisor, The Tokio Marine and Fire Insurance Co., Ltd. (presently Tokio
Marine & Nichido Fire Insurance Co., Ltd.)Jun 2003
Outside Director, Sony Corporation (presently Sony Group Corporation)
Aug 2004 Senior Managing Executive Officer, JFE Steel Corporation
Apr 2008 President, Japan Oil, Gas and Metals National Corporation
Jun 2016
Director, SECOM Co., Ltd. (currently)
Jun 2018
Outside Audit & Supervisory Board Member, San-Ai Oil Co., Ltd.
(currently)<Important Position of Other Organizations Concurrently Assumed>
Outside Audit & Supervisory Board Member, San-Ai Oil Co., Ltd.
Reasons for Election and Outline of Expected Role
Mr. Hirobumi Kawano has a career in important positions at the government offices suchas the Ministry of International Trade and Industry (presently Ministry of Economy,
Trade and Industry) and the Agency for Natural Resources and Energy as well as in theprivate sector such as Japan Oil, Gas and Metals National Corporation. As a member ofthe Board of Directors, he has provided advice and recommendations from a diverse
perspective on key directions of management as well as on business in general and theexecution and risk management of overseas projects in particular. As he has played an
appropriate role as Outside Director including the supervision of business execution, in
the light of continuous enhancement of the corporate value, we would like to ask
shareholders to elect him as Outside Director. After the election, he is expected tocontinue to play the role mentioned above.

[English Translation]
14

Number of Sharesof the Company
Owned
0 sharesCandidate
Number10

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.
(currently)
Jun 2016
Director, SECOM Co., Ltd. (currently)

Number of Sharesof the Company
Owned
1,100 shares<Important Position of Other Organizations Concurrently Assumed>
President 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.
Candidate
Number11

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)<Important Position of Other Organizations Concurrently Assumed>
Representative Certified Public Tax Accountant of Tax Corporation Yokohama
Benten Accounting, Inc.
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
insight accumulated 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. As she has played an appropriate role as Outside Director including thesupervision of business execution, in the light of continuous enhancement of thecorporate value, we would like to ask shareholders to elect her as Outside Director. Afterthe election, she is expected to continue to play the role mentioned above.

[English Translation]
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Number of Sharesof the Company
Owned
0 shares(Notes)
1.
2.
3.

4.

5.

6.

7.

8.

9.

10.

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, Hirobumi Kawano, Hajime Watanabe and Ms. Miri Haraare candidates for Outside Directors. The designation of Messrs. Takaharu Hirose,
Hirobumi Kawano, Hajime Watanabe and Ms. Miri Hara as Independent Officers
has been filed with Tokyo Stock Exchange, Inc.
On February 16, 2017, Watanabe Pipe Co., Ltd. of which Mr. Hajime Watanabe isRepresentative Director received a cease and desist order and a surcharge payment
order from the Japan Fair Trade Commission for violating the Act Concerning
Prohibition of Private Monopolization and Maintenance of Fair Trade(Antimonopoly Act) in connection with a construction work related to horticultural
facility placed order by local public body and the like in the designated areas of
Miyagi prefecture or Fukushima prefecture as construction sites.
The number of years during which Mr. Takaharu Hirose is in the office of Outside
Director of the Company will have been for eight (8) years at the close of this
General Meeting of Shareholders.
The number of years during which Messrs. Hirobumi Kawano and Hajime
Watanabe are in the office of Outside Director of the Company will have been forfive (5) 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 a (1) year 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
for in Article 423, Paragraph 1 of the Companies Act with each of Messrs.
Takaharu Hirose, Hirobumi Kawano, Hajime Watanabe and Ms. Miri Hara. In caseeach of them is re-elected, it is scheduled that the liability limit agreement willcontinuously 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 37 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 is insured under the relevant insurance contract. If each candidate is reappointed,
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 term of office.

[English Translation]
16

Third Item of Business: Revision of Remuneration Payable to Directors Enabling
Restricted Stock to be Granted to Directors
Following the approval of shareholders for the resolution: “Determination of
remuneration payable to Directors enabling restricted stock to be granted to
Directors” (“Original Resolution”) at the 56th Ordinary General Meeting of
Shareholders held on June 27, 2017, the Company introduced and has operated a
restricted stock remuneration plan with a view to giving Directors of theCompany (other than Outside Directors; hereinafter the “Subject Directors”) an
incentive to continuously enhance the corporate value of the Company andfurther promote the sharing of common value between Directors and shareholders.
For the purpose of giving Subject Directors an incentive to continuously enhance
the corporate value of the Company for a longer period and further promote thesharing of common value between Directors and shareholders, the Company
proposes to revise the contents of the Original Resolution to change the Nontransferable Period applicable to restricted stock from the “period determined inadvance by the Board of Directors of the Company within the range of three (3)year to five (5) year period” to the “period until the day on which the Subject
Director resigns or retires from office and ceases to be any of Director, Executive
Officer, Audit & Supervisory Board Member, and employee of the Company(including the resignation and retirement due to the death)” and to make any otherchanges necessary in relation to the change of the Non-transferable Period.
Therefore, shareholders are requested to approve the revision of the Original
Resolution as follows with regard to the restricted stock to be granted to Subject
Directors in the future.
The Company has determined that the contents of this item are reasonablebecause the proposed revision is necessary and reasonable in view of the purposeof the remuneration plan mentioned above and the Company’s policy for
determining the contents of remuneration of individual directors (which is to berevised) and is in line with the advice of the Nomination and Compensation
Committee of the Company, which has been established to strengthen the
independence and objectivity of the functions and the accountability of the Boardof Directors concerning the remuneration of Directors. (The outline of the current
determination policy is as shown on page 38-40 of this Notice of Convocation.
Subject to the approval of shareholders for this item, the determination policy
will also be revised to change the Non-transferable Period applicable to restricted
stock and to make any other necessary changes in a manner consistent with theproposal in this item.)
When this remuneration is paid and how much remuneration is paid to each of
the Subject Directors shall continue to be decided at the Board of Directors of theCompany. The number of Directors is currently 11 (including four Outside
Directors) and will continue to be 11 (including four Outside Directors) at the[English Translation]17

close of the General Meeting of Shareholders if the Second Item of Business:
Election of Eleven (11) Directors is approved as proposed.
1 Grant of restricted stock
The Company shall provide the Subject Directors with monetary claim as
remuneration to grant restricted stock (hereinafter the “Monetary Remuneration
Claims”). Based on the resolution of the Board of Directors of the Company, theSubject Directors shall transfer to the Company the whole of the Monetary
Remuneration Claim as contribution in kind and thereby receive Company’s
shares of common stock issued or disposed by the Company as restricted stock.
2 Upper limits of the total amount of Monetary Remuneration Claims and thetotal number of Company’s shares of common stock issued or disposed
The total amount of Monetary Remuneration Claims shall be a reasonable amountin the light of the purpose of the remuneration plan mentioned above, which shallnot exceed 100 million yen separately from pecuniary remuneration. The
provision of Monetary Remuneration Claims to each of the Subject Directors
shall be made by the relevant Subject Director’s consent to the abovementioned
contribution in kind and entering into the Allotment Agreement (meaning the
Allotment Agreement defined in 3 below).The total number of Company’s sharesof common stock issued or disposed as restricted stock by the Company shall be
20,000 or less per year; provided, however, that in the event that the Company
consummates stock split of common stock of the Company, free distribution ofshares of common stock, or consolidation of shares of common stock or any otherevent necessitating adjustment of the total number of Company’s shares ofcommon stock issued or disposed as restricted stock, such total number ofCompany’s shares of common stock shall be adjusted to the reasonable extent.
The dilution rate on the Company’s shares of common stock by granting such
restricted stock shall be less than 0.01 percent per annum and therefore theCompany recognizes that the effect such granting of restricted stock will have on
the shareholders of the Company is minor.
The payment amount per share of the Company’s shares of common stock issued
or disposed as restricted stock shall be determined at the Board of Directors of
the Company within the range not specially favorable to certain Subject Directors
subscribing the shares on the basis of the closing price of the shares of common
stock of the Company on the Tokyo Stock Exchange on the business day
preceding the date of resolution of the Board of Directors pertaining to such
issuance or disposition (or the closing price on the transaction date immediately
prior thereto if no transaction is made on such business day).
3 Contents of restricted stock allotment agreement
In connection with issuance and disposition of shares of common stock of theCompany as restricted stock, a restricted stock allotment agreement including thefollowing content (hereinafter the “Allotment Agreement”) shall be entered into
between the Company and each of the Subject Directors.

