A Message to Shareholders

Makoto Iida
Founder

Consolidated Operating Results

and the absence of a settlement loss of benefit

Although consumer spending continues to lackobligation on transfer to defined contribution

vibrancy, economic conditions in Japan remain

pension plan registered in the previous period.

on a steady upward trend as buoyant corporate

Net income advanced 11.0%, or ¥5.6 billion, toprofits support higher capital investment and¥55.9 billion.

an improvement in the employment situation.

Calculated according to accounting princi-In this environment, SECOM continues toples generally accepted in Japan, consolidated

cater to its customers’ needs for security andrevenue rose 8.2%, to ¥614.0 billion, whilepeace of mind by providing value-added

operating profit, ordinary profit and net income

products and services that are aimed at realiz-reached ¥97.8 billion, ¥102.7 billion and ¥ 58.3

ing the Social System Industry vision. We arebillion, respectively—all record highs.

stepping up efforts to expand our core security

With the aim of providing returns to share-services business—by introducing new prod-holders that more accurately reflect our operat-

ucts and services, and building new branch

ing performance, we shifted the basis foroffices while relocating existing ones—as welldetermining dividends, which are calculated

as our medical, insurance, geographic informa-using Japanese accounting principles, totion, and information and communication

consolidated results, from nonconsolidated

related and other services. In December 2006,

results. Shareholders adopted a resolution to

we acquired new shares offered by Nohmi

raise cash dividends by ¥20.00, to ¥80.00 per

Bosai Ltd., an affiliated company listed on theshare at the general shareholders’ meeting onFirst Section of the Tokyo Stock Exchange, andJune 27, 2007.

consequently Nohmi Bosai became a consolidated subsidiary. This move has allowed us toMaximizing Comprehensive Capabilities tomake a decisive entry into the market for fireRespond to Customer Needs

protection services, providing automatic fire

The needs that prompt people to take advan-

alarm, fire extinguishing and other fire protec-

tage of security services are growing increas-tion systems for a broad range of applications,ingly diverse and sophisticated. In recent years,

including office buildings, plants, tunnels,

customers have come to favor security services

cultural properties, ships and residences.

providers able to deliver not only outstanding

In the fiscal year ended March 31, 2007, weservices, but also flexible and suitable solutions

recorded record-high consolidated net sales andthat relieve apprehensions and tackle dangers

operating revenue, operating income and netthat arise in daily life. This change in customer

income. Owing to favorable results in all seg-perception has become a key consideration inments and contributions from our fire protec-

determining which security services are chosen.

tion services business, included in consolidated

As an example, tenders for security services

results during the period under review, net

contracts for key facilities are judged increas-

sales and operating revenue increased 9.7%,

ingly on service content, rather than simply onor ¥56.2 billion, to ¥636.7 billion. Operatingcompetitive pricing. We endeavor to capitalize

income rose 15.3%, or ¥12.5 billion, to ¥94.4

on our years of accumulated know-how andbillion, reflecting the increase in net sales andexperience, as well as our comprehensive

operating revenue, as well as a decline incapabilities, to accurately identify customers’

selling, general and administrative expenses

security requirements and, by adopting theAnnual Report 20072

customer’s perspective, propose services that

Toward Further Growthoffer truly effective solutions. We recognize

We are pursuing various initiatives aimed atthat the Japanese government’s decision tofurther accelerating growth. The consolidation

award a contract to construct, maintain andof affiliated company Nohmi Bosai in December

operate a private finance initiative (PFI) correc-

2006 has facilitated our entry into the fire pro-tional facility in the city of Mine, Yamaguchi

tection services market. We were alreadyPrefecture to a SECOM-led consortium,Nohmi Bosai’s principal shareholder, andreflected the government’s high evaluation ofconsolidation will reinforce this relationship.

the consortium’s proposal, which focused not

The integration of our expertise in security

only on price, but also on substance and thesystems with Nohmi Bosai’s fire protection

outstanding level of security offered.

