SOHGO SECURITY SERVICES CO., LTD.

Eyes Toward
the Future
ALSOK REPORT 2017
Fiscal Year Ended March 31, 2017

Securities Code: 2331

Eyes Toward the Future
Since its founding in 1965, the ALSOK Group has continued to contribute to the safety and security ofcustomers and society by developing its wide-ranging security services operations as a leading
company in the Japanese security services industry.
Our more than 36,000 employees pride themselves on ALSOK’s history, which inspires them as theybuild our future.
We are committed to always protecting the safety and security of customers and society.
Accordingly, we see our mission as continuously creating new corporate value by providing products
and services of impeccable quality.

Editorial Policy

Contents
ALSOK Report 2017 has been constructed as an integrated report that compiles informa-

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Contents / Editorial Policy

information as well as non-ﬁnancial information on its corporate social responsibility

Message from the Chairman(CSR) activities and other topics. In addition to describing the state of management from

Conversation with the President

an economic perspective, this report also explains the ALSOK Group’s environmental,social, and governance (ESG) initiatives as well as the various CSR activities the Group

Japanese Security Services Industry andcarries out to contribute to the international society’s drive to achieve the United Nations’

ALSOK’s Position Therein

Sustainable Development Goals (SDGs). In this manner, we have sought to paint a com-

The ALSOK Group’s Business
Financial and Non-Financial Highlights
Review of Operations

We hope that this report will provide an opportunity to deepen our engagement with
our various stakeholders.
For data and information on corporate activities that were not included in this report,
please also refer to the Company’s corporate website.

for Realizing Sustainable Growth

Information for Shareholders and Other Investors

CSR Management

ALSOK’s corporate website includes detailed information on the Company’s

Initiatives for Realizing Sustainable Improvement

management policies, ﬁnancial position, business performance, andstocks as well as an assortment of investor relations (IR) materials.
IR website: http://www.alsok.co.jp/en/ir/

Corporate GovernanceDirectors, Audit & Supervisory Board Members,
and Executive Ofﬁcers

41
56

prehensive picture of the ALSOK Group’s pursuit of ongoing growth.

Management Tasks and Initiatives

in Corporate Value

33
37

tion on the Company’s performance, business operations, future strategies, and ﬁnancial

Financial Section

CSR and Social Contribution Activities
Detailed information on the CSR and social contribution activities that ALSOK isadvancing as part of its business activities based on ISO 26000 canbe found on its corporate website.

Corporate Information / Stock Information

CSR website: http://www.alsok.co.jp/company/society(available in Japanese only)
http://www.alsok.co.jp/en/csr/

2

Message from the Chairman

ALSOK contributes to the ongoingdevelopment of society by functioning
as a form of social infrastructure that
supports safety and security.

Atsushi Murai
Chairman and Representative Director
Chief Executive Ofﬁcer (CEO)Pursuit of New Business Opportunities
In the ﬁscal year ended March 31, 2017, the ALSOK Group’s operatingsame time, the threats facing society are growing more diverse withenvironment was characterized by favorable trends in the security

each coming year, as seen in ever more frequent natural disasters andservices industry seen in the midst of a rise in capital investment

accidents linked to aging social infrastructure.

among companies stimulated by a modest economic recovery. However,In this environment, demand continues to grow for security services

the trend toward protectionism witnessed overseas, which was exempli-that can support the safety and security of society, and these services

ﬁed by the economic policies of the Trump administration in the United

have come to function as an inseparable component of social infrastruc-States and the United Kingdom’s decision to leave the European Union,

ture. Meanwhile, labor shortfalls arising from the declining birthrate andcreated cause for concern. A cautious outlook is thus warranted withaging population have led to diversiﬁcation in the types of outsourcing

regard to the impacts of these developments on the domestic economy.

needs requested of security services companies. Acting based on its

In regard to public safety in Japan, the number of reported crimes ispolicy of “responding accurately to customers’ various risks and out-

decreasing rapidly. Regardless, the incessant media coverage of various

sourcing needs,” the ALSOK Group continues to pursue an ever wider

crimes contributed to a situation in which this decrease did not trans-

range of new business opportunities in order to contribute to the ongoinglate to an improvement in perceived safety. Particular fear wasdevelopment of society. In this pursuit, we will move beyond the tradi-

drummed up for crimes targeting children, senior citizens, and differ-tional boundaries of security services, fully leveraging the Group’s assets

ently abled individuals as well as cyberattacks aimed at companies andin the process.

the acts of international terrorism that are shocking the globe. At the

Vision for the ALSOK Group of the Future (Eyes Toward the Future)
ALSOK’s management is “Based on two core principles exempliﬁed byaggressively expand our business overseas while still keeping our eye“arigato no kokoro” (a feeling of gratefulness and gratitude) and “bushi

on economic trends in Japan.

no seishin” (a samurai spirit), we devote ourselves to protecting the

3

In Japan, it is projected that the birthrate will continue to decline andsafety and security of our customers and of society as a whole.” Thisthat the population will continue to age, a situation that presents thephilosophy guides us in developing honest and diligent employees andrisk of further exacerbating social issues, such as labor shortfall andin expanding our business. We will continue to position our security

market shrinkage. Faced with this realization, the ALSOK Group

services operations as the core of our business going forward. At theremains committed to ongoing improvements in the quality of its secu-

same time, we will forge ahead with the development of new businesses

rity services. As one approach toward accomplishing this goal, we will

and new services with the potential to support the Company, such asprovide new security styles, such as those that utilize artiﬁcial intel-

long-term care services and general property management and ﬁreligence, or AI; the Internet of Things, or IoT; robots; and other new

protection services, both areas from which we anticipate synergies. The

technologies to prevent and predict crimes. Another approach will be to

infrastructure and know-how accumulated to date will be utilized inbetter position our human resources and otherwise realize more efﬁ-these efforts. As we grow our business in this manner, we willcient management.

ALSOK REPORT 2017

always guided by our unchanging management philosophy.

Through these efforts, we aim to grow the scale of the ALSOK Group’s
sales to roughly ¥1 trillion and to increase ordinary income to around

Japan is home to more than 3,000 companies that are over 200 years¥100.0 billion. As we work toward these goals in our business, there willold. Dreaming of one day joining this elite group, ALSOK will push forward

be no change to our basic policy of functioning as a form of social infra-

with steadfast efforts to develop its business, never being tempted by the

structure that supports safety and security no matter how times may

lure of easy proﬁts.

change. We will thus continue contributing to the development of society,

Trustworthy Management Systems and Workplace Environment
Furthermore, we recognize the Company’s obligation to provide

The security services industry is a labor-intensive industry. As such, thedeclining birthrate, aging population, and ensuing labor shortfalls

employees with a sound and comfortable workplace environment that ispresent serious issues. However, even if human resources are lacking,conducive to their ability to balance their work and private lives. We

we cannot lower our standards for employees. If ALSOK wants to sur-have therefore instituted various measures to help enrich the private

vive, it must be a company that can cultivate and retain talented

lives of employees and help them maintain good physical and mental

employees. The sustainable growth society expects of companies canhealth. For example, the Company offers childcare and long-term care

only be achieved when employees feel motivated in their work and aresupport systems that exceed the legally mandated level and provides

able to make contributions accordingly. It is therefore absolutely essen-

employees with regular health checkups that include some tests gener-

tial for management to maintain the appropriate policies andally reserved for more extensive checkups. In addition, we have estab-

approaches and for the Company to have a fair and open corporate

lished the ALSOK Support Line mental health consultation help desk.

culture. As one facet of its efforts to develop such a culture, the ALSOK

Furthermore, realizing that the security services industry is generallyGroup has established the ALSOK Hotline, providing an internal report-

viewed as a difﬁcult place for women to work, ALSOK actively supports

ing system that allows employees to report unlawful or inappropriate

the contributions of female employees. Speciﬁc efforts to this end

behavior without suffering disadvantageous treatment and simultane-

include the introduction of shortened working hour and childcare leave

ously cultivating governance awareness. In addition, we are improving

systems and other measures for developing a workplace environment

the awareness of all employees with regard to compliance through thethat is conductive to women working at various life stages.

related education program “Compliance Campaigns”.

Strengths Represented by the ALSOK Group’s Human Resources
The ALSOK Group currently offers security services 24 hours a day, 365

practice in all aspects of our business operations. The corporate culturedays a year, and it strives to supply customers with services that satisfy

fostered through these efforts places extreme emphasis on both sincer-

them. These efforts are supported by our more than 36,000 trustworthy

ity and integrity and is yet another strength that we can take pride in.

and highly capable employees, who are a precious asset and one of

Furthermore, ALSOK has been named as a Tokyo 2020 Ofﬁcial Partner

ALSOK’s core strengths. It goes without saying that providing security(Security Services and Planning category) to the Olympic and Paralympic

services requires one to acquire specialized knowledge and developGames Tokyo 2020. Aware of the responsibility this position entails, wehigh-level skills. Moreover, one must see value in protecting the lives,

have enhanced our employee education programs from the perspective of

bodies, and assets of people and be able to earn customer trust by

the global market. This involves not only education on language proﬁ-going about their duties in a disciplined manner. To cultivate this type ofciency and cultural understanding but also on manners. Going forward,

employee, ALSOK implements various training programs, including

we will continue to train our talented human resources, who are respon-training for new employees as well as rank-based training. In all of oursible for supporting the safety and security of society, and develop a

training programs, we further understanding of and entrench the fun-workplace environment that enables them to exercise their talents. In thisdamental spirit that we have adhered to since our foundation. We havemanner, we will seek to keep living up to the expectations of our stake-thus established a training system that ensures we put this spirit into

holders while contributing to the ongoing development of society.

Management Philosophy
Based on two core principles exempliﬁed by “arigato no kokoro” (a feeling of gratefulness and gratitude) and “bushi no seishin”(a samurai spirit). we devote ourselves to protecting the safety and security of our customers and of society as a whole.
Management Policies
1

Fundamental Spirit

Under any condition that we face, we work
hard to live by a fundamental spirit thatreﬂects our management philosophy—as
exempliﬁed by a feeling of gratefulness
and gratitude and a samurai spirit based
on toughness, fairness, and generosity—to be a highly principled company.

2

Priority

Our top priority is to provide products andservices of the ﬁrst rank, while cultivating
the highest levels of motivation in our
employees and living up to shareholder
expectations through attractive proﬁt
growth.

3

Basic Strategy

4

While security services remain at theheart of our business, as our basic
strategy, we also seek to offer a diverse
range of products and services in new
ﬁelds to satisfy the needs of the everchanging times.

Contributing to Society

Allying ourselves with public bodies
charged with protecting public safety andsecurity, we commit ourselves to developing value-adding products and services,
thereby always contributing to society.

* ALSOK is a Tokyo 2020 Ofﬁcial Partner (Security Services and Planning).

4

Conversation with the President

Seeking to become a service provider thatoffers comprehensive support for thesafety and security of society, ALSOK willcontinue to create new value together
with its customers.

We arranged for a discussion between President Yukiyasu
Aoyama and Yusuke Kawamura, deputy chairman of the instituteat Daiwa Institute of Research Ltd. Mr. Kawamura is highly
knowledgeable of the securities markets of Japan and otherparts of Asia as well as of ﬁnance and economics, and he iscurrently playing a central role in promoting the “Cool Japan”
strategy of the Japanese government. The topic of this discussion
was the recent course of ALSOK’s business expansion and ideal
form of the Company’s business in the future.

Kawamura

It has been 15 years since ALSOK was listed on the stock
exchange. I have been watching the stock market for many

years, and I have not seen many companies that have succeeded inachieving signiﬁcant performance growth after becoming listed. ALSOK,
meanwhile, has been able to grow its sales for seven consecutive years
and increase its income for ﬁve consecutive years. This incredibly
impressive performance demonstrates ALSOK’s exceptional ability toutilize equity ﬁnancing. What is the secret behind ALSOK’s success?

AoyamaAfter becoming listed on the stock exchange, we proceeded
to install internal controls and otherwise solidify our operat-

ing foundations. It was only ﬁve or six years ago when we began growing
consolidated sales and diversifying our product and service lineup
primarily through M&A activities while drastically reforming corporate

Yukiyasu Aoyama

structures to cut Groupwide costs. These efforts are steadily beginning

President and Representative Director

to produce results in the form of the performance you speak of.

Chief Operating Ofﬁcer (COO)

Kawamura

So in other words, the ALSOK Group expanded itself ina quantitative manner as a conglomerate that offers compre-

hensive support for safety and security. The recent decline in the birthrate
is said to herald the end of economies in rural areas. However, I see
ALSOK as having signiﬁcant potential to grow against this backdrop.
By this, I mean that ALSOK is doing a good job at developing operations
in areas where customers look to outsource their business processes.

Aoyamainspecting facilities and combating ﬁres and other disasters. We havethus been expanding the scope of our business based on the idea ofproviding services that respond to the safety and security needs ofindividual customers.

The business process outsourcing needs of customers canvary greatly based on their business model. When deciding inwhat areas ALSOK will develop its own business, we return to the basic
perspective on which our business is founded: protecting the safety andsecurity of customers by determining the areas in which they are troubled with this regard and providing services to address these troubles.
Customer needs extend beyond security at their facilities. They also

5need means of safely transporting cash and other valuables and of

Kawamura

I understand that ALSOK has recently been acquiring longterm care companies. I would not have seen a connection

between security services and long-term care. What led you to pursue
this course of action?

ALSOK REPORT 2017independent individuals, we turned our attention to the services that areneeded by individuals requiring care. We thus chose to enter into thevisit-based care service business ﬁve years ago. Our ﬁrst step was toestablish our own company for this purpose. However, we later decided
to utilize the resources of existing companies through M&A activities,
adapting them to fulﬁll our mission of protecting customers. Today, ourlong-term care services business is conducted by subsidiaries HCM
Corporation, ALSOK Care & Support Co., Ltd., and Wisnet Co., Ltd. Withannual sales in the area of ¥25.0 billion, this business provides bothin-home and in-facility care services, which have come to be used byaround 12,000 individuals.

Kawamura

I would like to ask about ALSOK’s overseas operations.
I understand that you are currently developing operations

centered on Southeast Asia. There are two main patterns through which
Japanese companies expand overseas. One pattern is when manufacturers and other companies establish manufacturing bases overseas.
The other pattern is when other companies provide services to support
Japanese companies in operating overseas manufacturing bases.
Am I correct in assuming that your overseas operations started
with offering support services, namely security services, to otherJapanese companies?

Aoyama

You are essentially right. The start of our overseas operations
actually came quite a bit before we commenced a full-ﬂedged

overseas business. Speciﬁcally, this start was in 1980, when we dispatched members of our staff to implement security measures at an
overseas branch of Japan’s Ministry of Foreign Affairs. Providing security for this facility and the Japanese citizens that staffed it was the ﬁrst
instance of our exercising the spirit of protecting companies and people,
which we have held since our founding, overseas. We later launched afull-ﬂedged overseas business with the intent of utilizing the insightgained through this undertaking to protect the safety and security ofJapanese companies developing operations overseas.

Yusuke Kawamura

It was in 2007, when we established a subsidiary in Thailand, that weﬁrst began providing security services to Japanese companies overseas

Deputy Chairman of the Instituteunder the ALSOK brand. Our business currently extends to nine coun-

Daiwa Institute of Research Ltd.

tries in Southeast Asia and other areas where many Japanese companies are developing operations. However, the regulations imposed on
the security services industries in such countries can make it difﬁcultfor us to play a direct role in developing security guards and in estab-

AoyamaAs we develop our home security operations, we have been
seeing an increase in cases of emergency reports from seniorcitizens living alone. This trend inspired us to start offering services inwhich we dispatch security guards in times of emergency to conﬁrm thesafety of senior citizens. After that, municipal governments began
developing projects for protecting senior citizens by installing emergency reporting systems in their homes. Meanwhile, security services
companies offering round-the-clock, nationwide dispatch services
similar to ALSOK’s started assisting in these projects as subcontractors. Senior citizens have diverse needs, with some being completely
independent and some requiring constant care. Considering that thelishing and operating security services companies. For this reason, ouroverseas operations largely consist of security consulting services
through which we help customers by formulating security plans, introducing local security services partners, and managing security squads.
Nonetheless, our Thai subsidiary has grown to possess a staff ofapproximately 700 security professionals over the past decade. These
employees provide Japanese companies expanding overseas withALSOK brand electronic security and stationed security services. In
addition, we acquired companies offering security services in Indonesia
and Vietnam in 2016, and our combined security staff in these two countries now totals roughly 3,000 individuals.

aforementioned government projects were services aimed at

6

Conversation with the President

Kawamura

Looking ahead, Japan is scheduled to host international

KawamuraOn the topic of new forms of security services, information

sporting events including the 2019 Rugby World Cup and theand communications technologies, or ICT, and IoT technolo-

Olympic and Paralympic Games Tokyo 2020. If we turn our eyes to thegies are progressing constantly and it can be expected that these tech-

past, we will see that it was similarly large events, most notably the

nologies will evolve into something completely new over the next several

Olympic Games Tokyo 1964 and Expo ’70 in Osaka, that have stimulated

years. ALSOK is a forerunner in the ﬁeld of smart security services,

rapid growth in private-sector security services companies. Do you

developing businesses using drones and employing robotics technolo-

expect these upcoming events to once again serve as catalysts forgies in its security services. How would you describe the Company’s

growth in the security services industry?

R&D and marketing systems?

AoyamaI expect that the upcoming events will indeed stimulate ourgrowth. ALSOK founder Jun Murai was appointed to Deputy

AoyamaWe advance research and development in collaboration withpartner manufacturers, coordinating closely with them.

Secretary-General on the organizing committee for the Olympic Games

However, this process requires time. Conditions inside and outside ofTokyo 1964, and this experience led him to establish the Company in the

the Company, meanwhile, change at breakneck speed. For example, if

following year of 1965. Expo ’70, held in Osaka in 1970, proved to be aincidents of stalking and other reprehensible crimes emerge, there isnational undertaking of similar scale to the Olympics, becoming thean immediate need to deploy products and services for combating theselargest international expo ever at that point in time. I feel great pride incrimes. Ideally, we would like to conduct research and development with

our ability to continue in this tradition by once again helping to ensure

an eye to three to ﬁve years down the line, but it can be difﬁcult tothe safety and security of major international events. In fact, I see thisaccurately predict future crisis management needs. Nonetheless, we

as part of ALSOK’s mission. Providing security at these events will berecognize that history repeats itself. We are therefore currently focusedmassive undertakings that will test Japan’s security services industry as

on working together with manufacturers to develop systems thata whole, requiring that the industry address tasks such as securing,effectively use cameras to identify the precursors of crimes and acci-

educating, and training an incredible amount of security guards anddents and to detect suspicious activities and to link these systems toutilizing cutting-edge technologies. Through our participation in these

our security services. In the future, there will be a need to more efﬁ-

events, I hope to show the world a new form of security services thatciently position security guards and to compensate for labor shortfalls,

take advantage of the IoT, AI, robots, and other technologies.

including those resulted from the declining birthrate and aging population. The collection of big data and the utilization of AI, the IoT, newsensors, and robots will be crucial to accomplishing these objectives.

Yusuke Kawamura
Deputy Chairman of the InstituteDaiwa Institute of Research Ltd.
Mr. Kawamura joined Daiwa Securities Co., Ltd., after graduating from the Faculty of Law at Tokyo University in 1977. Later, he acquired a Master ofLaws from the University of Washington in 1981, before becoming a professor at the Faculty of Economics and the Graduate School of Economics ofNagasaki University in 2000 and then Senior Counselor of Daiwa Institute of Research in 2010 and eventually assuming his current position in 2012. In
this position, he has also served concurrently as a member of the Ministry of Finance’s Fiscal System Council and the Financial Services Agency’s
Business Accounting Council, an expert advisor to the Steering Committee of the Cabinet Secretariat’s Assembly of Cabinet Ministers Related toPromoting Public-Private Fund Usage, and an outside director at Cool Japan Fund Inc. and Mitsui Sugar Co., Ltd.

7

ALSOK REPORT 2017

Kawamura

The Sustainable Development Goals, commonly known as the

Stock Exchange formulated Japan’s Corporate Governance Code. This

SDGs, were adopted at the United Nations General Assembly

code encourages companies to increase their number of outside direc-

session held in September 2015. In addition, the Japan Securities

tors and to practice effective governance. What are your thoughts with

Dealers Association started encouraging companies to join the effort tothis regard?

accomplish the SDGs in the ﬁscal year ending March 31, 2018. ALSOK
has already joined this effort, as seen in its initiatives for supporting the

Aoyamapreemptive action?

Listed companies are supported by their relationships withvarious stakeholders. In order for a company to grow while

contributions of female employees, among others. What inspired thisgaining the full understanding of these stakeholders, it must havevarious check systems in place with regard to its management policies

AoyamaALSOK’s business has always been to protect safety andto maintain transparency and practice appropriate accountability. What

security, and the point of departure for this business is to

is important is to prevent the form of governance systems from being

contribute to society. We have recently been engaging in CSR activities

made into the end goal. The construction of frameworks that cannot

focused on environmental, social, and governance, or ESG, concerns.

actually function is a backwards approach. There is an inherent impor-

Accordingly, we had a strong recognition of the fact that the accomplish-tance to management policies and the concept of management ethics

ment of the SDGs would be crucial to the sustainable growth of companies.

with regard to the best way to exercise accountability. I therefore want to

ALSOK aims to ensure safety and security in the lives of all people in its

focus on creating systems that enable these concepts to be discussed

capacity as a provider of a form of social infrastructure that supports

and to permeate the entire organization.

safety and security. To fulﬁll this role, we will broaden our perspectivefrom beyond the conventional scope of the security services industry,

Kawamura

focusing our eyes on the future. With this view, we will advance a full-out

That’s why the arigato no kokoro and bushi no seishin principles described in ALSOK’s management philosophy are also

pursuit of innovation to create value for protecting safety and security inimportant to corporate governance, or, in other words, that a company

the present and in the future.

must put its heart into its governance efforts. Thank you for inviting me
to speak with you today.

Kawamura

In Europe and the United States, whether or not a company iscontributing to the accomplishment of the SDGs has alreadybecome an important indicator for institutional investors. I too think it isThank you for joining us today.
Aoyamanecessary for Japan, as a whole, to join this movement as a member ofthe international society and to increase its presence in the global* ALSOK is a Tokyo 2020 Ofﬁcial Partner (Security Services and Planning).

ﬁnancial market. I plan to pay attention to the efforts of companies,
ALSOK included, with this regard going forward.
Lastly, I would like to ask you about a corporate management topic
that has been garnering a great deal of attention in recent years: thereinforcement of corporate governance. A couple of years ago, the Tokyo

8

Japanese Security Services Industry and ALSOK’s Position Therein

Public Safety and Security Services Operating Environment in Japan
In 2016, the number of reported crimes declined for the 14th consecutive

scene and the police and other authorities can be notiﬁed as necessary.

year, dropping below 1 million for the ﬁrst time since World War II.