[English Translation]18

(1) Non-transferable period
The Subject Director shall not transfer, create a mortgage on, or otherwise
dispose of, shares of common stock of the Company allotted to the Subject
Director (hereinafter the “Allotted Stock”) by the Allotment Agreement during
the period (the “Non-transferable Period”) following the date of such issuance ordisposition of the Allotted Stock (hereinafter the “Grant Date”) until the day on
which the Subject Director resigns or retires from office and ceases to be any of
Director, Executive Officer, Audit & Supervisory Board Member, and employeeof the Company (hereinafter the “Directors, etc.”) (including the resignation andretirement due to the death, hereinafter the “Retirement, etc.”) (hereinafter, such
restrictions shall be referred to as the “Restriction”). The Restriction shall be
rescinded after the Non-transferable Period has passed.
(2) Treatment of restricted stock upon the expiration of the Non-transferable
PeriodUpon the expiration of the Non-transferable Period, the Company shall acquire
all Allotted Stock free of charge as a matter of course unless the Retirement, etc.
of a Subject Director from the office of Director, etc. is determined by the Boardof Directors of the Company to be due to a reasonable cause, such as expirationof the term of office, mandatory retirement due to age, or death.
Upon the expiration of the Non-transferable Period, notwithstanding thedetermination 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 of office, 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 Allotted
Stock determined in accordance with the reasonable standard set out in advanceby the Board of Directors of the Company among the Allotted Stock held by sucha Subject Director, the Company shall acquire the rest of Allotted Stock held bysuch Subject Director free of charge as a matter of course.
(3) Treatment in case of reorganization and the like
Notwithstanding any provisions of (1) and (2) above, in the event that the General
Meeting of Shareholders of the Company (or the Board of Directors of theCompany in case of the reorganization and the like which is not subject toapproval by resolution of the General Meeting of Shareholders of the Company
under applicable laws) approves by resolution any merger agreement underwhich the Company is absorbed or any stock exchange agreement under which
the Company becomes a wholly owned company or any item related to stocktransfer plan or other reorganization and the like (limited to the case where theeffective date of such reorganization and the like arrives before the Nontransferable Period expires) before the maturity of the Non-transferable Period,
the Restriction shall be rescinded at the time immediately before the business day
preceding the effective date of such reorganization and the like with respect to[English Translation]19

certain number of Allotted Stock determined in accordance with the reasonable
standard set out in advance by the Board of Directors of the Company among the
Allotted Stock held by Subject Directors as of the date of such approval, and theCompany shall acquire the rest of Allotted Stock held by Subject Directors freeof charge as a matter of course.
(4) Other matters
In addition to the above, indication of intention and method of correspondence,
method to amend the Allotment Agreement and other matters to be determinedat the Board of Directors shall be included in the Allotment Agreement.

[English Translation]
20

[Attached Documents]

Business Report (Fiscal Year Ended March 31, 2021)
I. Outline of the Group’s Business1. The Current Business Development and Results of Operations

During the fiscal year ended March 31, 2021 (“the current fiscal year”), theJapanese economy remained challenging with a significant decline in corporate
earnings due to COVID-19, and required continual attention to the trends of theinfectious disease in Japan and overseas as well as the effects of fluctuations in
the financial and capital markets. With the resume of social and economic
activities, while measures are taken to prevent the spread of infections, theeconomy has shown some signs of recovery owing to the effects of various
policies and improvements in overseas economies.
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, and the SECOM
Group Road Map 2022, in which we clarified what we should do now to achieve
the vision.
Dealing with COVID-19, we provided products and services that contribute topreventing the spread of infections. In July 2020, we launched a thermal camera
integrated with a tablet device, which can measure face surface temperatures
despite wearing face masks. Responding to the needs for teleworking, we started
to offer SECOM Anshin Telework via USB Remote Device in August, a service
that allows employees to securely access to their companies’ IT systems fromtheir private PCs. In order to further accelerate overseas businesses by promoting
business operations in new potential markets such as growing wealthy andmiddle-classes in Asia, we acquired 100% outstanding shares of three security
services providers under Johnson Controls International PLC (headquartered in
Cork, Ireland) in Malaysia in September 2020, in Singapore in October, and inHong Kong in February 2021, making each a subsidiary. In March 2021, werevamped COCO-SECOM, a mobile security system for outdoor use, with a
newly invented function that links to a smartphone app and improves
convenience for a variety of purposes including business and home use. In the
period under review, we continued to provide meticulous and seamless services
through various initiatives to satisfy the increasingly diversified and sophisticatedneeds of our customers for their safety and peace of mind.
As a result, consolidated revenue for the current fiscal year decreased by 2.3% to1,035.8 billion yen compared with the previous fiscal year, and consolidated
operating profit decreased by 4.2% to 136.9 billion yen, largely attributable to the[English Translation]21

effect of COVID-19. Consolidated ordinary profit decreased by 8.2% to 138.9
billion yen, mainly due to the recognition of net losses of 3.5 billion yen on
private equity investment in the U.S. etc., compared with net gains of 2.0 billion
yen in the previous fiscal year, in non-operating income/expenses. Consolidated
net income attributable to owners of the parent decreased by 16.2% to 74.6 billion
yen, mainly attributable to the recognition of amortization of goodwill of 5.6
billion yen and net losses of 2.9 billion yen on sales of investment securities insubsidiaries and affiliates in extraordinary losses.
（Millions of Yen）

Revenue

Operating profit

Ordinary profit

Net income
attributable toowners ofthe parent

Current fiscal
year (FY2020)

1,035,898

136,925

138,990

74,681

Previous fiscal
year (FY2019)

