Financial Data

2020

Year ended March 31, 2020

AUDITED FINANCIAL STATEMENTS

Contents
Consolidated Financial Statements ........................................ 02
Consolidated Balance Sheets............................................. 02
Consolidated Statements of Income.................................. 04
Consolidated Statements of Comprehensive Income.......... 04
Consolidated Statements of Changes in Equity.................. 05
Consolidated Statements of Cash Flows ........................... 06
Notes to Consolidated Financial Statements....................... 07
Independent Auditors’ Report................................................ 33

SECOM Financial Data 202001

Consolidated Financial Statements
Consolidated Balance Sheets
SECOM CO., LTD. and Subsidiaries
March 31, 2020 and 2019		In millions of yen

Translation into thousandsof U.S. dollars (Note 3)

March 31

March 31

2019

2020

¥  414,668 ¥   349,730
9,097
10,619140,906
142,336
31,08425,294
166,612
156,869
63,11263,01256,29765,94525,67927,111(1,641)(1,738)4,301
6,809
25,74924,301$ 3,804,294
83,4591,292,716
285,174
1,528,550
579,009516,486
235,587(15,055)
39,459236,229ASSETS
Current assets:
Cash and Cash equivalents (Notes 5 and 22)............................................................
Time deposits (Note 13)............................................................................................
Cash deposits for armored car services (Note 6)........................................................
Short-term investments (Notes 7 and 22)..................................................................
Notes and accounts receivable, trade........................................................................
Due from subscribers................................................................................................
Inventories (Note 8)..................................................................................................
Short-term receivables (Notes 9, 13, 20 and 21).......................................................
Allowance for doubtful accounts (Note 9)................................................................
Deferred insurance acquisition costs (Note 14)..........................................................
Other current assets.................................................................................................
			Total current assets...........................................................................................

935,864

870,2888,585,908

Investments and long-term receivables:
Investment securities (Notes 2 (7), 7, 13 and 22).......................................................
Investments in affiliated companies (Note 10)...........................................................
Long-term receivables (Notes 9, 13, 20 and 21)........................................................
Lease deposits..........................................................................................................
Other investments....................................................................................................
Allowance for doubtful accounts (Note 9)................................................................

194,82264,49941,566
17,725
10,947(4,237)

212,641
63,69740,095
17,245
11,952(4,218)

1,787,358
591,734
381,339
162,615
100,431(38,872)

325,322

341,4122,984,605

Property, plant and equipment (Notes 2 (12), 11, 13, 19 and 20):
Land.........................................................................................................................
Buildings and improvements.....................................................................................
Security equipment and control stations...................................................................
Machinery, equipment and automobiles...................................................................
Construction in progress..........................................................................................

117,457
365,362
346,168
156,830
7,026

116,540
351,947
337,756
155,944
6,759

1,077,587
3,351,945
3,175,853
1,438,807
64,459

Accumulated depreciation........................................................................................

992,843(567,339)

968,946(552,719)

9,108,651(5,204,945)

425,504

416,227

3,903,706

143,468
25,664
108,925
58,814
31,79025,769—25,220108,12257,89238,48922,0601,316,220
235,450
999,312539,578
291,651
236,413394,430

251,783

3,618,624¥2,081,120 ¥1,879,710$19,092,843

Other assets:
Operating lease right-of-use assets (Notes 2 (12) and 19).........................................
Deferred charges (Note 2 (13)).................................................................................
Goodwill (Note 12)...................................................................................................
Other intangible assets (Notes 12, 13, 19 and 20)....................................................
Prepaid pension and severance costs (Note 15).........................................................
Deferred income taxes (Note 17)..............................................................................
			Total assets.......................................................................................................
See accompanying notes to consolidated financial statements.

02

2020

SECOM Financial Data 2020		
In millions of yen

Translation into thousandsof U.S. dollars (Note 3)

March 31

March 31

2019

2020

¥   39,002 ¥   38,658
17,98318,44748,466
46,60644,331
44,208
122,796
127,61937,04835,947
24,811
22,90439,65037,987
19,171—37,90632,992$   357,817
164,982444,642406,706
1,126,569
339,890
227,624
363,761
175,881
347,761

LIABILITIES AND EQUITYCurrent liabilities:
Bank loans (Notes 6 and 13).....................................................................................
Current portion of long-term debt (Notes 13, 19 and 21).........................................
Notes and accounts payable, trade...........................................................................
Other payables.........................................................................................................
Deposits received (Note 6)........................................................................................
Deferred revenue.....................................................................................................
Accrued income taxes..............................................................................................
Accrued payroll........................................................................................................
Current operating lease liabilities (Notes 2 (12) and 19)............................................
Other current liabilities.............................................................................................

2020

			Total current liabilities.......................................................................................

431,164

405,368

3,955,633

Long-term liabilities:
Long-term debt (Notes 13, 19 and 21).....................................................................
Guarantee deposits received.....................................................................................
Accrued pension and severance costs (Note 15)........................................................
Long-term deferred revenue.....................................................................................
Unearned premiums and other insurance liabilities (Note 14)....................................
Investment deposits by policyholders (Notes 14 and 21)...........................................
Deferred income taxes (Note 17)..............................................................................
Long-term operating lease liabilities (Notes 2 (12) and 19)........................................
Other long-term liabilities (Notes 21, 22 and 23)......................................................

44,25531,546
31,393
12,511
128,908
21,51613,132
124,297
14,99145,342
31,88730,913
11,623
124,30923,615
16,041—
14,710406,009289,413
288,009
114,779
1,182,642
197,394
120,477
1,140,339
137,532

			Total long-term liabilities...................................................................................

422,549

298,440

3,876,594

			Total liabilities...................................................................................................

853,713703,808

7,832,227

66,401
74,68010,833
1,017,661

66,39373,166
10,783
967,679

609,183
685,138
99,3859,336,339

2,046(4,601)(4,506)

2,309
(742)
(1,645)

18,771(42,211)(41,338)(7,061)(78)(64,778)

Commitments and contingent liabilities (Note 24)
Equity:SECOM CO., LTD. shareholders’ equity (Note 18):
Common stock		 Authorized—900,000,000 shares, issued 233,293,998 shares in 2020
		 Authorized—900,000,000 shares, issued 233,292,219 shares in 2019.................
Additional paid-in capital..........................................................................................
Legal reserve............................................................................................................
Retained earnings.....................................................................................................
Accumulated other comprehensive income (loss):		 Unrealized gains on securities (Note 7)..................................................................
		 Pension liability adjustments (Note 15)..................................................................
		 Foreign currency translation adjustments..............................................................
Common stock in treasury, at cost:
15,033,588 shares in 2020 and 15,031,867 shares in 2019...................................

(73,776)(73,759)(676,844)

			 Total SECOM CO., LTD. shareholders’ equity.....................................................

1,088,738

1,044,184

9,988,423

Noncontrolling interests...............................................................................................

138,669

131,718

1,272,193

			Total equity.......................................................................................................

1,227,407

1,175,902

11,260,616

			 Total liabilities and equity..................................................................................

¥2,081,120 ¥1,879,710$19,092,843

See accompanying notes to consolidated financial statements.