The number of facilities introducing these services has continued toMoreover, the number of reported crimes was nearly one-third the level

increase in recent years. In 2016, 3 million facilities used these services,from 2002 when the number of reported crimes peaked at 2.85 million,

2.6 times higher than in 2002. Today, the chance of a house protected byand cases of intrusion and theft, in particular, were roughly one-fourthelectronic security services being burgled is approximately one-sixth

the level from 2002. One reason behind this ongoing decline owes to thethat of unprotected houses (based on Company estimate).

services for protecting safety and security provided by security services

The role security services companies play in preventing crime iscompanies becoming widely recognized by society and the accompany-

growing larger. Such companies have been taking part in community

ing increase in the use of these services.

crime prevention activities in collaboration with the police. Also, there
has recently been a rise in the number of cases of security camera

Among the services provided by security services companies, elec-

images being used to help arrest suspects.

tronic security services entail installing sensors at customer premises
to detect abnormalities so that security guards can be dispatched to the

Number of Reported Cases of Crimes and Buildings Introducing
Electronic Security Services and Perception of Public Safety in Japan(Cases)(%)

3,500,000

70.0

2016

3,006,244cases

2002

2,853,739cases

3,000,000

60.0

50.0

2,500,000

2,000,000

2017

40.0

22.0%
2016

1,500,000

996,120cases

30.0

1,000,000

20.0

500,000

10.0

0(Fiscal years
ended March 31)

1989 90

91

0

92

93

94

95

96

97

■ Total reported cases of crimes ■ Cases of intrusion and theft■

98■

99 2000 01

02

03

04

05

06

Buildings introducing electronic security services

07
■

08

09

10

11

12

13

14

15

16

17

People stating that public safety is improving*

People stating that public safety is deteriorating*Sources: Crime statistics materials, overviews of the security industry, National Police Agency; public perception surveys, Cabinet Ofﬁce* Data for the years 1999, 2001, and 2003 is not publicly available and has therefore been omitted.

In addition, social needs for safety and security are on the rise among

Meanwhile, there has been signiﬁcant rises in speciﬁc types ofcrimes. These crimes include bank transfer scams and other special-households, companies, and communities alike. This trend is beingcase scams preying on senior citizens, stalking, domestic violence, childstimulated by concerns about natural disasters, terrorism, infectious

abuse, kidnapping and other abductions, and cybercrimes. As a result,diseases, and other threats as well as changes in the structure ofmore than 2 million consultations are received by the police each year

society, such as from the declining birthrate and aging population. Givenfrom individuals seeking to protect themselves from such crimes orthat only just over 20% of people in Japan state that public safety is

inquiring into other public safety topics.

improving when surveyed, one cannot claim that the perception of
public safety is getting better.

Consultations
Regarding Stalking

22,737

Kidnapping Victims Under
the Age of 13

Up36%

Source: The White Paper on Police, 2017

Up
28%

106
Source: The White Paper on Police, 2017

Number of Reported
Special-Case Scams

14,154

Number of Arrests Related
to Cybercrimes

Up
96%

8,324
Source: The White Paper on Police, 2017

Ratio of Special-Case Scams Targeting
Senior Citizens Over the Age of 65

Damages ofSpecial-Case Scams

78.2

¥

%

Up
45%

40,770Up
100%

millionSource: The White Paper on Police, 2017
Note: Figures are from 2016. Rates of increase or decrease are in comparison to 2011.

9

ALSOK REPORT 2017

Trends in the Security Services Industry
The security services industry provides services for protecting safety inintroducing home security services in Japan is currently around 4%.

people’s lives by completing one’s own crime prevention activities orThis ratio is much lower than ratios of more than 20% seen in Europe

conducting such activities on one’s behalf. As such, security services

and the United States, and it can thus be said that the Japanese secu-

companies make a business of protecting the safety and security ofrity services market features substantial latent demand. Given thesociety based on the requests of their customers.

labor-intensive nature of security services, labor shortfalls arising fromPresently, there are approximately 9,400 security services companies inJapan with roughly 540,000 security guards, and the combined sales ofthe declining birthrate and aging population are an issue, making theimprovement of labor productivity a pressing task.

these companies total ¥3.4 trillion (Source: Overview of the Security

According to the proposal that led to the decision to hold the Olympic

Industry in 2016, National Police Agency). The consolidated net sales ofand Paralympic Games in Tokyo for 2020, the event will entail the mobiliza-

the ALSOK Group account for approximately 10% of these sales, giving ittion of 14,000 private-sector security guards to ensure its safety. ALSOK is

the No. 2 position in the industry.

committed to contributing to the success of the Olympic and Paralympic

The majority of security services companies mainly offer laborintensive stationed security services, trafﬁc control, and crowd control.
Only a small portion of these companies are capable of offering elec-

Games Tokyo 2020 as a leading company in Japan’s security services
industry and as a Tokyo 2020 Ofﬁcial Partner.
* ALSOK is a Tokyo 2020 Ofﬁcial Partner (Security Services and Planning).

tronic and transportation security services, which require a large
amount of capital investment. Furthermore, the ratio of households

ALSOK

Introduced

Approx. 10% No. 2

Approx. 4%

Share of Sales in theJapanese Security
Services Industry

Ratio of Households
Introducing
Home Security Services
in JapanCalculated based on Overview

of the Security Industry in 2016,

Calculated based on Statistics of Japan 2017,

National Police Agency

Statistics Bureau, Ministry of Internal Affairs andCommunications

10

The ALSOK Group’s Business

Since its founding as SOHGO SECURITY SERVICES CO., LTD., in 1965, ALSOK has
endeavored to protect the safety and security of society as a leading company inJapan’s security services industry.
The Company’s main line of business is security services, which include
electronic security services, stationed security services, and transportation
security services. ALSOK protects the lives, assets, and safety of people byproviding these services on a nationwide basis. With the mobility necessary
to swiftly dispatch security guards nationwide 24 hours a day, 365 days ayear, we are furnishing an important piece of Japan’s economic and social
infrastructure.
At the same time, we are leveraging the experience and expertise gained
through our security services operations to broaden the scope of our business while responding to customer needs as they grow more diverse inconjunction with the changing times. For individual users, we provide a vast
lineup of products and services that support safe, secure, and comfortable
lives, including caring service and watching over precious members of one’s
family. For corporate clients, we can deliver multifaceted support for business activities with building maintenance and ancillary installation services
as well as with disaster prevention, business continuity, andterrorism countermeasure services.

Security Services
Electronic Security Services Contracts(for Corporate Clients and Individual Users)

Approx. 900,000
Note: Approx. 1,550,000 housing units covered when including
contracts with housing complexes
As of March 31, 2017

Domestic Stationed Security Services Sales¥102.3 billion
Note: In the ﬁscal year ended March 31, 2017

ATMs Managed throughTotal ATM Management System

Approx. 63,500
Note: Approx. 200,000 ATMs in Japan in total(based on Company estimate)
As of March 31, 2017

Long-Term Care Services

6.0%
Other Services

General Property Management
and Fire Protection Services

0.8%

General Property
Management and Fire
Protection Services

Aggregate AED Sales

Security Services

13.5%

79.7%
Net Sales(Fiscal Year Ended
March 31, 2017)

Electronic Security Services

41.3%

Approx. 135,000 units
Note: Approx. 630,000 AEDs in Japan in total (as of December 31,
2014, based on survey by Ministry of Health, Labour andWelfare research team)
As of March 31, 2017¥413.3billion

Long-Term Care Services
Transportation
Security Services

Stationed Security Services

24.8%

13.6%

Long-Term Care Service Users

Approx. 12,000

Individuals

As of March 31, 2017

11.0%
Public Institutions

7.6%

Other Services
Net Sales by
Client Type(Fiscal Year Ended
March 31, 2017)

Financial Institutions

22.2%
11

Companies

59.2%

Number of Municipal Governments Introducing
MIMAMORI Tags as Part of Test Project10
Note: Number of municipal governments taking part in the smart
wellness housing test project promoted by the Ministry ofLand, Infrastructure, Transport and Tourism
As of March 31, 2017

ALSOK REPORT 2017

Electronic Security Services

Stationed Security Services

Transportation Security Services

At the core of the security services of ALSOK

ALSOK’s Stationed Security Services segment

ALSOK’s Transportation Security Services seg-is a centralized monitoring and dispatch

protects customer safety by stationing security

ment provides services to prevent theft and othersystem, which utilizes state-of-the-art ICT andguards at buildings and facilities as well as atincidents when transporting cash, precious

is constantly linked to customer properties. In

events. Our trustworthy and highly capable

metals, marketable securities, and other valu-

the Electronic Security Services segment,

security guards seek to provide services

ables. Services offered include cash transportation

members of our highly trained and experi-

including access management, patrols, secu-

as well as the Total ATM Management System, inenced staff are on call at our Guard Centersrity monitoring, and greeting guests that are

which we provide management and operation

and approximately 2,400 depots locatedalways of impeccable quality.

services for the ATMs of banks and convenience

nationwide, ready to rush to the scene 24

stores, and the Cash Deposit and Dispenser

hours a day, 365 days a year should a cus-

Machine On-line System, in which we manage

tomer face an emergency.

stores’ sales revenues.

Net Sales

Net Sales(Millions of yen)

(Millions of yen)

170,585

180,000

Net Sales(Millions of yen)

120,000

102,322

120,000

80,00040,00060,00040,00020,000

0(Fiscal years
ended March 31)

2013

2014

2015

2016

2017

0
(Fiscal years
ended March 31)

2013

2014

2015

2016

2017

56,11960,000

0(Fiscal years
ended March 31)

2013

The ALSOK Group provides one-stop service for everything from security to facility management,

Net Salesdisaster prevention, and facility installation through close coordination between our Group com-

(Millions of yen)panies, Japan Facilio Co., Ltd.; Nippon Building Maintenance Co., Ltd.; ALSOK Souei Co., Ltd.;ALSOK Building Services Co., Ltd.; HOCHIKI CORPORATION; and Nippon Dry-Chemical Co., Ltd.

2014

2015

2016

2017

55,96160,00040,000We are also devoting efforts to aerial photography services utilizing drones and sales of AEDs
and disaster prevention supplies.

20,000
0(Fiscal years
ended March 31)

2013

ALSOK provides a wide range of long-term care services through HCM Corporation; ALSOK CareNet Sales& Support Co., Ltd.; and Wisnet Co., Ltd. Offered primarily in the Tokyo metropolitan area, these(Millions of yen)services include visit-based and daytime care services as well as fee-based, long-term carefacilities, group homes, and other in-facility long-term care services. Currently, these services

2014

2015

2016

30,0002017

24,921

20,000are used by approximately 12,000 individuals. Through these services, ALSOK will address theincrease in customers’ needs for long-term care services that is projected to accompany the
aging of Japan’s society.

10,000
0(Fiscal years
ended March 31)

2013

MIMAMORI Tags, a newly launched miniature security terminal, have been adopted by 10 munici-

Net Sales

pal governments as part of a test project aimed at protecting senior citizens suffering from

(Millions of yen)dementia. We also offer MAMOLOOK, a mobile security terminal; information security services,

2014

2015

2016

4,000

which protect against cyberattacks and information leakage; ALSOK DENPO (telegram service);

3,000

and a diverse range of other products and services that take full advantage of the ALSOK Group’s

2,000

nationwide network.

1,000
0(Fiscal years
ended March 31)

2017

3,433

2013

2014

2015

2016

2017

12

Financial and Non-Financial Highlights

Net Sales¥413.3 billion
Up 8.3% YOY

Ordinary Income / Ordinary Income Margin

Profit Attributable to Owners of Parent¥30.3 billion
Down 1.2% YOY¥18.3 billion
Up 2.6% YOY

Ordinary income

Millions of yen

Millions of yen%

Millions of yen

480,000

40,00012.0

20,000413,343 million¥

30,309 million
9.0
7.3 %

¥

18,330 million¥
360,000

30,000240,000

20,000

6.0

10,000120,000

10,000

3.0

5,000

0
FY

2013

2014

2015

2016

0

2017

FY

2013

2014

■ Ordinary Income

Dividends per Share

2015

2016

2017

0

Yen

¥

2013

2014

2015

2016

2017

ROE

9.7%

Ordinary Income Ratio

Total Net Assets / ROE
ROA

8.2%

Down 0.3 percentage points YOY
Millions of yen

55.00

60.00

0
FY

Total Assets / ROA¥55.00Up ¥5.00 YOY

15,000¥400,000

385,877 million 12.0%

Down 0.2 percentage points YOY
Millions of yen%

250,000

222,230¥8.2%

300,000

200,000

12.0

9.7%

9.0

40.00
200,000

15.0
million

150,000

9.0

100,000

6.0

50,000

3.0

6.0

20.00
100,000

0
FY

2013

2014

2015

2016

2017

0

3.0

2013

2014

■ Total Assets

ROA

As of March 31

2015

2016

2017

0

0
As of March 31

2013

2014

■ Total Net Assets

2015

2016

2017

0

ROE

Millions of yen
Fiscal year

2015

2016

2017

Fiscal year

2015

2016

2017

Proﬁt attributable to owners ofparent134.65177.77182.37

Net assets

1,800.15

1,805.09

1,956.25

Dividends

38.00

50.00

55.00

Ordinary income margin

6.8

8.0

7.3

Per share (Yen)Net sales

365,749

381,818

413,343

Ordinary income

24,70030,66730,309Proﬁt attributable to owners ofparent13,534

17,86818,330Capital expenditures

13,627

14,875

12,614

Depreciation and amortization

11,331

12,10913,773At the end of ﬁscal year

13

Fiscal year

Ratios (%)

Total assets

373,863349,561

385,877

Return on assets (ROA)

6.9

8.5

8.2

Total net assets

204,363

205,622

222,230

Return on equity (ROE)

7.8

9.9

9.7

ALSOK REPORT 2017

Number of Employees

Number of Employees by Gender

36,693Up 16.7% YOY
People36,69340,000

Average Number of Years of Continuous
Service (Non-Consolidated)(Non-Consolidated)

1,114
Up 1.3% YOY

15.9 years
Up 0.5 years YOY

Number of female employees

PeopleYears

16,00020.0

30,00012,00020,0008,000

10,0004,000

15.9 years

12,072

15.0

1,114

10.0

5.0
10,9580
As of March 31

2013

2014

2015

2016

2017

0
As of March 31

2013

2014

2015

2016

0

2017

As of March 31

2013

2014

2015

2016

2017

■■ Male Employees ■■ Female Employees

Percentage of Employees Returning toWork after Childcare Leave

CO2 Emissions Volume (Non-Consolidated)

36,649t-CO2
Down 2.0% YOY(Non-Consolidated, Total for Male and Female Employees)

91.3%
Down 1.7 percentage points YOY%

91.3 %

100.0

80.0

Fuel Usage by Vehicles (Non-Consolidated)

8,665.5kl
Down 2.8% YOY

t-CO2

kl

50,00012,00036,649t-CO

40,00010,0008,665.5kl

2

8,000
60.0

30,0003,549.4

15,596

kl

t-CO2

6,000
40.0

20,00020.0

10,0004,000

0
As of March 31

2013

2014

2015

2016

2017

0
FY

5,116.1

21,053
t-CO2

2013

2014

2015

2016

2017

■■ Vehicle Usage ■■ Ofﬁces and Other Facilities

kl

2,000
0
FY

2013

2014

2015

2016

2017

■■ Gasoline ■■ Diesel Oil

Percentage of Administrative Positions

Number of Children Participating in

Number of Individuals Completing

Filled by WomenALSOK ANSHIN KYOSHITSU Classes

First-Aid Training(Non-Consolidated)(As of March 31, 2017)(As of March 31, 2017)(As of April 1, 2017)

3.5%

Aggregate total of

1,333,000

Total of17,15114

Review of Operations
Security Services Operations
TOPICS
from the Fiscal Year Ended
March 31, 2017, and the
Fiscal Year Ending
March 31, 2018

Performed security operations at the G7 Ise-Shima
Summit and other meetingsof government leaders (totalof 10 cities and towns)

Acquired PT. ALSOK BASS
Indonesia Security Services

Electronic Security Services
In the year under review, strong sales were achieved by ALSOK’s
Electronic Security Services segment for services for corporateclients including ALSOK-GV (read as “ALSOK G-ﬁve”) and
ALSOK-ST as well as for security cameras and access management equipment. ALSOK-GV is a cutting-edge, all-in-one security
system with functions for sensor detection, image monitoring using
security cameras, equipment control, and labor management using
access management information, including information related towhen employees arrive at and leave work. Moreover, this systemenables these functions to be controlled via the Internet. ALSOK-ST
is a standard system that mainly monitors for intrusions, ﬁres, andequipment issues.
In services for individual users, growth in contract numbers wasfavorable for Home Security Basic, the current standard model in
ALSOK’s home security lineup, and for HOME ALSOK Premium,
which provides a sophisticated security system. As a result, thenumber of households enrolled in ALSOK home security services(including housing complexes) has surpassed 1 million.
Looking ahead, we are conducting research and development ontechnologies aimed at utilizing security camera images and AI to

Stationed Security Services
The rising need for high-quality security and security augmentation
services to address frequently occurring acts of terrorism created afavorable trend in contracts for large-scale security operations at
events in the Stationed Security Services segment during the year
under review. Speciﬁc events included the G7 Ise-Shima Summit
and other G7 meetings and the 2017 Sapporo Asian Winter Games.
Contracts for security operations at facilities were also strong
amidst the rise in outsourcing needs stimulated by the severe lackof workers in the manufacturing industry as well as the increase in
newly constructed ofﬁce buildings that occurred as part of urban
redevelopment plans.
In addition, we began offering Net de Security Guard. This newservice is an industry-ﬁrst in that it allows customers to request
security guards with ease via the Internet. Through this service, we
aim to expand the market by providing a highly accessible framework for customers that have not previously had direct dealing withALSOK to make inquiries and orders related to the Company’s
stationed security services.

15

Acquired ALSOK Vietnam
Security Services Joint
Stock Company

Began offering Net deSecurity Guard

Introduction video(in Japanese only)

create electronic security services that go beyond conventional intrusion detection services to help prevent crimes before they happen.
As one facet of these R&D activities, we have developed a systemthat analyzes and highlights the emotional state of people appearing
in security camera images to detect in real time suspicious individuals that may potentially commit crimes. This system contributed to
efﬁcient security operations at the 2016 G7 Ise-Shima Summit.

Introduction video(in Japanese only)

Future initiatives in this business will include measures to increase
our on-site response capabilities and improve operational efﬁciency
in light of the ever-more severe labor shortfalls. To this end, we plan
to coordinate security guards armed with ICT equipment, such as
wearable cameras and ultra-compact tablets, and security robots, anarea in which we have 30 years of development history.

ALSOK REPORT 2017

Established ALSOKSHOJITSU SECURITYSERVICE CO., LTD.

Provided security services
for the 2017 Sapporo Asian
Winter Games

Established ALSOK-TW
East Japan Co., Ltd.

Formed capitalalliance with Keihanshin
Security Services Co., Ltd.

Transportation Security Services

Established ALSOK KANTO
DELIVERY CO., LTD.

Introduction video(in Japanese only)

In the year under review, the Transportation Security Services
segment beneﬁted from an increase in orders for the Total ATM
Management System amid a growing trend toward outsourcing
operation and management of ATMs installed inside and outside ofﬁnancial institutions and in stores as well as a rise in ATMs that arecompatible with overseas bank cards. There was also a strong
trend in business process outsourcing orders for cash management and other aspects of ﬁnancial institution businesscenter operations.
In the future, it can be expected that there will be an increase in
the need for services related to ATMs that are compatible withoverseas bank cards given the anticipated rise in the number of
inbound visitors to Japan. Meanwhile, we are advancing new initiatives including the creation of new cash management services that

address labor shortages in the distribution and retail industries bymerging register operation with the Cash Deposit and Dispenser
Machine On-line System.

ColumnICT and ALSOK’s Electronic Security Services
ALSOK began offering electronic security services in 1967, and these
services have continued to evolve together with ICT technologies
over the 50 years that followed.
As telecommunication technologies have evolved from dedicatedcommunications lines to standard telephone lines, Internet connections, and eventually mobile networks, we have taken advantage ofthe current technologies to provide ever speedier and more reasonably priced services. Similarly, the capacity for large-volume datatransmissions has made it possible to branch out from alarmsystems to realize sophisticated security services utilizing facility
control as well as camera images and video.
Today, we are developing technologies for preventing crime andaccidents in the upcoming era of big data utilization. Such technologies include those that use AI to analyze camera images in
Evolution of ALSOK’s Electronic Security Services
Magnetic security
sensors

First generation
1970s

Infrared sensors
Equipment control

Second generation
1980s

Still imagetransmission

Third generation
1990sorder to track individuals via face recognition systems, predict the
behavior of crowds, and detect suspicious activities.
As part of our toolkit for large-scale security operations at events,
we will continue to evolve ALSOK Zone Security Management. This
total security system is an amalgamation of ALSOK’s cutting-edge
security expertise that protects entire areas through the use of
security guards armed with wearable equipment, network cameras,
drone detection systems, and multi-language robots.
Furthermore, ALSOK is engaged in veriﬁcation tests aimed atdeveloping security services that utilize ultra-high-speed, highcapacity 5G communication networks to achieve compatibility with 4K
and other high-resolution images. We hope to realize practicalapplication of these services in the near future.

Image sensors
Wearable cameras
Imaging monitoring and verbal
Droneswarnings from remote locations Image analyses
Security cameras
Life rhythm monitoring
Precursor analyses

Fourth generation
2000s

Fifth generation
2010s

Sixth generation
2020s

Broadband
Internet

3G modules
Smartphonecompatibility

4G, 5G, and IoT
platforms

More advanced
image analysis
Accident and crime
prevention

Evolution of Telecommunications Technologies
Dedicated communications lines

Analog telephony

ISDN

16

Review of Operations

Non-Security Operations
TOPICS
from the Fiscal Year Ended
March 31, 2017, and the
Fiscal Year Ending
March 31, 2018

Began providing
vacation rental
support solutions

Launched Flood
Prevention Act response
solutionsStarted drug andexplosive detector
maintenance services

General Property Management and Fire Protection Services
By increasing coordination between Group companies, the General
Property Management and Fire Protection Services segment has
been successful in expanding orders for comprehensive property
management services, which encompass the maintenance, management, and operation of various facilities, as well as for cleaning
and renovation services. In addition, we continue to achieve favorable sales of sprinklers and other ﬁre extinguishing equipment,
which were stimulated by the revision of the Fire Service Act, anddisaster response kits and other disaster preparedness items. In
this segment, we also boast a large share of AED sales in thedomestic market.
The Group is also actively promoting other services, including
ALSOK Aerial Photography Services, which use drones to aid in
inspections of large-scale solar power installations, and services
relating to disaster response and terrorism countermeasure plansand drills. A newer offering, our vacation rental support solutions
were launched in response to the rise in inbound visitors to Japan.
These solutions are garnering attention for their ability to provide
total support for all aspects of operating rental properties, including security, cleaning, and call center support.
In the future, we anticipate an increase in renovation projects
targeting buildings constructed during the period of the so-called

Long-Term Care Services
In its Long-Term Care Services segment, the ALSOK Group provides
long-term care services in the Tokyo metropolitan area and in othermajor cities, including Osaka, Nagoya, and Sendai. In the year
under review, the combined sales of this segment’s three operatingcompanies—HCM Corporation, ALSOK Care & Support Co., Ltd.,and Wisnet Co., Ltd.—totaled approximately ¥25.0 billion.
These services are currently provided to around 12,000 people outof the Group’s approximate 380 nationwide long-term care service
bases. Of these, around 130 bases are fee-based, long-term carefacilities and group homes offering in-facility care services while
the other roughly 250 bases conduct visit-based care services, dayservices, welfare item operations, and other elements of in-homecare services.
We have systems in place in our service area that ensure customers can continue to receive support from the ALSOK Group even
if their care needs or physical conditions change.
Furthermore, all of the Group’s long-term care facilities areequipped with security systems to ensure that they meet customers’ expectations for safety. Evacuation and disaster response drills

17

Began providing
cybersecurity solutions
for regional ﬁnancial
institutions

Introduction video(in Japanese only)

Japanese post-war economic miracle as well as a lack of thenecessary staff to maintain and manage such buildings. For thisreason, we launched the new ALSOK Security and Equipment
service package. This package bundles ALSOK’s high-quality security services with comprehensive property management services,
including installation, operation, and management of equipment.
Looking ahead, the Group will gather its combined strength topromote this service package and other offerings that are capableof accurately responding to the various building- and facilityrelated outsourcing needs of customers.