1,060,070

142,858

151,356

89,080By business segment, in the security services segment, we provided customers
chiefly with centralized monitoring services (on-line security systems) for
commercial and residential clients, as well as static guard services, armored car
services and merchandises.
For our commercial security services, we worked to expand the sales of 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
response to the increasingly diverse needs for video surveillance, we offered
SECOM IP Camera System and SECOM Cloud Video Surveillance, which canbe integrated with AZ and flexibly respond to a wide range of requests regardlessof the scale of facilities, with the extensive lineup of surveillance cameras andcloud capability.
For our residential security services, in addition to responding to security and fire
protection needs, we improved the functions of SECOM Home Security NEO, aflexible system suited to modern lifestyles that can expand its services by linking
with various devices, and have made continuous efforts to market it. Also, we
provided Mago-channel with SECOM, a service that enables discreet monitoringof parents whom children have difficulties of visiting during the COVID-19
calamity.
Outside Japan, we promoted our “SECOM-style” security services, characterized
by its emergency response services, mainly in economically developing areas,such as People’s Republic of China and Southeast Asia. We accelerated efforts
to develop and introduce security systems adapted to local market while[English Translation]22

advancing initiatives for digital transformation of on-line security systems byincorporating latest technologies.
As a result, revenue decreased by 1.4% to 561.5 billion yen, mainly due to thedecreases in sales of merchandise and revenue from installation largely affectedby COVID-19, despite the brisk sales of on-line security systems for commercial
and residential use. Operating profit decreased by 2.2% to 113.3 billion yen.
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 along with customers’ needs to a wide variety of facilities such as officebuildings, production facilities, tunnels, cultural properties, ships and residences.
In the current fiscal year, two major fire protection companies, Nohmi Bosai Ltd.
and Nittan Co., Ltd., promoted various fire protection systems based on eachcompany’s business infrastructure and product development expertise.
Revenue decreased by 6.4% to 142.6 billion yen, mainly attributable to the effectof COVID-19 and the inclusion of large projects in the previous fiscal year.
Operating profit decreased by 28.5% to 12.9 billion yen, chiefly owing to theconcentration of projects with 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 decreased by 6.0% to 71.6 billion yen, mainly due to the decreases insales of medical equipment and drugs largely affected by COVID-19 and inrevenue in Takshasila Hospitals Operating Pvt. Ltd., a general hospital operatingcompany in India. Operating profit decreased by 25.2% to 4.1 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
actual cost of medical treatment; and SECOM Anshin My Car, a comprehensive
automobile insurance policy that offers on-site support services provided by our
emergency response personnel in the event of an accident.
Revenue increased by 4.6% to 49.4 billion yen, mainly due to the firm increasein sales of MEDCOM, an unrestricted cancer treatment policy, and automobile
insurance policy provided by Secom General Insurance Co., Ltd. Operating profit
decreased by 51.5% to 0.7 billion yen, chiefly owing to the effect of major[English Translation]23

disasters including the Typhoon No.10 and the Heavy Rain Event of July 2020.
In the geospatial information services segment, we collected geographic datafrom aerial photography, vehicle/ground surveying systems and satellite images,
and provided the geospatial data services, by integrating, processing, andanalyzing the geographic data, to domestic national and local governmental
agencies, private sectors, and foreign governmental agencies including emerging
and developing countries.
Revenue increased by 1.6% to 54.8 billion yen, chiefly owing to the rise inrevenue from domestic public-sector customers, with the increase in surveying
services using airborne laser. Operating profit increased by 31.8% to 4.7 billion
yen, attributable to the rise in revenue from domestic public-sector customers andthe improvement in cost ratio as a result of the enhanced production efficiency,
as well as the decrease in selling, general and administrative expenses due to thebusiness optimization efforts in the international division and changes in sales
procedures utilizing remote environments.
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 112.0 billion yen, chiefly owing to the increase
in revenue in TMJ, Inc., a provider of BPO services including contact centers andback office services, and data center business. Operating profit increased by
19.5% to 11.8 billion yen.
Real estate and other services segment comprises real estate leasing andconstruction and installation services.
Revenue decreased by 26.7% to 43.7 billion yen, chiefly owing to the effect of
the exclusion of the consolidated subsidiary, Secom Home Life Co., Ltd., fromthe scope of consolidation, due to the transfer of all of the issued shares in
December 2020. Operating profit decreased by 7.0% to 5.5 billion yen.

[English Translation]
24

Results by Business Segment (60th Fiscal Year – current fiscal year)(Millions of Yen)
OperatingprofitCustomers

Revenue
Intersegment

Security services

561,531

11,553573,084

113,331

Fire protection services

142,660

3,277

145,938

12,972

Medical services

71,624

206

71,831

4,104

Insurance services

49,491

3,087

52,579793

Geospatial information
services

54,821

207

55,0294,716

BPO and ICT services

112,025

9,580

121,606

11,805

Real estate and otherservices

43,742

1,093

44,835

5,558

1,035,898

29,006

1,064,904

153,282-(29,006)(29,006)(16,356)

1,035,898-

1,035,898

136,925

Business segment

Total
Eliminations andcorporate items
Consolidated revenue

Total

With respect to the results by geographical segments, in Japan, revenue
decreased by 1.9% to YEN 991.7 billion. Overseas revenue decreased by 10.3%
to YEN 44.1 billion.

[English Translation]25

2. Issues the Group Has to Cope with

The circumstances surrounding the SECOM Group pose certain social challenges
to be addressed, including the declining birthrate and aging population,
manpower reduction, and rapidly-changing lifestyles due to technologicalinnovation. With these circumstances in mind, the SECOM Group considers
technological advances and a declining labor force as priority issues, andpromotes the following efforts to find solutions to 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 best use of
the business resources of the SECOM Group, in order to offer high value-added
services that meet diversified customer needs, thereby aiming to establish asociety that enjoys “safety, peace of mind, comfort and convenience.”(3) Strengthening overseas businesses
For overseas businesses, 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]
26

Due to the decreasing labor force population, securing talented human resources
represents a challenge. The SECOM Group will set up efforts to recruit talented
human resources including individuals with IT skills or the ability to function in
global business environments, and promote education, training, etc., to develop
existing employees and improve their abilities to adapt to change. We will also
accelerate organizational strategies to strengthen growing sectors, including thereallocation of human resources, as well as efforts to improve the SECOM
Group’s competitiveness.
(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.

[English Translation]27

3. Capital Expenditures

Capital expenditures for the current fiscal year totaled YEN 59.4 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 38.9 billion.
(Millions of Yen)
Business segment

AmountSecurity services

38,982

Fire protection services

4,982

Medical services

1,308

Insurance services

2,100

Geospatial information services

2,052

BPO and ICT services

6,879

Real estate and other services

3,508
Subtotal

Eliminations and corporate items

59,814
(330)

Total

59,484

4. Fund Raising

During the current fiscal year, no funds were raised by the Group in capital
markets through the issuance of corporate bonds or new shares.

[English Translation]28

5. Trends in Earnings and Assets of the Group(Millions of Yen except for net income per share)
60th fiscal year
Fiscal years 57th fiscal year 58th fiscal year 59th fiscal year
(current fiscal year)(4/1/2017–(4/1/2018–(4/1/2019–
Category(4/1/2020–
3/31/2018)
3/31/2019)
3/31/2020)
3/31/2021)
Revenue
970,624
1,013,823
1,060,070
1,035,898
Operating profit
135,448130,213
142,858
136,925
Ordinary profit
144,318
144,889
151,356
138,990
Net income
attributable to92,00989,08074,681
86,993owners of theparent
Net income per421.56408.14342.17398.58share (Yen)
Return on Equity
Total assets
Net assets

9.4%
1,715,123
1,081,213

9.4%
1,765,105
1,125,954

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

7.1%
1,864,179
1,229,824(Note)
Since the 58th fiscal year, we have applied “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No.28, February 16, 2018). Total assets shown for the 57th fiscal year are after retroactive
application of this Standard.

[English Translation]29

6. Trends in Earnings and Assets of the Company(Millions of Yen except for net income per share)
60th fiscal year
Fiscal years 57th fiscal year 58th fiscal year 59th fiscal year
(current fiscal year)(4/1/2017–(4/1/2018–(4/1/2019–(4/1/2020–
Category
3/31/2018)
3/31/2019)
3/31/2020)
3/31/2021)
Revenue
387,881394,181
398,929394,389
Operating profit
78,16876,83376,87775,541
Ordinary profit
91,083
88,972
90,53889,301
Net income
67,69274,01665,80859,960Net income per
310.15339.12301.51274.72share (Yen)
Return on Equity
9.3%
9.6%
8.2%
7.3%
Total assets
884,045921,472
947,194
971,493
Net assets
748,988785,801
812,878
838,562(Note)
Since the 58th fiscal year, we have applied “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No.28, February 16, 2018). Total assets shown for the 57th fiscal year are after retroactive
application of this Standard.

