A Message to Stakeholders

Adhering to SECOM’s Philosophy and making forward-looking investments in growth to increase

Returns to shareholders

corporate value

Seeing the provision of fair returns to shareholders as a
crucial management task, we determine our consolidated
dividend payout ratio and internal reserves based on an
overall assessment of efforts to expand our businesses
and trends in our consolidated operating performance,in line with our policy of ensuring a consistent and stable

Responding to COVID-19
We would like to begin by extending our deepest sympathies
to everyone who has been affected by COVID-19. As always,
we are especially grateful to the medical professionals andothers who are working tirelessly and at considerable
danger to themselves to help curb the spread of the virus.
The socioeconomic impact of the pandemic has beensignificant worldwide. The Basic Policies for Novel
Coronavirus Disease Control, published by Japan’s
government, designates SECOM’s medical, security, building
maintenance, data center and insurance services, among
others, as social infrastructure necessary for safety andsecurity and has requested their continuation even when the
country is under a state of emergency.
Against this backdrop, we believe that the greatest
contribution we can make to society is to do our utmost to
maintain services while placing the highest priority on thesafety of customers and employees. We have established a
COVID-19 headquarters and put in place a number of criticalmeasures to prevent infection, thereby ensuring business
continuity and our ability to provide services without
interruption. We have also created the COVID-19 Risk
Response Committee, which spans our International
Business Division and overseas subsidiaries, to protect thehealth of overseas SECOM Group employees, helping prevent
infection and ensure business continuity.
Going forward, we will continue to promote stringent
measures to limit the further spread of infection and toextend services as appropriate given local conditions, while
not causing customers untoward trouble, in line with ourabiding commitment to delivering safety and peace of mind
and making life more comfortable and convenient.

Consolidated operating results
In the fiscal year ended March 31, 2021, the Japanese
economy remained challenging, owing to a significant
decline in corporate earnings attributable to COVID-19, withboth trends in the spread of the pandemic worldwide andfluctuations in global financial markets requiring constantmonitoring. With the socioeconomic activities gradually
resuming, the economy has begun to rally, despite theongoing need for strict measures to curb infections, owing to
the positive impact of various strategic measures andimprovements in overseas economies.
In this environment, we pressed forward with ongoing
efforts to realize our Social System Industry vision, in
accordance with our goal of delivering safety and peace ofmind, as well as making life more comfortable andconvenient, whenever and wherever necessary, for anyone
and everyone. To this end, we continued to concentrate on
extending high-grade services and systems optimized tomeet the increasingly diverse and sophisticated needs ofcustomers in our security services, fire protection services,
medical services, insurance services, geospatial information
services, BPO and ICT services, and real estate and other

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SECOM REPORT 2021

services businesses. We also accelerated these efforts byclarifying initiatives to be implemented in line with the
SECOM Group Road Map 2022 with the goal of achieving the
SECOM Group’s Vision for 2030.
Notwithstanding the negative impact of COVID-19 incertain areas of the security services, fire protection
services and medical services segments, consolidated net
sales and operating revenue in the period under review
edged up 0.2%, or ¥2.7 billion, to ¥1,135.3 billion, andoperating income rose 4.8%, or ¥6.2 billion, to ¥135.8 billion.
This was due to an increase in the BPO and ICT services
segment and to net realized investment gains (including again on other-than-temporary impairment of investment
securities) in the insurance services segment, comparedwith net realized investment losses in the previous fiscal
year. Despite a loss from discontinued operations, net of tax,
net income attributable to SECOM CO., LTD., advanced 3.2%,
or ¥2.8 billion, to ¥89.9 billion, underpinned by an increasein operating income, as well as by a gain on other-thantemporary impairment of investment securities, comparedwith a loss in the preceding period.

distribution of profits. At the Ordinary General Meeting of
Shareholders on June 25, 2021, the payment of a yearend dividend of ¥85.00 per share was approved. As aconsequence, dividends for the full term—the record dates
for which fall in the period under review—amounted to¥170.00, level with the previous fiscal year.