SECOM Financial Data 202003

Consolidated Statements of Income
SECOM CO., LTD. and Subsidiaries
Three years ended March 31, 2020
		In millions of yen

Translation into thousandsof U.S. dollars (Note 3)

Years ended March 31

Year ended March 31

2020

Net sales and operating revenue (Notes 14, 18, 22 and 25).............................................
Costs and expenses:
Cost of sales (Note 8)........................................................................................................
Selling, general and administrative expenses (Notes 2 (18), 2 (19), 2 (20) and 4)...............
Impairment loss on long-lived assets (Note 11)..................................................................
Impairment loss on goodwill (Note 12)..............................................................................
Gain and loss on sales and disposal of fixed assets, net.....................................................

2018

2020

¥1,160,707 ¥1,111,600 ¥1,082,792$10,648,688

2019

819,867
205,796
952
758
2,770
1,030,143
130,564

784,918
200,932595—
1,444
987,889
123,711

751,944
191,389841
11(1,504)
942,681
140,111

7,521,715
1,888,037
8,734
6,954
25,4139,450,853
1,197,835

2,127
2,297
—
5,557
9,981

1,807
—
4,673
4,766
11,246

1,637
237
5,884
5,696
13,454

19,514
21,073—50,982
91,569

1,151
—
3,738
139
1,482
6,510

1,184
115
3,959
—
1,136
6,394

1,236
—
57
—
1,482
2,775

10,560—34,294
1,275
13,59559,724

134,035

128,563

150,790

1,229,680

45,654(4,715)40,93947,210(12,086)
35,12454,225(6,118)
48,107

418,844(43,256)
375,588

93,09693,439102,683
6,654
7,002
7,179
99,750100,441
109,862(12,614)(10,755)(13,239)¥   87,136 ¥   89,686 ¥   96,623

854,092
61,046915,138(115,725)$   799,413		In yenTranslation into
U.S. dollars (Note 3)

Years ended March 31

Year ended March 31

				Operating income.................................................................................................
Other income:Interest and dividends.......................................................................................................
Gain and loss on sales of securities, net (Notes 7 and 18)..................................................
Gain on private equity investments (Note 22)....................................................................
Other (Notes 15, 16, 18 and 23).......................................................................................
Other expenses:
Interest.............................................................................................................................
Gain and loss on sales of securities, net (Notes 7 and 18)..................................................
Loss on other-than-temporary impairment of investment securities (Notes 18 and 22).......
Loss on private equity investments (Note 22).....................................................................
Other (Note 16)................................................................................................................
				 Income from continuing operations before income taxes and equity				 in net income of affiliated companies.................................................................
Income taxes (Note 17):
Current.............................................................................................................................
Deferred...........................................................................................................................
				 Income from continuing operations before equity in net income of				 affiliated companies...........................................................................................
Equity in net income of affiliated companies (Note 18)..................................................
				Net income...........................................................................................................
Less: Net income attributable to noncontrolling interests.............................................
				 Net income attributable to SECOM CO., LTD. ......................................................

2020

2019

2018

2020

¥399.23¥170.00¥410.91¥160.00¥442.70¥150.00

$3.66
$1.56

		
In millions of yen

Translation into thousandsof U.S. dollars (Note 3)

Years ended March 31

Year ended March 31

Per share data (Note 2 (22)):
Net income attributable to SECOM CO., LTD. ...................................................................
Cash dividends per share (Note 18)...................................................................................

Consolidated Statements of Comprehensive Income
SECOM CO., LTD. and Subsidiaries
Three years ended March 31, 2020

Comprehensive income:Net income.......................................................................................................................
Other comprehensive income (loss), net of tax:
		 Unrealized gains on securities.......................................................................................
		 Pension liability adjustments.........................................................................................
		 Foreign currency translation adjustments......................................................................
Total comprehensive income.............................................................................................
Less: Comprehensive income attributable to noncontrolling interests.........................
Comprehensive income attributable to SECOM CO., LTD. ....................................................
See accompanying notes to consolidated financial statements.

04

SECOM Financial Data 2020

2020

2019

2018

2020

¥99,750¥100,441¥109,862$915,138

(263)
274
256
(4,037)(2,566)
5,376(2,934)(4,908)
1,952
92,516
93,241
117,446(12,364)(10,060)(13,710)¥80,152 ¥ 83,181 ¥103,736(2,413)(37,037)(26,917)
848,771(113,431)$735,340

Consolidated Statements of Changes in Equity
SECOM CO., LTD. and Subsidiaries
Three years ended March 31, 2020
In millions of yen
Number ofsharesissuedAdditional
Commonpaid-instock
capitalLegalreserve

Retained­earnings

Accumulated
other com­prehensive
income (loss)

Commonstock intreasury,
at costTotal
SECOM CO., LTD.
shareholders’ Noncontrolling
equityinterests¥20,076(¥73,731)¥  929,242¥122,226¥1,051,468

Total

Balance, March 31, 2017.................................................... 233,288,717
Comprehensive income:Net income......................................................................
—
Other comprehensive income (loss), net of tax (Note 18):
		 Unrealized gains on securities.....................................
—
		 Pension liability adjustments.......................................
—
		 Foreign currency translation adjustments....................
—
Total comprehensive income............................................
Issuance of new stocks..........................................................
1,724
Cash dividends paid to SECOM CO., LTD. shareholders.........
—Cash dividends paid to noncontrolling interests.....................
—
Transfer to legal reserve........................................................
—
Equity transactions with noncontrolling interests and other(Note 18)............................................................................
—
Changes in the scope of application of the equity method....
—Gains on disposal of treasury stock.......................................
—Net changes in treasury stock................................................
—¥66,378¥73,102¥10,632¥  832,785

—

—

—

96,623——96,623

13,239109,862

—
—
—

—
—
—

—
—
—

—
—
—

268
5,070
1,775

—
—
—

7
—
—
—

7
—
—
—

—
—
—
101

—
(32,738)
—
(101)

—
—
—
—

—
—
—
—

268
5,070
1,775
103,736
14(32,738)
—
—

(12)
306
177
13,710——(5,381)
—

256
5,376
1,952
117,446
14(32,738)(5,381)
—

—
—
—
—

24
—
0
—

—
—
—
—

—
17
—
—

—
—
—
—

—
—
—
(18)

24
17
0
(18)

473
—
—
—

497
17
0
(18)

Balance, March 31, 2018.................................................... 233,290,441
Cumulative effect adjustments resulting from adoption of
new accounting standards, net of tax.................................
—
Comprehensive income:Net income......................................................................
—
Other comprehensive income (loss), net of tax (Note 18):
		 Unrealized gains on securities.....................................
—
		 Pension liability adjustments.......................................
—
		 Foreign currency translation adjustments....................
—
Total comprehensive income............................................
Issuance of new stocks..........................................................
1,778
Cash dividends paid to SECOM CO., LTD. shareholders.........
—Cash dividends paid to noncontrolling interests.....................
—
Transfer to legal reserve........................................................
—
Equity transactions with noncontrolling interests and other(Note 18)............................................................................
—
Changes in the scope of application of the equity method....
—Gains on disposal of treasury stock.......................................
—Net changes in treasury stock................................................
—

66,385

73,133

10,733

896,586

27,189(73,749)

