TO OUR SHAREHOLDERS

TMakoto Iida
Founderhe outlook for Japan’s
economy remained unclear
throughout the fiscal year
ended March 31, 2002, reflecting
sluggish capital investment, apersistently difficult employment
situation and flagging consumer
spending. In this environment,
SECOM pressed forward with efforts
to realize its vision for the future—
the Social System Industry. Centeredon a groupwide reorganization andthe improvement of business processes, these efforts were undertaken with the aim of enhancing
existing services, reinforcing marketing and developing new services
that better meet the needs of customers. In the period, they contributed to a 5.4% increase inconsolidated revenue and otherincome, to ¥493.5 billion.
Net income decreased 22.5%, to¥34.1 billion, largely owing to theabsence of ¥21.4 billion generated
by a gain on securities contribution
to employee retirement benefit trustin the previous period. Basic net
income per share was ¥146.19, downfrom ¥188.76. Cash dividends per
share of ¥40.00 were approved at thegeneral shareholders’ meeting heldon June 27, 2002.
Integrating Businesses andServices
To respond to society’s increasingly
complex needs, we are expanding
our security services, while at thesame time maximizing synergies
among seemingly unrelated businesses, notably those involving
security, information, medical, education, insurance and GIS services.

2SECOM CO., LTD. Annual Report 2002

We have created the infrastructurenecessary for the establishment of
the Social System Industry, and weare now integrating businesses andservices that use our network capabilities to provide innovative, practical services and systems, thereby
creating new value. We believe thetime has come to embark on thesecond stage of development of theSocial System Industry. Accordingly,
during the period under review wetook decisive steps to expand andenhance services. As a consequence,
we saw considerable growth incore businesses.
In the security services field,
we launched COCO-SECOM in April
2001. COCO-SECOM is a suite ofservices that combines security withinformation technology (IT) and GIS
services to locate the position ofpeople on the move and mobile
objects, such as automobiles.
Subsequent additions to the COCOSECOM lineup include COCOSECOM Car Alarm 2, which
supplements the basic car alarmservice with antitheft functions, andCOCO-SECOM EZ, Japan’s first
mobile phone-based medical emergency alert service, which operates
with next-generation mobile phones
provided by KDDI Corporation, oneof Japan’s leading telecommunications firms. In the area of home
security services, we concluded anagreement with a leading housing
construction company, whereby theSECOM Home Security system has
been incorporated into the company’s housing series. Another highlight of the period was the launch ofTOTAX ZETA, a comprehensive

large-scale proprietary system thatfeatures access via wireless integrated circuit (IC) pass cards andboasts unparalleled flexibility andexpandability, making it a highly
cost-effective choice for use inindustrial complexes and buildings.
In the area of information services, subsidiary SECOM Trust.net
Co., Ltd., continued to capitalize on
its advanced technological capabilities and expertise to provide a fullrange of cyber security services,
including digital authentication, network security monitoring and consulting. The company won contracts
from four leading Japanese financial
institutions to provide digital certificate authority hosting services,which encompass the construction
and operation of certificate authority
services on behalf of customers, forthe Identrus B2B e-commerce network. SECOM Trust.net also operates
SECOM Secure Data Center, which
provides a highly secure operating
environment for customers’ serversthat includes rigorous monitoring ofunauthorized access and virus activity. This center is the culminationof SECOM’s expertise in physicalsecurity, cyber security, networking
technology and system operations.
In medical services, we merged
our medical services department withthree subsidiaries engaged in homenursing services, home personal careservices and health foods, to form anew company under the name ofSecom Medical System Co., Ltd. In
doing so, we created a solid platform
for the development of medical,
health and personal care services
as an integrated business. During

