REVIEW OF OPERATIONS

Security Service Subscribers by Category
At March 31, 2001

Commerce
16.5%
Manufacturing
14.4
Banking and financial services 12.0
Service industries
19.7
Government agencies
9.1
Others28.3

CONTENTSSECURITY SERVICES .........................................................................................

13

MEDICAL SERVICES .........................................................................................

13INSURANCE SERVICES ......................................................................................

14

INFORMATION AND COMMUNICATION RELATED AND OTHER SERVICES .......

14OVERSEAS OPERATIONS ..................................................................................

1612 SECOM CO., LTD. Annual Report 2001

Security Services
Electronic Security Services
In the fiscal year ended March 31, 2001, revenue
and other income in the electronic security services category, encompassing commercial andhome security and large-scale proprietary systems, rose 3.9%, to ¥234.4 billion, and accounted
for 50.1% of consolidated revenue and otherincome, down from 54.7% in the fiscal year
ended March 31, 2000.
On-line centralized commercial security
systems form the core component of this category. Centralized security systems use SECOMsensors, which are located on subscribers’premises and linked via telecommunications circuits to our control centers, to facilitate aroundthe-clock remote monitoring. Our control center
staff collect and analyze data and are prepared
to respond promptly to alarms by dispatching
emergency response personnel and, if necessary, calling the police, ambulance service, fire
department or gas company.
Our centralized home security systems link
subscribers’ homes with our control centers tofacilitate remote monitoring for intruders, fire,gas leaks and medical emergency calls, thereby
ensuring safety and peace of mind.
Other Security Services
This category comprises static guard andarmored car services. In the period under review,
these services generated revenue and otherincome of ¥47.3 billion, an increase of 4.7%, andrepresented 10.1% of consolidated revenue andother income, compared with 11.0% in theprevious period.
Merchandise and OtherThis category encompasses sales of CCTV surveillance cameras, access-control systems, automatic fire detection and extinguishing systems
and intruder detection systems. Revenue andother income in this category climbed 37.2%, to¥34.4 billion, equivalent to 7.4% of consolidated
revenue and other income, up from 6.1% in thefiscal year ended March 31, 2000.
The period brought two important additions
to our merchandise lineup, namely SESAMO NTIII, an access-control system employing contactless IC cards, and SESAMO MC, an access-control
system that uses any magnetic card complying
with JIS. We also augmented our lineup ofPYTHAGORAS proprietary security vaults with
the new PYTHAGORAS series, which offers
improved fire resistance at lower prices.

Medical Services
Revenue and other income from the medical services segment was ¥6.3 billion, up 4.8 times fromthe previous period and accounted for 1.4% ofconsolidated revenue and other income, compared with 0.3% in the previous period.
During the period under review, subsidiary
Secom Home Medical System worked to
expand its network of visiting nurse stations,

Percentage of Revenue and Other Income

67.6%
Security Services
SECOM CO., LTD. Annual Report 2001 13

thereby improving accessibility to the services
provided by these stations. In addition to such
Medical Care Insurance-approved traditional
home nursing services as assisting patientsusing home intravenous or oxygen equipment,these stations now offer Long-Term Carelnsurance-approved services.
In another development, we welcomed
Mac, a Sapporo-based medical instruments firm,
into the SECOM Group. This development has
significantly reinforced our service capabilities
in this sector.

Insurance Services
The insurance services segment generated ¥22.7
billion in revenue and other income in the
period under review, a decline of 25.5% from theprevious period, and accounted for 4.8% of consolidated revenue and other income, down from7.4%. Subsidiary Secom General Insurance continues to promote sales of attractive products
and services that capitalize on its capabilities insecurity and insurance, such as Secom Anshin
My Car insurance and Security Discount Fire
Policy, for SECOM corporate security system subscribers. During the period under review, thecompany augmented its lineup with SecomAnshin My Home, a comprehensive fire insurance package for SECOM centralized residential
security system subscribers that provides comprehensive, seamless protection, thus ensuringsafety and peace of mind.