1,000,277

131,028

1,131,305———

16,379(20,762)—(4,383)(421)(4,804)———

89,686——

89,686

10,755

100,441

—
—
—

—
—
—

—
—
—

—
—
—

274
(2,320)(4,459)

—
—
—

8
—
—
—

7
—
—
—

—
—
—
50

—
(34,922)
—
(50)

—
—
—
—

—
—
—
—

274
(2,320)(4,459)83,181
15(34,922)
—
—

—
(246)
(449)
10,060——(6,252)—274(2,566)(4,908)93,241
15(34,922)(6,252)
—

—
—
—
—

26
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
(10)

26
—
—
(10)

(2,697)———(2,671)——(10)

Balance, March 31, 2019.................................................... 233,292,219
Comprehensive income:Net income......................................................................
—
Other comprehensive income (loss), net of tax (Note 18):
		 Unrealized gains on securities.....................................
—
		 Pension liability adjustments.......................................
—
		 Foreign currency translation adjustments....................
—
Total comprehensive income............................................
Issuance of new stocks..........................................................
1,779
Cash dividends paid to SECOM CO., LTD. shareholders.........
—Cash dividends paid to noncontrolling interests.....................
—
Transfer to legal reserve........................................................
—
Equity transactions with noncontrolling interests and other(Note 18)............................................................................
—
Changes in the scope of application of the equity method....
—Gains on disposal of treasury stock.......................................
—Net changes in treasury stock................................................
—

66,39373,166

10,783

967,679(78)(73,759)

1,044,184

131,718

1,175,902———

87,136——

87,136

12,61499,750

—
—
—

—
—
—

—
—
—

—
—
—

(263)
(3,858)(2,862)

—
—
—

8
—
—
—

8
—
—
—

—
—
—
50

—
(37,104)
—
(50)

—
—
—
—

—
—
—
—

(263)
(3,858)(2,862)80,153
16(37,104)
—
—

—
(178)
(72)
12,364——(3,438)—(263)(4,036)(2,934)92,517
16(37,104)(3,438)
—

—
—
—
—

1,506
—
0
—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
0
(17)

1,506
—
0
(17)

(1,975)
—
—
—

(469)
—
0
(17)

Balance, March 31, 2020.................................................... 233,293,998¥66,401¥74,680¥10,833¥1,017,661(¥ 7,061)(¥73,776)¥1,088,738¥138,669¥1,227,407

Translation into thousands of U.S. dollars (Note 3)
Additional
Commonpaid-instock
capitalLegalreserve

Retained­earnings

Balance, March 31, 2019....................................................
Comprehensive income:Net income......................................................................
Other comprehensive income (loss), net of tax (Note 18):
		 Unrealized gains on securities.....................................
		 Pension liability adjustments.......................................
		 Foreign currency translation adjustments....................
Total comprehensive income............................................
Issuance of new stocks..........................................................
Cash dividends paid to SECOM CO., LTD. shareholders.........
Cash dividends paid to noncontrolling interests.....................
Transfer to legal reserve........................................................
Equity transactions with noncontrolling interests and other(Note 18)............................................................................
Changes in the scope of application of the equity method....
Gains on disposal of treasury stock.......................................
Net changes in treasury stock................................................

$609,110 $671,248$98,926$8,877,789

Balance, March 31, 2020....................................................

Accumulated
other com­prehensive
income (loss)

Commonstock intreasury,
at cost($   716) ($676,688)

Total
SECOM CO., LTD.
shareholders’ Noncontrolling
equityinterests$9,579,669

Total$1,208,422 $10,788,091

—

—

—

799,413——

799,413

115,725

915,138

—
—
—

—
—
—

—
—
—

—
—
—

(2,413)(35,393)(26,256)

—
—
—

73
—
—
—

73
—
—
—

—
—
—
459

—
(340,404)
—
(459)

—
—
—
—

—
—
—
—

(2,413)(35,393)(26,256)
735,351
146(340,404)———(1,633)(661)
113,431——(31,541)—(2,413)(37,026)(26,917)
848,782
146(340,404)(31,541)
—

—
—
—
—

13,817
—
0
—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
0
(156)

13,817—0(156)(18,119)———(4,302)—0(156)$609,183 $685,138$99,385$9,336,339($64,778) ($676,844)$9,988,423$1,272,193 $11,260,616

See accompanying notes to consolidated financial statements.

SECOM Financial Data 202005

Consolidated Statements of Cash Flows
SECOM CO., LTD. and Subsidiaries
Three years ended March 31, 2020
		In millions of yen

Translation into thousandsof U.S. dollars (Note 3)

Years ended March 31

Year ended March 31

2020

Cash flows from operating activities:
Net income.........................................................................................................................
Adjustments to reconcile net income to net cash provided by operating activities—
		 Depreciation and amortization, including amortization of deferred charges
		 (Notes 2 (11), 2 (13) and 12).........................................................................................
		 Accrual for pension and severance costs, less payments..................................................
		 Deferred income taxes....................................................................................................
		 Gain and loss on sales and disposal of fixed assets, net...................................................
		 Impairment loss on long-lived assets (Note 11)................................................................
		 Write-down on real estate inventories (Note 8)...............................................................
		 Gain and loss on private equity investments (Note 22)....................................................
		 Impairment loss on goodwill (Note 12)............................................................................
		 Gain on sales of securities, net (Notes 7 and 14).............................................................
		 Loss on other-than-temporary impairment of investment securities (Notes 14 and 22).....
		 Equity in net income of affiliated companies...................................................................
		 Changes in assets and liabilities, net of effects from acquisitions and disposals:			 (Increase) decrease in cash deposits for armored car services.......................................
			 (Increase) decrease in receivables and due from subscribers, net of allowances............
			 (Increase) decrease in inventories................................................................................
			 Increase in deferred charges.......................................................................................
			 Increase (decrease) in notes and accounts payable......................................................
			 Increase (decrease) in deposits received.......................................................................
			 Increase (decrease) in deferred revenue.......................................................................
			 Increase (decrease) in accrued income taxes................................................................
			 Increase (decrease) in guarantee deposits received......................................................
			 Increase in unearned premiums and other insurance liabilities.....................................
			 Increase (decrease) in accrued consumption tax..........................................................
			Other, net...................................................................................................................
				 Net cash provided by operating activities................................................................
Cash flows from investing activities:(Increase) decrease in time deposits.....................................................................................
Proceeds from sales of property, plant and equipment........................................................
Payments for purchases of property, plant and equipment..................................................
Payments for purchases of intangible assets........................................................................
Proceeds from sales and redemptions of investment securities (Note 7)...............................
Payments for purchases of investment securities.................................................................
(Increase) decrease in short-term investments......................................................................
Acquisitions, net of cash acquired (Note 4)..........................................................................
(Increase) decrease in short-term receivables, net................................................................
Payments for long-term receivables.....................................................................................
Proceeds from long-term receivables...................................................................................
Other, net...........................................................................................................................
				 Net cash used in investing activities........................................................................
Cash flows from financing activities:
Proceeds from long-term debt............................................................................................
Repayments of long-term debt...........................................................................................
Increase (decrease) in bank loans, net.................................................................................
Increase (decrease) in investment deposits by policyholders.................................................
Dividends paid to SECOM CO., LTD. shareholders...............................................................
Dividends paid to noncontrolling interests...........................................................................
Payments for acquisition of shares of consolidated subsidiaries from noncontrollinginterest holders.................................................................................................................
Proceeds from sales of shares of consolidated subsidiaries to noncontrollinginterest holders.................................................................................................................
Increase in treasury stock, net.............................................................................................
Other, net...........................................................................................................................
				 Net cash used in financing activities........................................................................
Effect of exchange rate changes on cash and cash equivalents......................................
Net increase in cash and cash equivalents.........................................................................
Cash and cash equivalents at beginning of year...............................................................
Cash and cash equivalents at end of year.........................................................................
See accompanying notes to consolidated financial statements.

