A Message to Shareholders

The Management

Looking to the future, we are working to expedite thedevelopment of new services under the ALL SECOM banner
to realize a broader range of services that benefit societyand position us for a new stage of growth.

New Management Team
Changes to the responsibilities of directors were approved at a meeting of the Board of Directorsof SECOM held on May 8, 2014. As a consequence, effective June 1, 2014, Shuji Maeda
became chairman and representative director and Hiroshi Ito was appointed president andrepresentative director.

Understanding and Responding to Change
Makoto Iida
Founder

Consolidated Operating Results
In the fiscal year ended March 31, 2014, the Japanese economy remained on a path of gradual
recovery, as the positive impact of fiscal and monetary policies continued to support a weak yen
and high share prices, as a result of which corporate earnings rallied, while improvements wereseen in employment and in personal income. Economic conditions were also bolstered by alast-minute demand rush in advance of an increase in Japan’s consumption tax.
In this environment, we continued working toward the realization of our vision for thefuture—the Social System Industry—by responding to the needs of customers through the provision of high-grade services and systems in our security services segment, as well as in our othersegments: fire protection services, medical services, insurance services, geographic information
services, information and communication related services, and real estate and other services. We
also pressed forward with efforts to apply the ALL SECOM concept, which emphasizes cooperation among our various independent businesses to strengthen the Group as a whole, with a viewto hastening our advance to a new stage of growth.
Consolidated net sales and operating revenue rose 7.3%, or ¥62.7 billion, to ¥921.2 billion.
This result was attributable principally to increases in net sales and operating revenue contributedby At Tokyo Corporation and certain subsidiaries providing security services, newly consolidated
from the previous period, as well as to higher net sales and operating revenue in all segments
except for the real estate and other services segment. Operating income grew 5.8%, or ¥6.5 billion, to ¥120.1 billion, bolstered by the increase in net sales and operating revenue and a reduction in cost of sales in the fire protection services segment, the full year contribution of At Tokyo
in the information and communication related services segment, as well as the higher net sales
and operating revenue in the security services segment. Net income attributable to SECOM CO.,LTD., advanced 4.8%, or ¥3.4 billion, to ¥74.0 billion.

Distribution of Dividends
Recognizing the provision of a fair return to shareholders as a crucial management task, wedetermine our consolidated dividend payout ratio based on an overall assessment of trends inour consolidated operating performance, in line with our policy of ensuring a consistent, stable
distribution of profits. At the Ordinary General Meeting of Shareholders, held on June 25, 2014,
management proposed and shareholders approved the payment of annual cash dividends of¥115.00 per share, up ¥10.00 from the previous fiscal year. A partial amendment to the Articlesof Incorporation to facilitate the introduction of an interim dividend was also proposed bymanagement and approved by shareholders.

6SECOM Annual Report 2014

Needs for security, peace of mind, convenience and comfort are expected to become increasingly
diverse and sophisticated. Another factor behind the significant growth potential for our services
is broader acceptance of security systems with high-value-added features. Under these circumstances, we continue to draw on our own proprietary technological capabilities and our knowhow in system operation to swiftly identify needs and to respond promptly and accurately bydeveloping and providing services and systems that reflect evolving social imperatives,
infrastructure changes and technology trends.
In the security services business, we continued to actively cultivate new subscribers in theperiod under review. We also endeavored to further strengthen our relations with existing subscribers, as well as to enhance customer satisfaction, through in-person visits and direct contact,enabling us to effectively interpret needs and propose the most appropriate systems from ourextensive lineup.
In commercial security services, we expanded sales of mainstay on-line security systems such
as SECOM AX, a remote imaging on-line security system that features advanced image recognition technologies; SECOM LX, which integrates an on-line security system and access control
functions; and SECOM FX, an on-line system that incorporates facility control functions. In addition, we responded to growing needs for systems that help strengthen internal controls—a trend
propelled by, among others, an incident in Japan in which food products were laced with a toxic
substance—by promoting security camera and access control systems. In the area of home security systems, we sought to bolster sales of SECOM Home Security G-Custom, a residential security
system that also includes a variety of features that make daily life more convenient.
In overseas markets, we continued working to encourage broad acceptance of SECOM-stylesecurity services, focusing on the rapidly growing economies of the People’s Republic of China(PRC) and Southeast Asia, and establishing a presence in Myanmar. “SECOM-style securityservices” is a term used to describe comprehensive on-line security systems that encompass theinstallation of security equipment at the subscriber’s premises, around-the-clock monitoringfrom a SECOM control center via telecommunications circuits and the prompt dispatch of highly
trained emergency response personnel should an irregularity be detected.
Guided by our Social System Industry vision, we also implemented a number of strategic
measures in our other businesses. In fire protection services, subsidiaries Nohmi Bosai Ltd. andNittan Co., Ltd., two of Japan’s leading fire protection services providers, continued to leverage
their respective business foundations and product development capabilities to provide high-grade
automatic fire alarm systems, fire extinguishing equipment and other fire protection services, aswell as to secure orders for fire protection systems for large-scale building renovation projects,tunnels, hospitals and other applications.
In the medical services business, we continued to promote our extensive range of services,which centers on Home Medical Services—comprising home nursing and pharmaceutical