In the area of casualty insurance, SecomGeneral Insurance offers Anshin L Rich, ahigh-return casualty insurance policy, and Anshin
New Double, a comprehensive policy that pays
back the principal in full upon maturity.
Customers continue to give high marks to theguaranteed principal and attractive returns ofboth policies.

Information and Communication Related
and Other Services
Revenue and other income in this segment
advanced 27.3%, to ¥92.6 billion, and constituted 19.8% of consolidated revenue andother income, compared with 17.6% in theprevious period.
Software and Information andCommunication Related Services
Subsidiary Secom Information System Co., Ltd.,is in charge of our information and telecommunications network and Web site design, construction and operation. The company’s services also
extend to corporate network system design,development, operation and maintenance.
Subsidiary Secom Trust.net provides a wide
range of cyber security services, including
authentication, network security monitoring andsecurity consulting. Authentication services, such
as SECOM Passport for Web, which issues certificates for Web sites, are providing a PKI that will
enhance the reliability of e-business activities.

Percentage of Revenue and Other Income

14 SECOM CO., LTD. Annual Report 2001

1.4%

4.8%

Medical Services

Insurance Services

Network security monitoring involves SECOM
Virus Monitoring Service and SECOM Intrusion
Detection Service, which provide around-theclock monitoring and reporting on virus activity
and unauthorized intrusion, respectively. Security
consulting encompasses the analysis, assessment and diagnosis of network risk and thedevelopment of proposals to facilitate its management. Secom Trust.net also offers network
construction services and Web application services, which include Web-based information
system management and support.
During the period, we capitalized on ourtechnological capabilities in authentication—
which enabled us to win several contracts
from major banks to build and operate a digital
certificate authority service for use with theIdentrus business-to-business network of global
financial institutions—to launch SECOM
Secure Data Center services. In addition tohighly physical security and rigorous monitoring of unauthorized network access and virus
activity, SECOM Secure Data Center offers
various support services to ensure the security
and responsiveness of e-business while
minimizing costs.
GIS Services
Subsidiary Pasco is one of Japan’s leading purveyors of aerial mapping and GIS services. In theperiod under review, Pasco launchedManagement Navigation Service, a management
support service developed for private-sector cor-porate customers. Management Navigation
Service integrates digital maps with customergenerated corporate data to assist management
analysis, marketing and customer service. Pasco
extends this service to customers under exclusive, long-term user contracts, whereby it provides regular, low-cost updates of base maps andsystem content. Pasco also makes use ofaddresses and other necessary information,
which it links with the information from subscribers’ systems, base maps and system content.
By enabling management to assess market
conditions accurately, Management Navigation
Service functions as an important tool forenhancing competitiveness and ensuring
survival in a challenging environment.
Education Services
A pioneer in the field of computer-aided learning, subsidiary Secom Lines, continued topromote sales of software packages designed
to support computer-assisted learning forschools. These include local-area network(LAN) systems for classrooms and Internetbased software programs.
Real Estate Development
Secom Home Life, the SECOM Group’s real estatedevelopment arm, continues to incorporate otherSECOM Group services, including security,
home medical care, information and insurance,
to develop and market high-value-addedcondominiums.

Percentage of Revenue and Other Income

19.8%
Information and Communication
Related and Other Services

SECOM CO., LTD. Annual Report 2001 15

SECOM provides aOverseas Operations
In line with its belief that desire for safety andpeace of mind is universal, SECOM began offering on-line security services in Taiwan in 1978
and in the Republic of Korea and the UnitedStates in 1981. Today, SECOM also has operations in the United Kingdom, Australia,Thailand, Malaysia, Singapore, Indonesia
and the PRC.

variety of security
services in overseasmarkets.

16 SECOM CO., LTD. Annual Report 2001

We have earned a solid reputation inoverseas markets because of our ability to create packages combining top-of-the-line services
with an understanding of local needs and sensibilities. We will continue to capitalize on ourexpertise to enhance our services in the markets we currently serve as well as expand into
new markets where there is demand for SECOMstyle security services.