06

SECOM Financial Data 2020

2018

2020

¥ 99,750 ¥100,441 ¥109,862$   915,138

77,574
1,193(4,715)
2,770
952
66
139
758
(2,962)
8,540(6,654)201975,300614(12,086)
1,444
595
580
(4,673)
—
(901)
8,991
(7,002)

78,955977(6,118)(1,541)841
865(5,884)11(1,073)
199(7,179)711,688
10,945(43,257)
25,413
8,734
606
1,275
6,954
(27,174)
78,349(61,046)

1,430(6,527)(10,576) (17,404)
9,256
4,285
(11,754) (10,716)
2,361
3,388
(4,822)
8,690
1,874
938
5,146
(4,914)
(352)
(164)
4,600
9,495
4,529
(831)
5,295
8,784
184,398 158,327(5,189)(8,292)(18,639)(15,902)
(378)
5,962
(779)
(2,441)
(474)
4,796
1,924
2,754
133,257

13,119(97,028)
84,917(107,835)
21,661(44,239)
17,19347,211(3,229)42,202
41,55048,577
1,691,724

1,564
1,178
(63,126)(11,722)
50,259(45,325)(1,357)(725)(147)(1,416)
1,578
2,628(66,611)(1,251)
3,379(56,401)(11,454)
43,597(36,686)(4,256)(3,133)62(1,024)
1,685
1,052(64,430)

172
6,166(53,751)(7,859)69,365(51,098)(1,150)(23,283)
(457)
(840)
1,224
50
(61,461)

14,34910,807(579,138)(107,541)
461,092(415,826)(12,450)(6,651)(1,349)(12,991)
14,477
24,114(611,107)

8,802(18,793)162(2,099)(37,104)(3,425)

7,161(20,184)(1,789)(1,592)(34,922)(6,263)

9,613(20,582)(3,378)(2,483)(32,738)(5,426)80,752(172,413)
1,486(19,257)(340,404)(31,422)(659)(3,033)(120)(6,046)

—
—
—
(16)
(10)
(17)
190
331
94
(52,942) (60,301) (55,037)
93
(595)
370
64,93833,001
17,129349,730 316,729 299,600¥414,668 ¥349,730 ¥316,729

—
(147)
1,743
(485,708)
853
595,762
3,208,532$3,804,294

Notes to Consolidated Financial Statements
SECOM CO., LTD. and Subsidiaries
Three years ended March 31, 2020

1. Nature of Operations
The parent company and its subsidiaries (collectively “the Company”)
are engaged in the businesses of security services, fire protection­services, medical services, insurance services, ­geospatial information­services, BPO and ICT ­services, and real estate and other services. With
these ­services combined, the Company is focusing on the establishmentof a Social System Industry, a network of integrated services and­systems, targeted at the needs of people and business.
The Company’s principal business activities are security services,­including on-line security systems for commercial and residential premises, static guard services, armored car services for cash collection anddeposit and sales of security merchandise. The Company has also been
diversifying its services covering: fire protection services, including automatic fire alarm systems and fire extinguishing systems; medical services,
including home and other medical services and the operations of variable interest entities of which the Company is the primary beneficiarythrough managing h­ ospitals and health care-related institutions; non-life
insurance ­services; ­geospatial information services using geospatial­information ­systems (GIS) and surveying and ­measuring technology; BPO
and ICT ­services, including data center services, ­business continuity plan
support, information security services and cloud-based services; as wellas Business Process Outsourcing (“BPO”) related services; real estate andother services, including the development and sale of condominiums
equipped with security and contingency planning features, lease of realestate, c­ onstruction and installation services and other services.
2. Significant Accounting Policies
The parent company and its Japanese subsidiaries ­maintain theirrecords and prepare their statutory financial s­ tatements in accordancewith accounting principles generally accepted in Japan (“Japanese
GAAP”). Certain adjustments and reclassifications have been incorporated in the accompanying financial statements to c­ onform with U.S.
generally accepted accounting principles (“U.S. GAAP”). These­adjustments were not recorded in the statutory books of account.
Significant accounting policies used in the preparation of the­accompanying consolidated financial statements are summarized below:(1) Basis of Consolidation and Investments in Affiliated ­Companies
The consolidated financial statements include the accounts of the­parent company and those of its majority-owned s­ ubsidiaries. All significant intercompany transactions and balances have been ­eliminated inconsolidation.
Investments in companies in which the ability to exercise significant
influence exists (generally 20 to 50 percent owned companies), areaccounted for under the equity method. Consolidated income includes
the Company’s current equity in the net income of a­ ffiliated companies,
after elimination of intercompany profits.
(2) Consolidation of Variable Interest Entities
The consolidated financial statements also include variable i­nterest
entities (“VIEs”) of which the Company is the primary beneficiary.
The Accounting Standards Codification (“ASC”) 810,
“Consolidation,” issued by the Financial Accounting Standards Board(“FASB”) requires the reporting entity to consolidate a variable interest
entity (“VIE”) as its primary beneficiary when it is deemed to have acontrolling financial interest in a VIE, meeting both of the following
characteristics:• The power to direct activities of a VIE that most significantly impact
the VIE’s economic performance.
• The obligation to absorb losses of the VIE that could potentially besignificant to the VIE or the right to receive benefits from the VIEthat could potentially be significant to the VIE.

