The Management

Strategic Highlights

Special Feature

SECOM Today

Financial Review

Financial Section

A MESSAGE TO SHAREHOLDERS

Having positioned the fiscal year ending March 31, 2013, as the first year ofwith efforts to realize our Social System Industry vision, thereby ensuring
doing so will help them resolve security and other concerns.
Consolidated Operating Resultsa new stage of growth, we continued to press forward
customers can turn to SECOM with the confidence thatIn the security services business, we continued to introduce new systems in the period underDespite signs of a gradual recovery from the temporary lull in economic activity that followed thereview with the aim of cultivating new subscribers and of offering existing subscribers higher

Great East Japan Earthquake, which struck in March 2011, prospects for the Japanese economy

levels of security. Capitalizing on the lessons of the Great East Japan Earthquake, we launchedremained uncertain throughout the fiscal year ended March 31, 2012, owing to a host of factors,

SECOM Home Security G-Custom, an advanced new residential security system that combines

including the European sovereign debt crisis, rising oil prices, the appreciation of the yen andfeatures of our popular SECOM Home Security system with, among others, a storage service fordeflation.

important personal data and My Page, a customized user information page that includes infor-

In this environment, we continued working toward the realization of our Social System

mation from selected collaborating companies. We also reinforced our sales capabilities for secu-Industry vision by responding to the needs of customers through the provision of high-graderity services designed for rental apartments, a sector that is seeing growth in demand. Other newMakoto Iida

services and systems in our security services segment, as well as in our other segments: fire pro-offerings that maximize the comprehensive capabilities of the SECOM Group include SECOM

Shohei KimuraFounder

tection services, medical services, insurance services, geographic information services, real estate

Remote Monitoring for Seniors, which brings together on-line security services, medical services

Chairmandevelopment and sales, and information and communication related and other services. We alsoand SECOM Home Service to help safeguard the safety and wellbeing of seniors living apart frompressed forward with efforts to promote the ALL SECOM concept, which emphasizes cooperation

relatives. In addition, we took steps to reinforce our meticulous basic approach, whereby sales

among our various independent businesses to strengthen the Group as a whole with a view topersonnel visit each commercial and home security service subscriber in person, thus enabling us

hastening our advance to a new stage of growth.

to accurately interpret needs and expectations and propose the most appropriate products andConsolidated net sales and operating revenue for the period under review rose 2.7%, orservices from our extensive lineup and enhance customer satisfaction.

¥20.6 billion, to ¥772.5 billion. This result reflected higher net sales and operating revenue in theOn another front, in an effort to integrate our security services and related installation andsecurity services segment—due to increases in revenue from subscriptions for our core electronic

maintenance businesses, as well as to enhance our ability to provide optimal services to custom-

security services and in sales of merchandise—as well as in the medical services, geographic

ers, in July 2011 we absorbed consolidated subsidiary Secom Techno Service Co., Ltd., a provider

information services and fire protection services segments. Operating income declined 21.5%,of on-line security system installation and maintenance services.

or ¥21.6 billion, to ¥78.8 billion, as we wrote down real estate inventories in light of dwindlingOverseas, the acquisition of a local firm facilitated our entry into the New Zealand security

demand in the condominium market, which prompted a dramatic reorganization of our related

services market, while in the United Kingdom we took steps to increase subscriptions by financialbusiness, while flagging economic conditions resulted in the recognition of an impairment loss

institutions. In the rapidly developing economies of the PRC and Southeast Asia, efforts toon long-lived assets, principally real estate. Owing mainly to the decline in operating income, net

encourage broad acceptance of SECOM-style security services contributed to the expansion ofincome attributable to SECOM CO., LTD., fell 34.2%, or ¥21.4 billion, to ¥41.2 billion.

our subscriber base. “SECOM-style security services” is a term used to describe comprehensive

Shuji Maeda
President and Representative Director

security services that encompass installing security equipment at the subscriber’s premises