Initiatives in the period under review and efforts to thrive in the new normal
Owing to the rampant spread of COVID-19, we faced
significant difficulties, including restrictions on businessactivities such as sales and installations, and cautious
customer attitudes toward purchases. In response to these
difficulties, we took decisive steps to enhance the stability ofbusiness continuity, adopting a sales configuration anddeveloping products that make effective use of information
technologies (IT), and building an effective telework system.
It is also important to note that the impact of thepandemic has not been entirely negative. In the security
services business, sales of surveillance cameras, access
control systems and other merchandise and revenue fromthe installation of systems decreased, but the influence on
on-line security systems and other businesses based on
fixed monthly fees was limited, despite concerns promptedby the integration and downsizing of retail premises.
Moreover, with many convenience stores and factories thatused to operate around the clock now opting to close atnight, needs for security when premises are empty haverisen, underscoring increased public awareness of safety
and security and the firmness of demand for on-line
security systems.
In our fire protection services and medical services
businesses, the impact of COVID-19 has indeed largely been
adverse, but our BPO and ICT services business has
benefited from growing demand for data center services andspecial demand for contact center services arising from theemergence of new lifestyles and the greater use of teleworkarrangements.
With a view to thriving during COVID-19, as well as in the
post-pandemic world, we continued to implement our fourongoing priority strategies, which are to expand monitoring
services, reinforce our BPO and ICT services business,
strengthen our overseas operations, and improve
productivity.

Promoting four priority strategies
Expand monitoring services
Recognizing that needs for assistance with care for seniors
vary depending on age group and have become increasingly
diverse as a consequence of changes in family structure, we
added a number of new selections to our lineup of remotemonitoring services.
Specifically, in addition to SECOM Senior Care Phone
Service, an emergency monitoring service that combines
emergency medical alert, health consultation and safety
confirmation functions, and Mago Channel with SECOM, aservice that encourages communication with parents living
apart while providing unstructured monitoring, we beganoffering SECOM Monitoring Service for Seniors, an option to
SECOM Home Security subscribers that includes a cloudbased smartphone app.
Family members living apart can check up on theirparents in a nonintrusive manner to confirm any variationsin the frequency or nature of daily activities by accessing
information captured by SECOM Home Security sensors
installed in the parents’ home. By installing an optional

dedicated sensor, subscribers can also monitor the indoor
temperature and humidity changes at their parents’ homefrom a smartphone using a dedicated application. SECOM
emergency response personnel will be sent as necessary
to check on the parents directly if, for example, the security
sensors detect no movement over a certain period of time.
Family members can also use the app to ask SECOM todispatch emergency response personnel to check in person.
We are also currently developing a new sensor that detects
changes in posture, falls and whether the individual isbreathing to enable more careful monitoring for parents
requiring closer observation.
In addition, we are working to verify the value of newservices that link SECOM Home Security with the Apple
Watch, thereby making effective use of monitoring
information, with the aim of achieving commercialization in
the fiscal year ending March 31, 2022. One of these services
stores pedometer, calorie expenditure counter, exercise time,heart rate and sleep quality data from the subscriber’s Apple
Watch, together with information on the frequency or nature

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A Message to Stakeholdersof daily activities detected by SECOM Home Security, in thecloud*1 for analysis and viewing. In addition to enabling
family members to monitor parents living apart, these
services also assist parents in managing their own health.
Monitoring services in the future will require advanced
technological capabilities, in addition to the ability topromptly dispatch emergency response personnel whencircumstances demand. In our drive to deliver peace ofmind, as well as make life more comfortable and convenient,
we will not only promote in-house development but alsocollaborate actively with various partners who have crucial
technologies and devices under our strategy of open
innovation. Going forward, we will continue working tohelp monitor the health of families by combining advanced
technologies and human sensibilities to provide distinctively
SECOM services that ensure our ability to be there forcustomers whenever we are needed.
Reinforce BPO and ICT services businessWe continue to develop services to meet the diverse BPO
and ICT needs of our customers and to take decisive steps
in the period under review to accelerate the growth of thisbusiness. Our data center business is expanding steadily
thanks to the increased use of advanced digital technologies,
including artificial intelligence (AI), the Internet of Things(IoT) and cloud-based services, and we continue striving toenhance our capabilities in this area. Subsidiary At Tokyo
Corporation, one of Japan’s largest data center operators,
opened two data centers in the Kansai region in 2020. In
light of robust demand, the company also plans to open a
new hyperscale urban data center in 2023, while in 2025
Secom Trust System Co., Ltd., plans to open a new data
center on a site adjacent to an existing facility. Investment in
the two new data centers is expected to be in the area of ¥40
billion. We will continue to expand our data center businessin response to rapid digitalization to create a disasterresilient infrastructure.
In the area of BPO services, we saw a temporary jump indemand for contact center services, including from local
governments seeking to set up COVID-19 helpdesks.
Telework arrangements, which have become increasingly
widespread due to the pandemic, are likely to become the
new normal. With the steady decline in Japan’s labor force,a structural issue, expected to continue, the need to realize
work style reforms and improve operational efficiency
will remain common themes for companies in the years
ahead. Given such trends, we expect our BPO business tocontinue expanding steadily. Accordingly, core BPO services
company TMJ, Inc., will spearhead further efforts to combine
optimal state-of-the-art technologies with the front-line
administrative competency and ability to refine services it
has fostered to offer distinctively SECOM BPO services that