The Company provides investments, loans and guarantees to­ rganizations managing hospitals and health care-related institutions,oto a company holding real estate, and to a PFI (Private Finance Initiative)
organization which was established to build, maintain and operate correctional facilities. Certain of these organizations are considered VIEs
under ASC 810.
Total assets and liabilities held by VIEs of which the Company is the­primary beneficiary were ¥85,968 million ($788,697 thousand) and¥94,807 million ($869,789 thousand), respectively, at March 31, 2020,and ¥73,396 million and ¥82,725 million, respectively, at March 31,
2019. The creditors of VIEs do not have recourse to the Company’s general credit with the exception of debts guaranteed by the Company.
Total assets and liabilities held by VIEs of which the Company holds­significant variable interests but is not the primary beneficiary were¥28,067 million ($257,495 thousand) and ¥25,738 million ($236,128
thousand), respectively, at March 31, 2020, and ¥28,531 million and¥26,610 million, respectively, at March 31, 2019. The Company’s assets
in the consolidated balance sheets and the Company’s maximum exposure to losses related to VIEs at March 31, 2020 and 2019 were ¥7,273
million ($66,725 ­thousand) and ¥6,851 million, ­respectively.
(3) Revenue Recognition
The Company recognizes revenue based on the following five steps inaccordance with ASC 606, “Revenue from Contracts with Customers.”
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: A llocate the transaction price to the performance obligationsin the contract
Step 5: R ecognize revenue when (or as) the entity satisfies a­performance obligation
The Company generates revenue principally through the sales of­ erchandise and services in the areas of security services, fire protectionmservices, medical services, insurance services, geospatial information­services, BPO and ICT services, and real estate and other services under
separate contractual arrangements.
Revenue from term service contracts, including security services, is­recognized over the contractual period or, in the case of specific s­ ervices,
when such services are rendered. Subscribers are generally requested toprepay a portion of service charges, especially for security services, which
are credited to deferred revenue and recognized in income ratably overthe covered service period. Revenue from the i­nstallation of security
equipment used to provide on-line centralized security services isdeferred and recognized over the contractual period of security services
after completion of the installation. The related installation costs arealso deferred and amortized over the contractual period (Note 2 (13)).
The Company enters into arrangements with multiple elements,
which may include any combination of security equipment, installationand security services. The Company allocates revenue to each element
based on its relative fair value if such element meets criteria for treatment as a separate unit of accounting as prescribed in ASC 606,
“Revenue from Contracts with Customers.” Otherwise, revenue isdeferred until the ­undelivered elements are fulfilled as a single unit ofaccounting.
Revenue from sales of merchandise and software is recognized whenthe merchandise and software are received by the customer and, in thecase of installations, when such installations are completed.
Revenue from construction contracts is recognized on the basis of
the progress of the performance obligation, which is mainly measured
by input methods based on costs incurred.

SECOM Financial Data 202007

Revenue from sales of real estate is recognized when the title of thereal estate is transferred to the customer.
Excluding the aforementioned policy, the policies as specificallydescribed hereinafter are applied for each of revenue items.
Property and casualty insurance premiums are earned ratably over
the terms of the related insurance contracts. Unearned premiums areearned ratably over the terms of the unexpired portion of premiums
written.
Revenue from sales of equipment under sales-type leases is recognized at the inception of the lease. Unearned income on sales-typeleases and direct-financing leases is recognized over the life of each
respective lease using the interest method. Leases not qualifying as­sales-type leases or direct-financing leases are accounted for as operating leases and the related revenue is recognized over the lease term.
Taxes collected from customers and remitted to governmental­authorities on revenue-producing transactions are accounted for on a
net basis and therefore are excluded from net sales and operating­revenue in the consolidated statements of income.
(4) Foreign Currency Translation
All asset and liability accounts of foreign subsidiaries and affiliates aretranslated into Japanese yen at the rates of exchange in effect at yearend and all income and expense accounts are translated at average rates
of exchange during the year. The resulting translation adjustments areaccumulated and reported as part of other c­ omprehensive income (loss).
Foreign currency receivables and payables of the Company are translated into yen at the rate in effect at the balance sheet date and theresulting translation gains and losses are credited or charged to foreign
currency income/expenses for the year.
(5) Cash Equivalents
For the purpose of the consolidated statements of cash flows, theCompany considers all highly liquid investments purchased with initial­maturities of three months or less to be cash equivalents.
(6) Investments in Debt and Equity Securities
The Company classifies investments in debt and equity securities as“available-for-sale” or “held-to-maturity.” The Company has no securities classified as “trading.” “Held-to-maturity” securities are those securities in which the Company has the ability and intent to hold the
security until maturity. All securities not included in “trading” or “heldto-maturity” are classified as “available-for-sale” securities. Marketable
equity securities classified as “available-for-sale” are measured at fairvalue with unrealized gains and losses included in income. Marketabledebt securities classified as “available-for-sale” are measured at fairvalue, and unrealized holding gains and losses are reported as part ofaccumulated other compre­hensive income (loss), net of tax. Debt securities classified as “held-to-­maturity” are reported at amortized cost.
A decline in the fair value of any marketable debt securities classified
as “available-for-sale” below cost that is deemed to be other-than-­temporary results in a reduction in the carrying amount to fair value.
The impairment is charged to income and a new cost basis for the­securities is established. To determine whether an impairment is otherthan-­temporary, the Company considers the length of time and extent
to which the market value of the security has been less than its original
cost, the financial condition, other specific factors affecting the market
value, deterioration of the credit condition of the issuers, and whether
or not the Company is able to retain the investment for a period of time
­sufficient to allow for the anticipated recovery in market value.
Realized gain or losses on the sale of marketable debt securities­classified as “available-for-sale” are based on the moving-average cost
method and are credited or charged to income.