technologies will enable us to develop highly

The scope of security needs is also expand-competitive, original products that help us toing. Our security services subscribers include

cultivate new markets. This move will also

companies that have come looking for help incontribute to more efficient operations byformulating a business continuity plan (BCP) toallowing us to concentrate related manage-facilitate the resumption of business as quickly

ment resources in a manner that capitalizes on

as possible in the event of occurrences such as

our strengths, including consigning the manu-major natural disasters, as well as provide

facture of fire alarms and security systems towhatever disaster response support services are

Nohmi Bosai, and to promote joint development

necessary. BCPs are increasingly being recog-of products and services.

nized as a crucial component of corporate risk

In the area of home security services, we will

management. With the aim of actively support-continue to augment our lineup by offeringing the efforts of corporate subscribers to

new products and services that delivermanage risk, we have been quick to offer aenhanced security and peace of mind. Brutal

variety of disaster response support services bycrimes perpetrated when people are at homemaximizing our strengths. Most notable is thehave been on the increase in recent years. InSECOM Safety Confirmation Service, which

addition to regular services that protect homes

helps companies to promptly confirm thewhen occupants are away, the SECOM Home

whereabouts and safety of employees and their

Security on-line security system also includes

families and collect and share disaster-related

functions to ensure security for occupants wheninformation.

they are at home as standard features. We also

In response to these and other changes inoffer a wide range of products, including high-the security services market, we continue toimpact, breakage-resistant window glass andbuild on our comprehensive capabilities—

residential monitoring cameras, which reinforce

which reflect our ability to effectively apply thehome security. Looking ahead, we will also

expertise and management resources we havecontinue to reinforce our competitive position

accumulated in a variety of businesses—toin the area of home security by applying theprovide products and services that deliver value

extensive know-how and management

and satisfy customers. Going forward, we will

resources we have accumulated to date to thealso strive to cultivate new markets by helping

provision of various products and services.

customers find effective solutions.

Shohei Kimura
ChairmanIn the area of geographic information services,
the recent launch of a German commercial

SECOM Co., Ltd.

3Kanemasa Haraguchi
President andRepresentative Director

A Message to Shareholderssatellite has made it possible for us to obtain

Shortly after SECOM was established, wehigh-resolution geographical data in only apublished the SECOM Employee Code, con-fraction of the time required with conventional

taining an employee code of conduct thatsatellites. Pasco Corporation, SECOM’sembodied our corporate philosophy. With thegeographic information services firm, has

expansion and diversification of our businessobtained exclusive rights in Japan and nonex-

portfolio, we revised the SECOM Employee

clusive rights worldwide to sell image data

Code in December 2006 and renamed it theoffered by the satellite’s operator. In the years

SECOM Group Code of Employee Conduct, toahead, Pasco will continue to build on its accu-ensure that all employees, regardless of theirmulated surveying and measuring technologies

occupation, embrace our corporate philosophy,

and geographic information system (GIS) capa-and to establish a foundation from which we canbilities, as well as its newly acquired access toaddress future challenges together. We are also

high-resolution satellite image data, to broaden

reinforcing the swift communication of criticalits service lineup and achieve new growth.

information to management in the event ofsignificant occurrences, either internal or exter-

Reinforcing Our Corporate Philosophy

nal, thereby strengthening our corporate struc-Groupwide

ture to facilitate cohesive Group management.

Today, SECOM has an extensive business

These efforts will position us to leverage theportfolio that encompasses security services,Group’s strengths and accelerate growth. We

fire protection services, medical services,

are also striving to enhance operating efficiency

insurance services, geographic informationin an effort to further reduce costs. Finally, weservices, and information and communication

continue to actively implement measures aimed

related and other services. Accordingly, toat realizing the Social System Industry andmaximize our comprehensive capabilities andmaximizing our corporate value. In these and all

realize our Social System Industry vision, weof our endeavors, we look forward to yourrecognize the need to ensure that employees

continued support.

conduct themselves in a disciplined mannerand hold common values.

Makoto Iida
FounderJune 27, 2007

Shohei KimuraChairman

Annual Report 2007

Kanemasa Haraguchi
President and Representative Director4