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SECOM REPORT 2021

deliver safety and peace of mind and in so doing respond to
demand arising from the need to rely on others.
In ICT services, we are endeavoring to bolster sales of IT
products that are also effective in differentiating our on-line
security systems. We have also assigned employees withadvanced IT skills to regional headquarters to oversee sales
promotions, as well as to support and provide direction toregional sales staff, with the aim of expanding the scale of IT
product sales. Additionally, we are stepping up efforts tointegrate BPO and ICT services with security systems toboost customer convenience.
Strengthen overseas operations
With the goal of extending the reach of our security services
business in Asia, between September 2020 and February
2021, we acquired ADT Services (M) Sdn. Bhd. in Malaysia,
ADT Integrated Security Solutions Pte. Ltd. in Singapore, and
ADT Alarm Monitoring Hong Kong Ltd., all of which became
wholly owned subsidiaries. This positions us well to expand
operations in promising markets, including services for theregion’s growing wealthy and middle classes, and accelerate
efforts to extend the scope of our overseas operations.
These three companies provide cloud-based services
and systems via the Internet and will work to enhancesmartphone-linked interactive and smart home functions in
Asian markets.
With Japan’s population expected to continue shrinking
over the long term, we believe that strengthening ouroperations in promising overseas markets is essential to oursustainable growth going forward. In the PRC and Thailand,
we have launched projects aimed at cultivating businesses
and developing products suited to local needs thatincorporate advanced technologies. In early 2021, we also
embarked on focused marketing activities designed tobroaden awareness of the SECOM brand and enlarge ourcustomer bases in countries and territories where wealready have operations.
Improve productivity
We recognize higher productivity as vital to our ability toabsorb cost increases associated with additional
investments in growth in the years ahead. We are advancing
measures aimed at reinforcing in-house IT systems to boost
the productivity of individual employees so that we arepositioned to handle even a significant surge in work volume
resulting from higher subscriber numbers and the
expansion of services with current staffing levels.
In the fiscal year ended March 31, 2021, we sought tooptimize regional sites by merging SECOM control centersand shifting the sales and administrative functions ofsmaller offices to larger offices. Additionally, we reorganizedsales and operational departments to clarify their roles,

expedite decision making and eliminate waste with theobjective of breaking down organizational silos. We willcontinue working as one to further improve productivity,
guided by the concept of refusing to be content with thestatus quo,*2 a key element of SECOM’s Philosophy.

*1 In addition to information from SECOM sensors, information from devices
in the home manufactured by other companies can be stored in the cloudand used to enhance monitoring of daily activities and health.
*2 The concept of refusing to be content with the status quo expresses ourdetermination to offer innovative services and systems by challenging
outdated beliefs and accepted norms.