08

SECOM Financial Data 2020

Other investments in non-public companies, except for private equity
investments, are recorded at cost as fair value is not readily determinable. The Company periodically evaluates the values of other investments in non-public companies for possible impairment by taking into
consideration the financial and operating conditions of the issuer, thegeneral market conditions in the issuer’s industry and the period of thedecline in the estimated fair value and other relevant factors. If theimpairment is determined to be other-than-temporary, other investments in non-­public companies are written down to their impaired
value through a charge to income.
(7) Private Equity Investments
The Company accounts for private equity investments in accordancewith ASC 946, “Financial Services—Investment Companies,” in whichinvestments are accounted for at fair value based on the Company’s
assessment of each underlying investment. The investments, by theirnature, have little or no price transparency.
Investments are initially carried at cost as an approximation of fairvalue. Adjustments to carrying value are made if there is evidence of achange in fair value. Downward adjustments are also made, in theabsence of third-party transactions, if it is determined that the
expected realizable value of the i­nvestment has declined below thecarrying value.
The carrying value of private equity investments was ¥10,366 million($95,101 thousand) and ¥13,372 million at March 31, 2020 and 2019,respectively.
Private equity investments are included in investment securities in the
consolidated balance sheets.
(8) Inventories
Inventories, consisting of security-related products, fire protectionrelated products, real estate and other related products, are stated at
the lower of cost. Cost is determined, in the case of real estate,based on the specific identification method and, in the case of otherinventories, primarily using the m­ oving-­average method.
(9) Allowance for Doubtful Accounts
The Company recognizes an allowance for doubtful accounts toensure trade, short-term and long-term receivables, and other receivables are not overstated due to uncollectibility. Allowance for doubtful
accounts is maintained for all customers based on a variety of factors,
including the length of time receivables are past due, macroeconomic
conditions, significant one-time events and historical experience. An
additional reserve for individual accounts is recorded when the
Company becomes aware of a customer’s inability to meet its financial­obligations, such as in the case of bankruptcy filings or deterioration in
the customer’s operating results or financial position. If circumstances
related to customers change, estimates of the r­ ecoverability of­receivables would be further adjusted.
(10) Deferred Insurance Acquisition Costs
Costs that vary with and are primarily related to acquiring new insurance policies are deferred and amortized principally over the premiumpaying period of the related ­insurance policies applying a percentage
relationship of cost incurred to premiums from ­contracts issued to­applicable unearned p­ remiums throughout the period of the contract.
(11) Property, Plant and Equipment and Depreciation
Property, plant and equipment, including significant ­leasehold
improvements, are carried at cost and depreciated at rates based on theestimated useful lives of the assets. Depreciation is computed using thestraight-line method for assets other than security equipment andcontrol stations. Security equipment and control stations are depreciated using the declining-balance method. Assets leased to others under­operating leases are depreciated using the straight-line method over theestimated useful lives. Depreciation expense was ¥55,498 million($509,156 thousand), ¥54,474 mil­lion and ¥54,127 million for theyears ended March 31, 2020, 2019 and 2018, respectively.
Maintenance, repairs and renewals are charged to income as incurred.
The estimated useful lives of depreciable assets are as ­follows:		 Buildings
22 to 50 years
		 Security equipment and control stations
5 to 8 years
		 Machinery, equipment and automobiles
2 to 20 years
The Company recognizes asset retirement obligations if the fair valueof the obligations can be reasonably estimated. Asset retirement obligations include those for which an entity has a legal obligation to perform
an asset retirement activity, however, the timing and/or method of settling the obligation are conditional on a future event that may or may
not be within the c­ ontrol of the entity.
Performance of a contractual asset retirement obligation is required
for the building leased by a certain subsidiary when the lease matures
and the Company returns the leased building to its owner. However, theCompany plans not to relocate from the building and to continue to
use it until it will be demolished without restoration. As such, the execution of such obligation is not expected. The Company evaluated all theavailable evidence as of March 31, 2018 and performed efforts toestablish the best estimate. However, the scope and the amount of execution of the obligation cannot be reasonably estimated. Therefore, anasset ­retirement obligation for that building lease is not recognized.
(12) Leases as lessee
The Company recognizes a right of use asset and a lease liability at
the lease commencement date, for finance leases and operating leases.
Some of the contracts include options to extend or to terminate thelease. The Company take such options into consideration in order todetermine the lease term when it is reasonably certain that it will­exercise these options. The Company use their incremental borrowing
rate based on the information available at commencement to determine
the present values of lease payments. The incremental borrowing rate is
the rate of interest that the Company would have to pay to borrow.
(13) Deferred Charges
Deferred charges primarily consist of costs related to installation services of security equipment used to provide on-line security s­ ystems.
The installation costs are deferred and amortized using the straight-line
method over the contractual period of security s­ ervices after completionof the installation. Amortiza­­tion expense was ¥11,080 million ($101,651
thousand), ¥10,310 million and ¥15,529 million for the years ended
March 31, 2020, 2019 and 2018, respectively.
(14) Impairment or Disposal of Long-Lived Assets
In accordance with ASC 360, “Property, Plant and Equipment,” theCompany reviews the carrying amount of its long-lived assets held andused, other than goodwill and intangible assets with indefinite lives,and assets to be disposed of, whenever events or changes in circumstances ­indicate that the carrying amount may not be recoverable.
Long-lived assets to be held and used are reviewed for impairment bycomparing the carrying amount of the assets with their estimatedfuture undiscounted cash flows. If it is determined that an impairment

loss has occurred, the loss would be recognized during the period, andcalculated as the difference between the assets’ carrying amount andthe fair value. Long-lived assets that are to be disposed of other than bysale are considered held and used until they are disposed of. Long-lived
assets that are to be disposed of by sale are reported at the lower of
their ­carrying amount or fair value less cost to sell. Reductions in the
carrying amount are r­ ecognized in the period in which the long-lived
assets are classified as held for sale.
(15) Goodwill and Other Intangible Assets
Goodwill represents the excess of costs over the fair value of assets ofbusiness acquired. Pursuant to ASC 350, “Intangibles—Goodwill andOther,” goodwill and ­intangible assets acquired in a purchase businesscombination and determined to have an indefinite useful life are notamortized, but instead tested for impairment at least annually. Thisaccounting standard also requires that intangible assets with estimable­useful lives be amortized over their respective estimated useful lives totheir estimated residual v­ alues, and reviewed for impairment in accordance with ASC 360. The Company conducts its annual impairment
test each fiscal year.
(16) Unearned Premiums and Other Insurance Liabilities
Unearned premiums are related to unexpired periods of insurance
contracts and are earned on a pro-rata basis over the remaining contract period. Other insurance liabilities consist principally of liabilities for
unpaid claims and adjustment expenses, which are estimates of payments to be made on reported claims and incurred but not reported
claims, which are computed based on past e­ xperience for unpaid losses.
(17) Income Taxes
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases, and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences and carryforwards are expected to be realized or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date. Valuation allowances arerecorded to reduce deferred tax assets when it is more likely than notthat a tax benefit will not be realized.
The Company recognizes in the consolidated financial statements
the impact of a tax position, if any, based on the technical merits ofthe position, when that position is more likely than not to be sustained
upon examination. The benefit of the tax position is measured at thelargest amount of benefit that has greater than 50 percent likelihood of
being realized upon settlement with the ­appropriate tax authority.
The Company recognizes interest and penalties accrued related tounrecognized tax benefits in income taxes in the consolidated­statements of income.
(18) Research and Development
Research and development costs are charged to income as incurred.
Research and development expenses included in selling, general andadministrative expenses for the years ended March 31, 2020, 2019 and2018 were ¥7,428 million ($68,147 thousand), ¥7,345 million and¥6,383 million, respectively.

SECOM Financial Data 202009

(19) Advertising Costs
Advertising costs are charged to income as incurred, except for thecosts related to insurance policies. Advertising costs for acquiring new
insurance policies are deferred and amortized as part of insurance­acquisition costs. Advertising expenses included in selling, general andadministrative expenses for the years ended March 31, 2020, 2019 and2018 were ¥5,740 million ($52,661 thousand), ¥5,374 million and¥5,011 million, respectively.
(20) Shipping and Handling Costs
Shipping and handling costs included in selling, general and­administrative expenses for the years ended March 31, 2020, 2019 and2018 were ¥1,482 million ($13,596 thousand), ¥1,430 million and¥1,380 m­ illion, respectively.
(21) Derivative Financial Instruments
The Company accounts for derivative financial instruments in­accordance with ASC 815, “Derivatives and Hedging.”
The Company recognizes all derivative financial instruments in the
consolidated financial statements at fair value regardless of the purpose
or intent for holding them. Changes in the fair value of derivative
financial instruments are either recognized periodically in income or inequity as a component of accumulated other comprehensive income(loss) depending on whether the derivative financial instruments qualify
for hedge accounting, and if so, whether they qualify as a fair value
hedge or a cash flow hedge. Changes in the fair values of derivative
financial instruments accounted for as a fair value hedge are recorded
in income along with the portion of the change in the fair value of thehedged item that relates to the hedged risk. Changes in the fair value ofderivative financial instruments accounted for as a cash flow hedge, tothe extent it is effective as a hedge, are recorded in accumulated othercomprehensive income (loss), net of tax. Changes in the fair value ofderivative financial instruments not qualifying as a hedge are reported inincome.
The Company meets the documentation requirements necessaryfor effective hedges which include the risk management objective andstrategy for undertaking various hedge transactions. In addition, formal
assessment is made at inception of the hedge and periodically on an
on-going basis, as to whether the derivatives used in hedging activities
are highly effective in offsetting changes in fair values or cash flows ofhedged items. Hedge accounting is discontinued for ineffective hedges,
if any. Changes in fair value of discontinued hedges are recognized
in income.
(22) Per Share Data
Basic Earnings per Share (“EPS”) is computed based on the average
number of shares of common stock outstanding for the period. The
average number of shares of common stock outstanding for the years
ended March 31, 2020, 2019 and 2018 was 218,261 thousand shares,
218,261 thousand shares and 218,260 thousand shares, respectively.
There were no potentially dilutive shares outstanding during the years
ended March 31, 2020, 2019 or 2018.
Cash dividends per share shown in the accompanying consolidated
statements of income are computed based on dividends approved andpaid in each fiscal year.
(23) Use of Estimates
The preparation of the consolidated financial statements requires
management of the Company to make a number of estimates andassumptions relating to the reported amounts of assets and l­iabilities,