Introduction video(in Japanese only)

are also instituted at these facilities through collaboration withALSOK ofﬁces.
Our facilities offer a lineup of recreation activities including ouroriginal ALSOK ANSHIN YOGA and ALSOK ANSHIN TAISO workout
routines for senior citizens, both of which were developed in 2016. In
this manner, we hope to help support the independence of ourcustomers going forward.

ALSOK REPORT 2017

Released the ALSOKANSHIN YOGA workout
routine for senior citizens

Launched roadmonitoring services

Started selling
emergency supply kits
for senior citizens

Launched ALSOK Security
and Equipment service
packageStarted selling
MIMAMORI Tags

Other Services
Other services provided by ALSOK include the MAMOLOOK, a GPSequipped multifunctional mobile security terminal that caters to demand
for means of watching over children and senior citizens. MIMAMORI Tags,
another offering, are lightweight, miniature terminals developed speciﬁcally with the aim of addressing the issue of individuals with dementia
wandering and becoming lost. These tags have been adopted by municipal governments across Japan for use in regional systems for looking
after such individuals.
Other offerings include safety conﬁrmation systems, an indispensable
part of companies’ business continuity plans; virus protect, information
leakage countermeasures, and other information security services;volcanic eruption countermeasure solutions; support for preventing
diseases in livestock; wildlife damage countermeasures; and othersolutions for addressing types of crises that have been frequently

occurring in recent years. We are also actively promoting our telegram
service, which takes advantage of the ALSOK Group’s nationwide
network.

ColumnAggressive Business Expansion through M&A Activities
The ALSOK Group is currently undertaking the aggressive expansionof its business scope through M&A activities with the aim of better
fulﬁlling its mission of protecting the safety and security of society.
ALSOK began expanding the scope of its business by reinforcing
its operations in the building maintenance and facility installationﬁelds, which could be seen as an extension of security services. As
a result, we are now able to provide one-stop service for safety andsecurity, including disaster prevention services, through our
involvement in the management and operation of customers’ facilities and buildings. Our next step was to construct business foundations in the ﬁeld of long-term care services with the aim ofsupporting safety and security in the daily lives of senior citizens asJapan’s society ages. Operations in this ﬁeld have been positioned
as a new pillar of ALSOK’s business.
The ALSOK Group is also expanding its mainstay security services operations through M&A activities. In this manner, we areendeavoring to grow our domestic customer base and provide
higher levels of value in our security services by enhancing operational efﬁciency through the integration of the expertise and management resources of the Group and acquisition targets. Similarly,
overseas M&A activities are being conducted to increase the rangeof countries in which ALSOK-quality security services are available
and to build frameworks for responding to the safety and security
needs of Japanese companies expanding overseas.
In the future, we will work to maximize synergies on a Groupwide
basis in order to create new businesses for providing ALSOK’s brand ofsafety and security as we move forward in our pursuit of ongoing growth.

Recent Additions to the ALSOK Group

Security Services● ALSOK SHOJITSU SECURITY SERVICE CO., LTD.
(February 2017, converted Hitachi Security Service Co.,
Ltd., into a consolidated subsidiary)● ALSOK-TW East Japan Co., Ltd.
(April 2017, succeeded security services operations of
TelWel East Japan Corporation)● Keihanshin Security Services Co., Ltd.
(April 2017, formed capital alliance)● ALSOK KANTO DELIVERY CO., LTD.
(July 2017, succeeded the transportation security
services operations of TOBU DELIVERY CO., LTD.)
General Property Management and Fire Protection Services● Japan Facilio Co., Ltd. (February 2011)● ALSOK Souei Co., Ltd. (April 2014)● Nippon Building Maintenance Co., Ltd. (April 2014)
Long-Term Care Services● HCM Corporation (October 2014)● ALSOK Care & Support Co., Ltd. (February 2015)● Wisnet Co., Ltd. (May 2016)18

Management Tasks and Initiatives for Realizing Sustainable Growth

ALSOK has continued to provide security services of impeccable quality for the more than 50 years since its establishment. Leveraging its
core strengths—its human resources, organizational capabilities, and the reliability recognized by customers and society—the Company isreinforcing its operating foundations with the aim of achieving consolidated net sales of ¥1 trillion and ordinary income of ¥100 billion.
Although conditions are changing rapidly both inside and outside of the Company, we remain committed to creating new value forrealizing a safe and secure future for customers and society while simultaneously increasing ALSOK’s earnings capacity. By accomplishing these goals, we aim to achieve growth that meets the expectations of all stakeholders.

Management Resources andExpertise Accumulated Over More than
50 Years Since Founding

Employees

Employees with
Security Planner Certiﬁcation

Employees that Have
Completed
First-Aid Training

Female Employees(Consolidated,
including part-time)

36,693533

17,151

Approx.

Depots Located Nationwide
Approx.

(No. 1 in the industry)

Average Dispatch Time

2,400

Approx.

14

minutes

Rating from Rating andInvestment
Information, Inc.

Inclusion in
JPX-Nikkei Index 400

A

Selected for(maintained for
10 consecutive years)

3

Overseas Operations

Municipal Governments with which
Collaborative Emergency Reporting
Systems Have Been Developed

9425

countries centeredon Southeast Asia

Inclusion in
FTSE4Good Index

consecutive
years

9,000

Selected for

10

consecutive
yearsTokyo 2020
Official Partner

Core Strengths Fostered by ALSOKHuman resources

Organizational capabilities

Reliability

Eyes Toward the Future
Fiscal Year Ended March 31, 2017

Net sales ¥

19

413.3

billionOrdinary income ¥30.3

billionALSOKA
ALS
OK REPREPORT
ORT 2017

TargetNet sales

Ordinary income ¥1 trillion
100 billion¥

Steps Toward the Next Stage—Pursuit of Further Growth
Expansion of Consolidated Net Sales
Society is currently faced with many risks, including the threats ofterrorism and cybercrimes as well as natural disasters, declining
birthrates, aging populations, and shrinking workforces. Against thisbackdrop, ALSOK believes that one of its obligations is to maintain an
accurate understanding of customers’ diversifying safety and security
needs and to respond to these needs. Fulﬁlling this obligation will
require the Company to augment its crime prevention and protection
functions by actively incorporating the latest ICT equipment into its
security services operations as well as into its services for protecting
children and senior citizens. At the same time, we will contribute to theefforts of national and municipal government bodies to respond to andprevent disasters and to improve national resilience. We will also aid inmeasures to improve safety on the national and community level, primarily with regard to infrastructure monitoring. Furthermore, ALSOK
will aspire to support ﬁnancial institutions and private-sector companies in light of the impending contraction of the workforce and changes
in cash distribution markets. Efforts to this end will not be limited toconventional outsourcing services related to security, ATM management, and other business processes, but will also entail comprehensive
support for areas including facility management and ofﬁce procedures.

We also recognize the extreme importance of leveraging theincreased capacity for intra-Group coordination realized through recent
M&A activities to provide services that exceed the boundaries of ourprevious business scope. Based on this recognition, we launched
ALSOK Security and Equipment service package, a comprehensive
facility and building management service package. This service wasborn out of the marriage of our security services operations and theequipment management and installation expertise of Group companies.
Meanwhile, we have increased the number of individuals using ourlong-term care services to approximately 12,000 by constructing asystem that allows us to provide both in-home and in-facility careservices. Going forward, we will continue to create hybrid businesses
that merge security services with long-term care services to support
senior citizens. Overseas, we have acquired and converted local
Indonesian and Vietnamese security services companies into consolidated subsidiaries. As a result, we are now developing overseas security
services operations in nine countries centered on Southeast Asia, where
we plan to deploy ﬁne-tuned security services of the same caliber as
those ALSOK provides in Japan.

Transition to Highly Proﬁtable Structure
The ALSOK Group aims to transition to a highly proﬁtable structure
through improved labor productivity and cost management achieved bystreamlining business processes.
Seeking to improve productivity in its labor-intensive security services operations, the Company is actively adopting ICT equipment. For
example, the mobile dispatch system terminals previously used by
ALSOK security guards performing electronic security services havesince been replaced with smartphones. As a result, security guards can
now operate equipment while viewing images from the incident site andmaintenance procedures have been made simpler, contributing to anincrease in on-site response capabilities and allowing security guards
to multitask. Moreover, smartphones have decreased the amount oftime required for routine tasks through means such as enabling work
logs to be compiled more easily.

Future initiatives will include encouraging stationed security services
staff to acquire qualiﬁcations and otherwise improve their skills. At thesame time, we will train technicians as multi-discipline engineers toendow them will the skills necessary to perform conventional security
equipment installation and inspection tasks while also being able toconduct inspections and maintenance of various other safety and security related devices. Through these efforts, we aim to expand the scopeof our activities.
Furthermore, we have been consolidating Guard Centers and otherGroup facilities and streamlining business processes related to routine
work to reduce overtime as part of our efforts to better manage costs.
Drastic reforms and improvements to business processes will be implemented going forward, unfettered by existing manuals or past convention, with the aim of realizing ongoing improvements in per employee
labor productivity.

20

CSR Management

To ALSOK, CSR entails remaining ever mindful of the expectations of customers and society at large and exercising its management philosophy
based on the principles of arigato no kokoro, an ever-present feeling of gratefulness and gratitude, and bushi no seishin, a strong and noble
samurai spirit that emphasizes toughness, fairness, and generosity as well as teamwork and unity.

ALSOK’s CSR Policy
Since its founding in July 1965, the Company has continued to develop its
security services business based on its fundamental spirit, which isdeﬁned by the two principles set out in its management philosophy ofarigato no kokoro and bushi no seishin, and with a strong sense of com-

Management
Philosophy

mitment to protecting the safety and security of customers and society.
We believe that CSR entails protecting the safety and security ofsociety by contributing to the resolution of the issues faced by customers and society through our business activities. To facilitate this under-

Management
Policiestaking, ALSOK has established its management policies and code of
conduct as well as a framework of internal regulations and rules.
Furthermore, the Company has outlined issues to address in its CSR
activities, giving a clear structure to its CSR ideals.
The management policies set out the principles of how the ALSOK

Code of Conduct

Group should engage with its stakeholders. The code of conduct deﬁnes
how all members of the Company, including employees and executiveofﬁcers, should act in carrying out their daily business activities. The
Company has also established various internal regulations and rules
related to speciﬁc issues. Based on these guidelines, we are incorporat-

Internal Regulations and Rules

ing CSR activities into all areas of our business operations.

Initiatives for Strengthening and Inculcating the CSR Promotion Framework
In April 2011, the Company established the CSR Ofﬁce. This ofﬁce is

As a result of these efforts, ALSOK has been recognized by external

responsible for all areas of the Group’s CSR activities and undertakes

institutions as a company that exercises its social responsibility from ansuch tasks as managing the implementation of CSR activities and

ESG perspective. Such institutions have thus selected the Company forcommunicating CSR-related information to stakeholders. The ofﬁce

inclusion in various investment indexes.

also implements initiatives for strengthening the CSR promotion framework. Moreover, by distributing our in-house quarterly magazine,

ALSOK CSR Newsletter, and our CSR Activities Guide, we strive toExternal Recognition

inculcate CSR in all employees.
We also incorporate lectures on basic CSR principles and the importance of CSR into training for newly promoted managers and hold grouptraining sessions to allow employees to think together about how toincorporate CSR activities into our business. Through such efforts, we
are working to cultivate a CSR-based mind-set.
Furthermore, we have been conducting CSR activity surveys targeting
employees at the Head Ofﬁce, branches, and all Group companies since2014. These surveys help us collect quantitative and qualitative information on the state of ESG matters within the Group. Moreover, initiatives

ALSOK has been included in the
FTSE4Good Index Series, a socially
responsible investment index, for 10
consecutive years.

ALSOK is included in the FTSE
Blossom Japan Index, an ESG
investment index.

such as this provide an opportunity to promote CSR, and CSR awareness has been improving with each coming year as a result.
Since the ﬁscal year ended March 31, 2015, the Company has published ALSOK Reports, a series of yearly reports that compile, in aneasy-to-understand manner, both ﬁnancial and non-ﬁnancial information on the ALSOK Group’s activities to provide a more integrated view ofthe link between the Group’s business activities and CSR activities.
Meanwhile, we provide more robust disclosure of information related to
CSR activities and ESG initiatives through our corporate website.

21

MSCI Japan ESG Select Leaders Index
ALSOK is included in the MSCI Japan ESG SelectLeaders Index, an ESG investment index.

ALSOK REPORT 2017

Initiatives for Realizing Sustainable Improvement in Corporate Value
A keyword for the ALSOK Group is to “protect.”
As ALSOK has proceeded to expand its business while responding tosocial change, it has kept true to its mission of protecting the safety andsecurity of customers and society, which has remained unchanged sinceshareholders and other stakeholders. Based on these themes, we will
pursue ongoing improvements in corporate value while developing ourbusiness.
Moreover, we realize that a large number of the 17 Sustainable

the Company’s founding. Today, we continue striving to live up to theDevelopment Goals (SDGs), which were adopted by the United Nations

expectations of customers and society by supplying products and ser-to guide efforts to address global issues, coincide with the CSR activi-

vices that address diversifying needs and issues. Recognizing theties the Group is advancing with the goal of achieving sustainability.

importance of working to secure the talented human resources needed

As it seeks to continue protecting the safety and security of custom-

to support our business, we are also avidly building workplaces in which

ers and society, ALSOK will broaden its perspective beyond its conven-

employees can fully exercise their talents. At the same time, ALSOK will

tional security services operations to look to the safety and security

aspire to contribute, in its own unique way, to the creation of safer andrequiring protection in a wide range of other ﬁelds. Adopting this per-more secure communities and to the development of these

spective while looking to the future, we will foster wide-ranging innova-

communities.

tion as we endeavor to create value for protecting the future.

In 2014, we deﬁned four material CSR themes with the aim of fulﬁlling our social responsibilities and sharing our social values withRelationship Between Four Material CSR Themes and SDGs

Material
CSR Theme

1

Material
CSR Theme

2

3

Contributing to Local Communities
through Active Communication

Operating Practice:Material
CSR Theme

Labour Practice:
Cultivating Human Resources and Building a
Comfortable Workplace Environment

Community:

Material
CSR Theme

Consumer:
Providing Products and Services that Help
Resolve Social Issues

4

Providing Trustworthy Security Services

Transforming our world: the 2030 Agenda for Sustainable Development
At the United Nations General Assembly held in September 2015,
Transforming our world: the 2030 Agenda for Sustainable
Development was adopted by all 193 UN member states through aunanimous decision.
The agenda deﬁnes the SDGs, 17 goals that form an action planmeant to guide the actions of the entire international society inaddressing the various issues facing the world from the perspectives of economic, social, and environmental matters up until
2030. The accomplishment of each of the 17 goals is incredibly
important to ensuring that everyone can enjoy safety and security
in their lives.

22

Initiatives for Realizing Sustainable Improvement in Corporate Value

Material
CSR Theme

Consumer:

1

Providing Products and Services that Help Resolve Social Issues

ALSOK is providing a multifaceted lineup of products and services that help resolve the issues faced by customers and society. This task
is accomplished by leveraging its security services expertise based on an accurate understanding of ever-changing social trends, such asaging populations, declining birthrates, and the tendency toward nuclear families.

Collaborative Services for Protecting Society’s Safety
and Security Together with Municipal Governments and Companies
Resolution of Social Issues Together with Municipal Governments

Products and Services for Responding to Natural Disasters and

The population of Japan is aging to a degree not seen anywhere else in

Addressing Aging Infrastructure

the world, a trend presenting many issues to be addressed by society. In

Earthquakes and water damage from causes such as concentrated

light of this situation, the ALSOK Group has deployed services to watch

torrential downpours have recently been occurring in high frequencies,

over citizens and thereby address the issues faced by municipal govern-posing a very real threat to society. While it may be difﬁcult to predictments throughout Japan. These issues include the lack of commis-

natural disasters, appropriate response measures can be taken tosioned welfare volunteers and trouble developing emergency reporting

prevent the spread of disaster damages. ALSOK provides services such

systems for responding to population aging.

as its Underpass Monitoring Service and Flood Prevention Act response

In addition, ALSOK has developed a framework through which communi-

solutions to support customers in responding to natural disasters. At

ties can take the initiative in looking after dementia sufferers to prevent suchthe same time, the aging of social infrastructure is also becoming a

individuals from becoming lost. This system, which utilizes our MIMAMORI

serious issue. Road surfaces, for example, require appropriate upkeep,

Tags, MIMAMORI Tag App, and MIMAMORI Tag Detectors, has been provided

but the expensive surveys this upkeep entails place a major burden on

to certain municipal governments as part of a veriﬁcation test targeting themunicipal governments. ALSOK’s road monitoring services, whichdevelopment of regional networks for watching over dementia sufferers. In

include road surface monitoring and pavement repair plans, help

November 2016, this project was designated as a smart wellness housing test

reduce such upkeep

project as promoted by the Ministry of Land, Infrastructure, Transport andcosts while simultane-

Tourism. Currently, the Company

ously contributing to theis working together with 10
municipal governments
throughout Japan to advancedevelopment of comNumber of Municipal Governments
using ALSOK’s Emergency Reporting
Systems (As of March 31, 2017)

initiatives targeting the resolution of issues faced by local
communities.

everyone can enjoy
safety and security in

425

their lives.

Wildlife Damage Countermeasure Services that Help Preserve

Vacation Rental Support Solutions Contributing to Security ofSatoyama (Village-Vicinity Mountain)

Communities

In recent years, damage to crops from deer, boars, and other wildlife

Due in part to the measures of the national government’s growth strate-

has been becoming an increasingly more serious and widespread issue.

gies, there has recently been a rise in the number of inbound visitors toCatalysts for this major social issue, which leads to damages in the area

Japan. New government targets for such visitors have been set, callingof ¥20.0 billion each year, include the expansion of areas in which wild-for 40 million inbound visitors to Japan by 2020 and 60 million inboundlife resides and the decrease and aging of Japan’s hunter population.

visitors by 2030. Given these targets, increasing the number of lodging

Traps are being deployed across Japan to catch such troublesome

facilities in Japan is an urgent task. In light of this situation, the govern-

wildlife, but the process of checking these traps and removing thement is preparing to institute a law in 2018 to regulate rental property

captured animals can place a great burden on municipal government

businesses that entail renting vacant rooms at homes or condominiums

organizations and hunting associations. Accordingly, there is a need to

on a short-term basis. Important issues faced in these businesses

increase efﬁciency with this regard.

include measures to ensure the safety of lodgers, such as the installa-

ALSOK provides wildlife damage countermeasure services utilizing trap
monitoring devices that send emails to users when a trap is activated.
These services not only reduce thelabor burden associated with

Captured boar

23

munities in whichtion of ﬁre extinguishing and crime prevention systems, as well as
measures to protect the safety and security of the surrounding
community.
To address these issues, ALSOK provides vacation rental support

trapping, but also contribute tosolutions offering comprehensive support for all aspects of rental

quick detection of cases in which

property businesses. Through these solutions, ALSOK will install thetraps capture animals that are notnecessary ﬁre extinguishing equipment, conduct remote monitoring for

harmful or cause injury to humans.

ﬁres, and supply other ﬁre and crime prevention measures. We also sellIn this manner, our services help

and manage the AEDs needed as part of ﬁrst-aid provisions and per-protect the safety and security ofform cleaning services. By providing these solutions, we are contribut-

farmers and preserve pristineing to the development of communities in which inbound travelers andSatoyama rural areas.

residents alike can stay and live with a feeling of security.

ALSOK REPORT 2017

Relationshipwith SDGs

New Products and Services for the Aging Society
Products and Services for Watching Over Elderly Family Members

ALSOK’s Vision for Long-Term Care Services

Living Separately

As the population ages, it can be anticipated that the number of people

As the number of households comprised solely of senior citizens

requiring long-term care will increase. In response to this social trend,

increases, there is a growing need for services to watch over these indi-

ALSOK has positioned long-term care services as a new pillar for sup-viduals. HOME ALSOK MIMAMORI SUPPORT is a service that entails

porting its business. Customers expect reliability in the long-term careinstalling control terminals with emergency call buttons that can beservices offered by security services companies, and we are developing

pushed to have a security guard rush to the scene at any time of day.

our operations in this area with safety and security as our top priority to

These guards will conﬁrm the status of the individual in question andlive up to these expectations. For example, we install security systems

contact family members and also, in the case of an emergency, callat all of the Group’s long-term care facilities, and these facilities col-paramedics or perform CPR as necessary. In addition, the control termi-

laborate with ALSOK ofﬁces to carry out evacuation and disasternal has a consultation button that can be pushed to consult our staff

response drills. In this manner, ALSOK’s long-term care service opera-

about one’s health condition, receive information about medical institu-

tions will be coordinated with the Company’s security services opera-

tions, or ask other questions. We are expanding our line of options fortions to better address the issues faced by the aging society.

HOME ALSOK MIMAMORI SUPPORT. One such option is the Life Pattern
Monitoring Service, which tracks user life patterns and dispatches secu-

Number of ALSOK Long-TermCare Services Bases(As of March 31, 2017)

rity guards to investigate the situation should an abnormality be detected.
A new service for watching over senior citizens is MIMAMORI Pack, which
utilizes MIMAMORI Tags. By installing a MIMAMORI Tag Detector in a382

senior citizen’s home, family members can receive email notiﬁcations
when the individual has left the house or when abnormalities can be seenin their life patterns, room humidity levels, or other areas. When deemednecessary, family members can request that a security guard be dis-

Evacuation drill at long-term care facility

patched to the scene, offering an added degree of support for watchingover family members living separately.