Transformation of the security services business
COVID-19 has brought far-reaching, fundamental changes tosociety, including business practices, consumer behavior
and work styles. With many of these changes likely toremain even after the pandemic has eased, our future
depends on responding effectively to survive and thrive inwhat is emerging as the new normal. At the same time, wemust also continue to address challenges associated with asuper-aged society and a declining labor force. We are
excited at the potential for such socioenvironmental changes
to stimulate new needs and create promising business
opportunities.
New needs include those for enhanced troubleshooting
and security as a result of reduced staff numbers or a shift
to an unattended format for retail facilities, as well as thosefor personnel management–related systems compatible
with telework and other work style reforms, information
security and document digitalization. With people spending
more time at home and making frequent use of delivery
services, we are also seeing increased needs for safe andsecure home environments, monitoring services that help
protect elderly parents and other family members, andremote healthcare. Acknowledging that we have a
responsibility to advance social change in this new era, weare striving to develop and offer services that accurately
address these and other emerging needs.
The security services business is expected to enter aperiod of fundamental transformation. Factors behind thisinclude the spread of AI, the IoT and 5G mobile
communications technologies, and rapid advances in thearea of sensing technologies,*1 which are forecast to support
the development of IoT services that respond to various
social imperatives. The linking of these to security services
will greatly expand the scope of services available tocustomers.
We also anticipate the realization of services thatleverage data science to extract information of value fromthat captured by sensors installed at subscribers’ premises.
In the security services industry of the future, we believethat the key to growth will be our ability to create a service
framework based on a new concept that involves the use of
these technologies.
During the investment phase of the SECOM Group Road
Map 2022, we promoted investments to reinforce ourbusiness infrastructure and secure individuals with the highlevel skills necessary to work in IT in preparation for thedigital era.
We currently have more than 2.4 million on-line security
subscribers in Japan. By offering a software as a service(SaaS)*2 on-demand service model, we will make it possible
for subscribers to access highly convenient IoT and othernew services that leverage new technologies. To this end,
we must install security equipment with functions andperformance features compatible with these services at
subscribers’ premises.
Based on the belief that the services we provide tosociety should both be revolutionary and utilize
sophisticated technologies, we will systematically replacesubscribers’ existing security equipment with new models
compatible with the new technologies of today and thefuture. This combination of state-of-the-art equipment with
our around-the-clock monitoring services will continue toensure our ability to offer new value by extending reliable
services that improve convenience. In addition to enhancing
customer convenience, these sophisticated technologies will
also boost the efficiency of our operations.
We see this period of transformation as an importantbusiness opportunity. To ensure sustainable growth over thelong term, we are working to build next-generation businessmodels—an effort spearheaded by the Business Design
Laboratory, which was established in-house in August
2020—and advancing measures to sharpen our competitiveedge under the banner of “SECOM DX.”
*1 Sensing technologies are technologies that measure and quantify
information acquired by sensors.
*2 SaaS is a subscription-based delivery model whereby services areaccessed via the Internet.

Promoting ESG initiatives
Since our establishment, we have sought to fulfill our
responsibility to society through our business activities,
acknowledging the importance of sustainability for ourselves

and for society. The key to our ability to deliver safety andpeace of mind, as well as make life more comfortable andconvenient, is the human resources who are responsible

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A Message to Stakeholders

for providing our services. With our operating environment
expected to undergo major changes in the years ahead,owing to the emergence of a new normal in the wake of
COVID-19 and the coming period of transformation for the
security services business, securing and training people
who excel in terms of adaptability to change, ability to create
value and desire to contribute to society, will become anincreasingly critical management challenge.
To attract human resources who are a good fit for
SECOM and capable of performing at a high level over thelong term, it is vital that we offer attractive employment
conditions in terms of pay scale, work-life balance andemployee welfare, and maintain a high degree of employee
motivation by striving constantly to bolster job satisfaction.
We thus strive to guarantee safe working environments,
create employee-friendly workplaces, offer training to foster
employees with superior ethical standards and skills, andadvance diversity and inclusion.
Further, we endeavor to encourage a managerial
mindset, that is, to nurture individuals who understand our
corporate philosophy, including our mission, and are capableof independent judgment and action. To this end, senior
management is leading efforts to maximize employees’capabilities and inspire them to fulfill their potential bycreating a virtuous circle rooted in job satisfaction andstepping up implementation of our Tri-ion initiative, whichseeks to ensure that SECOM’s Philosophy fully penetrates
every aspect of our operations.
Rigorous corporate governance is indispensable to ourability to earn public trust and fully leverage our competitiveedge. Our core business is security services. As such, we
appreciate the importance of each and every employee
discharging his or her duties in good faith and in keepingwith the spirit of related laws. For this reason, we viewcompliance as an integral component of our day-to-day
operations. All employees are required to act in accordancewith the SECOM Group Code of Employee Conduct and the
Behavioral Guidelines Based on SECOM’s Philosophy and toensure compliance. Preserving confidentiality is also criticalto the provision of security services. We have established an
information security policy and rules for the handling ofvarious types of information that are applicable to all SECOM
employees and promote the scrupulous protection of dataand information. We also work actively to reinforce ourcorporate governance system, recognizing that a robust
configuration is crucial for related measures to have teeth.
We are also taking steps to enhance the diversity andeffectiveness of our Board of Directors, including appointing
a female outside director in June 2020.
Recent years have seen natural disasters generally
associated with climate change, including large-scale forest
fires and heavy rain incidents, occurring with greater