the period, we introduced SECOM
Ubiquitous Electronic Medical
Report (EMR), an innovative reportsystem that combines medical services with IT. We continued to promote the development of SECOM
Healthcare Net by linking patientswith their primary physicians, andclinics and small hospitals withspecialists and large hospitals.
Our education services businesscenters on subsidiary Secom LinesCo., Ltd. During the period, thecompany continued to take steps
to increase the popularity of ourcomputer-aided learning systems
for schools.
In insurance services, subsidiary
Secom General Insurance Co., Ltd.,augmented its lineup of innovative
policies with MEDCOM, an unrestricted treatment policy that gives
cancer patients access to cuttingedge courses of treatment not covered by Japan’s national healthinsurance scheme.
Subsidiary Pasco Corporationis Japan’s leading purveyor of aerial
mapping and GIS services. During
the period, Pasco continued to takesteps to expand Japan’s GIS services
market. On February 21, 2002, thecompany entered into a comprehensive business alliance with
Switzerland’s Leica Geosystems AG,
a global leader in the surveying
instruments and systems field. InApril 2002, Pasco and ESRI of theUnited States, the world’s largest
GIS software developer, establisheda joint venture, ESRI Japan.
Subsidiary Secom Home Life
Co., Ltd., heads our real estatedevelopment arm. This company

Toshitaka Sugimachi
Chairman

Shohei Kimura
President and Representative Director

SECOM CO., LTD. Annual Report 20023TO OUR SHAREHOLDERS

focuses on developing high-grade,
safe condominiums with built-in
on-line security systems, ensuringsafety, security and peace of mindfor residents.
In other news, subsidiary SecomJoshinetsu Co., Ltd., which overseesGroup operations in Niigata, Naganoand Gunma prefectures, listed its
shares on the Second Section of theTokyo Stock Exchange.
Introducing SECOM’s New
Management TeamAt a meeting of SECOM’s Board ofDirectors on February 22, 2002, a
proposal for a reorganization of theBoard of Directors was approved.
As a consequence, effective April 1,2002, Toshitaka Sugimachi assumed
the post of Chairman and was succeeded as President and Representative Director by Shohei Kimura. The
new management team looks forward to building on the accomplishments of its predecessors as SECOM
continues to advance the Social
System Industry vision.
Embarking on the Second Stage ofDevelopment of the Social System
Industry
Recognizing the opportunities for
growth resulting from the increasing
sophistication and diversity ofsociety’s expectations regarding
safety and security, we have reinforced our services and developed
a wide variety of innovative systems.
At the same time, we have expanded
our focus beyond security services,establishing operations in such areas
as information, medical, education,insurance and GIS services.
We have identified the recent
management change as the beginning of the Social System Industry’s
second stage of development. Our
efforts at this stage will focus on
integrating our business in a mannerthat enables us to develop new,value-added services. We will continue to be guided by our determination to respond to society’s changing
safety and security needs, and seethat SECOM remains the first choiceof people seeking peace of mind. To
ensure our future success, we willencourage greater understanding
and application of the SECOM philosophy at all levels of our organization and endeavor to maximize
synergies among our various businesses, while at the same time providing services and systems thatmake life more secure, convenientand comfortable.
We recognize that a clear visionencompassing all SECOM employees
and all businesses will become

increasingly crucial to our ability tomaximize internal synergies in theyears ahead. Our corporate philosophy, which has remained unchanged
since the parent company’s founding, emphasizes the importance oftranscending established boundaries
and engaging in businesses that society values. Accordingly, our businessdevelopment efforts will continue toreflect our belief in the importanceof seeking new challenges and defying conventional wisdom, as well as
our commitment to developing products and services that are truly beneficial to society. As we embark on
the second stage of the Social System Industry’s development, therefore, we are reinforcing the basic
principles that have guided us todate to ensure we continue to maintain a corporate culture based on aspirit of innovation and courage.
We recognize the importance ofresponsive, efficient management ina changing environment, and theneed to maximize shareholder value.
We will strive to continue meetingthe expectations of our shareholders
on both counts, and we look forward
to your ongoing support.

August 30, 2002

Makoto Iida,
Founder

4

SECOM CO., LTD. Annual Report 2002

Toshitaka Sugimachi,
Chairman

Shohei Kimura, President andRepresentative Director