[English Translation]30

7. Matters Concerning Principal Subsidiaries
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[English Translation]
31

Percentage ofownership(Percentage ofvoting rights)
(%)
53.42
(54.56)(%)
100.00(100.00)(%)
50.36(50.71)(%)
100.00(100.00)(%)
100.00(100.00)(%)
97.11(97.82)(%)
69.84(72.17)(%)
100.00(100.00)(%)
50.88(50.88)(%)
100.00(100.00)(%)
100.00(100.00)(%)
100.00(100.00)

Principal business activities

Security and safety services

Cash collection anddelivery 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
and software development

Data center business

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

Security business in the U.K.

(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 Secom Joshinetsu Co.,
Ltd. and Nohmi Bosai Ltd. include those owned by the Company’s subsidiaries.
3. The Company transferred all of the issued shares of Secom Home Life Co., Ltd. asof 22 December, 2020. Accordingly it is no more a subsidiary of the Company.

8. Principal Business of the GroupThe Group consists of the Company, 165 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 Real Estate and Other Services centering onreal 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).

[English Translation]
32

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

59,436

1,032(2) Matters Concerning Employees of the Company
Number of
employees

Increase from the end of
the previous fiscal year

Average age

Average years of service

16,290
137
43.2
16.8
(Note)The number of employees refers to the number of full-time employees.

11. Principal Lenders(Millions of Yen)

Lenders

Balance

MUFG Bank, Ltd.

11,726

Mizuho Bank, Ltd.

8,292

Sumitomo Mitsui Banking Corp.

5,002

Resona Bank Ltd.

3,049

12. Other Important Matters Concerning the Group

There is no matter applicable.

[English Translation]
33

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:

233,295,926(including 15,034,565 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:

21,739100 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)

36,082

16.53

Custody Bank of Japan, Ltd.
(Trust Account)

16,969

7.77

JP MORGAN CHASE BANK 380055

9,358

4.28

STATE STREET BANK AND
TRUST COMPANY 505223

5,453

2.49

Custody Bank of Japan, Ltd. (Trust
Account 7)

4,870

2.23

STATE STREET BANK WEST
CLIENT-TREATY 505234

4,321

1.98

Makoto Iida

4,242

1.94

Secom Science and Technology
Foundation

4,025

1.84

Custody Bank of Japan, Ltd.
(Investment Trust Account)

3,291

1.50

STATE STREET BANK AND TRUST
2,996
1.37
COMPANY 505103(Note)
Although the Company holds treasury stock of 15,034,565 shares, it is not included in
the table above. The percentage of ownership is calculated on the basis of the total
number of shares outstanding excluding treasury stock. The percentage of ownershipis truncated to two decimal places.

6. Shares Granted to Officers of the Company for Their Business Execution during
Current Fiscal Year
Number of shares
1,928

Directors (excluding Outside Directors)[English Translation]
34

Number of
Grantees7III. Directors and Audit & Supervisory Board Members
1.

Names and Titles of Directors and Audit & Supervisory Board Members
Position(As of March 31, 2021)
Field of responsibility andimportant position of otherorganization
concurrently assumed

Name

Director

Makoto Iida

Supreme Advisor

Chairman and
Representative Director

Yasuo Nakayama

Executive Officer
Chairman, All Japan Security
Association

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

Director

Takaharu Hirose

Director

Hirobumi Kawano

Director

Hajime Watanabe

Director

Miri Hara[English Translation]
35

Executive Officer (head of generalaffairs & human resources division)
Chairman and Representative
Director of Monitas, Inc.
Outside Audit & Supervisory Board
Member of San-Ai Oil Co., Ltd.
President and Representative Directorof Watanabe Pipe Co., Ltd.
Representative Certified Public Tax
Accountant of Tax Corporation
Yokohama Benten Accounting, Inc.

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. Messrs. Takaharu Hirose, Hirobumi Kawano, 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, Messrs. Takaharu Hirose, Hirobumi Kawano, 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, Messrs. Takaharu Hirose, Hirobumi Kawano,
Hajime Watanabe and Ms. Miri Hara being independent officers was submitted toTokyo 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. Change in important position of other organization concurrently assumed by Director
Ms. Miri Hara has assumed the office of Director at the 59th Ordinary General Meetingof the Shareholders held on June 26, 2020.
10. Changes in post of Audit & Supervisory Board Members during the current fiscal
year
Audit & Supervisory Board Member, Mr. Makoto Yasuda resigned from Outside
Director of Sanwa Holdings Corporation as of June 24, 2020.

[English Translation]36

〈Reference〉
Executive Officers who are not Directors are as follows:(As of May 1, 2021)
Title
Managing Executive
Officer

Executive Officer

Name
Kenichi Furukawa, Masahiro Takeda, Toshiaki Mizuno,
Shokichi Ishimura, Keitaro Arai, Osamu Ueda, Yoshinori
Yamanaka
Yoichi Sugimoto, Sumiyuki Fukumitsu, Kensuke Shindo,
Yasufumi Kuwahara, Noriyuki Fukuoka, Takeshi Akagi,
Sadahiro Sato, Seiya Nagao, Noriyuki Uematsu, Osamu Nagai,
Atsushi Komatsu, Kazuhiro Mitomo, Takehiko Senda, Takashi
Nakada, Michiyoshi Morita, Makoto Inaba, Toshinori
Sugimoto, Satoshi Araki(Notes)
1. Executive Officer, Mr. Yoshinori Yamanaka was appointed to Managing Executive
Officer as of June 1, 2020.
2. Mr. Toshinori Sugimoto was appointed to Executive Officer as of June 1, 2020.
3. Mr. Satoshi Araki was appointed to Executive Officer as of October 1, 2020.

2. Description of the Agreement Limiting Liabilities
The Company has entered into with each of the Outside Directors and each of
the Outside Audit & Supervisory Board Members an agreement limiting their
liabilities as prescribed by Article 423, Paragraph 1 of the Companies Act,
pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act.
The maximum amount of the liabilities under this agreement which each of
the Outside Directors and each of the Outside Audit & Supervisory Board
Members incurs is equal to the lowest amount of liabilities stipulated in Article
425, Paragraph 1 of the Companies 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]
37

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

366

293

-

55

17

7

45

45

-

-

-

2

Outside Directors

39

39

-

-

-

4

Outside Audit &Supervisory Board
Members

25

25

-

-

-

3

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

Total

476
403
55
17
16
(Notes)Both the performance-based remuneration and non-pecuniary remuneration described above
are in accordance with the policy for determining the content 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 124,000 million yen, and the actual result
was 136,925 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). The
pecuniary remuneration of each director is determined by the Nomination andCompensation Committee, which is authorized by the Board of Directors,
within the limit of the maximum amount of such remuneration resolved at the[English Translation]
38