Products and Services Fusing Advanced Technologies and Security Expertise
Ongoing Evolution of ALSOK Zone Security Management
It is becoming increasingly more important to be able to address inci-

infrastructure of NTT DOCOMO, INC., to establish “modern-day watch-dents at facilities and spaces in which large numbers of people gather

towers” that are able to detect the approach of suspicious drones,

and to limit the spread of damages from such incidents. There is also awide-spread disasters, and runaway vehicles.

rising need to detect the precursors of crimes so that they can be

The insight and data acquired through the provision of ALSOK Zone

prevented. At the same time, security operations at large-scale events

Security Management will be compiled and converted into Company

require security methods that allow for staff to be positioned in the ideal

knowledge to drive the further evolution of this service. The aim of thismanner and for the operations to be managed efﬁciently.

approach is for the Company to develop service platforms capable of

To address these needs, the Group offers ALSOK Zone Security

furnishing accurate and multifaceted responses to social issues andManagement, a service that combines the security services expertiserisks and thereby contribute to the safety and security of society in 2020,

ALSOK has developed to date with AI and other cutting-edge ICT tothe year of Olympic and Paralympic Games Tokyo 2020, and beyond.

deliver high-quality security at
appropriate costs. Furthermore,
we are engaged in veriﬁcation
tests of security services that canModern-day watchtower

High-resolution
cameras (4K, etc.)AI

5G

provide monitoring and prevent
crimes and accidents throughout
entire urban zones, not just thearea we are assigned to protect.
These services utilize highresolution cameras taking
advantage of the ultra-highspeed, high-capacity ﬁfth-generation (5G) mobile communication24

Initiatives for Realizing Sustainable Improvement in Corporate Value

Material
CSR Theme

Labour Practice:2

Cultivating Human Resources and Building a Comfortable Workplace Environment

The Company strives to help employees realize their full potential. To this end, it is enhancing training systems, actively supporting
career development, promoting diversity, and otherwise building a comfortable workplace environment and cultivating the humanresources that underpin its corporate activities.

ALSOK’s Human Resource Development Systems
Development of Human Resources that Embody ALSOK’s Philosophy

Proactive Career Development Programs

The ALSOK Group views employees as the most important resource

To invigorate its organization and facilitate human resource development,

underpinning its business activities. Reﬂecting this belief, we seek to

ALSOK actively conducts personnel exchanges within the Group as well

promote understanding of our management philosophy and entrench

as with central government agencies and other companies. In addition,

this philosophy in the minds of employees. We have thus established a

we recruit security solutions staff for providing security services totraining system to ensure that we put this philosophy into practice in all

Japanese embassies and consulates overseas through an internal open

aspects of our business operations. Speciﬁcally, our focus is on devel-

application system and are thereby working to cultivate employees that

oping human resources that can accurately determine changes in the

can function globally. This open application system is used to discover

operating environment pertaining to ALSOK and identify social needs

and develop human resources capable of working in and forming the core

and that can execute Company measures guided by this insight. At theof not only our mainstay security services operations but also operations

same time, we support individuals looking to pursue further educationin various other ﬁelds, such as long-term care services.

on their own accord, and we have implemented the Employee Skill

We are also advancing a concerted Groupwide effort to increase that

Improvement Program to aid such efforts. Through this program, wepercentage of employees that have obtained publicly recognized qualiﬁca-

provide assistance for holding self-development classes, help develop

tions. This effort is based on the recognition that various qualiﬁcations are

an environment conducive to reading, and implement other initiatives torequired for security services operations. Under the ALSOK Standards, we

facilitate the improvement of employee skills and the enhancement of

have established targets for the acquisition of publicly recognized qualiﬁ-

their ability to perform theircations, and we offer compensation for expenses related to acquiring

duties. We also provide

qualiﬁcations along with other support for the aspirations of ambitious

educational materials to

employees. Going forward,

education representatives

we will continue to aid in

at branches as part of ourthe career development ofefforts to cultivate

employees to cultivate

instructors.

human resources that cancontribute to improved

Employees listening to lecture at Tokyo Training
Centercorporate value.

Aggregate Number of Security
Solutions Staff Dispatched toJapanese Embassies and Consulates
Overseas (As of March 31, 2017)

715

Healthy Workplace Environments and Diversity
Workplace Environments Built on Respect for Basic Human Rights

Promotion of Diversity

ALSOK respects the basic, inalienable human rights with which every-

ALSOK is creating frameworks to enable diverse human resources to

one is born as well as the core labor standards of the International

fully exercise their talents to drive the ongoing development of theLabour Organization. We are therefore committed to maintaining

Company. As the Group expands through M&A activities, it has come tohealthy workplace environments in which employees’ human rights are

employ approximately 9,000 female employees (including part-time

respected. The Company’s compliance manual explains, in clear terms,

employees). Our efforts to provide these employees with a workplacethat acts in violation of human rights and excessive labor are forbidden.

environment that empowers them led to the Company being certiﬁed as

This fact is made known to all employees.

an “Eruboshi” company by the Ministry of Health, Labour and Welfare in

We have concluded labor-management agreements based on Article
36 of Japan’s Labor Standards Act that are designed to ensure theaccordance with the Act on Promotion of Women’s Participation andAdvancement in the Workplace in February 2017.

maintenance of a healthy workplace environment, and notiﬁcation of

The Group is also active in promoting the employment of differently

these agreements have been sent to labor standards inspection ofﬁces.

abled individuals, with more than 500 such individuals working through-Supervisory divisions constantly conﬁrm and monitor work situations toout the Group. In 2010, ALSOK Business Support Co.,

prevent excessive labor. Overseas, we establish work and salary rules

Ltd., a specially certiﬁed subsidiary under the Act on

based on local regulations, and contracts are concluded in the language

Employment Promotion of Persons with Disabilities, wasof the country in question and are properly managed.

established as part of our efforts to normalize the pres-Furthermore, the ALSOK Hotline is in place to address human rights
risks by offering an easy-to-use venue through which employees canreport human rights violations or harassment.

25

ence of differently abled individuals in the workplace.
“Eruboshi”
certiﬁcation markawarded by the
Ministry of Health,Labour andWelfareFurthermore, we have implemented a Groupwide framework to rehire employees that have undergone mandatory
retirement and place them in the ideal position. Effectively
utilizing the skills of employees that would have otherwise retired is contributing to improved productivity.

ALSOK REPORT 2017

Relationshipwith SDGs

Work Style Reforms and Work-Life Balance
ALSOK’s Work Style Reforms

Work-Life Balance

For a company to continue to grow, its employees must have fulﬁlling

ALSOK has implemented various internal systems that make it possible

professional and private lives and its workplace environment must ener-

for employees to balance their work and their family with peace of mind.

gize these employees in their work. ALSOK is looking to improve opera-

To remove obstacles to female employees realizing their potential, we

tional efﬁciency and heighten labor productivity so that it can reduce

encourage them to take leave during pregnancy and after childbirth.

overtime work and encourage employees to use paid vacation days.

We also provide childcare and long-term care leave and shortened work-

The security services business is a labor-intensive business as

ing hour systems that go above and beyond the legal requirements. The

security guards must be on call to be dispatched to customer premisesGroup is thereby creating a workplace environment in which women can

at all times of day. Accordingly, it is difﬁcult to reduce overtime work,

develop their careers in the same manner as men. Out of recognition forespecially considering the recent shortage of labor. Nevertheless, wethese systems, the Company was certiﬁed by the Tokyo Labour Bureau of

are dedicated to alleviating the burden placed on our employees. Efforts

the Ministry of Health, Labour and Welfare as a company having support-

to this end include revising security guard shifts and assignments andive child-raising systems in 2010 andpromoting efﬁciency in work processes. In addition, we are engaged in2015. ALSOK also seeks to encourage

R&D ventures targeting the creation of new services utilizing AI and themen’s participation in childrearing.

IoT. We anticipate that such services will require less staff to provide

For this reason, we increased thewhile simultaneously realizing higher quality. Other initiatives include

amount of special leave days avail-consolidating processes, holding twice-weekly “no overtime” days,

able to men when their spouse gives

ending work early on the last Friday of each month, and turning offbirth to ﬁve in April 2016. Other

Company lighting at 9PM (excluding on-site work-related divisions).

support systems for use in conjunc-

Maintaining our respect for employees’ private lives, we will continue totion with employee life stages

implement work style reforms that are distinctly ALSOK in order to growinclude reemployment systems forour business.

employees that have resigned forchildbirth, parenting, or long-termcare reasons.

“Kurumin” markidentifying companies
with supportive
child-raising systems

Average Number ofYears of Continuous Service(Non-consolidated, as ofMarch 31, 2017)

16.1
Women 14.7
Men

Improvement of Occupational Health and Safety Management and Employee Satisfaction
Management of Employee Health

Frameworks for Gathering Employee

Ensuring occupational health and safety and helping employees main-

Feedbacktain sound physical and mental health is vital to a security services

Communication within a company iscompany. Accordingly, ALSOK has established occupational health andcrucial to building a comfortablesafety committees at all ofﬁces and formulated targets for preventing

workplace environment. ALSOK

occupational accidents. We are also developing and instituting occupa-

periodically provides opportunities fortional health and safety education programs. Through these efforts, weemployees and senior managers toseek to ensure safe workplaces and healthy employees. In addition,exchange opinions in order to stimu-

ALSOK is a partner to the Ministry of Health, Labour and Welfare’slate communication within the

Action Plan for Companies Promoting Cancer Prevention program. We

Company. In the year under review, 112 Employee Satisfaction Meetings

thus incorporate more extensive tests into regular health examinations

were held, and some of the opinions and requests solicited fromand enable screenings for multiple cancer

employees were incorporated into internal measures. In addition, atypes to be conducted simultaneously. We

discussion was held between female managers and President Aoyama,

also hold the Hustle Weight Loss Game

during which opinions were shared regarding means of supporting thelimited-period event each year to support

contributions of female employees. Several ideas put forth were incor-

employees in managing their health byporated into diversity promotion efforts.

providing them with an enjoyable way to

President Aoyama engaged in discussion
with female managers

ALSOK has been conducting annual employee surveys since 1999 toaddress lifestyle diseases. Furthermore, theinvestigate matters that include employee thoughts regarding manage-

ALSOK Support Line, a mental health help

ment, work, and workplaces as well as employee opinions of thedesk, has been established to offer ﬂexible

Company’s various internal systems. Survey results are relayed toresponses to the concerns of employees andtheir families (currently available at 44
Group companies).

employees through the internal newsletter and are used as the basis for
Employee undergoing regular
health examination conducted
at ALSOK’s Healthcare
Management Ofﬁce

new measures for improving employee satisfaction.

26

Initiatives for Realizing Sustainable Improvement in Corporate Value

Material
CSR Theme

Community:

3

Contributing to Local Communities through Active Communication

To give form to arigato no kokoro (a feeling of gratefulness and gratitude)—part of ALSOK’s fundamental spirit—the Company acts as agood corporate citizen, diligently working to contribute to the resolution of the various issues faced by the communities it serves.

Contributions to Safer and More Secure Communities
ALSOK ANSHIN KYOSHITSU

Crime Prevention, Disaster Prevention, and Educational Activities forWith the aim of responding to the

Local Communities

requests and expectations of local

The ALSOK Group carries out volunteer crime prevention patrols using

communities for safety and secu-

vehicles with revolving blue lights. In addition, employees patrol therity, the ALSOK Group dispatchesroutes used by elementary school students when commuting to and fromits employees, who are safety
professionals, to elementary

school. Other crime prevention activities closely linked to local communiALSOK ANSHIN KYOSHITSU classties are also conducted on a Groupwide basis. Furthermore, we hold theschools throughout Japan to

ALSOK HOTTO LIFE KOZA, a class for senior citizens to teach them how

conduct the ALSOK ANSHIN KYOSHITSU program. This program

to avoid crimes targeting their age group, as well as the ALSOK Women’steaches children crime prevention and ﬁrst-aid skills. We hope that

Crime Prevention Seminar, which teaches women techniques for defend-

these classes will provide opportunities for children to learn about

ing themselves from crime. Amidst the frequent occurrence of crimes

crime prevention and the preciousness of life. In addition, we share our

preying on senior citizens and women, these classes provide a feeling ofcrime prevention education expertise with teachers and parents.

safety and security in people’s everyday lives. Overseas, meanwhile, we

Through this program, it is our goal to protect the smiles of as many

participate in the KIZUNA EKIDEN series long-distance relay races inchildren as possible. We have been implementing this program for 13

Indonesia and Thailand. These events are meant to foster exchanges

years, over which 42,842 classes have been performed at 10,098 ele-

between people in Japan and these countries. At these events, we supply

mentary schools and attended by upwards of 1,333,000 students (as of

AEDs and provide support in the form of emergency aid when necessary.

March 31, 2017).
Number of ALSOK ANSHINKYOSHITSU Classes Held
(Fiscal year ended March 31, 2017)

Number of ALSOK HOTTO LIFE
KOZA Classes Held
(Fiscal year ended March 31, 2017)

2,880

79
ALSOK HOTTO LIFE KOZA classSocial Contributions and Patronage of Culture and the Arts
ALSOK ARIGATO UNDOALSOK’s Patronage of Culture and the Arts

The ALSOK ARIGATO UNDO movement was launched by ALSOK’s founder

ALSOK’s business ﬁnds the Company providing security services to

Jun Murai in 1967 as an embodiment of the arigato no kokoro principle,

protect historical buildings and natural heritage sites that have been

which is part of our fundamental spirit. Since its start, the movement has

designated as World Heritage Sites. In addition, the Group makes dona-

been funded by contributions and donations from employees and execu-

tions to support the continuation of traditional events, encourages

tives at the Company and Group companies that concur with its objec-

employees to participate in these events to contribute to their success,tives. Now the movement is entrusted to the ALSOK ARIGATO UNDO

and otherwise practices patronage of local culture and arts. One of theFoundation, which was certiﬁed as a nonproﬁt organization in OctoberCompany’s club activities is the ALSOK SHISHIMAI (Lion Dance) CLUB.

2016. Following this change, in addition to members of ALSOK, the move-

Members of this club receive instruction from a master of thement has also come to be funded by contributions and donations from

Daikagura lion dance and perform their dance at customer companies

individuals outside of the Company, which help it support social welfare,and events around the New Years’

disaster relief, and a wide range of other activities. Through monetary andseason. This club’s activities havenon-monetary donations, including those directed at disaster relief, thisbeen certiﬁed as a “This is MECENAT”

movement supports social welfare, disaster relief, and a wide range ofactivity by the Association forother activities. As of March 31, 2017, the ALSOK ARIGATO UNDO move-

Corporate Support of the Arts out ofment had donated 100 welfare vehicles.

recognition of how these corporate
activities contribute to enrichingsociety through culture and the arts.

Aggregate Number of Welfare
Vehicles Donated through
ALSOK ARIGATO UNDO(As of March 31, 2017)100
27

Donated welfare vehicles

Lion dance performed by ALSOKSHISHIMAI CLUBALSOK REPORT 2017

Relationshipwith SDGs

Support for Sports Activities and Education
Support for the Cultivation of Athletes and Promotion of Sports

Work Experience Program and Exhibitions at Education Events

Through sports, ALSOK strives to heighten team spirit among employ-

Together with Future Innovation Forum, an organization that collabo-

ees and thereby further the development of its business. The Company

rates with companies to advance social contribution activities, ALSOK

holds annual nationwide internal tournaments for its Company sports:holds an annual work experience program for elementary school stu-judo, kendo, and ALSOK self-defense techniques (kendo and ALSOK

dents. Held in 2017, the ﬁfth iteration of this program was based on the

self-defense techniques are held in alternating years). In addition, thetheme of security of the future merging people with IT. Students partici-

Company currently has a total of 10 sports clubs, including its presti-

pating were given the opportunity to experience the security of thegious judo club as well as its wrestling, weight lifting, marksmanship,

future and the cutting-edge technologies it will employ. Also, in Marchand track and ﬁeld clubs. These clubs have contributed to promoting

2017, ALSOK held an exhibit at Manabi no Fes 2017 Spring, an annual

sports in Japan by producing numerous Olympic athletes and world

hands-on education event for elementary schools sponsored by The

champions. In addition, employees from ALSOK’s various branches andMainichi Newspapers Co., Ltd. This exhibit allowed attendees to experi-Group companies contribute toence the latest ALSOK technologies and included a demonstration ofcommunity growth by supporting

how the face recognition function of the REBORG®-X security robot can

the healthy development of chil-be used to follow individuals.

dren and promoting sports

ALSOK forges partnerships withthrough judo and kendo work-

other companies through these activi-

shops and instruction on futsal,

ties while also providing opportunities

basketball, and track and ﬁeld

to learn about the frameworks pro-

events offered for children in thetecting the safety and security ofcommunity.

society. We hope these efforts will
help protect children in both thepresent and the future.
Security robot exhibited at Manabi no
Fes 2017 Spring

Sohgo Security Alliance kendo tournament

Partnerships for Supporting Disaster Relief
Ongoing Afforestation Activities at Disaster-Stricken Areas

Ongoing Support to Regions Impacted by the Great East Japan Earthquake

The Hasunuma coastline in Sammu City, Chiba Prefecture suffered severe

Following the occurrence of the Great East Japan Earthquake, ALSOK

damage as a result of the Great East Japan Earthquake. In 2015, weGroup employees immediately headed to the heavily impacted regions,conducted afforestation activities, planting 2,000 Japanese black pinewhere they proceeded to provide support for maintaining order along withsaplings in this area in collaboration with the NPO Laboratory of Earthother aid for the people of these regions. We are currently participating inConscious Life as part of our social contribution initiatives commemorat-

disaster relief coordination projects spearheaded by Japan’sing ALSOK’s 50th anniversary. The aim of these activities was to help

Reconstruction Agency. Through these projects, we contribute to com-preserve the coastline environment and revive a forest that had previously

munity building by holding ALSOK HOTTO LIFE KOZA classes to teachplayed a part in limiting disaster damages. After planting saplings, it isdisaster victims living in public housing about crime prevention andnecessary to clear nearby underbrush for at least ﬁve years in order toﬁrst-aid techniques. Also, in March 2017, ALSOK announced that it would

ensure their healthy development. Such activities were carried out for theonce again participate in the “Watashitachi wa Wasurenai (We Will Neverthird time in July 2017; more than 80 employees and family members

Forget)” campaign implemented by theparticipated in removing the thick undergrowth.

Japanese Red Cross Society. ALSOKIn addition to helping preserve the environment,

displays the campaign’s sticker on all

this afforestation initiative will contribute tosecurity vehicles used in its businesssafety and security by helping limiting disaster

activities to help keep the memory ofdamages. This can truly be said to be a social

the earthquake alive.

contribution activity characteristic of ALSOK.
We intend to continue such activities in the
future, never forgetting the devastation causedby the Great East Japan Earthquake.
Employees and family
members conducting
weedingCampaign sticker displayed on
security vehicle28

Initiatives for Realizing Sustainable Improvement in Corporate Value

Material
CSR Theme

Operating Practice:4

Providing Trustworthy Security Services

ALSOK is expected to maintain high levels of social trust while acting in a highly ethical and disciplined manner. We therefore position
compliance and business continuity as management issues of extreme importance, and are advancing various initiatives in relation tothese matters.

Stringent Compliance
Focus on Compliance

ALSOK Hotline

The Company has established the Compliance Committee, which is

The ALSOK Hotline was set up in April 2004 to facilitate reporting andheaded by the executive ofﬁcer in charge of compliance. The committee

consultation regarding harassment and other inappropriate corporate

strives to spread and install an unwavering awareness of compliance inbehavior. If employees encounter legal issues, improper conduct, or

all executive ofﬁcers and employees based on the compliance rules

unethical behavior, they are able to report such instances using thisformulated in 2002, and periodically veriﬁes the status of compliance invenue without fear of detrimental treatment. The ALSOK Hotline isbusiness and other activities. In addition, Groupwide training sessions

based on the principles of the protection of the reporter, the prevention

are held to provide education centered on fostering understanding ofof detrimental treatment, and the ability to report anonymously and is

ALSOK’s management philosophy and corporate ethics with the aim ofthus able to safeguard corporate value by ensuring that illegal or

promoting compliance throughout the Group.

improper conduct is quickly detected.

Compliance-Related Campaigns in the Fiscal Year Ended March 31, 2017

We view compliance as an important issue needing to be addressedon a Groupwide basis. As of March 31, 2017, the ALSOK Hotline was

PeriodThemeavailable to employees of 63 Group companies. In addition, the hotline

Apr.–May Education on compliance (basic)

was expanded on April 1, 2016, to include a venue for consultation with aJun.–Jul. Education on compliance (case studies)

third-party institution in addition to the prior internal reporting venue.

Thorough labor management to prevent excessive work hours
Aug.–Sep.
and unpaid overtime
Compliance with business-related laws (Act against Unjustiﬁable
Oct.–Nov. Premiums and Misleading Representations and Act against Delayin Payment of Subcontract Proceeds, Etc. to Subcontractors)
Prevention of information leaks through appropriate use of
Dec.–Jan.
information systems

We have also prepared ethical education booklets, include those detailing ALSOK’s approach toward corporate ethics and methods for preventing harassment and improper conduct. These booklets are
distributed to employees as part of our efforts to ensure strict
compliance.

Feb.–Mar. Prevention of insider trading

Measures for Protecting and Managing Information Assets
Basic Policies for Information Security

Reinforcement of Information Security

The ALSOK Group receives important information from customers when

The ALSOK Group conducts periodic security diagnosis of all systems

concluding security contracts. Therefore, appropriate protection andnecessary for providing services and all internal systems. We have also

management of information assets is essential to conducting security

constructed frameworks that allow security measures to be imple-

operations.

mented immediately should threats to information security be detected.

With this in mind, we established the Basic Information Security

In addition, internal drills are instituted to ensure that employees are

Policy in 2004. Forming the basis for Companywide information security

able to respond appropriately to ever-changing cyberattacks as part ofefforts, this policy is applied to all employees, including executive ofﬁ-

our efforts to quickly detect threats and prevent their damages from

cers, and all the information assets that we hold.

spreading.

In addition, the ALSOK Group has established the Personal

As a security company responsible for protecting customers’ lives

Information Security Policy as well as developed internal personal

and assets, ALSOK realizes that trustworthiness and reliability form theinformation security regulations and management systems. Also,basis for its operations. Striving

related training and educational programs are conducted. In theseto achieve even higher levels ofways, we ensure that personal information is properly protected.

personal information manage-

Furthermore, aiming to reinforce the protection and management ofment, the Company acquired

information assets, the ALSOK Group is promoting the acquisition ofPrivacyMark® accreditation incertiﬁcation under ISO 27001, which is the international standard forJuly 2013.

information security management systems. As of March 31, 2017, 16Group companies had acquired this accreditation. In addition, theCompany has established an internal computer security incident
response team (CSIRT) as a precaution for the risk of serious information security breaches.