Distribution of Dividends

and providing around-the-clock monitoring from a SECOM control center, as well as promptly

Recognizing the provision of a fair return to shareholders as a crucial management task, we set

dispatching highly trained emergency response personnel should an irregularity be detected.

consolidated dividend levels based on an overall assessment of trends in our consolidated operat-To accelerate efforts to expand our overseas operations, in December 2011 we established theing performance, in line with our policy of ensuring a consistent, stable distribution of profits. At

International Business Headquarters, which is charged with coordinating overseas operations

the Ordinary General Meeting of Shareholders, held on June 26, 2012, management proposed

across the Group, as well as with promoting the sharing of management resources and expertiseand shareholders approved the payment of annual cash dividends of ¥90.00 per share, the sameamong all our overseas businesses, including security services, fire protection services andas in the previous fiscal year.

­geographic information services, to further strengthen our capabilities in overseas markets.

Understanding Change and Responding with New Products and Services

measures in areas other than security services. In the fire protection services business, consoli-

Increasingly diverse and sophisticated needs for security and peace of mind—a consequence ofdated subsidiary Nohmi Bosai Ltd., Japan’s leading provider of such services, continued working

changes in the social fabric and in peoples’ lifestyles—continue to drive growth in the security

to provide high-grade automatic fire alarm systems, fire extinguishing equipment and other fireservices market. Other factors influencing security needs include social infrastructure-related issues

protection systems that suit the requirements of customers.

Guided by our vision for the future—the Social System Industry—we also implemented key

and business continuity risks, both revealed to a devastating degree by the Great East Japan

6SECOM Annual Report 2012

In the medical services business, we pressed ahead with efforts to enhance our services forEarthquake. We continue to provide service systems that respond to evolving social imperatives,seniors, including taking steps to increase occupancy in recently opened residences for seniors

changing patterns of criminal behavior, technological progress and efforts to improve the socialand expanding our network of day service facilities for seniors. We also sought to reinforce ourinfrastructure to deliver greater security and peace of mind. At the same time, we acknowledge

home medical services. Ahead of changes to the nursing care insurance system in Japan in April

the importance of developing new service systems that maximize our ability to contribute to2012, we established SECOM Home Health Care Center Kugayama, which provides a full range­society through our business activities.

of services combining conventional home nursing with home personal care.

SECOM Annual Report 2012

7

The Management

Strategic Highlights

Special Feature

SECOM Today

Financial Review

Financial Section

A MESSAGE TO SHAREHOLDERS

Efforts in our insurance services business focused on marketing our distinctive non-life insur-of SECOM and domestic fire protection market leader Nohmi Bosai with those of Nittan, Japan’sance policies. These include the Security Fire Discount Policy, a fire insurance policy for commer-third-largest provider of fire protection services, will position us well to rise to the challenge ofcial premises, and SECOM Anshin My Home, a comprehensive fire insurance policy for homes,

developing next-generation fire and disaster protection systems that will safeguard both premises

both of which offer discounts for subscribers with on-line security systems, recognizing theand people even in the event of a major catastrophe.

risk-mitigating nature of such systems. We also expanded efforts to market SECOM Anshin My

One of the principal themes influencing our domestic business development in the years

Car, a comprehensive automobile insurance policy that includes access to on-site support services

ahead will be the rapid aging of Japan’s population. Particularly promising new offerings include

provided by our emergency response personnel, and MEDCOM, an unrestricted cancer treatment

the launch of SECOM Remote Monitoring for Seniors, which takes full advantage of Group

policy that extends coverage for all treatment costs.

management resources, and Seikatsu Tasuke, a comprehensive lifestyle support service provided

In geographic information services, we offer geospatial information services that make use

through a joint venture with a top building materials and housing equipment manufacturer.

of advanced measuring devices and technologies. We also collect and process high-resolution

Going forward, we will continue to devote considerable efforts to developing a wide range ofdata from satellites and other sources, which we combine with other crucial information to meet

uniquely SECOM services that anticipate and respond to the future needs of an aging society.

customers’ needs in such areas as map preparation, environmental monitoring, firefighting anddisaster mitigation.
Our real estate development and sales business continued to emphasize the development andsale of condominiums with sophisticated security and contingency planning features.