General Meeting of Shareholders. Regarding share-based remuneration, it was
resolved at the 56th Ordinary General Meeting of Shareholders held on June27, 2017 that the total amount of monetary claims to be provided to grant
restricted stock shall not exceed 100 million yen per year, which is separate
from pecuniary remuneration, and that the number of common stock shares tobe issued or disposed as restricted stock shall not exceed 20,000 shares per year(the number of Directors pertaining to the resolution (excluding Outside
Directors) was eight); that the Non-transferable Period shall be determined by
the Board of Directors in advance to be a period not shorter than three years,
but not longer than five years from the day on which each Director receivescommon stock of the Company through the issuance or disposition of shares;
and that in the event that a Director who has received common stock of theCompany through the issuance or disposition of shares resigns or retires fromoffice and ceases to be any of Director, Executive Officer, Audit & Supervisory
Board Member and employee of the Company before the maturity of the Nontransferable Period the Company shall acquire all such common stock free ofcharge as a matter of course unless the resignation or retirement is determinedby 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.
The share-based remuneration of each director (excluding Outside Directors)
is determined by the Board of Directors based on the result of deliberation by
the Nomination and Compensation Committee within the limit of theabovementioned maximum amount and number resolved at the General
Meeting of Shareholders.
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
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 and[English Translation]
39

Compensation 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 consists of the following seven members in total (including four
Outside Directors): Makoto Iida (Chairperson, Supreme Advisor and Director),
Yasuo Nakayama (Director), Ichiro Ozeki (Director), Takaharu Hirose(Outside Director), Hirobumi Kawano (Outside Director), Hajime Watanabe(Outside Director), and Miri Hara (Outside Director).
(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). 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.
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

OutsideDirector

Name

Takaharu
HiroseAttendanceof theMeetings ofthe Board of
Directors

10(out of 10)[English Translation]
40

Attendance ofthe Meetings of
the Audit &Supervisory
Board

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.

Category

Name

Attendance of Attendance of thethe Meetings of Meetings of thethe Board ofAudit &
Directors
Supervisory Board

OutsideDirector

Hirobumi
Kawano10(out of 10)-

OutsideDirector

HajimeWatanabe10(out of 10)-

OutsideDirector

Miri Hara

8(out of 8)-[English Translation]
41

Main Activities
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.
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.

Category

Name

Attendance ofthe Meetings ofthe Board of
Directors

Attendance of the
Meetings of the
Audit &
Supervisory
Board

OutsideAudit &
Supervisory
Board
Member

Hideki Kato

10(out of 10)

11(out of 11)

OutsideAudit &
Supervisory
Board
MemberMakotoYasuda10(out of 10)

11(out of 11)

OutsideAudit &
Supervisory
Board
MemberSetsuoTanaka10(out of 10)

11(out of 11)

Main Activities

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.
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.

(Note)
Ms. Miri Hara was elected as Director at the 59th ordinary general meeting of shareholders held on
June 25, 2020, and assumed the office. Therefore, the table shows the attendance figures of themeetings of the Board of Directors held on and after June 25, 2020.

[English Translation]42

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

204

0

198

4

Consolidated
Subsidiaries

372

65

378

62

Total

577

65

576

67

(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 and Secom Plc by KPMG LLP.

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
Consolidated subsidiaries pay consideration to the Accounting Auditor forservices as non-audit duties, including verifying work for the status of
preparedness on internal control system, in accordance with Auditing andAssurance Practice Committee Practical Guideline No 86, “Assurance Reports
on Controls at a Service Organization.”

5. Policy for Decision for Dismissal or Non-reappointment
Whenever there occurs any material event which could be a substantial hazard to
the performance of audit duties of the Company, such as a case when it is deemedthat the Accounting Auditor has come to fall within the purview of Article 340,
Paragraph 1 of the Companies Act or the Accounting Auditor or the firm of the
Accounting Auditor is subjected to the disposition of suspension of business by
the supervisory authorities, the Audit & Supervisory Board will hold Meeting ofAudit & Supervisory Board Members, and, when all Audit & Supervisory Board[English Translation]
43

Members have consented thereto, the Audit & Supervisory Board Member willtake action for the dismissal of the subject Accounting Auditor or the subject firmof the Accounting Auditor. In such case, the Audit & Supervisory Board
will make decision on appointment of a temporary Accounting Auditor or asubstitute Accounting Auditor and will submit a proposal of the appointment ofa substitute Accounting Auditor to the general 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 thedismissal at the general meeting of shareholders.
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 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 April 4, 2019.)(1)

GeneralThis resolution manifests the basic policy regarding the internal control
system of the Company to be specifically established by the President andRepresentative Director based on Article 362, Paragraph 5 of theCompanies Act.
The internal control system based on this resolution shall be establishedurgently by Executive Officers in charge, and 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
Executives and employees are required to act in accordance with the
SECOM Group Code of Employee Conduct, which sets behavioral
standards for the execution of duties, including compliance with laws andregulations, and the Article of Incorporation. The SECOM Group Code of
Employee Conduct is based on the philosophy of SECOM, which we havefollowed since the establishment of the business. These ethical guidelines[English Translation]
44

prescribe ideals covering the official and private affairs of all executives
and employees and action standards (including the blocking relationships
with anti-social forces) to be followed in the execution of specific daily
duties. As such, these guidelines provide the basis of all actions. The
compliance management system is as follows:(i) From the start, compliance with laws and regulations and the Articles ofIncorporation has been an indispensable requirement of our business,
and we have always sought to operate in strict adherence to this spirit.
Therefore, compliance is a part of the Company’s daily routines, whichshould not require a system in which a specific section or manager is
responsible for implementation. Each and every employee is at the frontline of promoting the code of conduct, including legal compliance. The
implementation of guidelines is carried out by the line managers of theorganization. Further control is provided by the Executive Officers incharge of departments under their control, with the President andRepresentative Director providing companywide control.
(ii) The Executive Officers in charge of each area are responsible for having
thorough knowledge particularly 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. The Legal Affairs Department
and other relevant departments and sections support them, providing
cross-organization coordination.
(iii) Following the orders of the President and Representative Director, theInternal Audit and Compliance Department provides crossorganizational inspection in a timely manner over the execution of duties,
indicating how to improve morale through the observance of laws andregulations and the Company’s rules and at the same time pointing out
matters that need correction. The Internal Audit and ComplianceDepartment will promptly report the findings of the inspection to the
President and Representative Director.
(iv) When executives and employees of the Company become aware ofunethical actions, they have the obligation to report such actions to theproper superior without hesitation. A “Hot Helpline” is established tofacilitate direct contact with the Internal Audit and ComplianceDepartment if corrective actions are not taken even after reporting tosuperiors or it is difficult to report. Pursuant to the “Basic Policy of the
SECOM Group for Compliance,” the Company will keep the reported
matters confidential, and promptly take necessary investigation andappropriate 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 examines important organizational
culture-related issues (including compliance-related matters), which are
the cornerstone of developing and maintaining the corporate
organization, and determines important official commendations andpunishments.

[English Translation]
45

(vi) Revisions of the SECOM Group Code of Employee Conduct and/or
critical compliance-related matters are undertaken after discussion with
the Organizational Culture Committee and subject to the approval of theBoard of Directors after obtaining the opinions of the Audit &Supervisory Board Members.
(vii) Basic plans and policies concerning internal controls related to financial
reporting are determined and evaluated in accordance with the standardsof the Business Accounting Council.
(3)

System under which information regarding execution of business byDirectors shall be maintained and controlled
Information regarding the execution of duties of Directors (minutes ofthe Meetings of the Board of Directors, decision-making documents,etc.), shall be properly maintained, administered (including destruction)
pursuant to the rules of the Company, which will be amended upon
reviewing the operating conditions if necessary.