29

The PrivacyMark System ® was established by
JIPDEC to acknowledge private enterprisesthat take appropriate measures to protect
personal information. Compliant enterprises
are granted the right to display the“PrivacyMark” logo in the course of theirbusiness activities.

ALSOK REPORT 2017

Relationshipwith SDGs

Improvement of Security Services Quality and Customer Satisfaction
Initiatives for Improving Quality

Enhancement of Customer Service

ALSOK has continued to hold the Sohgo Security Alliance Quality

We strive to reﬂect both positive and negative opinions, requests, andImprovement Tournament since 2010 to encourage employees tofeedback from customers in our security services. To accomplish this,improve their skills, and subsequently security services quality, and to

we compile customer input on a daily basis and issue reports to theincrease customer satisfaction.

relevant ofﬁcers and to the president. In addition, improvements are

The seventh annual tournament, held in November 2016, expanded

pursued through awareness-raising activities and guidance by related

upon the belongings searching competition, which is designed to help

divisions. Compiled customer input reports are also displayed on the

prepare for access management operations at large-scale events, byCompany intranet to share this information with all employees.

introducing a new Chinese-language service category in addition to the

Furthermore, presentations of customer service improvement activi-

existing English-language service category. The event also saw a com-ties are held to identify ofﬁces that have been particularly successful inpletely new competition: a telephone manner contest aimed at improv-

enhancing customer service and to report on the results of these activi-

ing service quality from the perspective of customers. A total of 222

ties. Awards are presented to ofﬁces conducting exemplary initiatives to

employees advanced from preliminary tournaments held across Japanencourage further service quality improvements.

to put their skills, which had been honed through daily operations, tothe test in the main tournament’s 17 events.
Since 2016, presentations of quality improvement initiatives at ALSOK

Breakdown of Customer Input Reports Compiled by ALSOK(Fiscal year ended March 31, 2017)

Group long-term care service compa-

Reports of Praisenies have been held to promote

2,453 / 1,371

initiatives for improving service quality and customer satisfaction in theReports of Complaints

Note: Immediate action is taken to pursue improvements in response to complaints.

long-term care services business.

Foreign-language service competition
simulating security service operations
at events

Business Continuity Initiatives
Business Continuity—A Crucial Concern for Security Companies
ALSOK’s main business is to protect the safety and security of people,

BCP Drills in Preparation for
Emergencies

meaning that the Company supports an important part of social infra-

Natural disasters cannot be pre-structure. For this reason, it is absolutely essential that we prepare forvented. For this reason, it is crucial

unpredictable disasters and accidents and ensure that we can continue

for ALSOK to be able to effectively

business operations even under extreme circumstances.

carry out its BCP and quickly resume

The Company has established a business continuity plan (BCP) in

operations when disasters strike.

preparation for a wide range of potential disruptions, such as major

Regular drills are required to ensure

earthquakes, typhoons, and other natural disasters; system malfunc-

these capabilities. The ALSOK Grouptions; and outbreaks of new strains of inﬂuenza. Based on this BCP, we

conducts comprehensive disasteracquired certiﬁcation under ISO 22301, the international standard for

response drills to prepare for naturalbusiness continuity management systems (BCMSs), in March 2014. The

disasters twice a year and also insti-

Company remains vigilant in implementing ongoing improvements, suchtutes drills on assembling employees

as introducing terrorism as a new threat its BCP must address, to ensure

via travel by foot and safety conﬁrma-

preparedness for all potential risks. Under the BCP, a disaster responsetion drills to ensure preparedness forcorrespondence ofﬁce is to be promptly established in cases when the

any emergency. In addition, individual

damages of a natural disaster threaten to spread or when a disasterofﬁces prepare for emergencies by

warranting Company response has been predicted. Once this ofﬁce is set

creating their own disaster manuals

up, we strive to gather information and secure the necessary staff. Suchbased on the characteristics of theirofﬁces were formed 11 times in the year under review as necessary toregion. Ofﬁces also coordinate disas-

respond to natural disasters, including earthquakes and typhoons, andter response drills with community members and otherwise partner

we were thereby able to provide swift responses to these disasters.

with the community to increase its disaster resilience.

Comprehensive disaster
response drill

Disaster response drill conducted
together with the community

30

Initiatives for Realizing Sustainable Improvement in Corporate Value

Consideration for the Global Environment
Global environmental concerns are common issues for all of humanity. Based on this recognition, ALSOK is working to reduce the environmental impact of its operations and has set goals for CO2 emission reductions and other environmental indicators. We are also
engaged in initiatives to address climate change and preserve the natural environment. The Company shapes such initiatives based on
the United Nations Framework Convention on Climate Change and other global consensuses and targets.

Initiatives to Address Global Environmental Issues
Environmental Management and Environmental

Organizational
Role and duties
structure

Initiative Promotion Systems• Discussion and approval of environmental preservation plans• Discussion and approval of ISO 14001 certiﬁcation acquisition plans
Environmental• Discussion and approval of reporting frameworks for the Board ofManagement
Directors related to complying with Japan’s Corporate Governance CodeCommittee• Examination of other environmental matters as determined necessary by
chairperson (including sustainability initiatives)

Recent years have seen an increased movement to establish global
consensuses and targets related to the environment, including theUnited Nations Framework Convention on Climate Change and theParis Agreement, which was negotiated at the 2015 United Nations
Climate Change Conference. In April 2006, ALSOK established theGreen Purchasing Guidelines to guide it in developing its business while
exercising a greater degree of responsibility for global environmental
issues. We coordinate with suppliers and business partners in a drive tostep up environmental preservation initiatives that encompass the
manufacturing, use, and disposal stages of our products’ lifecycles.
Furthermore, the Company established environmental policies andacquired ISO 14001 certiﬁcation for certain operating sites in 2016 to help
realize a sustainable society. The Environmental Committee playsa central role in implementing a plan-do-check-act cycle with regard to
our environmental management system in order to promote eco-

• Discussion and proposal of environmental preservation plans andinstitution of related surveys
Environmental • Discussion, planning, and proposal of reporting frameworks for the
Board of Directors related to complying with Japan’s Corporate
Management
Subcommittee Governance Code and institution of related surveys• Examination of other environmental matters as determined necessary
by chairperson (including sustainability initiatives)• Discussion, formulation, and proposal of ISO 14001 certiﬁcationacquisition plans and institution of related surveys• Discussion, planning, and proposal of integrated certiﬁcation
ISO 14001
acquisition plans for the ALSOK Group and institution of
Certiﬁcation
Subcommittee related surveys• Examination of other matters related to ISO 14001 certiﬁcationacquisition as determined necessary by chairperson

friendly action on a Companywide level.
Environmental Policies

Green Purchasing Guidelines

As a leader in providing security and other related services, ALSOK recognizes that
global environmental concerns are common issues for all of humanity. Exercising theprinciples of arigato no kokoro and bushi no seishin described in its management
philosophy, the Company formulates environmental policies and institutes ongoing
improvements to its environmental management system to contribute to the realization of a sustainable society.

ALSOK endeavors to use resources more effectively in the security equipment it
employs and to limit waste. At the same time, the Company coordinates with business partners to promote environmental preservation initiatives that encompass the
manufacturing, use, and disposal stages of its products’ lifecycles
Website: http://www.alsok.co.jp/company/info/green.html (Japanese only)

Website: http://www.alsok.co.jp/company/info/environmental_policy.html (Japanese only)

New Environmental Targets
Humanity is currently facing global warming and the loss of diversity

reduction by the ﬁscal year ending March 31, 2051. Following this example,

arising from deforestation and ocean pollution. In light of this situation,

ALSOK set a new short-term target—achieve a year-on-year decrease of

the Japanese government has announced its Plan for Global Warming

1.4% in CO2 emissions each year leading up to the ﬁscal year ending

Countermeasures. With the ﬁscal year ended March 31, 2014, as the

March 31, 2021. We also set a new medium-term target—achieve a 26%

base year, this plan puts forth a medium-term target of achieving a 26%

reduction for the ﬁscal year ending March 31, 2031, from the level seen in

reduction in total greenhouse gas emissions by the ﬁscal year ending

the ﬁscal year ended March 31, 2014—and a new long-term goal of

March 31, 2031, and a long-term target of accomplishing an 80%

reducing CO2 emissions by 80% of this year’s level by 2050.

CO2 Emissions Reduction Targets and Performance Leading Up to the Fiscal Year Ended March 31, 2017, and New Short-Term Target(t-CO2)42,000.0

41,377.0

40,871.0
40,000.0

39,212.0

New target
Achieve decrease of

38,587.0
38,022.0

38,000.0

37,390.0

1.4% each year

36,649.0

Previous target
Achieve an average decrease of

36,000.0

1.0% each year

34,000.0

10.3(vs. the ﬁscal year ended
March 31, 2014)(vs. the ﬁscal year ended March 31, 2010)

2010

2011

2012

■■ CO2 Emissions (Non-Consolidated)

31

Achieve
26% reduction

Successfully achieved%
reduction in the ﬁscal year ended March 31, 2017

32,000.00FY

Medium-Term CO2 Emissions
Reduction Target for the Fiscal
Year Ending March 31, 2031

39,968.0

2013■■

Target

2014

2015

2016

2017

2018

2019

2020

2021

ALSOK REPORT 2017

Relationshipwith SDGs

3R and Energy Conservation Initiatives
ALSOK is advancing Companywide initiatives based on the “3Rs,” oryear ended March 31, 2017, we worked to cultivate a mind-set focused

reduce, reuse, and recycle. We cooperate with garbage separation andon electricity conservation among employees while actively introducing

ink cartridge collection programs, and also reuse and recycle various

fuel-efﬁcient vehicles and motorcycles into our ﬂeet. At the same time,

types of equipment. For example, articles to be disposed of at brancheswith the aim of reducing vehicle traveling distance, we developed more-in the Tokyo metropolitan area are accumulated at our repair center in

efﬁcient routes for use by sales staff on sales visits and lowered theShin Yokohama, which categorizes, repairs, ships, and properly dis-

number of technicians placed on night duty. As a result, we achieved aposes of or recycles these items. In the year under review, the average

20% reduction in fuel usage and a 10.2% reduction in electricity usage inratio of items reused at all branches across Japan came to approxi-

comparison with the ﬁscal year ended March 31, 2010, the base year formately 31% as a result of these initiatives. In addition, the rechargeable

reduction targets as deﬁned by the revised Act on the Rational Use ofnickel-cadmium batteries used in our various power supply equipment

Energy.

are recycled for reuse, and approximately 23,000 batteries were recycled
in this manner during the year under review, making further contributions to the reduction of our environmental footprint.
Mindful that we have many ofﬁces, facilities, and vehicles for business use throughout Japan, we are making a concerted effort to reduce

Electricity Consumption(Thousands of kWh)

37,000electricity usage and vehicle fuel consumption volumes. In the ﬁscal
34,00033,225.0
31,935.0
30,661.0

31,00029,824.0

29,841.0

29,405.0
28,617.0

28,680.0

2016

2017

28,00025,000

Repair center

Bicycle introduced to reduce fuel usage

0
FY

2010

2011

2012

2013

2014

2015

ColumnThe ALSOK Group’s Environmental Preservation and Biodiversity Protection Initiatives
The ALSOK Group is implementing various initiatives to address
climate change and preserve the environment.
Groupwide initiatives for reducing CO2 emissions include introducing eco-friendly vehicles into our ﬂeet and using bicycles fortransportation in urban areas. In addition, we conduct afforestation
activities to protect forests and also position greenery on the roofsof our buildings and install ﬂower planters to help preserve thelocal environment. Furthermore, employees volunteer to take partin various events aimed at preserving the pristine natural environment and protecting biodiversity. Examples of these events include
those for tending to unused farmland, cleaning up rivers andbeaches, and planting and harvesting rice to preserve traditional
Satoyama (Village-vicinity mountain) rural areas. We also donate
to and assist in environmental preservation activities spearheaded
by municipal governments and NPOs to support initiatives bysuch organizations.
In the year under review, ALSOK became the ﬁrst company todonate to the special environmental fund created by theEnvironmental Restoration and Conservation Agency. This fund ismeant for corporate sponsors and is designed to contribute to thisagency’s initiatives for creating an environmental legacy andinspiring a citizen-driven environmental preservation movement
leading up to the Olympic and Paralympic Games Tokyo 2020. The
Group will continue aiding the activities of the NGOs and NPOs tosupport the Olympic and Paralympic Games Tokyo 2020 from anenvironmental
perspective.

Volunteer cleanup activities
along Enoshima coastline in
Kanagawa Prefecture

ALSOK President Yukiyasu Aoyama (left) and
Environmental Restoration and Conservation
Agency President Mitsuhiko Fukui (right)

32

Corporate Governance

Basic Policies and Systems
Based on its management philosophy exempliﬁed by the principles ofarigato no kokoro (a feeling of gratefulness and gratitude) and bushi noseishin (a samurai spirit), ALSOK devotes itself to protecting the safety
and security of its customers and of society as a whole. The ALSOKGroup also advocates “contributing to society” as one of its management policies. Meanwhile, to continue to be a corporate group that istrusted by all stakeholders, we strive to reinforce Groupwide corporate
governance with measures that separate managerial execution andoversight functions, allow swifter decision making, encourage strong
corporate ethics, and provide transparency in business management.

Observation of Japan’s Corporate Governance Code
The Company observes the principles put forth by Japan’s Corporate
Governance Code, which was formulated by Tokyo Stock Exchange, Inc.,
using these policies as guidelines for corporate governance and carrying out detailed inspections and reviews of organizational structures. In
addition, we submit a Corporate Governance Report to the Tokyo Stock
Exchange, Inc. on a yearly basis and post this report on our corporatewebsite (in Japanese only). This report contains information on ourefforts to observe the Corporate Governance Code.
Going forward, we will continue to examine possible measures forour various systems in order to create an organizational structure thatfeatures more effective corporate governance, incorporating social
trends as part of this endeavor.

Overview of Corporate Governance Systems andReasons for Adoption
The Company has adopted the Company with Audit & Supervisory Board
structure described in the Companies Act of Japan. By implementing
the following systems, the Company afﬁrms that effective and complete
audits are conducted by Audit & Supervisory Board members and thatmanagement is being appropriately governed. The Company has
appointed 12 directors, three of which are outside directors, and four
Audit & Supervisory Board members, three of which are outside Audit &Supervisory Board members. The Board of Directors meets once amonth, in principle, to decide on basic management policies and important matters pertaining to operational execution and to supervise theexecution of duties by directors and executive ofﬁcers. The Management
Committee, which is chaired by the chairman and representative director, meets twice a month, in principle, to determine the agenda items tobe presented to the Board of Directors and to discuss the operational
execution policies formulated based on Board of Directors’ decisions.
The Audit & Supervisory Board meets once a month, in principle, todiscuss and make decisions based on reports on important mattersrelated to audits. One Audit & Supervisory Board member attends
meetings of the Management Committee to provide appropriate oversight for management.
We have adopted the current system based on the judgment that it
effectively ensures the impartiality and transparency of management.

33

As stipulated in Clause 1, Article 427, of the Companies Act of Japan,
outside directors and outside Audit & Supervisory Board members haveentered into a liability limitation agreement with the Company in relation to the limitation of liability speciﬁed in Clause 1, Article 423, of theCompanies Act. Amounts of liability under this agreement shall be thehigher amount of ¥10 million and the minimum amount of liability
designated by Clause 1, Article 425, of the Companies Act. These provisions ensure that outside directors and outside Audit & Supervisory
Board members can effectively perform their expected duties.
Corporate governance system

Company with Audit & Supervisory Board

Chairman of the Board of
Directors

Chairman and Representative Director

Number of directors

12 (of whom 3 are outside directors)

Number of Audit &Supervisory Board members

4 (of whom 3 are outside Audit &Supervisory Board members)

Ratio of outside directors andAudit & Supervisory Board
members to total directors andAudit & Supervisory Board
members38%

Number of independent directors/ Audit & Supervisory Board
members6

Number of meetings of theBoard of Directors and attendanceby outside directors and Audit &Supervisory Board members in theyear under review

14 times
Outside directors:
2 attended 100% of meetings
Outside Audit & Supervisory
Board members:
3 attended 100% of meetings

Number of meetings of the Audit& Supervisory Board andattendance by outside Audit &Supervisory Board members in
the year under review

18 times
3 attended 100% of meetings

Reasons for Appointment and Duties of Outside Directors
and Outside Audit & Supervisory Board Members
Outside directors and outside Audit & Supervisory Board members are
assumed to cover the functions of observation and supervision of the
management team with objective and neutral standpoints. Also, we donot set any basis or policy concerning independence for appointing
outside directors and outside Audit & Supervisory Board members,
although we refer to requirements of independent ofﬁcers ﬁxed by the
Tokyo Stock Exchange, Inc.
Outside directors and outside Audit & Supervisory Board members
attend meetings of the Board of Directors, at which they offer theiropinions on the matters at hand. They receive briefings on the issues tobe discussed at meetings of the Board of Directors the day prior to themeeting, allowing them to more effectively monitor management. The
outside Audit & Supervisory Board members coordinate with theInspection Department and the independent auditing corporation

ALSOK REPORT 2017

employed by the Company in regard to audits by Audit & Supervisory
Board members, internal audits, and accounting audits. To facilitate
this coordination, the outside Audit & Supervisory Board members
periodically exchange information with these bodies.
The participation of the outside directors in these meetings enables
them to monitor the operational execution of other directors withregard to Internal Control Operations and other matters from an
independent standpoint.
They also evaluate the legality of the measures implemented byInternal Control Operations. To this end, they perform both operational
and accounting audits of the organization and review all relevant
documents.
The Company employs three outside directors and three outside
Audit & Supervisory Board members; applications have been submitted
to the Tokyo Stock Exchange, Inc., identifying each of these individuals
as independent officers.

Compensation for Directors andAudit & Supervisory Board Members
Policies and Methods for Deciding Compensation Amounts
Annual limits of ¥400 million for the compensation of directors and ¥120
million for the compensation of Audit & Supervisory Board members
have been set at the General Shareholders’ Meeting.
The compensation of directors includes a ﬁxed amount, calculated
according to their positions and whether they are an outside director ornot, as well as a performance-linked amount, calculated based on an
evaluation of the operational execution performance of individual directors in the previous ﬁscal year conducted in accordance with predetermined standards. Decisions regarding the exact amounts ofcompensation of directors are made by the Board of Directors.
The compensation of Audit & Supervisory Board members is paid asa ﬁxed amount, and the exact amounts of compensation are decided inaccordance with standards set by the Audit & Supervisory Board.

General Shareholders’ Meeting

Audit & Supervisory Board
3 Outside Audit & Supervisory Board Members
1 Internal Audit & Supervisory Board Member
Total: 4 (Includes two part-time
Audit & Supervisory Board Members)

Board of Directors’ Meetings (Monthly)
3 Outside Directors
9 Internal Directors
Total: 12
Discussions about Operational
Policies on Business Affairs
Management Committee(Twice monthly)

Committees
Risk Management Committee
Compliance Committee
Information Asset Management
Committee

Outside Audits by an Independent
Auditing Corporation: Accounting Audits Conducted by
Grant Thornton Taiyo LLC

Chairman and Chief Executive Officer (CEO)Internal Audits
President and Chief Operating Officer (COO)

Inspection Department

Head Office,Internal Company Divisional Management

Advisory Contracts with
Attorneys in Specialized Fields

Operating Committee of the Company(Twice monthly)
Executive Officers
8 Directors and Executive Officers
10 Executive Officers
Total: 18

Legal Consultation
Legal OfficeInternal Control Operations
As of Oct 1, 201734

Corporate GovernanceInternal Control System
Based on the Companies Act and the Financial Instruments andExchange Act, the Company has established systems to ensure directors perform duties in compliance with all relevant laws and regulations
and its articles of incorporation. In addition, the Company has in placesystems for guaranteeing that proper operating practices are observed
by other listed companies and the corporate groups consisting of thesecompanies and their subsidiaries.
The management of the ALSOK Group carried out an evaluation of
the Group’s internal control system as of March 31, 2017, based on the
Financial Instruments and Exchange Act. This evaluation found that theinternal control system is effective, which has been noted in the reporton the internal control system. The independent auditing corporation,
Grant Thornton Taiyo LLC, has also expressed the opinion that theresult of the evaluation by the management noted in the internal control
report is accurate.

Compliance
The Company has established the Compliance Committee, which isheaded by the executive ofﬁcer in charge of compliance, to promotelegal compliance. The committee strives to inculcate an unwaveringawareness of compliance in all executive ofﬁcers and employees basedon the compliance rules formulated in 2002, and periodically veriﬁes thestatus of compliance in business and other activities. Furthermore, theCompany conducts activities to promote compliance on a Groupwide
basis. Moreover, together with the Education & Training Department,
the Compliance Committee is implementing corporate ethics training
and taking other steps to cultivate and thoroughly entrench a compliance-based mind-set.
The ALSOK Hotline was set up in April 2004 to facilitate early identiﬁcation and prevention of corporate ethics issues. This hotline allows
executive ofﬁcers and employees to report any illegal, inappropriate, orunethical behavior they may witness via email, telephone, or written
statement without fear of suffering disadvantageous treatment. On April
1, 2016, the Company established an external reporting hotline to add tothe already existing internal hotline.

Risk Management
The Company places particular importance on risk management, whichis central to its business of protecting the safety and security of society.
Accordingly, the Company formulated risk management rules in 2002.
The Company then established the Risk Management Committee basedon these risk management rules and assigned the executive ofﬁcer incharge of risk management as its chairperson. In addition, individual
risk management assessment bodies have been set up at the Head
Ofﬁce and each individual business ofﬁce to undertake Companywide
risk management activities, such as the identiﬁcation and evaluation of35

risks and the formulation of preventative measures and countermeasures. The Risk Management Committee also contains subcommittees
for risks in speciﬁc areas. These subcommittees gather information on
the risks in their designated area, analyze and evaluate these risks, anddraft measures to mitigate these risks. Furthermore, the Company has
developed organizational structures to ensure that it can respondquickly should a serious emergency occur. Through such structures, theCompany is able to relay urgent orders throughout the organization, set
up a response headquarters, or take other emergency response
measures.
In September 2004, the Company established the Information AssetManagement Committee, chaired by the executive ofﬁcer in charge of
information asset management. The purpose of the committee is to
respond as swiftly as possible to changes in the information asset
management environment, such as the full implementation of the
Personal Information Protection Law, which was enacted in April 2005.
The committee undertakes such activities as the development of astructure for the management of personal, business, and other important information in the Company’s possession as well as the promotionof employee education on this topic.
The Legal Ofﬁce exists to respond to lawsuits, legal disputes, andother legal risks, which it does while coordinating with the relevant
operating divisions. Moreover, the Company has formed consultant
contracts with seven law ﬁrms, ensuring that it can receive appropriate
advice and guidance for responding to major legal and complianceissues and thereby helping prevent the actualization of risks. By maintaining compliance while receiving such counsel, we are involving lawyers in the Company’s corporate governance systems.