10

SECOM Financial Data 2020

the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues
and expenses during the period. Actual results could differ from thoseestimates. Significant items subject to such estimates and assumptions
include the carrying amounts of inventories, deferred insurance acquisition costs, investment securities, other investments, property, plant andequipment, goodwill, other intangible assets, unearned premiums andother insurance liabilities, valuation of receivables, valuation allowances
for deferred income taxes, valuation of derivative instruments, assets and­obligations related to employee benefits, asset retirement o­ bligations,income tax uncertainties, and other contingencies.
(24) Recent Pronouncements
In February 2016, the FASB issued ASU No. 2016-02 “Leases.” Thisaccounting standard requires lessees to recognize almost all lease assets
and lease liabilities on the balance sheet that arise from lease contracts
which are classified as operating leases. The Company used the­modified retrospective method of adoption and elected the transition
method that allows for application of the standard at the adoption date.
The Company also elected the package of practical expedients of notreassessing lease classifications and others for lease contracts that
expired or exists as of the adoption date. This accounting standard iseffective for fiscal years beginning after December 15, 2018, includinginterim periods within that reporting period and was adopted by theCompany in the fiscal year beginning April 1, 2019. As a result of the
adoption of this accounting standard, the Company recognized¥151,472 million ($1,389,651 thousand) of operating lease right-of-use
assets and ¥151,472 million ($1,389,651 thousand) of operating leaseliabilities on the consolidated balance sheet at April 1, 2019.
In June 2016, the FASB issued ASU No. 2016-13, “Measurement ofCredit Losses on Financial Instruments.” This accounting standard
replaces the current incurred loss methodology that delays recognitionof the full amount of credit losses until the loss was probable of occurring with a methodology that reflects expected credit losses andrequires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This accounting standard was originally planned to be effective for fiscal years beginning
after December 15, 2020, however, in November 2019, the FASB
issued ASU No. 2019-10, “Effective Dates.” which defers the effective
date of ASU No. 2016-13 for public entities excluding Securities andExchange Commission (SEC) filers for two years. Therefore, thisaccounting standard is effective for fiscal years beginning after
December 15, 2022, including interim periods within that reporting
period, and will be adopted by the Company in the fiscal year beginning April 1, 2023. The Company is currently evaluating the effect of
adopting this accounting standard on its consolidated financial­statements.
In January 2017, the FASB issued ASU No. 2017-04, “Simplifying theTest for Goodwill Impairment.” This accounting standard eliminates
Step 2 from the goodwill impairment test. Instead, the amendments
require an entity to perform its annual, or interim, goodwill impairment
test by comparing the fair value of a reporting unit with its carrying
amount and recognize an impairment charge for the amount by which
the carrying amount exceeds the reporting unit’s fair value. Thisaccounting standard is effective for fiscal years beginning after
December 15, 2020, including interim periods within that reporting
period, and will be adopted by the Company in the fiscal year beginning April 1, 2021. The Company is currently evaluating the effect of
adopting this ­accounting standard on its consolidated financial
statements.

In August 2018, the FASB issued ASU No. 2018-12, “Targeted
Improvements to the Accounting for Long-Duration Contracts.” Thisaccounting standard changes the recognition, measurement, presentation and disclosure requirements for long duration contracts. Thisaccounting standard was originally planned to be effective for fiscal
years beginning after December 15, 2020, however, in November
2019, the FASB issued ASU No. 2019-09, “Effective Dates.” which
defers the effective date of ASU No. 2018-13 for public entities excluding Securities and Exchange Commission (SEC) filers for three years.
Therefore, this accounting standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years­beginning after December 15 2024, and will be adopted by theCompany in the fiscal year beginning April 1, 2024. The Company iscurrently evaluating the effect of adopting this accounting standard on
its consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, “Disclosure
Framework—Changes to the Disclosure Requirements for Fair Value
Measurement.” This accounting standard adds to, removes and­modifies the disclosure requirements for fair value measurements.
This accounting standard is effective for fiscal years beginning after
December 15, 2019, and will be adopted by the Company in the fiscal
year beginning April 1, 2020. As this accounting standard is a provision
for presentation only, the adoption will not have an impact on the
Company’s ­consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-14, “Disclosure
Framework—Changes to the Disclosure Requirements for Defined
Benefit Plans.” This accounting standard adds to, removes and clarifies
the disclosure requirements for defined benefit pension or other postretirement plans. This accounting standard is effective for fiscal years­ending after December 15, 2020, and will be adopted by the Company
in the fiscal year beginning April 1, 2020. As this accounting standard is
a provision for presentation only, the adoption will not have an impact
on the Company’s consolidated financial statements.
(25) Discontinued Operations
ASC 205-20, “Discontinued Operations,” requires the operating
results of any component of an entity with its own identifiable operations and cash flows which is disposed of or is classified as held for
sale, and with which the Company will not have significant continuing
involvement to be reported in discontinued operations.
(26) Reclassifications
Certain amounts in the accompanying consolidated financial
statements for the years ended March 31, 2019 and 2018 have been­reclassified to conform to the presentation used for the year ended
March 31, 2020.
3. U.S. Dollar Amounts
U.S. dollar amounts have been included in these financial statements
solely for the convenience of the reader. The translations of yen into
U.S. dollars have been made at the rate of ¥109=US$1, the approximate rate ­prevailing on the Tokyo Foreign Exchange Market on March
31, 2020. These t­ ranslations should not be ­construed as representingthat the yen amounts actually constitute, or have been or could be­converted into U.S. dollars at that rate.

4. Acquisitions
Acquisition of TMJ, Inc.
On October 2, 2017, the Company acquired 100% of commonshares outstanding of TMJ, Inc. for ¥26,550 million in cash. The purpose of this acquisition is to increase corporate value through generating various synergies including further improvements in quality ofexisting business and development and provision of new BPO (Business
Process Outsourcing) services by taking full advantage of the collective
strengths of SECOM and TMJ.
The following table summarizes the estimated fair values of theassets acquired and liabilities assumed at the date of acquisition.
In millions of yen

Cash and cash equivalents.................................................
Cash deposits for armored car services...............................
Other current assets...........................................................
Investments and long-term receivables...............................
Property, plant and equipment...........................................
Intangible assets, including goodwill..................................

¥ 2,654
3,803
290
1,642
1,262
24,919Total assets acquired..........................................................

34,570Current liabilities................................................................
Long-term liabilities............................................................

5,075
2,945

Total liabilities assumed......................................................