(4)

System regarding control of risk of loss and other system(i) The Company’s approach to risk management is embedded in dayto-day business activities, with acknowledgement that risk
management itself is the Company’s business. Executive Officers incharge, under the direction of the President and Representative
Director, analyze and assess business risk and fraud risk in theoperational areas for which they are responsible, and revise
established rules and manuals as conditions change. Rules andmanuals are based on risk analysis and assessment, and stipulate
preventive measures, prompt and appropriate communication andemergency preparedness when incidents occur, daily risk monitoringand other systems.
(ii) The Executive Officer in charge shall report to the President andRepresentative Director and the Audit & Supervisory Board on the
results of risk analysis and assessment.
(iii) 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 asnecessary to the President and Representative Director.
(iv) Any important changes of the Company’s risk control system shallbe subject to the approval of the Board of Directors after obtaining
the opinions of the Audit & Supervisory Board Members.

[English Translation]
46

The risks at times of large scale calamities and at ordinary times are as follows.
Risk Category
Large scalecalamity

Ordinary times

Earthquake, wind, flood, volcanic
disasters, radiation leakage, etc.

(1) Large scalecalamity risk

Noncompliance with “Constitution of
SECOM’s Business and Operation,”“SECOM Group Code of Employee
Conduct,” other internal rules and(2) Compliance risk
guidelines, etc., risk accompanied byestablishmentorchangesinregulations (in the area of tax system,
medical system, etc.), breach of law,etc.
Information system shut down,
electronic data extinguishment, large
scale blackout, wide area circuit(3) System risk
disturbance, ICT (information andcommunication technology) relatedrisk, etc.
Risk incurred when providing services(4) Service providing risk (Accidents related to security, fire
alarm or equipment maintenance, etc.)
Input error or input omission inadministrative or account processing,estimation error for allowance, etc.

(5) Administrative
work andaccounting risk

Offence from outsiders (groundlessrumor, calumniation, theft, terror, etc.),
risk related to M&A, risk related to
new system development, other risk
related to business infrastructure (fireon the Company’s premises, pandemic
influenza, disease epidemic, etc.), etc.

(6) Others(5)

ExampleSystem by which efficient execution of duties of Directors shall beensured(i) All Directors shall carry out the operation and execution of business on
the basis of the “Constitution of SECOM’s Business and Operation” sothat they may share the ideas essential to the execution of the duties suchas decision making for management by the Board of Directors anddecision making for the execution of duties by the Directors.
(ii) On the basis of the preceding item, the Company, aiming to implement
the execution of duties efficiently, introduces the system of Executive
Officers so that decision making and the execution of business shall befurther facilitated.
(iii) The Company develops the IT system for dissemination of notices, etc.,
and decision making by managerial decision requests, and maintains the[English Translation]47

system for swiftly enabling full introduction and implementation.
(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 the progressof the plan.
(6)

System under which the group of enterprises consisting of the Company
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 and regulations
and the Articles of Incorporation(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 by theseguidelines, the executives and employees work to accomplish thecorporate goals in an appropriate manner.
(ii) Each of the subsidiaries carries out IT controls in conformance with the“Basic Policy of the SECOM Group for Information Security.” The
Company’s IT 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 and otherparties appointed by the chairperson, works to ensure that appropriate
operations are carried out. It accomplishes this goal by conducting
discussions of issues related to the Group’s internal controls in an effort
to share Group information and operating philosophy. Where necessary,
the President and Representative Director reports the results to theBoard 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 and ComplianceDepartment and Group Governance Department) to inspect subsidiaries,
if necessary. The subsidiaries accept the inspection by the Company,
and at the same time promote the understanding and improvement ofcompliance-related issues by exchanging information with theCompany. Furthermore, the Company establishes the whistle-blowing
system “Group Head Office Helpline” which enables executives andemployees of subsidiaries to directly report to the Company’s Group
Governance Department, whenever they become aware of any noncompliance. Pursuant to the “Basic Policy of the SECOM Group forCompliance,” the Company will keep the reported matters confidential,
and promptly take necessary investigation and appropriate measures.
The reporter will suffer no disadvantage on the grounds of such report.
(v) The Audit & Supervisory Board Members of the Company visit major
subsidiaries and conduct audits regarding internal controls.

[English Translation]48

(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 byDirectors, etc., of subsidiaries are reported to the Company
In order to enhance Group synergy leading to the achievement of thebusiness vision by the entire SECOM Group, the Company establishes andimplements the “Basic Rules for SECOM Group Corporate Management,”
which clarify the guidelines for the reporting of the important items, theitems to be coordinated in advance with the Company and the items to beapproved by the Company.
(6-3) Rules and other systems for controlling risks of loss of subsidiaries
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 theirduties efficiently(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 business plans forthe next year based on the business vision by the entire SECOM Group,and confirm the progress of the plans.
(7)

Matters related to employees to assist duties of Audit & Supervisory Board
Members when Audit & Supervisory Board Members requests to do so(i) The Company establishes the system to assist audit duties, by
establishing the Office of Audit & Supervisory Board manned by at least
two employees who are fully familiarized with the exclusive duties andinternal situations.
(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.

(8)Matters related to the independence of the employees in item (7) from
Directors and ensuring the effectiveness of the instructions of the Audit &Supervisory Board Members
Transfer and evaluation of the assistants for the Audit & Supervisory Board
Members shall be subject to 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[English Translation]49

order from Directors and Executive Officers and employees with respect tothe subject audit duties, nor be obligated to report to them.
(9)

The following systems and other systems under which any report is madeto Audit & Supervisory Board Members(9-1) System under which Directors and Accounting Advisors and employees
make any reports to the Audit & Supervisory Board Members(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.
(iii) The matters reported to the “Hot Helpline” will be reported to the Audit& Supervisory Board Members from the Internal Audit andCompliance Department.
(9-2) 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., other persons equivalent
to such persons, and employees, or any persons receiving reports fromthese persons, make reports to the Audit & Supervisory Board Members
The matters reported to the “Group Head Office Helpline” will bereported to the Audit & Supervisory Board Members from the Group
Governance Department.
(10) System which ensures that the persons who made the reports under (9)above will not be treated disadvantageously on the grounds of such reports

Pursuant to the “Basic Policy of the SECOM Group for Compliance,”
the Company will keep the reported matters confidential, and promptly
take necessary investigation and appropriate measures, while the reporter
will suffer no disadvantage on the grounds of such report.
(11) Matters regarding the policies for the procedures of the advance payment
or reimbursement of expenses incurred for the execution of duties by the
Audit & Supervisory Board Members and other processing of expenses ordebts incurred for the execution of such duties.