Disclosure and IR Activities
ALSOK has formulated its Disclosure Policy based on which it actively
conducts impartial and timely information disclosure. In addition, theCompany has revised its investor relations (IR) website to provide stakeholders with greater ease in ﬁnding the information they seek. We also
aim to foster a deeper understanding among overseas institutional
investors of the security services industry in Japan and the growthstrategies of the ALSOK Group. To this end, we provide Englishlanguage translations of ﬁnancial summaries and other documents on
our English-language IR website.
The Company’s IR Website

http://www.alsok.co.jp/en/ir/

ALSOK REPORT 2017

Messages from Outside Officers

Contribution to Sustainable Corporate Value
Masakazu Iwaki
Growth for the ALSOK Group

Outside Director

I spent 29 of my 45 years at Nippon Steel Corporation (Currently
NIPPON STEEL & SUMITOMO METAL CORPORATION) at steel manufacturing sites, where I was constantly forced to face risks head-on in
my work.
When I became an outside director at ALSOK, I instantly felt a strong
connection with the Company as it too was facing risks head-on in its
quest to protect the safety and security of society. The principle ofarigato no kokoro contained in ALSOK’s management philosophy also
left a strong impression on me as it coincided with the feeling of gratitude I have maintained toward colleagues and customers in my work up
until this point. The just, upright, and disciplined approach toward
management encapsulated in the principle of bushi no seishin, anotherelement of the management philosophy, similarly matched up with myown personal creed.
The Company’s corporate governance systems are incredibly transparent, with an atmosphere that encourages outside ofﬁcers to openly
voice opinions, and established sincere frameworks for incorporating
this input into management.

Rising Importance of Reinforcing
Groupwide Governance

ALSOK has been achieving
rapid growth under thestrong leadership of its
management. In addition tothis growth, the Company
has added a new element of
ﬂexibility to its robust
management structures byencouraging active
communication between
management and other Company divisions.
I see it as the duty of outside directors to adopt an objective andimpartial perspective and exercise foresight in judging the organizationof the Company. Moreover, I pledge to remain always mindful of
ALSOK’s various stakeholders and to contribute to ongoing corporate
value growth for the ALSOK Group by offering advice from a forwardlooking perspective.

Makoto Uenoyama

Outside Audit & Supervisory Board Member

The frameworks and rules of the Company are being effectively managed,
making for exceptionally effective internal controls on a non-consolidated basis. However, society is increasingly expecting companies toexercise governance on a groupwide basis that extends to their subsidiaries. Whether in Japan or overseas, there exists the very real threat ofinsufﬁcient governance of subsidiaries leading to accidents or scandals.
The ALSOK Group has recently been acquiring companies through M&A
activities and it also possesses overseas subsidiaries. It is therefore
incredibly important for the Group to reinforce governance based on a
“corporate conglomerate” mentality that includes such companies.
A top-down approach is insufﬁcient for reinforcing Groupwide governance; a bottom-up approach is also necessary. In tackling this task, it
will be crucial for both the executive management team and the Audit &Supervisory Board members to perform their roles.
I wholeheartedly believe that a company cannot become stronger if its
operating divisions, its frontline operations, do not also become stronger.
Audit & Supervisory Board members are tasked with the importantmission of performing audits to ensure the appropriateness of theoperational execution function of the directors. The effectiveness ofoperation execution can be judged by looking at the effectiveness ofoperating divisions. For this reason, I see my role as going beyond

attending meetings of theBoard of Directors. As an
Outside Audit & Supervisory
Board member, it is vitalthat I frequently visit thefrontlines to maintain anunderstanding of both frontline operations and management. It is also my duty toreport input from the frontlines to management based on this understanding. The Company provides time at a meeting of the Board of Directors once every six months
for Audit & Supervisory Board members to report on the issues andrequests they have uncovered at the Head Ofﬁce and at business sites.
There are some issues that can be addressed immediately and others
that require time, and addressing these issues on an ongoing basis will
no doubt lead to increased corporate value for the Group. I am committed to contributing to this increase in my capacity as an Outside Audit &Supervisory Board member.

36

Directors, Audit & Supervisory Board Members, and Executive Ofﬁcers
As of June 30, 2017

Back row, from left

Ikuji Kayaki

Masashi Terao

Hiraku Otani

Kiyomi Hara

Director
Senior Executive Ofﬁcer
Security Operations
Structural Reform of Transportation
Security Services

Director
Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business
Promotion Division
West Japan

Director
Senior Executive Ofﬁcer
Chief Ofﬁcer of International Affairs
Financial & Accounting
International Affairs
Internal Control

Director
Executive Vice President
Chief Ofﬁcer of Business Promotion
Division
East Japan

Makoto Uenoyama

Seiei Ono

Yutaka Takehana

Atsushi Murai

Audit & Supervisory Board Member(Outside Audit & Supervisory Board
Member)Director (Outside Director)

Director (Outside Director)

Chairman and Representative Director
Chief Executive Ofﬁcer (CEO)Front row, from left

37

ALSOK REPORT 2017

Hirohisa Hokari

Tsuyoshi Murai

Shigeki Nomura

Masaki Tatsuguchi

Director
Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business
Promotion DivisionCorporate Planning & Administration
Strategic BusinessBusiness Planning & Management
Financial Institutions
Investor Relations

Director
Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business
Promotion Division
Human Resources
Corporate Ethics

Director
Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business
Promotion Division
Chief Ofﬁcer of Regional Division (III)

Audit & Supervisory Board Member

Yukiyasu Aoyama

Masakazu Iwaki

Takeshi Oiwa

Ikuhiro Watanabe

President and Representative Director
Senior Executive President
Chief Operating Ofﬁcer (COO)

Director (Outside Director)

Audit & Supervisory Board Member(Outside Audit & Supervisory Board
Member)Audit & Supervisory Board Member(Outside Audit & Supervisory Board
Member)38

Directors, Audit & Supervisory Board Members, and Executive Ofﬁcers As of June 30, 2017

Atsushi Murai

Yukiyasu Aoyama

Kiyomi Hara

Chairman and Representative Director
Chief Executive Ofﬁcer (CEO)President and Representative Director
Senior Executive President
Chief Operating Ofﬁcer (COO)

Director
Executive Vice President
Chief Ofﬁcer of Business Promotion Division
East Japan

Sep. 1995: Director-General, Chubu Regional Police Bureau(Resigned in Jun. 1996)
Jun. 1996: Deputy Governor, Deposit Insurance Corporation ofJapan (Resigned in Sep. 1997)
Sep. 1997: Joined the Company as a consultant
Jun. 1998: Senior Executive Vice President and Representative
Director
Jun. 2001: President and Representative Director
Jul. 2003: Chief Ofﬁcer of Business Promotion Division
Apr. 2004: Chief Ofﬁcer of Security Operations Division
Apr. 2011: Chief Executive Ofﬁcer (Current)
Apr. 2012: Chairman and Representative Director (Current)
Major Concurrent Position
Dec. 1997: Representative Director, SOHGO CORPORATION(Current)

Jul. 2006: Director-General, Customs and Tariff Bureau,
Ministry of Finance Japan (Resigned in Jul. 2008)
Aug. 2008: Joined the Company as Senior Executive Ofﬁcer,
Chief Ofﬁcer of Security Operations Division
Apr. 2009: In charge of Human Resources, Security Operations,and Corporate Ethics
Jun. 2009: Executive Vice President and Representative Director
Apr. 2010: Senior Executive Vice President and Representative
Director, Chief Ofﬁcer of Business Promotion Division
Apr. 2011: Chief Operating Ofﬁcer (Current)
Apr. 2012: President and Representative Director (Current)
Senior Executive President (Current)
Major Concurrent Position
Jun. 2014: Chairman, All Japan Security Service Association(Current)Mar. 1970: Joined the Company
Jun. 2006: President and Representative Director, Tokyo Sohgo
Security Services Co., Ltd. (Seconded, resigned in
Apr. 2008)
Jun. 2007: Executive Ofﬁcer
In charge of Stationed Security Services
Reorganization
Apr. 2008: In charge of Corporate Marketing, Business
Promotion Division
Aug. 2008: In charge of Support and Products / Services,
Business Promotion DivisionJun. 2010: Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business Promotion Division
In charge of Support and Products / Services
Jun. 2011: Director and Senior Executive Ofﬁcer
In charge of Sales Department of Head Ofﬁce
Apr. 2012: In charge of Sales Promotion and Corporate
Customer Sales Promotion
Apr. 2014: Chief Ofﬁcer of Corporate Customer Sales Promotion
Apr. 2016: Director and Executive Vice President (Current)
Chief Ofﬁcer of Business Promotion Division (Current)
Apr. 2017: In charge of East Japan (Current)
Major Concurrent Positions
Apr. 2016: Representative Director, Japan Facilio Co., Ltd.
(Current)
Feb. 2017: Representative Director, ALSOK SHOJITSU SECURITYSERVICE CO., LTD. (Current)
Apr. 2017: Representative Director, ALSOK-TW East Japan(Current)

Hirohisa Hokari

Hiraku Otani

Tsuyoshi Murai

Director
Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business Promotion DivisionCorporate Planning & Administration
Strategic BusinessBusiness Planning & Management
Financial Institutions
Investor Relations

Director
Senior Executive Ofﬁcer
Chief Ofﬁcer of International Affairs
Financial & Accounting
International Affairs
Internal Control

Director
Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business Promotion Division
Human Resources
Corporate Ethics

Apr. 2010: Director-General of Operations Department at Bankof Japan (Resigned in Jun. 2011)
Jun. 2011: Joined the Company as Executive Ofﬁcer
In charge of Business Planning and Financial
Institution Marketing & Sales Promotion
General Manager of Business Planning Department
Feb. 2012: Senior Executive Ofﬁcer and Deputy
Chief Ofﬁcer of Business Promotion Division(Current)
In charge of Business Planning & Management
Apr. 2012: In charge of Financial Institution Services andTransportation Security Services
Apr. 2014: In charge of General Affairs / Corporate Planning,
Financial Institution Services, Compliance, Risk
Management, and Information Asset Management
Jun. 2014: Director and Senior Executive Ofﬁcer (Current)
Apr. 2016: Corporate Planning & Administration (Current)
Strategic Business (Current)
Business Planning & Management (Current)
Financial Institutions (Current)
Investor Relations (Current)

Jun. 2010: Joined the Company as Executive Ofﬁcer
In charge of Financial & Accounting and Internal
Control (Current)
Jun. 2011: Senior Executive Ofﬁcer
Apr. 2012: In charge of Procurement
Apr. 2013: In charge of International Affairs (Current)
Apr. 2014: Chief Ofﬁcer of International Affairs (Current)
Jun. 2016: Director and Senior Executive Ofﬁcer (Current)

Jul. 1997: Joined the Company
Jun. 2007: Chief Ofﬁcer of Home Marketing Division
Apr. 2010: Executive Ofﬁcer
Chief Ofﬁcer of Regional Division (I)Feb. 2011: In charge of General Property Management
Mar. 2011: Representative Director, Japan Facilio Co., Ltd.
(Seconded, resigned in Mar. 2014)
Apr. 2014: Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business Promotion Division(Current)
In charge of Business Planning & Management andRegional Financial Institution Services
Apr. 2016: In charge of Human Resources and Corporate Ethics(Current)
Jun. 2016: Director and Senior Executive Ofﬁcer (Current)
Major Concurrent Position
Sep. 2014: Representative Director, SOHGO CORPORATION(Current)

Masashi Terao

Shigeki Nomura

Ikuji Kayaki

Director
Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business Promotion Division(Kansai)West Japan

Director
Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business Promotion Division(Central Japan)
Chief Ofﬁcer of Regional Division (III)Director
Senior Executive Ofﬁcer
Security Operations
Structural Reform of Transportation Security Services

Apr. 1977: Joined the Company
Apr. 2006: Chief Ofﬁcer of Transportation Security Services
Headquarters
Jun. 2007: Executive Ofﬁcer
Apr. 2010: Deputy Chief Ofﬁcer of Security Operations
In charge of Transportation Security Marketing,Business Promotion DivisionJun. 2011: Chief Ofﬁcer of Regional Division (VIII)
Apr. 2012: Senior Executive Ofﬁcer
Chief Ofﬁcer of Security Operations
Apr. 2015: Deputy Chief Ofﬁcer of Business Promotion Division(Kansai) (Current)
Apr. 2016: In charge of West Japan
Jun. 2017: Director and Senior Executive Ofﬁcer (Current)

Apr. 1984: Joined the Company
Apr. 2011: General Manager of Human Resources Department
Jun. 2011: Executive Ofﬁcer
In charge of Human Resources
Apr. 2014: Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business Promotion Division(Central Japan) (Current)
Chief Ofﬁcer of Regional Division (III) (Current)
Apr. 2017: Chief Ofﬁcer of Regional Division (VII)Jun. 2017: Director and Senior Executive Ofﬁcer (Current)

Major Concurrent Positions
Jun. 2015: Representative Director, Hiroshima Sohgo Security
Services Co., Ltd. (Current)
Representative Director, Ehime Sohgo Security
Services Co., Ltd. (Current)

39

Apr. 2008: Executive Ofﬁcer, Mizuho Corporate Bank, Ltd.
(Currently Mizuho Bank, Ltd.) (Resigned in Apr. 2010)

Major Concurrent Positions
Jun. 2014: Representative Director, Toyama Sohgo Security
Services Co., Ltd. (Current)
Representative Director, Nihon Guard Co., Ltd.
(Current)
Representative Director, Chukyo Sohgo Security
Services Co., Ltd. (Current)

Apr. 1982: Joined the Company
Apr. 2011: Chief Ofﬁcer of Regional Division (IV)
Apr. 2012: Executive Ofﬁcer
Apr. 2014: Deputy Chief Ofﬁcer of Security Operations
In charge of Structural Reform (Transportation
Security Services) (Current)
General Manager of Security Operations Department (I)Apr. 2015: Senior Executive Ofﬁcer
Chief Ofﬁcer of Security Operations (Current)
Jun. 2017: Director and Senior Executive Ofﬁcer (Current)

ALSOK REPORT 2017

Yutaka Takehana

Masakazu Iwaki

Seiei Ono

Director (Outside Director)

Director (Outside Director)

Director (Outside Director)

Sep. 2001: Director, Hiroshima Prefectural Police Headquarters
Jun. 2003: Vice Governor of Tokyo (Resigned in Jul. 2005)
Aug. 2005: Director of Public Safety Department, National Police
Agency (Resigned in Jan. 2007)
Mar. 2007: Consultant, Matsushita Electric Industrial Co. Ltd.
(Currently Panasonic Corporation)
Oct. 2007: Member of Tokyo Metropolitan Board of Education(Resigned in Sep. 2015)
Apr. 2008: Executive Ofﬁcer, Matsushita Electric Industrial Co.
Ltd. (Currently Panasonic Corporation)
Apr. 2009: Managing Executive Ofﬁcer, Panasonic Corporation(Resigned in Mar. 2013)
Jun. 2013: President & CEO, Tokyo Big Sight Inc. (Resigned inJun. 2017)
Jun. 2015: Joined the Company as Outside Director (Current)

Jun. 2010: Representative and Executive Vice President, Nippon
Steel Corporation (Currently NIPPON STEEL &SUMITOMO METAL CORPORATION, resigned inMar. 2014)
Apr. 2014: Member of the Board, NIPPON STEEL & SUMITOMOMETAL CORPORATION (Resigned in Jun. 2014)
Jun. 2014: Executive Advisor, NIPPON STEEL & SUMITOMOMETAL CORPORATION
Jun. 2016: Joined the Company as Outside Director (Current)
Jul. 2016: Advisor, NIPPON STEEL & SUMITOMO METALCORPORATION (Current)
Jun. 2017: Director, Misawa Homes Co., Ltd. (Current)

Apr. 2009: Executive Vice President, Mitsubishi Corporation(Resigned in Mar. 2013)
Apr. 2010: President, Mitsubishi International Corporation(Resigned in Mar. 2012)
Apr. 2012: Regional CEO, North America (Concurrently)
President, Mitsubishi Corporation (Americas)(Resigned in Mar. 2013)
Dec. 2013: Executive Vice President and Representative Director,
Mitsubishi Research Institute, Inc.
Dec. 2014: Executive Vice President and Representative Director,
Mitsubishi Research Institute, Inc. (Resigned in
Dec. 2016)
Dec. 2016: Executive Advisor, Mitsubishi Research Institute, Inc.
(Current)
Jun. 2016: Joined the Company as Outside Director (Current)

Masaki Tatsuguchi

Takeshi Oiwa

Makoto Uenoyama

Audit & Supervisory Board Member

Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)

Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)

Apr. 2007: Managing Executive Ofﬁcer, Sompo Japan Insurance
Inc. (Currently Sompo Japan Nipponkoa Insurance Inc.)
Jun. 2007: Director and Managing Executive Ofﬁcer, Sompo
Japan Insurance Inc. (Currently Sompo Japan
Nipponkoa Insurance Inc.)
Jun. 2010: Director and Senior Managing Executive Ofﬁcer,
Sompo Japan Insurance Inc. (Currently Sompo Japan
Nipponkoa Insurance Inc.)
Jan. 2011: Deputy President and Director, Sompo Japan
Insurance Inc. (Currently Sompo Japan Nipponkoa
Insurance Inc., resigned in Mar. 2011)
Apr. 2011: Audit & Supervisory Board Member, Nippon Export
and Investment Insurance (Resigned in Mar. 2017)
Jun. 2011: Joined the Company as Outside Audit & Supervisory
Board Member
Jun. 2017: Joined the Company as Outside Audit & Supervisory
Board Member (Current)

Jun. 2007: Director, Matsushita Electric Industrial Co. Ltd.
(Currently Panasonic Corporation)
Apr. 2010: Managing Director, Panasonic Corporation (Resigned
in Jun. 2012)
Jun. 2012: Managing Executive Ofﬁcer, Panasonic Corporation(Resigned in Mar. 2013)
Apr. 2013: Corporate Advisor, Panasonic Corporation (Resigned
in Mar. 2015)
Jun. 2013: Joined the Company as Outside Audit & Supervisory
Board Member
Apr. 2015: Associate, Panasonic Corporation (Current)
Jun. 2017: Joined the Company as Outside Audit & Supervisory
Board Member (Current)

Apr. 1978: Joined the Company
Jan. 2010: General Manager of Finance & Accounting
Department
Oct. 2012: General Manager of General Affairs Department
Jun. 2014: Chief Ofﬁcer of Regional Division (VIII)
Jun. 2015: Audit & Supervisory Board Member (Current)

Ikuhiro Watanabe
Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)
Jun. 2007: General Manager of Custodial Department, The
Norinchukin Bank (Resigned in May 2009)
Jun. 2009: Manager of Internal Audit Division, Starzen Co., Ltd.
Apr. 2013: Executive Ofﬁcer and Manager of Legal Department,Starzen Co., Ltd. (Resigned in Sep. 2014)
Oct. 2014: Corporate Advisor, Norinchukin Research InstituteCo., Ltd. (Resigned in Jun. 2015)
Jun. 2015: Joined the Company as Outside Audit & Supervisory
Board Member (Current)
Jun. 2016: Auditor, Norinchukin Research Institute Co., Ltd.
(Resigned in Jun. 2017)

Executive Officers
Motohisa Suzuki

Takashi Kumagai

Masato Yagi

Koji Kishimoto

Akira Kono

Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business
Promotion Division
General Affairs / PR
Procurement
Second in charge of
Security Operations
HOME ALSOK
Compliance
Risk Management
Information Assets Management

Senior Executive Ofﬁcer
Deputy Chief Ofﬁcer of Business
Promotion Division
Long-term CareManagement Company
Regional Management
Second in charge of R&D
Second in charge ofSales Promotion
Second in charge ofCorporate Customers

Senior Executive Ofﬁcer
Chief Ofﬁcer of Regional Division (I)Executive Ofﬁcer
Second in charge ofFinancial & Accounting

Executive Ofﬁcer
Chief Ofﬁcer of Regional Division (V)Norihiko Mizutani

Kazuhide Shigemi
Executive Ofﬁcer
Second in charge of Corporate
Planning & Administration
Second in charge ofStrategic BusinessYoshio Kumazaki
Yasuhiro Yoshimoto
Executive Ofﬁcer
General Property Management
and Fire Protection Services

Executive Ofﬁcer
Chief Ofﬁcer of Regional Division (IX)

Shinichi Honjo
Executive Ofﬁcer
Chief Ofﬁcer of Regional Division (II)Senior Executive Ofﬁcer
R&D

40

Financial Section
Management Indexes

2007

2008

2009

2010

Net sales

276,560

284,996

285,004

278,579

Cost of sales

203,080

212,287

215,711210,097

Gross proﬁt

73,47972,70969,292

68,482

Selling, general and administrative expenses

57,507

58,91359,34959,211

Operating income

15,972

13,795

9,943

9,270

Ordinary income

16,917

14,642

10,63010,819Proﬁt attributable to owners of parent

7,558

7,653

4,224

4,563

Gross proﬁt margin (%)

26.6

25.5

24.3

24.6

Operating income margin (%)

5.8

4.8

3.5

3.3

Ordinary income margin (%)

6.1

5.1

3.7

3.9

Return on assets (ROA) (%)

6.0

5.0

3.6

3.8

Return on equity (ROE) (%)

5.7

5.6

3.1

3.3

EV/EBITDA (Times)

6.9

5.1

3.0

2.3

47.2

46.2

47.7

50.9

Fiscal year ended March 31

Proﬁt and loss (Millions of yen)Proﬁtability

1Stability
Equity capital ratio (%)
Equity capital ratio on market-value basis (%)

77.2

47.4

29.5

39.4

61,042

74,48566,24751,318

14.9

15.2

20.7

24.0

Total asset turnover ratio (Times)

1.0

1.0

1.0

1.0

Shareholders’ equity turnover ratio (Times)

2.1

2.1

2.1

2.0

Tangible ﬁxed assets turnover ratio (Times)

4.8

5.0

5.0

4.9

1,322.82

1,356.35

1,364.33

1,397.90

74.71

75.07

41.90

45.39

Price-book value ratio (Times)

1.6

1.0

0.6

0.8

Price earnings ratio (Times)

28.9

18.5

20.2

23.9

Dividends per share (Yen)

20

20

20

20

Interest-bearing liabilities (Millions of yen)Interest coverage ratio (Times)
Efﬁciency

Per share information
Net assets per share (Yen)
Proﬁt attributable to owners of parent per share (Yen)Consolidated dividend payout ratio (%)

26.8

26.6

47.7

44.1

Closing stock price

2,160

1,390

845

1,083

25,30226,01426,96027,322

11.6

11.8

11.9

12.3

and female employees)

—

—

—

92.2

CO2 emissions volume (Non-consolidated, t-CO2)

—

—

—

40,871Other information
Number of employees (Consolidated)
Average number of years of continuous service(Non-consolidated)
Percentage of employees returning to work afterchildcare leave (Non-consolidated, total for male