Shuji Maeda
Chairman and Representative Director

Hiroshi Ito
President and Representative Director

SECOM Annual Report 2014

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A Message to Shareholders

The Management

dispensing services—and includes the operation of residences for seniors, electronic medical
report systems, sales of medical equipment and pharmaceuticals, personal care services and support for associated hospitals. With the aim of accommodating emerging needs in a super-agedsociety, we opened SECOM CAREA Azamino, a complex for seniors that combines a residence,a day service and other services, located in the Azamino district of Yokohama. Overseas, Sakra
World Hospital in Bangalore, India, a joint venture with a Japanese trading company and a local
firm, opened its doors to the public.
Efforts in our insurance services business continued to focus on promoting sales of our distinctive non-life insurance policies. These include the Security Discount Fire Policy, a fire insurance
policy for commercial premises, and SECOM Anshin My Home, a comprehensive fire insurance
policy for homes, both of which offer discounts for subscribers who have installed on-line security systems, recognizing the risk-mitigating nature of such systems; MEDCOM, an unrestricted
cancer treatment policy that covers all treatment costs; and SECOM Anshin My Car, a comprehensive automobile insurance policy that includes access to on-site support services provided byour emergency response personnel.
In the area of geographic information services, we collect geographic data from sources suchas commercial satellite images and aerial photography, which we integrate, process and analyze
to provide geospatial information services. In the period under review, we capitalized on needs
for geospatial information associated with, among others, comprehensive inspections of roads,
bridges and other structures that support society and ongoing reconstruction efforts in areasin Japan devastated by the 2011 Great East Japan Earthquake. As a consequence, we saw firm
demand from public sector customers in Japan, while orders from private sector customers inJapan and from overseas customers expanded.
We continue to provide a variety of uniquely SECOM information and communication
related services, which center on data center services and also encompass BCP support services,
information security and cloud-based services, thereby achieving solid results for the period.
Accommodating needs for effective protection of information in the event of a disaster, whichhave risen since the Great East Japan Earthquake, we opened two new Secure Data Center
facilities, in Tokyo and Osaka. We also introduced the Real-Time Disaster Information Service,
which leverages our Big Data analysis capabilities to provide crucial information to subscribers,
including information essential to effective evacuation procedures and BCP.
Our real estate and other services business continued to emphasize the development and saleof condominiums with distinctive security and contingency planning features.

Backed by a business infrastructure anchored by our data center business, we will continue
to actively leverage our expertise to develop new services that anticipate future needs in linewith three key themes—security services, a super-aged society and disaster preparedness/BCP/
environmental preservation.
Ever more varied and sophisticated security needs continue to drive demand for high-grade
security solutions that improve subscribers’ security levels. One example of such a solution is ourrecently launched SECOM NVR System, a next-generation security camera system that enables
subscribers to store images remotely at a data center facility.
In response to increasingly diverse needs engendered by demographic trends in Japan, wewill promote the creation of comprehensive services for seniors that integrate personal care,health care, residential accommodation and lifestyle support and other services designed tosupport the well-being of seniors. In the area of infrastructure improvement, we are taking othersteps to expand our menu of data center-backed services, including establishing the SECOM
Anshin Information Center, which is charged with overseeing the operation of Real-Time Disaster
Information Service, our next-generation disaster mitigation service.
We are one of Japan’s preeminent data center operators in terms of capacity for the efficientcollection and safe management of data, a position we recognize as crucial to realizing newservices based on the gathering and analysis of Big Data. Going forward, we will refine ourcapabilities in the analysis of Big Data and capitalize on our around-the-clock operations to create
services that customers seek.
By providing services that make life more convenient and comfortable, as well as deliver
security and peace of mind, we have traditionally sought to encourage people to turn to SECOM
with the confidence that doing so will help them resolve security and other concerns. Looking
ahead, our focus will be on making SECOM an ever-present and trusted part of our customers’
lives. As always, we must earn the trust of our customers by providing indispensible services that
respond to their expectations. In the words of our corporate message—“Providing reliable peaceof mind”—we vow to continue working as one to realize our Social System Industry vision.
In closing, we would be remiss if we did not mention the passing of SECOM’s co-founder
Juichi Toda on January 30, 2014. Mr. Toda devoted many years to growing and evolving theSECOM Group. While saddened, the management team pledges to honor Mr. Toda’s memory
by remaining true to the SECOM vision.
In all of our endeavors, we look forward to the support and guidance of our shareholders.

Accelerating Growth: The ALL SECOM Concept
Looking to the future, we will continue to rally the capabilities of the SECOM Group, guided by
the ALL SECOM concept, to develop innovative services with the aim of accelerating growth.
Our approach to developing new services begins with looking at how society is likely tochange in the years ahead and at what sort of services will be needed. We also consider whatkind of infrastructure and technological capabilities are necessary to create a viable service.
This approach is what makes it possible for us to realize forward-looking services that are truly
original and at the same time useful to society—services that customers immediately recognize
as being exactly what they need and want, encouraging them to turn to us and to see us as animportant partner for the future.

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SECOM Annual Report 2014

June 25, 2014

Makoto Iida
FounderShuji Maeda
Chairman and Representative Director

Hiroshi Ito
President and Representative Director

SECOM Annual Report 20149