[English Translation]
50

The Company bears the expenses incurred for the execution of duties by
the Audit & Supervisory Board Members.
(12) System under which audit by Audit & Supervisory Board Members is
ensured to be performed efficiently(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 toretain and consult professional accountants with respect to their audit
duties.
2. Outline of Status of Operation of Internal Control System

The Company, pursuant to the basic policy described above, has established theInternal Control System, and is continuously operating this System in a proper
manner. An outline of the status of operation of the System during the current
fiscal year is as follows.
(1) “System under which the execution of duties by Directors and employees is
ensured to comply with laws and regulations and the Articles ofIncorporation”

The Company promotes to instill awareness of the importance of compliancewith the SECOM Group Code of Employee Conduct and the Behavioral
Guidelines Based on SECOM’s Philosophy, which set behavioral standards
for the execution of duties, including compliance with laws, regulations, and
the Articles of Incorporation in day-to-day business operations. In addition,
all training curriculum contains training related to the philosophy of SECOM,
and the Company is also making efforts to instill and entrench thephilosophy of SECOM through “Tri-ion” initiative and e-learning system
and in-house newsletter. The Company takes appropriate actions to respondto any revisions of laws and regulations by requiring its Executive Officers
in charge of each area to have thorough knowledge of laws and regulations
related to their areas and to obtain information concerning revisions of
relevant laws and regulations on a regular basis. The Internal Audit andCompliance Department, as a leading organization, 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 instructs to take correctional measures necessary to solve
any issues identified. Furthermore, any internal reports made through “HotHelpline” are dealt with in a proper manner in collaboration with relevant
departments. Any important organizational culture-related issues (including[English Translation]
51

compliance-related matters) are deliberated and dealt with at a meeting of
the Organizational Culture Committee when necessary. The effectiveness ofinternal control related to financial reporting is properly evaluated based on
the basic plans and policies.
(2) “System under which information regarding execution of business byDirectors shall be maintained and controlled”

Minutes of the meetings of the Board of Directors and decision-making
documents are recorded in a paper form or electromagnetic media, and stored
and managed in a proper manner.
(3) “System regarding control of risk of loss and other system”

Each Executive Officer in charge analyzes and assesses business risks andfraud risks in the operational areas for which he/she is responsible, andreports the results to the President and Representative Director and Audit &Supervisory Board Members once a year, and further, reviews internal rules
and manuals that have been established as appropriate and makes
amendments as needed. Furthermore, a Risk Committee, which is chaired by
the Director responsible for risk management, has been established. The Risk
Committee grasps company wide risk and considers necessary measures.
(4) “System by which efficient execution of duties of Directors shall be ensured”

The Board of Directors of the Company consists of 11 Directors including 4
outside Directors. As a general rule, a meeting of the Board of Directors isheld 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, important management
matters are deliberated and the status of execution of duties by Directors isreported, based on the business vision of the Company, and the Board of
Directors strives for accurate and prompt decision-making. 31 Executive
Officers including 6 Directors are making efforts to make decisions and to
execute their duties in a more expeditious manner.
(The above officer structure is as of March 31, 2021.)(5)“System under which the group of enterprises consisting of the Company
and its subsidiaries is ensured to properly execute its business”
Directors of the Company and its subsidiaries are promoting proper
operation based on the “Constitution of SECOM’s Business and Operation”
as their basic philosophy. The President and Representative Director of theCompany convened a meeting of the “SECOM Group Management
Committee” semi-annually to share the Group information and operating
philosophy and to ensure the appropriate operations of each company. To
enhance subsidiaries’ corporate governance, Audit & Supervisory Board
Members visited and interviewed Group subsidiaries (total of 52 times), andheld information exchange meetings to reinforce cooperation with Group
Audit & Supervisory Board Members (total of 22 times). Internal audit
departments inspect (by way of leveraging online meetings utilizing
teleconference system as a preventive measure against spread of COVID19) to subsidiaries as needed, and take appropriate steps in collaboration
with relevant sections and subsidiaries in response to any internal reports
made through the “Group Head Office Helpline.” Through decision-making[English Translation]52

on important matters upon prior consultation and reporting of importantmatters by subsidiaries in accordance with the “Basic Rules for SECOM
Group Corporate Management,” the Company and its subsidiaries strive toensure that subsidiaries’ operations are properly carried out.
(6)

“Matters related to employees to assist duties of Audit & Supervisory Board
Members when Audit & Supervisory Board Members request to do so”
The Company has established the Office of Audit & Supervisory Board
manned by at least two designated employees at all times, who assists Audit& Supervisory Board Members in carrying out audits following the
instructions of Audit & Supervisory Board Members.

(7)“Matters related to the independence of the employees in item (6) abovefrom Directors and ensuring the effectiveness of the instructions of the
Audit & Supervisory Board Members”
The assistants for the Audit & Supervisory Board Members carry out theirduties following the instructions of the Audit & Supervisory Board
Members.

(8)“System under which any report is made to Audit & Supervisory Board
Members”
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,” at eachtime it occurs.

(9)“System which ensures that the persons who made the reports under item
(8) above will not be treated disadvantageously on the grounds of suchreports”
Any internal report is handled as confidential pursuant to the “Basic Policyon the SECOM Group for Compliance” and a system under which a person
who made a report is not treated disadvantageously has been established.
This has been complied with during the current fiscal year.

(10) “Matters regarding the policies for the procedures of the advance payment
or reimbursement of expenses incurred for the execution of duties by Audit& Supervisory Board Members and processing of other expenses or debts
incurred for the execution of such duties”

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.
(11) “System under which audit by Audit & Supervisory Board Members is
ensured to be performed efficiently”

Audit & Supervisory Board Members held meetings 7 times with the
President and Representative Director and 19 times with Accounting
Auditors to exchange opinions. In addition, Audit & Supervisory Board[English Translation]
53

Members attend meetings of the Board of Directors and other important
meetings to exchange opinions, and conduct interviews with Directors andemployees of the Company and its subsidiaries on a regular basis.
3. 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 and the appropriateness of the size of the Boardof Directors are secured, and the Outside Directors are actively making acomment and thus the business execution and the oversight of the management
are well-balanced. Moreover constructive comments regarding changes inbusiness environment and risks involved were made for further progress basedon medium to long term perspective.

[English Translation]
54

Consolidated Balance Sheet(As of March 31, 2021)(Millions of Yen)ITEM
ASSETSAMOUNT

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

942,033
499,247
138,889
132,886
39,98021,57941,511

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

922,145
391,775
152,7708,897

Intangible assets:
Software
Goodwill
Other

120,277
22,88365,604
31,789Investments 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

410,093272,123
33,301
16,45824,92439,53225,085
12,204(13,538)TOTAL ASSETS

14,289
186
4,880
7,524
11,003
3,053
28,714(1,715)74,704
24,342
120,876
10,184

1,864,179[English Translation]
55

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 & supervisoryboard members
Net defined benefit liability
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
361,106
42,85833,806439
4,730
42,21523,44012,652
7,828
119,334
30,192
18,2981,820
23,488273,248
3,899
10,444
12,85430,694
7,314
793

22,098181,0144,134

634,355
1,072,832
66,41081,801
998,405(73,785)
9,346
22,122(11)(17,011)
4,247
147,645
1,229,824
1,864,179

Consolidated Statement of Income(Fiscal Year from April 1, 2020 to March 31, 2021)(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
Other
Non-operating expenses:
Interest expenses
Loss on sales of investment securities
Loss on sales and disposal of fixed assets
Write-off of long-term prepaid expenses
Foreign exchange loss, net
Provision of allowance for doubtful accounts
Loss on private equity investments
Other
Ordinary profit
Extraordinary profit:
Gain on sales of fixed assets
Gain on sales of goodwill
Gain on sales of investment securities
Other
Extraordinary losses:
Amortization of goodwill
Loss on sales of investment securities insubsidiaries and affiliates
Loss on revaluation of investment securities
Net losses on disposal of fixed assets
Impairment losses on fixed assets
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]
56

1,035,898
705,326
330,571
193,645
136,925
1,425
602
842
6,179
2,503
824
204
1,712
582
243
1,376
3,513
1,031

143
120
8
79

11,5549,489
138,990

352

5,660
2,967
311
210
95
1,255
43,023(68)

10,499128,843
42,95585,888
11,207
74,681

Consolidated Statement of Changes in Net Assets(Fiscal Year from April 1, 2020 to March 31, 2021)(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

66,40181,8749

9960,828(73,775)

1,035,328(37,104)

18(37,104)

74,681

74,681
(9)

(82)

(9)
(82)

9

(73)

37,577(9)37,503

66,41081,801

998,405(73,785)