1. Method of calculation for EV/EBITDA is as follows:
EV (Enterprise value) = Market capitalization + Interest-bearing liabilities – Short-term liquidity (Cash and deposits + Short-term investments in securities)
EBITDA (Earnings before interest, tax, depreciation and amortization) = Operating income + Depreciation and amortization

41

ALSOK REPORT 2017

2011

2012

2013

2014

2015

2016

2017

279,272

304,723

315,564

328,209

365,749

381,818

413,343

209,364

232,812242,410

248,900

276,116

282,880

310,704

69,90871,91073,15379,30889,632

98,937

102,639

59,555

61,10061,36360,37566,66069,901

74,217

10,352

10,81011,79018,932

22,971

29,03628,422

11,765

12,55814,741

20,74524,70030,66730,309

4,706

3,903

8,574

10,955

13,534

17,86818,330

25.0

23.6

23.2

24.2

24.5

25.9

24.8

3.7

3.5

3.7

5.8

6.3

7.6

6.9

4.2

4.1

4.7

6.3

6.8

8.0

7.3

4.2

4.4

5.1

6.5

6.9

8.5

8.2

3.3

2.7

5.7

7.0

7.8

9.9

9.7

1.4

1.4

2.7

5.3

10.1

13.4

8.7

50.3

51.3

52.1

46.2

48.4

51.9

51.0

32.0

34.8

46.5

63.5

110.1

175.4

108.2

49,311

39,27037,45571,66673,69847,20865,599

20.1

34.1

36.9

36.4

28.5

30.1

54.2

1.0

1.1

1.1

1.0

1.0

1.1

1.1

2.0

2.1

2.1

2.1

2.2

2.1

2.2

4.9

5.2

5.4

5.2

5.4

5.3

5.1

1,421.67

1,446.93

1,536.30

1,574.74

1,800.15

1,805.09

1,956.25

46.82

38.83

85.30

108.99134.65177.77182.37

0.6

0.7

0.9

1.4

2.3

3.4

2.1

19.3

25.3

16.1

19.9

30.4

34.3

22.8

20

20

25

30

38

50

55

42.7

51.5

29.3

27.5

28.2

28.1

30.2

905

982

1,373

2,164

4,095

6,100

4,155

27,79027,86828,05428,091

31,221

31,446

36,693

12.7

13.3

13.8

14.4

14.9

15.4

15.9

90.2

93.3

97.6

92.4

96.6

93.0

91.3

39,96838,022

38,587

41,377

39,21237,39036,64942

Financial Section

Breakdown of Sales / Number of Contracts

Net Sales by Service Type
Billions of yen
Fiscal year ended March 31

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Electronic Security Services

143.9

142.5

138.9

138.4

142.9

147.1

151.8

160.4

167.1

170.5

Stationed Security Services

72.7

72.8

70.6

71.3

71.3

73.8

77.2

88.4

93.9

102.3

Security Services

Transportation Security Services

46.6

47.4

46.8

47.6

49.8

50.8

51.0

52.3

54.6

56.1

General Property Management andFire Protection Services1

—

—

—

17.0

36.6

40.6

44.8

58.3

54.9

55.9

Long-Term Care Services2

—

—

—

—

—

—

—

—

7.5

24.9

Other Services

21.6

22.2

22.1

4.7

4.0

3.0

3.2

6.2

3.5

3.4

Total

284.9

285.0

278.5

279.2

304.7

315.5

328.2

365.7

381.8

413.3

1. General Property Management and Fire Protection Services was converted to a reportable segment in the ﬁscal year ended March 31, 2012, and accordingly net sales amounts for this segment are displayed separately from the ﬁscal year ended March 31, 2011, and onward. Net sales amounts for ﬁscal years ended March 31, 2010, and prior are included under “Other Services.”
2. Long-Term Care Services was converted to a reportable segment in the ﬁscal year ended March 31, 2017, and accordingly net sales amounts for this segment are displayed separatelyfrom the ﬁscal year ended March 31, 2016, and onward. Net sales amounts for ﬁscal years ended March 31, 2015, and prior are included under “Other Services.”

413.3 billion¥

Billions of yen

400.0

300.0

200.0

100.0

0

08

FY

Electronic Security Services

09

Stationed Security Services

10

11

Transportation Security Services

12

13

14

15

General Property Management and Fire Protection Services

16

17Long-Term Care Services

Other Services

Net Sales by Client Type
Billions of yen
Fiscal year ended March 31

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Business corporations

162.7

164.8

163.1

160.9

178.4

186.5

196.7

224.9

234.3

244.9

Financial institutions3

90.0

90.4

85.7

88.3

90.7

89.8

90.5

91.3

92.3

91.7

Public institutions3

22.4

19.6

19.5

19.3

20.5

22.0

22.8

26.4

26.2

31.3

Individuals4

9.8

10.0

10.1

10.6

14.9

17.1

18.0

22.9

28.9

45.2

284.9

285.0

278.5

279.2

304.7

315.5

328.2

365.7

381.8

413.3

3

Total

3. In conjunction with the conversion of Japan Post to a privately operated company in October 2007, sales to Japan Post Co., Ltd., have been transferred from “Public institutions” to “Businesscorporations” and sales to Japan Post Bank Co., Ltd., and Japan Post Insurance Co., Ltd., have been transferred to “Financial institutions.” Sales to subsidiaries of ﬁnancial institutions
were previously included under “Business corporations” but have since been transferred to “Financial institutions.”
4. Sales of HOME ALSOK APARTMENT AND CONDOMINIUM PLAN and HOME ALSOK MIMAMORI SUPPORT have been included under “Individuals,” even for contracts in which the customer
is a business corporation or government ofﬁce.

413.3 billion¥

Billions of yen

400.0

300.0

200.0

100.0

0
FY

Business corporations

43

08
Financial institutions

09
Public institutions

10

11
Individuals

12

13

14

15

16

17

ALSOK REPORT 2017

Number of Contracts
Contracts
Fiscal year ended March 31

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Security Services
Electronic Security Services

487,228

507,954524,708

541,654580,263

630,977

677,672

803,601

854,083

888,955

Corporate Clients

372,196

381,759

388,853

396,580

406,261

422,676

440,028

463,053478,925

493,035

Individual Users

115,032

126,195

135,855

145,074

174,002

208,301

237,644

340,548

375,158

395,9207

Stationed Security Services

2,922

2,854

2,785

2,866

2,934

3,020

3,227

3,597

3,772

3,998

Transportation Security
Services

33,39733,96035,96339,06548,284

51,69855,42059,134

62,14665,755General Property
Management and Fire
Protection Services5

—

—

—

44,212

47,91354,90363,00473,89881,90889,670Long-Term Care Services6

―

―

―

―

―

―

―

―

12,804

22,628Other Services

56,09943,17142,909

8,307

8,957

11,98913,72522,477

18,21722,285

Total

579,646587,939

606,365

636,104

688,351

752,587

813,048962,707

1,032,930

1,093,291

5. General Property Management and Fire Protection Services was converted to a reportable segment in the ﬁscal year ended March 31, 2012, and accordingly the number of contracts forthis segment is displayed separately from the ﬁscal year ended March 31, 2011, and onward. The number of contracts for ﬁscal years ended March 31, 2010, and prior is included under“Other Services.”
6. Long-Term Care Services was converted to a reportable segment in the ﬁscal year ended March 31, 2017, and accordingly the number of contracts for this segment is displayed separatelyfrom the ﬁscal year ended March 31, 2016, and onward. The number of contracts for ﬁscal years ended March 31, 2015, and prior is included under “Other Services.”
7. If contracts for individual households in housing complexes are included, this ﬁgure would be approximately 1,060,000.

Number of Contracts for Corporate Clients

493,035 contracts

Contracts

500,000

400,000

300,000

200,000

100,000

0
FY

08

09

10

11

12

13

14

15

16

17

Number of Contracts for Individual Users

395,920 contracts

Contracts

400,000

300,000

200,000

100,000

0
FY

08

09

10

11

12

13

14

15

16

17

44

Financial Section

Management’s Discussion and Analysis

Analysis of Business Performance
Operating Environment
Consolidated Financial Results for the Fiscal Year Ended March
31, 2017 (April 1, 2016–March 31, 2017)
In the year under review, the general trend toward modest recovery
continued in Japan as improvements were seen in corporate
business sentiment, investment, and exports during the second
half of the ﬁscal year as the inauguration of the Trump administration in the United States stimulated yen depreciation, all in the
midst of ongoing improvements in the job market and wages.
Despite the steady recovery of the U.S. economy, the global
economy became increasingly opaque as a result of rising geopolitical risks, such as those associated with terrorist attacks by ISISand the issues surrounding North Korea, as well as concerns
regarding the United Kingdom’s decision to leave the European
Union and the trend toward protectionism. Accordingly, the current
operating environment requires ongoing caution, and this need forcaution extends to the economic policies to be implemented by the
Trump administration in the United States.
In regard to public safety in Japan, the number of reported crimes isdeclining rapidly and has set a new record for post-World War II lowseach year since 2015, coming to approximately 990,000 in 2016. However,there seems to be no end to the occurrence of crimes that affectpeople’s everyday lives, such as malicious crimes and special-casescams targeting senior citizens and differently abled individuals aswell as crimes aimed at women and children. At the same time, therange of risks faced by society is diversifying, now including suchthreats as natural disasters, cybercrimes, information leaks, andfrequently occurring acts of international terrorism. ALSOK thus
realizes the need for it to provide a wide range of services that respondto social needs as a company responsible for an important piece ofsocial infrastructure supporting the safety and security of society.

continued working to strengthen and expand its mainstay security
service operations while also growing businesses in peripheral ﬁelds
that are highly compatible with security services, such as long-termcare and facility management and other building maintenanceservice. At the same time, we pursued cost reductions throughefﬁciency improvements in security operation divisions realized byhaving human resources handle a broader range of functions as wellas through the consolidation of Guard Centers.
Due to the above factors, consolidated net sales rose 8.3% year
on year, to ¥413,343 million, and proﬁt attributable to owners ofparent increased 2.6%, to ¥18,330 million. These increases werealso due in part to new M&A activities conducted in long-term careservice operations. Meanwhile, operating income was down 2.1%, to¥28,422 million, and ordinary income declined 1.2%, to ¥30,309
million, due to the impacts of higher retirement beneﬁt expenses
and labor shortages.

Sales by Business Segment

Operating Results
In this environment, based on its policy of “responding accurately tocustomers’ various risks and outsourcing needs,” the ALSOK Group

Security Services
Electronic Security Services
In Security Services, the Electronic Security Services segment
promoted sales of various services for corporate clients. These
services included ALSOK-GV (read as “ALSOK G-ﬁve”), a service
that combines Internet-based security services utilizing image
monitoring with ALSOK Information Service, which allows for information regarding when employees arrive at or leave premises to beviewed online while also providing Internet-based remote control
functionality for equipment. Another promoted offering was Control
System S-860, a standard security system that is equipped withcomprehensive monitoring and management services related to
intrusions, natural disasters, and equipment. In services forindividual users, trends in contract numbers were favorable for
HOME ALSOK Premium, a sophisticated security system thatprovides a ﬁne-tuned response to customer needs, as well as forHome Security Basic, the new standard of home security services
boasting cutting-edge features.

Net Sales

Ordinary Income / Ordinary Income Margin

Millions of yen(%)

Millions of yen(%)

480,000

12.0

40,00012.0

360,000

9.0

30,000240,000

6.0

20,0006.0

120,000

3.0

10,0003.0¥413,343 million¥30,309 million

9.0

7.3%

0
FY

13

14

15

16

17

0

0
FY

13

Ordinary Income

45

14

15

Ordinary Income Ratio

16

17

0

ALSOK REPORT 2017

Stationed Security Services
In the Stationed Security Services segment, the operating environment was characterized by a rising need for high-quality security
and security augmentation services to address frequently occurring
acts of terrorism and various other risks. Against this backdrop,
sales contributions came from contracts for large-scale security
operations at the G7 Ise-Shima Summit and other meetings ofgovernment leaders as well as for security operations related to
new ofﬁce buildings constructed as part of urban redevelopment
efforts and to the 2017 Sapporo Asian Winter Games. In addition, we
began offering Net de Security Guard in December 2016. This newservice is an industry-ﬁrst in that it allows customers to request
security guards with ease via the Internet. Through this service, we
aim to increase the scale of the market for temporary security
services and thereby serve customers other than those that use
ALSOK services on an ongoing basis, a group of customers that has
previously faced difﬁculty placing direct requests.
Transportation Security Services
In the Transportation Security Services segment, solid orders for
the Total ATM Management System buoyed sales amid a growing
trend toward outsourcing operation and management of ATMs
installed both inside and outside of ﬁnancial institutions as well as
an increase in ATMs that are compatible with overseas bank cards.
In addition, sales contributions came from outsourcing orders forﬁnancial institution business center operations.
Also, with the aim of further expanding overseas markets,
we converted partnered local security companies in Vietnam andIndonesia into consolidated subsidiaries and thereby enhanced oursystems for deploying full-ﬂedged security services operations inthese countries.
Due to the above as well as to the conversion of ALSOKSHOJITSU SECURITY SERVICE CO., LTD., formerly Hitachi Security
Service Co., Ltd., into a consolidated subsidiary, net sales in the
Security Services segment amounted to ¥329,027 million, up 4.2%
year on year. However, operating income decreased 0.9%, to ¥32,291
million, due to the impacts of higher retirement beneﬁt expenses
and labor shortages.
Number of Electronic Security Services Contracts

General Property Management and Fire Protection Services
In the General Property Management and Fire Protection Services
segment, we focused on comprehensive management services thatencompass the maintenance, management, and operation services
for various facilities provided through enhanced intra-Group coordination, and orders for general property management, cleaning
services, and repair work contributed to sales accordingly. Other
contributions came from sales of disaster preparedness items aswell as from sales of sprinklers and other ﬁre extinguishing equipment, which were stimulated by the revision of the Fire Service Act.
As a result, net sales in the General Property Management and Fire
Protection Services segment increased 1.8% year on year, to ¥55,961
million, and operating income rose 12.7%, to ¥4,916 million.
Long-Term Care Services
In the Long-Term Care Services segment, net sales increased
228.5% year on year, to ¥24,921 million, as a result of the development of long-term care service operations at HCM Corporation and
ALSOK Care & Support Co., Ltd., as well as of the expansion of theCompany’s operations following the conversion of Wisnet Co., Ltd.,
into a consolidated subsidiary. However, as we are still in theprocess of reforming the management at Wisnet, operating loss of¥354 million was recorded, compared with operating loss of ¥1
million recorded in the previous ﬁscal year. Going forward, theGroup will fully leverage its management resources to develop its
conventional long-term care service operations while also creating
new hybrid services by fusing security services and long-term care.
Analysis of Individual Items
In the year under review, net sales increased ¥31,525 million, or8.3%, year on year, to ¥413,343 million.
Cost of sales was ¥310,704 million, primarily due to a ¥14,934
million increase in labor costs and a ¥12,677 million increase in
miscellaneous expenses.
Selling, general and administrative expenses amounted to¥74,217 million due to a ¥1,148 million increase in taxes and dues
and a ¥972 million increase in retirement beneﬁt expenses.
Ordinary income decreased ¥357 million, or 1.2%, to ¥30,309 million.
Number of Contracts for Individual Users

Contracts(%)

1,000,000

12.0

Contracts

400,000

750,000

9.0

300,000

9.0

500,000

6.0

200,000

6.0

250,000

3.0

100,000

3.0

395,920 contracts(%)

888,955 contracts

0
FY

09

10

11

12

13

14

15

16

17

0

0
FY

09

10

11

12

13

14

15

16

17

0

46

Financial Section

Extraordinary income was down due to a ¥33 million decrease incompensation income.
Extraordinary loss rose following the recording of a ¥95 million
provision for loss on dissolution of the employees’ pension fund.
Proﬁt attributable to owners of parent increased ¥461 million, or
2.6%, to ¥18,330 million.
Comprehensive income increased ¥17,073 million, or 296.9%, to¥22,823 million. This increase was due to a ¥13,834 million upward
adjustment attributable to remeasurements of deﬁned beneﬁtplans, net of tax, a result of the absence of the impacts of the
reduction in the discount rate applied to retirement beneﬁt obligations in the ﬁscal year ended March 31, 2016, as well as a ¥2,543
million boost stemming from valuation difference on available-forsale securities, which itself was a result of stock price trends thatwere more favorable than those seen in the previous ﬁscal year.
Forecast for the Fiscal Year Ending March 31, 2018
In the ﬁscal year ending March 31, 2018, the beneﬁts of various
government measures will be felt in the Japanese economy.
However, we will need to remain wary of the opaque nature ofoverseas markets as well as developments in the ﬁnancial market
and trends in corporate business conﬁdence.
In the security industry, traditional security needs will remainpresent. At the same time, we expect to see expanding business
opportunities resulting from increased outsourcing needs arisingfrom ever-more severe labor shortfalls and the accelerated development of both tangible and intangible social infrastructure as partof preparations for large-scale events. However, decreases inearnings among ﬁnancial institutions resulting from Japan’s
negative interest rate policy coupled with labor shortages are
forecast to create a harsh operating environment in the security
services market during the ﬁscal year ending March 31, 2018.
Success under these difﬁcult conditions will require that we
promote the further differentiation of our products and services.
ALSOK has always been a company that protects the bodies,
lives, and assets of its customers, and it has continued to build
upon its security services track record since its establishment. In

Total Assets / ROA

addition to growing its security services operations, the entire
Group will actively develop businesses in peripheral ﬁelds going
forward as it creates products and services that live up to customer
expectations and improves its business performance.
In the ﬁscal year ending March 31, 2018, the ALSOK Group
forecasts net sales of ¥440,000 million, up 6.4% year on year;
operating income of ¥33,400 million, up 17.5%; ordinary income of¥35,000 million, up 15.5%; and proﬁt attributable to owners of parentof ¥21,500 million, up 17.3%, results that will be achieved through theimplementation of initiatives such as those described above.

Financial Position
AssetsTotal assets at the end of the year under review increased ¥36,315
million, or 10.4%, from the previous ﬁscal year-end, to ¥385,877
million. Total current assets increased ¥11,613 million, or 6.2%, to¥199,627 million, and total noncurrent assets increased ¥24,701
million, or 15.3%, to ¥186,250 million.
The increase in current assets was primarily due to a ¥12,836
million increase in cash and deposits and a ¥4,475 million increasein notes and accounts receivable–trade, which offset a ¥6,397
million decrease in cash for Transportation Security Services.
The increase in noncurrent assets was mainly attributable to a
¥9,249 million increase in lease assets, a ¥8,465 million increase ingoodwill, and a ¥2,667 million increase in investment securities.
Liabilities
Total liabilities at the end of the year under review increased ¥19,707
million, or 13.7%, from the previous ﬁscal year-end, to ¥163,647
million. Total current liabilities increased ¥10,882 million, or 12.5%,
to ¥98,104 million, and total noncurrent liabilities increased ¥8,824
million, or 15.6%, to ¥65,542 million.
The increase in current liabilities was a result of factors such asa ¥6,315 million increase in short-term loans payable and a ¥1,702
million increase in accounts payable–other.

Total Net Assets / ROE

Millions of yen%¥385,877million 12.0

400,000

Millions of yen%

250,000

15.0¥222,230 million
300,000

200,000

12.0

150,000

9.7%9.0

100,000

6.0

50,000

3.0

9.0

8.2%
200,000

6.0

100,000

0
FY

3.0

13

Total Assets

47

14
ROA

15

16

17

0

0
FY

13

Total Net Assets

14
ROE

15

16

17

0

ALSOK REPORT 2017

The increase in noncurrent liabilities was due to a ¥11,194 million
increase in lease obligations.
Net Assets
Total net assets at March 31, 2017, were up ¥16,607 million, or 8.1%,
from the previous ﬁscal year-end, to ¥222,230 million.
Cash and Cash Equivalents
The balance of cash and cash equivalents (hereafter referred to as“cash”) at March 31, 2017, was ¥47,549 million, up from ¥35,630
million at March 31, 2016. This increase was because net cash
provided by operating activities was ¥54,561 million, net cash used
in investing activities was ¥22,055 million, and net cash used inﬁnancing activities was ¥20,582 million.
Cash ﬂows from operating activities
As a result of our operating activities in the year under review, net
cash provided by operating activities increased 177.3% year on year,
to ¥54,561 million. Principal items increasing cash included ¥30,215
million in income before income taxes, a decrease of 1.5% year on
year; ¥18,157 million in increase in assets and liabilities forTransportation Security Services, compared with ¥3,538 million in
decrease in assets and liabilities for Transportation Security
Services in the previous ﬁscal year; and ¥13,773 million in depreciation and amortization, an increase of 13.7%. Conversely, major
items decreasing cash included ¥10,617 million in income taxes
paid, an increase of 26.7%.
Increase (decrease) in assets and liabilities for Transportation
Security Services includes the increases and decreases in funds
procured for transportation security services that are included in cash
for Transportation Security Services and short-term loans payable.
Cash ﬂows from investing activities
Net cash used in investing activities in the year under review was¥22,055 million, a 72.2% year-on-year increase. The primary factors
were ¥11,006 million in purchase of property, plant and equipment,
down 19.9% from the previous ﬁscal year; ¥6,424 million in purchaseof shares in subsidiaries resulting in change in scope of consolidation, an item not present in the previous ﬁscal year; and ¥2,899
million in purchase of investment securities, an increase of 7.7%.
Cash ﬂows from ﬁnancing activities
Net cash used in ﬁnancing activities was ¥20,582 million, an
increase of 124.3% year-on-year. Major items decreasing cash
included ¥5,989 million in net decrease in short-term loans
payable, a decrease of 45.0%; ¥5,780 million in cash dividends paid,
an increase of 42.0%; ¥4,265 million in repayments of lease obligations, an increase of 46.9%; and ¥3,826 million in repayment oflong-term loans payable, an increase of 8.7%.