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SECOM REPORT 2021

frequency around the world. Seeing our mission as being tohelp achieve a society free from concerns, we strive to be acompany that is capable of providing enduring peace ofmind while at the same time fulfilling our responsibilities asa member of society and reducing the impact of ouroperations on the environment.
With the belief that protecting the environment isessential to our ability to deliver security and support
comfortable lifestyles, we incorporate environmental
conservation into all aspects of our business activities.
For example, we provide on-line security system equipment
to security services subscribers mainly on a rental basis.
We are thus able to collect all installed equipment after use,
recycle what can be repaired and reused, and appropriately
dispose of what cannot, a zero–resource waste businessmodel that dates back half a century. In our security
services business, which uses a significant number ofservice vehicles, we have largely completed the planned
introduction of fuel-efficient vehicles. We plan to upgrade toelectrified vehicles with an even lower environmental impact
in the years ahead, and have already replaced a number ofvehicles with hydrogen-powered models. In our data center
services business, which uses a considerable amount ofelectric power, our efforts have earned designation by the
Tokyo prefectural government as demonstrating particular
excellence in the implementation of initiatives to counter
global warming.
Seeking to further our goal of helping achievesustainability for society, in July 2019, we declared our
support for the Task Force on Climate-related Financial
Disclosures (TCFD), pledging to disclose related informationin line with TCFD recommendations. In July 2021, we
announced our intent to achieve carbon neutrality by 2045
and set a target for reducing CO2 emissions by 45% from thefiscal year ended March 31, 2019, by the fiscal year ending
March 31, 2031. These targets earned certification as
science-based targets (SBTs) from the Science Based
Targets initiative. In line with these targets, we also joined
Renewable Electricity 100% (RE100), a global renewableenergy initiative, with the aim of shifting entirely toelectricity generated using renewable energy by 2045.
Our day-to-day business activities, into which weincorporate consideration for the expansion of business
opportunities and the reduction of business risks, arestructured to both nurture continued growth and resolve
environmental, social and governance (ESG)-related issues.
We believe that increasing corporate value by expanding ourbusiness activities directly improves our ability to address
ESG issues, which in turn enables us to contribute to theachievement of the United Nations’ Sustainable
Development Goals (SDGs). These achievements haveearned solid marks, as evidenced by our continued inclusion

as a constituent of all four ESG investment indices* forJapanese equities used by Japan’s Government Pension
Fund (GPIF). Going forward, we will continue working toenhance our provision of ESG- and sustainability-related
information to our diverse stakeholders.

* The four indices used by the GPIF are the FTSE Blossom Japan Index, the
MSCI Japan ESG Select Leaders Index, the MSCI Japan Empowering Women
Index (WIN) and the S&P/JPX Carbon Efficient Index.

Ensuring unwavering, sustainable growth
We continue to operate in an environment characterized bysignificant upheaval and unprecedented uncertainty, caused
by factors such as a declining labor force, climate change
and the impact of COVID-19. At the same time, we expectthat the rapid digitalization of society, underpinned by theevolution of advanced AI, IoT and 5G mobile communications
technologies, and by the rising prevalence of cloud-based
services, will drive demand for services utilizing
smartphones and wearable mobile equipment.
Against this backdrop, we have begun to offer cloudbased and interactive services that accumulate, analyze andvisualize information detected by sensors installed at thepremises of security service subscribers. The rapid evolutionof sensing technologies is expected to fundamentallytransform the security services business in the years ahead.
As a consequence, our security services in the future mustnecessarily evolve into sophisticated high-grade services
that combine advanced digital technologies and human
support. For this reason, we must evolve as a “tech”
company with capabilities in such areas as health tech.
SECOM Group companies will also actively introduce newtechnologies to optimize our performance and ensure
unwavering growth. With Japan’s labor force expected
to continue shrinking, we also recognize that further
globalization is essential to the sustainability of our

growth. We have taken the first steps toward a full-scale
reinforcement of our overseas operations. We are confident
that measures implemented will yield positive results in thenear future.
Achieving the goals we have set for ourselves will
require continued and decisive investment in growth. We
will explore priorities while continuing to promote key
investments, including in M&As. Given the dramatic changes
in our operating environment and the increasingly uncertain
outlook, securing sufficient capital assets has also taken
on greater importance. With the aim of enhancing returns
to shareholders, we will continue working to improve
corporate value and maintain a stable dividend payout ratio
of between 40% and 45%, as set forth in the SECOM Group
Road Map 2022.
The Olympic and Paralympic Games Tokyo 2020 will beheld this year in the shadow of COVID-19. It is our hope thatthe efforts and commitments of the athletes will bringinspiration and joy to people around the world. We arecommitted to playing our part in ensuring the secure andsuccessful staging of the games. In this as well as our otherendeavors, we look forward to the ongoing support andguidance of our many stakeholders.
July 15, 2021

Makoto Iida

Yasuo Nakayama

Ichiro Ozeki

Founder

Chairman and
Representative Director

President andRepresentative Director

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