1,072,832[English Translation]
57

(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-controllinginterests
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(13,388)

1,096

(212)

12,095(15)

Noncontrolling interests Total net assets

137,378

1,172,494
18(37,104)
74,681(9)(82)

10,026

4(3,623)

3,151

9,558

10,267

19,826

10,026

4(3,623)

3,151

9,558

10,26757,33022,122(11)(17,011)

4,247

9,346

147,645

1,229,824[English Translation]
58

Non-Consolidated Balance Sheet(As of March 31, 2021)(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
Receivables – other
Merchandise
Supplies
Prepaid expenses
Short-term loans receivable
Other
Allowance for doubtful accounts

338,310 Current liabilities:
224,817
Accounts payable
37,273
Bank loans
Lease obligations
360
Payables – other
18,046
Payables – construction
10,802
Accrued income taxes
4,249
Accrued consumption taxes
7,300
Accrued expenses
2,356
Deposits received for armored car
2,483
services
22,123
Deferred revenue
8,568
Accrued bonuses
(70)
Other

111,252
4,505
19,516263
17,297
4,348
10,594
5,131
675
17,788Fixed assets:
Tangible assets:
Buildings and improvements
Automobiles
Security equipment and control
stations
Machinery and equipment
Tools, furniture and fixtures
Land
Construction in progress
Other

633,182 Long-term liabilities:
120,132
Lease obligations
16,283
Guarantee deposits received
557
Accrued pension and severance
71,042
costs
Other
105
3,812
22,2494,457
1,623
Total liabilities
NET ASSETS
11,343
7,826
3,516 Shareholders’ equity:
Common stock
Capital surplus:
501,706
Additional paid-in capital
22,215
Other capital surplus
356,243
Retained earnings:
Legal reserve
Other retained earnings:
2,179
Reserve for systemdevelopments
57,331
General reserve
7,650
Accumulated earnings carried
20,104
forward25,825
Common stock in treasury, at cost
4,408
4,268 Valuation, translation
adjustments and others:
2,307
Unrealized gains on securities(827)

21,678
3,807
16,167
1,389

Intangible assets:
Software
Other
Investments and others:
Investment securities
Investment securities insubsidiaries and affiliatedcompanies
Investments in subsidiaries andaffiliated companies
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

971,493[English Translation]
59

Total net assets
TOTAL LIABILITIESAND NET ASSETS

19,808
6,718
4,603

313

132,931

832,248
66,41083,08783,086
0756,535
9,028
747,507
800
2,212
744,495(73,785)
6,313
6,313

838,562
971,493Non-Consolidated Statement of Income(Fiscal Year from April 1, 2020 to March 31, 2021)(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
Write-off of long-term prepaid expenses
Other
Ordinary profit
Extraordinary profit:
Gain on liquidation of subsidiaries and affiliates
Gain on sales of investment securities
Other
Extraordinary losses:
Loss on revaluation of investment securities insubsidiaries and affiliated companies
Loss on debt forgiveness of subsidiaries and affiliates
Loss on revaluation of investment securities
Loss on sales of investment securities in subsidiaries
and affiliates
Other
Income before income taxes
Income taxes - current
Income taxes - deferred
Net income[English Translation]
60

394,389
235,165
159,224
83,68275,541873
14,185
1,114
177
1,398
485
353

208
8
9

16,1742,414
89,301

226

5,874
2,551
242
194
130
20,913(339)

8,992
80,534
20,57459,960Non-Consolidated Statement of Changes in Net Assets(Fiscal Year from April 1, 2020 to March 31, 2021)(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
Net changes of items otherthan shareholders’ equity
Total changes during the
fiscal year
Balance at the end of the
fiscal year

Other capitalsurplus

Total capitalsurplus0

83,07866,401

83,077

9

9

9

9

-

9

66,41083,086

0

83,087

9(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
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

721,639

733,679(37,104)
59,960(37,104)
59,960---22,85522,855

9,028

800

2,212

744,495

756,535[English Translation]
61

(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(73,775)

809,383(9)18(37,104)
59,960(9)

Net changes of items otherthan shareholders’ equity
Total changes during the fiscal
year

(9)

Balance at the end of the fiscal
year(73,785)[English Translation]
62

3,494

Total
valuation,translation
adjustments
and others

Total net
assets3,494

812,878
18(37,104)
59,960
(9)

2,819

2,819

2,819

22,864

2,819

2,819

25,684

832,248

6,313

6,313

838,562

Certified Copy of the Accounting Auditor’s Report (Consolidated)
Independent Auditor’s Report
May 20, 2021

The Board of Directorsof SECOM Co., Ltd.:KPMG AZSA LLC

Tokyo Office, Japan
Michitaka Shishido (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kiyoyuki Sakurai (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”) and its
consolidated subsidiaries (collectively referred to as “the Group”), as at March 31, 2021
and for the year from April 1, 2020 to March 31, 2021 in accordance with Article 444-4of 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]
63

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 theconsolidated financial statements in accordance with accounting principles generally
accepted in Japan, and for such internal control as management determines isnecessary to enable the preparation of consolidated financial statements that are freefrom 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, implementationand maintenance 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 andappropriate to provide a basis for our opinion. The selection and application ofaudit 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
the audit 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 basisof accounting 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 therelated 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 orconditions 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 inJapan, the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial[English Translation]64

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 astatement that we have complied with relevant ethical requirements regarding
independence, and communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

Interest required to be disclosed by the Certified Public Accountants Act ofJapan
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]
65

Certified Copy of the Accounting Auditor’s Report (Non-Consolidated)
Independent Auditor’s Report
May 20, 2021
The Board of Directorsof SECOM Co., Ltd.:KPMG AZSA LLC
Tokyo Office, Japan
Michitaka Shishido (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kiyoyuki Sakurai (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 supplementary schedules (“the financial statements and the supplementaryschedules”) of SECOM Co., Ltd. (“the Company”) as at March 31, 2021 and for theyear from April 1, 2020 to March 31, 2021 in accordance with Article 436-2-1 of theCompanies Act.
In our opinion, the financial statements and the supplementary schedules referred toabove present fairly, in all material respects, the financial position and the results ofoperations of the Company for the period, for which the financial statements and the
supplementary schedules 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 Financial Statements and the supplementaryschedules section of our report. We are independent of the Company in accordance withthe ethical requirements that are relevant to our audit of the financial statements inJapan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

[English Translation]
66

Responsibilities of Management and Corporate Auditors and the Board of
Corporate Auditors for the Financial Statements and the Supplementary
Schedules
Management is responsible for the preparation and fair presentation of the financial
statements and the supplementary schedules in accordance with accounting principles
generally accepted in Japan, and for such internal control as management determines isnecessary to enable the preparation of financial statements and the supplementaryschedules that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements and the 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 theSupplementary Schedules
Our objectives are to obtain reasonable assurance about whether the financial statements
and the 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 considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements and the supplementaryschedules.
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 financial statements andthe supplementary schedules, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The selection and application 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 supplementary schedules or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor’s report. However, future[English Translation]67

events or conditions may cause the Company to cease to continue as a going
concern.
 Evaluate whether the presentation and disclosures in the financial statements and the
supplementary schedules are in accordance with accounting standards generally
accepted in Japan, the overall presentation, structure and content of the financial
statements and the supplementary schedules, including the disclosures, and whether
the financial statements and the supplementary schedules represent the underlying
transactions and events in a manner 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]
68

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

May 20, 2021

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 60th business term from April
1, 2020 through March 31, 2021 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]69

(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 them and 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]
70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]
71