TO OUR SHAREHOLDERSIn the fiscal year ended March 31, 2000, theJapanese economy continued to perform
unevenly. Personal consumption, a key factor ofeconomic growth, failed to show any noticeable
improvement owing to high unemployment andthe prospects of further corporate restructuring.
Nonetheless, the government’sseries of economic stimulus policies began to bear fruit, and corporate profits strengthened
gradually, encouraging expectations of recovery.
This was the context in which
SECOM forged ahead during theperiod under review in its drive torealize its Social System Industryvision. Reflecting Groupwide
efforts to strengthen marketing,enhance services, develop new services and systems, and enter new
businesses, we achieved
significant progress, including
a measured rise in revenues.
Consolidated revenue andother income rose 4.6%, to ¥412.4 billion. Revenue
and other income during the period comprised
revenue, with services acounting for ¥270.7 billion,
merchandise, software, medical and real estate
operations ¥97.5 billion and insurance services¥30.0 billion; and other income, consisting of a¥5.5 billion gain on sale of securities, net, and¥8.8 billion in interest and other.
Net income amounted to ¥47.4 billion, a5.0% drop owing to a decline in proceeds from thesale of securities. Basic net income per shareamounted to ¥203.67, compared with ¥214.51 ayear earlier. At the annual general shareholders’meeting on June 29, 2000, cash dividends of¥40.00 per share were approved.

Business Development
SECOM believes that a truly
prosperous society offers an abundance of choices. Our mission isto expand those alternatives bycreating synergies between Group
companies to offer the systems
and services that make life moresecure, convenient and pleasant.
Accordingly, we aim to makecustomers feel that they can look
to SECOM for solutions to avariety of concerns, and to provide systems and services that areconvenient and make customers
feel secure. To these ends, wehave begun to build a new social
Makoto Iida
Founder infrastructure starting with thesecurity, information, medical,education, non-life insurance, and GIS fields.
During the period under review, we introduced
new products and services in these areas.
In the security services field, we developed
SECOM IX, an interactive surveillance system forconvenience stores and other commercial enterprises with late-night operating hours. We also
introduced the SUPER CCTV System, a surveillance system with built-in security features tosense tampering, providing more reliable security
to ease the concerns of all types of business. We
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TO OUR SHAREHOLDERS

unauthorized intrusions, and SECOM Virus
Monitoring Service, which offers constant protection against damage from computer viruses. We
also launched two digital certificate authorization
services: SECOM Passport for Web and SECOM
Passport for Members, which respectively
certify the reliability of businessWeb sites run on servers and thebrowsers and e-mail of individual
members and organizations.
In the medical field, Secom
Home Medical System Co., Ltd.,established four visiting nurse stations, thereby improving accessibility to the various Medical Care
Insurance- and Long-term Care
Insurance-approved services
offered by the company.
As the primary driving force
in our educational services field,
Secom Lines Co., Ltd., continued
helping to popularize on-line
Toshitaka Sugimachi
President and computer-aided learning by offerRepresentative Directoring a line of educational software
available over the Internet and via existing school
networks.
Following our entry into the non-life insurance
field, Secom General Insurance Co., Ltd., began
developing original products to complement ourother services. Secom General Insurance introduced a discount rate on its fire insurance policy
for our security systems subscribers, and SecomMy Car Insurance, an automobile policy offereddirectly to the public. The attractive returns
offered by Anshin L Rich casualty insurance andbolstered our home security lineup with SECOM
MS-2, a condominium building management
system that draws on our accumulated home
security know-how to provide value-added
options for senior citizens’ housing complexes,
such as an emergency medical alert system andsafety monitoring functions.
To serve the strong market
in Japan for mechanical automobile parking systems, we introduced the TOMAHAWK-PS
automated fire extinguishingsystem, which uses a new gas fire
suppressant that is zero-rated forozone-depleting substances,making it friendly to theenvironment as well as people.
In the information services
field, we took several steps toenhance our ability to help
customers protect information
and business data from fraud andcriminal activities in the Internetcommunity. We concentrated
cyber security services at Secom Trust.net Co.,
Ltd., formerly known as Secomnet Co., Ltd., supplementing its existing value-added network(VAN) services. This has positioned us to offer
security monitoring by network security specialists
365 days a year, and provide enhanced support for
e-commerce customers utilizing advanced digital
certificate authorization technologies. In the areaof security monitoring by network security specialists, we developed the SECOM Intrusion
Detection Service, which monitors and reports on3

SECOM CO., LTD. Annual Report 2000

TO OUR SHAREHOLDERS

Anshin New Double comprehensive insurance
policies generated a positive market response.
In August 1999, SECOM became the majority
shareholder of Pasco Corporation, Japan’s leading
purveyor of mapping and GIS services. We anticipate significant synergies between the operations of
this firm and those of SECOM.
Secom Home Life Co., Ltd., leads theGroup’s real estate development arm. This subsidiary primarily develops and sells condominiums
that feature built-in on-line security systems. Thisis another example of how we are integratingproducts and services to maximize consumer
security, convenience and peace of mind.

non-life insurance and GIS fields, as well as continually analyzing business and consumer activities todiscover new opportunities that complement or
can be integrated into our core businesses. This
will enable us to better respond to the needs ofcorporate customers and consumers and move
rapidly closer to the realization of the Social
System Industry.
We believe the best measure of our efforts
to enhance shareholder value is the number ofcustomers that look to us for solutions and consider our systems and services to be convenientand conducive to peace of mind. We also believe
the faster we can realize the Social System
Industry, the more we can build shareholder value.
We look forward to reporting additional
advances and milestones in the coming years as
we endeavor to maximize shareholder value. In all
our efforts, we ask for the continued support ofshareholders.

Enhancing Shareholder ValueSECOM has long managed its business to ensure
ample returns and the adequate disclosure of information to shareholders and investors. We havebeen rewarded with a stable shareholder base.
To make our shares more accessible to a broader
range of investors and heighten share liquidity, inNovember 1999 we implemented a two-for-one
stock split and in August 2000, we reduced ourminimum trading unit to 500 shares, from 1,000shares.
Society is changing rapidly as new values takeroot, diversity increases, and homes and businesses
are increasingly wired and networked. We are
striving to tap the new demand unleashed bychanges by offering new products and services inthe security, information, medical, education,

August 31, 2000

Makoto Iida
Founder

Toshitaka Sugimachi
President and Representative Director

4SECOM CO., LTD. Annual Report 2000