Dividend Policies
The ALSOK Group considers the return of earnings to shareholders
to be a top management priority, and its basic policy is to distributeproﬁts to shareholders based on its operating results while fortifying
internal reserves. The Group uses internal reserves for investments
in R&D required for future growth and development, qualitative
upgrades to information systems, and capital investment for new
businesses as it works to improve corporate value.
Also, it is the policy of the ALSOK Group to issue dividends fromretained earnings twice a year as interim and year-end dividends.
The year-end dividend is decided at the General Shareholders’ Meeting,while the interim dividend is decided by the Board of Directors.
Accordingly, for the ﬁscal year ended March 31, 2017, in consideration of results in the year under review, results forecasts for thecurrent ﬁscal year, and capital investment plans, the Company paid
an annual dividend of ¥55.00 per share, including an interim dividendof ¥27.50 per share, for a consolidated payout ratio of 33.2%.
Risk Information
In relation to the ALSOK Group’s business and accounting circumstances, the following items can potentially have signiﬁcant effects
on the judgment of investors. Future-related information mentioned
below was deemed appropriate by the Group as of June 27, 2017, thedate on which the 52nd Securities Report was ﬁled.
1. Sales Depending on a Speciﬁc Business Sector
Sales from the ﬁnancial institutions sector accounted for over 20%of the Group’s total sales in the ﬁscal year ended March 31, 2017.
Consequently, trends in the economic environment surrounding
ﬁnancial institutions, including the possible cancellations of existing
security services contracts due to the elimination or consolidationof branch locations, can have a considerable effect on the Group’s
operating performance. Therefore, the Group will continue toaggressively advance sales promotion toward other business sectors
in order to ﬁnd new clients as well as maintain and develop ﬁrm
relationships with existing clients in the ﬁnancial institutions sector.
2. Electronic Security Services BusinessOf the Group’s total sales, 41.3% are dependent on the Electronic
Security Services business. The effective operation of the Electronic
Security Services business requires continuous capital investment
for structuring and maintaining operational infrastructures such as
the preparation of Guard Centers and depots, vehicles for Electronic
Security Services and communication systems, as well as personnel
expenses for Guard Center staff and security staff. Should theGroup fail to enter into a certain volume of Electronic Security
Services contracts due to any of a wide range of factors associatedwith the Group’s Electronic Security Services business, the Group’s
operating performance can be affected. Therefore, we have tried todiversify our business so that we can minimize business risks.

48

Financial Section

3. Cash for Transportation Security Services
The Group uses its own funds or funds ﬁnanced through overdrafts
as cash to be used in the CD machines installed by the subsidiaries
of ﬁnancial institutions in their business partners’ stores and ofﬁces
or cash used to deposit advances for Cash Deposit Machine On-line
System contracts. For this reason, although the Group endeavors touse funds efﬁciently, should there be an increase in interest rates
associated with cash procured for these purposes, the Group’s
operational performance could be adversely affected. Consequently,
the Group must renegotiate the pricing conditions deﬁned incontracts between the Group and its clients. Furthermore, theCompany has subscribed to cash securities transport insurance tocover any damage or loss that may occur during the transportation
or storage of such cash.
4. Dependency on a Speciﬁc Equipment Supplier
The Group mostly depends on some companies for development
and provision of the center equipment installed in the Guard
Centers. Should any difﬁculty arise in the provision of such center
equipment due to natural disasters or other reasons, the normal
operation of the Guard Centers could be affected. As for provision
involving the center equipment as well as main equipment used forthe offer of Electronic Security Services, the Group enters into amaster agreement for commodity purchases to provide for anticipated quantities of items. Furthermore, the Group holds certain
levels of spare items for maintenance to allow for emergencies.
5. Adaptation to Changes in the Technological Environment
The development of security-related equipment and the adoption ofstate-of-the-art technologies such as ICT, IoT, and AI are indispensable to the Group’s adequate provision of security services,since we need to deal with “sophisticated and heinous crimes,”“expansion in crime ﬁelds such as cyberattacks, etc.,” “obsolescence of existing facilities due to the sophistication of information
communication infrastructures,” and “advances in a wide range of
operations applying technologies such as ICT, IoT, and AI”. Should
our adaption to technological progress fall behind the changes inthe technological environment, the Group’s operating performance
could be negatively affected. Therefore, the ALSOK Group continues
to make efforts in the development of security-related equipment
and advanced technologies such as ICT, IoT, and AI principally in
the R&D Department of the Group. At the same time, we work to
avoid risk by staying abreast of the latest technology trends incommunications, devices, and other technologies.
6. Management of Client Information
In order to conclude a security service contract with clients, theGroup obtains a signiﬁcant amount of information about them,including their names, addresses and phone numbers of relatedparties, as well as various information about the clients’ premises
where security services are to be provided, and utilizes that essential information for the execution of security services and businessactivities. If any problem, whether inevitable or not, should arise,49

the Group may suffer from an unfavorable reputation and legal
claim for damages. We therefore manage client information
properly through employee education and careful observation of
subcontractors. These measures enable us to avoid leaking, losing,and deleting personal information. As a further precaution, the
ALSOK Group has Leakage of Personal Information Insurance,
which covers all Group companies.
7. Ensuring Human Resources
In recent years, Japanese society has been rapidly aging due to a
combination of extended average life expectancy and a plunge inthe birthrate. Although it can be anticipated that these trends willlead to a rise in the need for ALSOK’s security services, it could
become more difﬁcult to recruit younger workers in this laborintensive industry. We established a recruitment association withthe aim of responding to the hostile recruitment environment andstrengthening cooperative structure in recruitment of the Group
companies to enhance local recruitment and year-round recruitment. Moreover, we ﬁxed the supply and demand of humanresources between urban areas and regional areas to promotepersonnel exchanges and nurture the performance of employees.
In addition, we established a company to re-employ experienced
retired workers to secure high-quality labor for the Group as awhole. In addition, we respond to demands such as applicants ofhomecoming as possible and will keep the environment for
employees so they continuously work in the Group. Furthermore weestablished a new company that reemploys experienced retired
workers for the purpose of securing a high-quality labor force. In
addition, formulation of a more efﬁcient operational structure is inprogress through the introduction of security services and security
robots that utilize ICT.
8. Legal Restrictions
In order to provide our clients with various security and other services,
the Group is subject to a variety of legal restrictions, including the
major restrictions stated in the table on the right. Should any of these
legal restrictions be amended or abolished, or any new legal provisions
be established, the Group’s operating performance could be affected.
9. Measures of System Failures Caused by Natural and Other Disasters
In the event in which an unprecedented natural disaster were tooccur, information exchange with clients would become unavailable,causing serious difﬁculties such as the suspension of our security
services. In such cases, the resulting claims for damages and thedecline in public trust of the Group could affect the operating
performance and future business development of the Group. In
addition, the Group may be compelled to pay huge expenses torecover damaged monitoring centers and other facilities. The Grouphas made backup systems for the monitoring centers through the
Support Center to prepare for damage caused by natural disasters
as a business continuity plan (BCP) of the systems. Moreover, theGroup established systems, which receive information from clients,
in two Network Centers and make backup systems according to its

ALSOK REPORT 2017priorities. Preparing for major wide-area natural disaster, theGroup will reduce risk by taking measures for each stage.
10. Risk Related to the Suspension of Infrastructure Function
Caused by Massive Disasters
Should a major earthquake occur, or if there is wind and ﬂood
damage, and subsequent disasters such as long-term power
failure occur, the Group’s networks or other operational infrastructure could stop functioning, which may disrupt its ability to provide
security and other services. Moreover, such disasters could
damage the Group’s assets, such as security equipment locatedon clients’ premises, forcing the Group to repair or replace thoseassets. As a result, the Group’s operating performance or ﬁnancial
position could be adversely affected. Therefore, the Group has
developed a number of precautionary measures based on its wealth

Major Operation

Electronic Security Services
Stationed Security Services
Transportation Security Services

Electronic Security Services
General Property Management andFire Protection Services

Electronic Security Servicesof security-related experience and expertise. It has formulated
disaster response rules in accordance with disaster response
regulations, established a BCP and other response manuals,
stockpiled necessary disaster prevention items, and developed a
ﬂexible nationwide response network. It also conducts periodic
disaster prevention training and education and other precautionary
measures. As to prevent ATMs suspension, if at all possible, even in
the event of natural disasters, ALSOK acquired ISO 22301 certiﬁcation in March 20, 2014, scoping Transportation Security Services andATMs trouble-shooting operation within Tokyo District, with which
made the Company to be nation’s ﬁrst certiﬁed security services
provider. Hereafter, the Group will enhance the structure in order tocontribute to the preservation of social infrastructure.

Relevant Laws

Competent Authorities, etc.

Security Business Law / Road Trafﬁc Law

National Public Safety Commission

Act against Delay in Payment of Subcontract Proceeds, Etc. to
Subcontractors

Japan Fair Trade Commission,
Small and Medium Enterprise Agency

Telecommunications Business Law / Radio Law

Ministry of Internal Affairs and Communications

Construction Business Act

Ministry of Land, Infrastructure, Transport andTourism

Act on Ensuring Fair Electric Business Practices

Ministry of Economy, Trade and Industry

Electrical Appliance and Material Safety Act

Ministry of Economy, Trade and Industry

The Speciﬁed Commercial Transaction Act

Ministry of Economy, Trade and Industry /Consumer Affairs Agency

Consumer Contract Act

Consumer Affairs Agency

Transportation Security Services
and Other Services

Truck Transport Business Law / Freight Forwarding Business Law /Road Trucking Vehicle Law

Ministry of Land, Infrastructure, Transport andTourismTransportation Security Services

Warehousing Business Law

Ministry of Land, Infrastructure, Transport andTourism

Act on Penal Detention Facilities and Treatment of Inmates and Detainees

Ministry of Justice

Act on Special Districts for Structural Reform

Cabinet Ofﬁce

Fire and Disaster Management Act

Ministry of Internal Affairs and Communications

Fire Prevention Ordinance

Each municipality

Pharmaceutical and Medical Device Act /Act on Maintenance of Sanitation in Buildings

Ministry of Health, Labour and Welfare

Stationed Security Services

General Property Management andFire Protection Services

Long-term Care Services

Other Services

Waste Disposal Act

Ministry of the Environment

Building Lots and Buildings Transaction Business Law / Architect Act /Act on Advancement of Proper Condominium Management

Ministry of Land, Infrastructure, Transport andTourism

Electricity Business Act / Law Concerning the Securing of Safety and the
Optimization of Transaction of Liqueﬁed Petroleum Gas

Ministry of Economy, Trade and Industry

Long-term Care Insurance Act / Act on Social Welfare for the Elderly

Ministry of Health, Labor and welfare /Each prefecture / Each municipality

Correspondence Delivery Act

Ministry of Internal Affairs and Communications

Worker Dispatching Act / Employment Security Act

Ministry of Health, Labour and Welfare

Insurance Business Law / Financial Instruments and Exchange Act /Act on Prevention of Transfer of Criminal Proceeds

Financial Services Agency

Law About the Adequacy of Duties of the Detective Business

National Public Safety Commission

Personal Information Protection Law

Consumer Affairs Agency / Ministry of Economy,
Trade and Industry / National Public Safety Commission

Act on Special Measures to Prevent and Correct Shift for Consumption Tax

Japan Fair Trade Commission / Small and Medium
Sized Enterprise Agency / Consumer Affairs Agency /National Public Safety Commission

Act Against Unjustiﬁable Premiums and Misleading Representations

Consumer Affairs Agency

50

Financial Section

Consolidated Balance Sheets

Millions of yen
As of March 31

AssetsCurrent assets
Cash and deposits
Cash for Transportation Security Services
Notes and accounts receivable–trade
Lease receivables and investment assets
Short-term investment securities
Raw materials and supplies
Costs on uncompleted construction contracts
Advances paid
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Software
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Lease and guarantee deposits
Insurance funds
Net deﬁned beneﬁt asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

51

2016

2017

42,75073,14245,643
4,114
419
6,150
436
6,030
1,880
7,682
(236)
188,01355,587
66,745
50,118
4,336
803
5,375
451
6,340
2,183
7,881
(197)
199,627

47,269(24,252)
23,016
127,800(108,573)
19,22723,18013,394(6,712)
6,682
1,274
14,340(10,381)
3,958
77,34048,336(25,480)
22,856130,824(111,367)
19,45723,01829,444(13,513)
15,931
992
16,227(11,509)
4,717
86,974

4,033
10,1491,210
15,394

3,411
18,615
2,973
25,00037,633
350
8,282
1,955
341
10,8109,788(347)
68,813
161,548
349,561

40,300
359
8,935
2,167
533
10,394
11,975(392)
74,275
186,250
385,877

ALSOK REPORT 2017

Millions of yen
As of March 31

Liabilities
Current liabilities
Notes and accounts payable–trade
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
Accounts payable–other
Lease obligations
Income taxes payable
Accrued consumption taxes
Provision for bonuses
Provision for directors’ bonuses
Deferred tax liabilities
Other
Total current liabilities
Noncurrent liabilities
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Net deﬁned beneﬁt liability
Provision for directors’ retirement beneﬁts
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities

Net Assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of deﬁned beneﬁt plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

2016

2017

22,602
21,1222,616
64
15,357
3,192
6,188
3,043
1,470
137
2
11,42487,222

21,42627,4383,378
54
17,060
4,090
6,214
3,849
1,958
100
0
12,534
98,10451
11,928
8,235
332
314
31,210
1,669
75
2,900
56,717
143,93947
11,161
19,429621
314
29,572
1,778
77
2,539
65,542
163,647

18,675
32,117
144,551(1,991)
193,352

18,67531,485
157,596(2,019)205,737

6,570(5,286)113(13,309)(11,912)24,182
205,622349,561

7,306(5,286)69(11,204)(9,114)25,607222,230
385,877

52

Financial Section

Consolidated Statements of Income andConsolidated Statements of Comprehensive Income

Consolidated Statements of Income

Millions of yen

Fiscal years ended March 31

2016

2017

Net sales
Cost of sales
Gross proﬁt
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Gain on sales of investment securities
Rent income
Gain from insurance claim
Equity in earnings of afﬁliates
Penalty income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of investment securities
Loss on retirement of noncurrent assets
Financing expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Compensation income
Total extraordinary income
Extraordinary loss
Loss on valuation of investment securities
Impairment loss
Provision for loss on dissolution of the employees’ pension fundTotal extraordinary loss
Income before income taxes
Income taxes–current
Income taxes–deferred
Total income taxes
Net income
Proﬁt attributable to non-controlling interests
Proﬁt attributable to owners of parent

381,818
282,880
98,937
69,901
29,036413,343
310,704
102,639
74,21728,422

209
617
24
263
63
790
358
739
3,066

176
587
6
277
57
1,420
274
999
3,798

652
7
217
297
260
1,436
30,667

1,005
3
162
296
443
1,911
30,309

60
33
93

59
—
59

2
75
—
77
30,682
10,429855
11,284
19,398
1,529
17,868

12
45
95
153
30,215
10,940(659)
10,281
19,934
1,603
18,330Consolidated Statements of Comprehensive Income
Fiscal years ended March 31

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of deﬁned beneﬁt plans, net of tax
Share of other comprehensive income (loss) of associates accounted for using equity method
Total other comprehensive income (loss)
Comprehensive income(Contents)
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

53

Millions of yen

2016

2017

19,39819,934(1,787)17(23)(11,742)(111)(13,648)
5,749

755
—
48
2,091
(6)
2,888
22,823

4,566
1,183

21,128
1,694

ALSOK REPORT 2017

Consolidated Statements of Changes in Net Assets

Millions of yen
Shareholders’ equity

Balance as of April 1, 2015
Cumulative effects of changes in accounting policies
Balance at the beginning of current period reﬂecting changes
in accounting policies
Changes of items during the period
Dividends from surplus
Proﬁt attributable to owners of parent
Purchase of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2016

Total
shareholders’equityCapital stock

Capital surplus

Retainedearnings

Treasury stock

18,675

32,117130,753(1,989)179,557—

18,675

32,117130,753(1,989)179,557(2)(4,071)
17,868(2)(4,071)
17,868——18,675—
32,117

13,797
144,551(2)(1,991)

13,794
193,352

NonControllinginterests

Total net
assets

Accumulated other comprehensive income

Balance as of April 1, 2015
Cumulative effects of changes in accounting policies
Balance at the beginning of current period reﬂecting changes
in accounting policies
Changes of items during the period
Dividends from surplus
Proﬁt attributable to owners of parent
Purchase of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2016

Valuationdifference on
available-for-salesecurities

Revaluation
reserve for land

8,235

(5,293)173(1,725)

1,389

23,415204,363—

8,235(5,293)173(1,725)

1,389

23,415204,363

Foreign currency Remeasurements Total valuation andtranslation of deﬁned beneﬁttranslation
adjustment
plans, net of tax
adjustments(4,071)
17,868(2)(1,665)(1,665)6,570

7
7(5,286)

(59)
(59)
113

(11,584)(11,584)(13,309)(13,302)(13,302)(11,912)766
766
24,182—(12,535)
1,258
205,622

Millions of yen
Shareholders’ equity

Balance as of April 1, 2016
Cumulative effects of changes in accounting policies
Balance at the beginning of current period reﬂecting changes
in accounting policies
Changes of items during the period
Dividends from surplus
Proﬁt attributable to owners of parent
Purchase of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2017

Retainedearnings

Treasury stock

Total
shareholders’equityCapital stock

Capital surplus

18,675

32,117

144,551495(1,991)

193,352495

18,675

32,117145,046(1,991)

193,848(28)(5,780)18,330(28)(5,780)18,330(632)—
18,675(632)
31,485(632)
12,550157,596(28)(2,019)11,889205,737

NonControllinginterests

Total net
assets

Accumulated other comprehensive income

Balance as of April 1, 2016
Cumulative effects of changes in accounting policies
Balance at the beginning of current period reﬂecting changes
in accounting policies
Changes of items during the period
Dividends from surplus
Proﬁt attributable to owners of parent
Purchase of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2017

Valuationdifference on
available-for-salesecurities

Revaluation
reserve for land

6,570

(5,286)113(13,309)(11,912)24,182

205,622495

6,570(5,286)113(13,309)(11,912)24,182

206,118

Foreign currency Remeasurements Total valuation andtranslation of deﬁned beneﬁttranslation
adjustment
plans, net of tax
adjustments(5,780)18,330
(28)

735
735
7,306

—
—
(5,286)

(43)
(43)
69

2,105
2,105
(11,204)

2,797
2,797
(9,114)

1,425
1,425
25,607(632)
4,222
16,112
222,230

54

Financial Section

Consolidated Statements of Cash Flows

Millions of yen
Fiscal years ended March 31

Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net deﬁned beneﬁt liability
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ bonuses
Interest and dividends income
Interest expenses
Equity in (earnings) losses of afﬁliates
Loss (gain) on sales of noncurrent assets
Loss on retirement of noncurrent assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on valuation of derivatives
Decrease (increase) in notes and accounts receivable–trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable–trade
Decrease (increase) in net deﬁned beneﬁt asset
Decrease (increase) in assets and liabilities for Transportation Security Services
Other
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Income taxes refund
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scope of consolidation
Decrease (increase) in short-term loans receivable
Payments of long-term loans receivableCollection of long-term loans receivable
Other
Net cash provided by (used in) investing activities
Net cash provided by (used in) ﬁnancing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Redemption of bonds
Purchase of treasury stock
Repayments of lease obligations
Cash dividends paid
Cash dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation
Net cash provided by (used in) ﬁnancing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
55

2016

2017

30,68230,215

12,10913,773

75

45

1,098

1,076

(210)

(20)

(25)

658

10

184

(49)

(36)

(827)

(763)

652

1,005

(790)

(1,420)

(1)

(22)

217

162

(77)

(62)

2

12

10

9

(1,640)(878)(1,451)844(1,425)(2,300)(2,083)402(3,538)18,157(5,028)4,135

27,711

65,181

988

984

(653)

(1,005)(8,378)(10,617)11

19

19,67854,561

1,066

(741)

(13,736)(11,006)69

165(2,692)(2,899)

1,770

2,106

—

(6,424)

(28)

183

(41)

(90)

86

110

697

(3,459)(12,808)(22,055)(10,900)(5,989)12,690491(3,519)(3,826)

(64)

(104)

(0)

(1)

(2,903)(4,265)(4,071)(5,780)

(406)

(474)

—

(632)

(9,176)(20,582)

(38)

(4)

(2,345)

11,91937,97635,63035,63047,549

ALSOK REPORT 2017

Corporate Information / Stock Information
As of March 31, 2017

Distribution of Shares by Shareholder Type

Corporate Information
Corporate NameSOHGO SECURITY SERVICES CO., LTD.

Head Ofﬁce

1-6-6 Motoakasaka, Minato-ku, Tokyo
107-8511, Japan

Established

July 16, 1965

Capital¥18,675 million

Fiscal Year-End

March 31

Employees(Consolidated) 36,693(Non-consolidated) 12,072

Business Operations

Head ofﬁce / 9 Headquarters /Overseas Division / 64 Branches /37 Ofﬁces / 252 Sales ofﬁces

300,000,000

Number of
Shares Issued

102,040,042(including 1,506,964 shares oftreasury stock)

1.5%

1.2%

18.7%
32.2%

22.1%
24.4%

Stock Information
Total Number of
Shares Authorized

Financial Institutions
Domestic Corporations
Individuals and Other
Foreign Investors
Treasury Stock
Securities Companies
and Other

Number of Shareholders 17,447
at the End of thePreceding Fiscal Period

Major Shareholders (Top 10)
Number ofControlling
Shares Held
Share (%)
(Thousand shares)

Name

SOHGO CORPORATION

7,388

7.34

Saitama Machinery Co., Ltd.

5,283

5.25

Employees Shareholding Association

4,550

4.52

Trust & Custody Services Bank, Ltd.
(as trustee for Mizuho Bank Ltd. Retirement
Benefit Trust Account re-entrusted by Mizuho
Trust and Banking Co., Ltd.)

4,261

4.23

Kamakura Corporation

4,150

4.12

Japan Trustee Services Bank, Ltd.
(Trust account)

3,706

3.68

Japan Master Trust Bank,Ltd. (Trust account)

3,274

3.25

Kizuna Corporation

2,950

2.93

Stock ListingFirst Section of Tokyo Stock Exchange

Atsushi Murai

2,885

2.86

Securities Code

2331

Tokio Marine & Nichido Fire Insurance Co., Ltd.

2,850

2.83

Minimum Trading Lot

100* Treasury stock (1,506,964 shares) has been excluded.

Stock Chart
Yen

Yen

24,000

8,000

6,000

18,000
Nikkei Stock Average

4,000

12,000

Our Closing Price (Left axis)

2,000

6,000

0

0

Thousand shares

18,000
Trading Volume

12,0006,000
02008/3

2009/3

2010/3

2011/3

2012/3

2013/3

2014/3

2015/3

2016/32017/3

ALSOK is a Tokyo 2020 Official Partner.
In October 2015, ALSOK concluded an agreement with the Tokyo Organising Committee of the Olympic and Paralympic
Games to become a Tokyo 2020 Ofﬁcial Partner in the category of “Security Services and Planning.”
The Company has long contributed to the promotion of sports in Japan by producing many of the athletes who haverepresented the country in such Olympic sports as judo and wrestling. Leading up to Olympic and Paralympic GamesTokyo 2020, we will continue to support the efforts of our athletes. During the event itself, we will contribute to theevent’s success through rigorous security provided by an all-Japan team.

56

SOHGO SECURITY SERVICES CO., LTD.

1-6-6 Motoakasaka, Minato-ku,
Tokyo 107-8511, Japan·REBORG is a registered trademark of SOHGO SECURITY SERVICES CO., LTD.
·PrivacyMark and PrivacyMark System are registered trademarks of JIPDEC.

http://www.alsok.co.jp/en/
IR Ofﬁce

TEL +81-3-3423-2331
FAX +81-3-3470-1565

CSR Ofﬁce

TEL +81-3-3470-1972
FAX +81-3-5411-1636

Printed in Japan