TO OUR SHAREHOLDERSI

Makoto Iida
Foundern the fiscal year ended March 31, 2001, Japan’seconomy showed signs of improvement as private-sector capital investment rose, particularly in theinformation and telecommunications sectors. Nonetheless, a recovery failed to materialize as personal consumption remained sluggish and stock prices flagged. In this environment, SECOM pressed
forward with efforts to realize its Social System Industry vision, focusing on Groupwide efforts toenhance existing services, reinforce marketing and develop new services and systems that respondto the needs of customers. These efforts contributed to a 13.4% increase in consolidated revenue
and other income, to ¥467.7 billion. Services generated ¥281.7 billion of this total; merchandise, software, medical, geographic information system and real estate contributed ¥129.8 billion; and insurance services totaled ¥21.7 billion. Other income comprised a ¥2.6 billion gain on sale of securities,
net, a ¥21.4 billion gain on securities contribution to employee retirement benefit trust and ¥10.4 billion in interest and other.
Despite firm growth in revenue, net income fell 7.0%, to ¥44.1 billion, primarily owing to higher
income taxes and the cumulative effect of accounting change. Basic net income per share was¥189.28, down from ¥203.67 per share the previous period. Cash dividends per share of ¥40.00 wereapproved at the general shareholders’ meeting held on June 28, 2001.

Expanding into New Areas
SECOM’s operations encompass security, information, medical, education, non-life insurance and GIS
services. To realize our Social System Industry vision, we are working to maximize synergies among
these seemingly unrelated businesses to provide comprehensive, integrated services and systems,
thereby creating value not possible with independent services. During the period under review, we
made particularly significant strides in developing innovative offerings that combine security services
with non-life insurance and GIS services.
In the security services field, we introduced COCO-SECOM—literally “Here SECOM”—
an innovative system that uses signals from Global Positioning System (GPS) satellites and cellular
telephone base stations to locate the position of mobile subjects, such as people and vehicles, and,if warranted, instructs SECOM to dispatch emergency response personnel. COCO-SECOM represents
a new application of subsidiary Pasco Corporation’s extensive experience and expertise in GISservices. Other important additions to our security services lineup included SESAMO NT III, anaccess-control system employing contactless integrated circuit (IC) cards, and SESAMO MC, an

SECOM’s

2Social System Industry

SECOM CO., LTD. Annual Report 2001

access-control system that uses any magnetic card complying with the relevant Japanese Industrial
Standards (JIS). We also augmented our lineup of PYTHAGORAS proprietary security vaults with thenew PYTHAGORAS series, which offers improved fire resistance and lower prices, and our HANKS ∑cash dispenser and automated teller machine (ATM) booth lineup with HANKS ∑-J, a simplified
model that offers significant reductions in price and shipping costs.
In information services, subsidiary Secom Trust.net Co., Ltd., capitalized on its advanced technological capabilities and accumulated expertise in the area of authentication to launch SECOM Secure
Data Center services. In addition to highly sophisticated access control, SECOM Secure Data Centeroffers rigorous monitoring of unauthorized access and virus activity and provides other support services
to ensure the security and responsiveness of e-business Web sites while minimizing costs. Together withFujitsu Limited, Marubeni Corporation and the Tokyo Electric Power Company, Incorporated, weestablished Japan Cablenet Limited, which provides cable television (CATV)-based broadband services.
In the medical services field, subsidiary Secom Home Medical System Co., Ltd., worked toexpand its network of visiting nurse stations, thereby improving accessibility to its services. During
the period, we acquired all outstanding shares in Mac Corporation, a medical instruments firmbased in Sapporo, Hokkaido. On another front, we acquired a stake in Royal Life Tama, a residential
facility for senior citizens in Machida, Tokyo.
The primary driver in our education services field is subsidiary Secom Lines Co., Ltd. In theperiod under review, the company continued to take a variety of steps aimed at popularizing
SECOM’s on-line computer-aided learning system for schools.
In the non-life insurance sector, subsidiary Secom General Insurance Co., Ltd., continues tobroaden its lineup of innovative policies that combine security and insurance. The company’slineup includes Secom Anshin My Home, a comprehensive fire insurance package offered at a discount to SECOM centralized residential security system subscribers in recognition of their low-riskstatus. This policy provides seamless protection, thus ensuring safety and peace of mind.
Subsidiary Pasco is one of Japan’s leading purveyors of aerial mapping and GIS services. In theperiod under review, Pasco launched Management Navigation Service, a powerful management information service to support corporate management.
Our real estate development services arm is led by subsidiary Secom Home Life Co., Ltd.
During the period under review, the company continued to develop high-grade, safe condominiums
with built-in on-line security systems.

visionToshitaka Sugimachi
President andRepresentative Director

is expanding the scope of its security services

SECOM CO., LTD. Annual Report 20013

Advancing Our Social System Industry Vision
A key priority for the current period will be to promote COCO-SECOM—which we have positioned
as a core element of the Social System Industry—by stepping up efforts to market the system.
Society’s expectations regarding safety and security are becoming increasingly sophisticatedand diverse. To tap new demand and develop services and systems that respond to changing needs,
as well as ensure SECOM remains the first choice of people seeking peace of mind, we recognize
the need to constantly evolve our business model.
Growth and change are also essential to realizing our Social System Industry vision, that is, tocreate a new social infrastructure by providing services and systems for corporate and private customers that make life more secure, convenient and comfortable. Accordingly, we will build on ourextensive information network to further integrate our core businesses, including security, information, medical, education and insurance, as well as seek out new opportunities that complement
existing services and systems.
As a leading corporation, we recognize the importance of not only reinforcing our operations
but also fulfilling our various responsibilities to society. To this end, we will step up efforts toincrease management efficiency and enhance shareholder value.
We look forward to reporting new milestones as we move closer to realizing our Social System
Industry vision, and we ask for the continued support of our shareholders.
August 31, 2001

Makoto IidaFounder4

SECOM CO., LTD. Annual Report 2001

Toshitaka Sugimachi
President andRepresentative Director