With operations in 19 countries and territories outside of Japan, we will also actively promote
the ALL SECOM concept overseas, encouraging our various businesses to work together tocapitalize on new opportunities in key global markets. In security services, we will expand theprovision of SECOM-style on-line security systems, customized to reflect local needs and cultural

In the information and communication related and other services business, we focused onsensibilities, through local partners, firms acquired through M&A deals and joint ventures.

providing wide-ranging information and network services, which encompass information security

In medical services, we proceeded with plans for the construction of a seniors’ residence inservices, the construction and operation of business systems and assistance in preparing for large-Shanghai, which has seen a sharp increase in the number of seniors in its population, symbolic

scale disasters. New offerings included the Total Support Service of Emergency Management,of the overall demographic trend in the PRC. We expect the new facility to open its doors inwhich leverages the comprehensive strengths of the Group to assist companies in formulating2015. Additionally, in India, which lacks medical facilities in many areas, we established a hospitalbusiness continuity plans (BCPs). The period under review also brought an increase in subscrip-management company in cooperation with a Japanese trading company and a local firm. The

tions for Secure Data Center services from companies seeking to develop or improve BCPs.

company is scheduled to open a hospital in Bangalore in Spring 2013.
Our 50th anniversary, while an occasion for celebration, is merely a transit point. Guided by

Advancing to a New Stage of Growth: ALL SECOM

the ALL SECOM concept, we will continue working to provide services and systems that respond

Our Social System Industry vision depicts a framework of distinctive products and services—bothto customers’ needs for greater security and peace of mind, encouraging them to turn to SECOM

individually and in tailored packages—that deliver security and peace of mind and help make life

with the confidence that doing so will help resolve security and other concerns. Through such

more secure, convenient and comfortable. One recent measure taken to hasten the realization ofefforts, we will move ever closer toward the realization of our Social System Industry vision. At

this vision was the introduction and promotion of the ALL SECOM concept. ALL SECOM empha-a recent event held to celebrate our first half century, many customers expressed high hopes

sizes advancing cooperation among our various businesses to anticipate and respond swiftly tofor greater security and peace of mind in the near future as envisioned under the ALL SECOM

evolving social imperatives by developing service systems worthy of our customers’ trust.

concept.

The fiscal year ending March 31, 2013, marks the 50th anniversary of SECOM’s founding. We

As always, our ability to earn the trust of customers will depend on our ability to respond tohave positioned this year as the first year of a new stage of growth. To drive this growth, in ourtheir expectations. In line with our corporate message—“Providing reliable peace of mind”—wemainstay security services business we will launch next-generation on-line security systems that

pledge to work as one to advance to a new stage of growth. We look forward to the ongoingdeliver a higher level of security than ever before, as well as such offerings as the Walkthroughsupport of all our shareholders in these and all of our endeavors.

Face Recognition System, a distinctive access control system that works by automatically constructing a 3D image of each individual from a registered photograph of the person’s face, and a next-June 26, 2012

generation surveillance camera system that sends images recorded by surveillance cameras to oneof our Secure Data Center facilities for storage.
In fire protection services, in April 2012 we acquired a 100% stake in LIXIL NITTAN Co. Ltd.,
which was subsequently renamed Nittan Co., Ltd. This move reflected our belief—arising fromlessons learned in the wake of the Great East Japan Earthquake—that we must expand the scopeof our fire protection services beyond the provision of systems aimed at minimizing the impact offires on structures, to offer broad-based disaster mitigation services. Coordinating the operations

8

SECOM Annual Report 2012

Makoto Iida

Shohei Kimura

Shuji Maeda

Founder

ChairmanPresident and Representative Director

SECOM Annual Report 20129