8,020

Net assets acquired............................................................

¥26,550

Intangible assets of ¥7,448 million subject to ­amortization includec­ ustomer relationships of ¥6,796 million with a 15-year useful life. The
goodwill of ¥17,471 million represents expected excess earnings power
based on the future business operations. It is not deductible for tax­purposes and has been assigned to the BPO and ICT services segment.
The Company recorded the acquisition costs of ¥274 million related
to this acquisition in selling, general and administrative expenses for theyear ended March 31, 2018.
The following unaudited pro forma information shows the Company’s
consolidated results of operations for the year ended March 31, 2018
as if the newly consolidated subsidiaries acquired in the year ended
March 31, 2018, were consolidated on April 1, 2016.
Unaudited

In millions of yen

Pro forma net sales and operating ­revenue.................
Pro forma net income attributable
to SECOM Co., Ltd. .................................................
Unaudited¥1,099,655
97,714
In yen

Pro forma net income attributable
to SECOM Co., Ltd. per share...................................

¥447.69

The unaudited pro forma data is not necessarily indicative of the­ ompany’s consolidated results of operations that would actually haveCbeen reported if the transaction in fact had occurred on April 1, 2016,
and is not necessarily representative of the Company’s consolidated
results of operations for any future period.

SECOM Financial Data 202011

5. Cash and Cash Equivalents
Cash and cash equivalents at March 31, 2020 and 2019 ­­comprisethe following:
In millions of yen

In thousands of
U.S. dollars

March 31

March 312020

Cash............................................
Time deposits...............................
Call loans.....................................
Investment securities....................

2019

2020

¥400,286 ¥337,195
13,024
12,447——1,358
88¥414,668 ¥349,730$3,672,349
119,486—
12,459$3,804,294

Investment securities include negotiable certificates of deposit andmoney management funds. These agreements mature within threemonths and their carrying values approximate f­ air value. The Company
has not experienced any losses through default of the financial institutions and does not a­ nticipate default of any ­outstanding agreements.
6. Cash Deposits for Armored Car Services
The Company operates cash collection and deposit services for­financial institutions relating to cash dispensers located outside of­financial institution facilities and also operates cash collection and­delivery ­services for entities other than financial institutions. Cashdeposit for armored car services balances are segregated from cash andcash equivalents and are restricted as to use by the Company. The
Company funds most of the cash for such operations through bankoverdrafts and deposits. Bank loans and deposits received, which relate
to these operations, were ¥22,565 million ($207,018 thousand) and¥118,302 million ($1,085,339 thousand), respectively, at March 31,
2020, and ¥21,211 million and ¥121,087 million, respectively, atMarch 31, 2019. As part of its fee arrangement, the Company is­reimbursed for the interest cost of the related overdrafts.
7. Short-Term Investments and Investment Securities
Short-term investments (current) and investment securities­(noncurrent) include debt and equity securities. The related aggregate
fair value, gross unrealized gains, gross unrealized losses and costs­pertaining to “available-for-sale” and “held-to-maturity” investments
at March 31, 2020 and 2019 are as ­follows:

In millions of yen
March 31, 2019
Gross unrealized
Cost

Short-term investments:
Available-for-sale:		Debt securities.............. ¥ 24,460
Held-to-maturity:
		Debt securities..............
—¥ 24,460
Investment securities:
Available-for-sale:		Debt securities.............. ¥111,534
Held-to-maturity:
		Debt securities..............
12,954¥124,488

Investment securities:
Available-for-sale:		Debt securities.............. ¥106,004
Held-to-maturity:
		Debt securities..............
11,509¥117,513

12

SECOM Financial Data 2020

Losses

Cost

Short-term investments:
Available-for-sale:		Debt securities.......... $  268,294
Held-to-maturity:
		Debt securities..........
13,761$  282,055
Investment securities:
Available-for-sale:		Debt securities.......... $  972,514
Held-to-maturity:
		Debt securities..........
105,587$1,078,101¥  3¥ 29,584

9¥  352

—
¥  3

1,509
¥ 31,093¥ 25,294——¥   865 ¥   31

—¥ 25,294¥ 2,644 ¥  320

¥113,858

1,743—¥ 4,387 ¥  320

14,697¥128,555

Gains

LossesFair value$ 3,147 $   28

$  271,413

83—$ 3,230 $   2813,844$  285,257$27,716 $5,211$  995,019

13,404—$41,120 $5,211

118,991$1,114,010

Gross unrealized losses on, and fair value of, “available-for-sale” and“held-to-maturity” securities, aggregated by invest­ment ­category andthe length of time that individual securities have been in a continuous
unrealized loss position at March 31, 2020 are as follows:
In millions of yen
March 31, 2020
Less than 12 months

12 months or longer

Fair valueGrossunrealized
lossesFair valueGrossunrealized
lossesAvailable-for-sale:
Debt securities..............

¥37,691

¥571

¥—

¥—

Held-to-maturity:
Debt securities..............

¥     —

¥ —

¥—

¥—

Fair value¥  343¥   865 ¥   31March 31, 2020

March 31, 2020
Gains

Fair value

Gross unrealized

Gross unrealized
Cost

LossesIn thousands of U.S. dollars

In millions of yen

Short-term investments:
Available-for-sale:		Debt securities.............. ¥ 29,244
Held-to-maturity:
		Debt securities..............
1,500¥ 30,744

Gains

In thousands of U.S. dollars
March 31, 2020

¥3,021¥568¥108,457

1,461¥4,482—¥568

12,970¥121,427

Less than 12 months

12 months or longer

Fair valueGrossunrealized
lossesFair valueGrossunrealized
lossesAvailable-for-sale:
Debt securities..............

$345,789$5,239$—$—Held-to-maturity:
Debt securities..............

$       —

$     —$—$—

Based on the Company’s ability and intent to hold the investments
for a reasonable period of time sufficient for a recovery of fair value,
the credit condition of the issuers and other relevant factors, theCompany does not consider these investments to be other-than-­temporarily impaired at March 31, 2020.
At March 31, 2020, debt securities principally consisted of short-term
investments in monetary trusts, Japanese government bonds, corporate
bonds, U.S. treasury securities and U.S. Government Agency Bonds.
The cost and fair value of “available-for-sale” and “held-tomaturity” debt securities by contractual maturity at March 31, 2020are as follows:
In millions of yen

The Company maintains long-term investment securities, issued bya number of non-public companies, included as investment securities
in the consolidated balance sheets. The aggregate carrying amount of
the investments in non-public companies, at cost net of other-than-­temporary impairment, was ¥11,911 million ($109,275 thousand) and¥10,890 million at March 31, 2020 and 2019, respectively. The corresponding fair value at that date was not computed as such estimation
was not practicable and no significant events or changes that might
have affected the fair value of the investments were observed.
8. Inventories
Inventories at March 31, 2020 and 2019 comprise the ­following:

March 31, 2020
Available-for-saleDue within 1 year......
Due after 1 year
through 5 years.......
Due after 5 years
through 10 years.....
Due after 10 years.....

Held-to-maturity

Cost

Fair value

Cost

Fair value¥ 29,244¥ 29,584¥ 1,500¥ 1,50980,652

81,767117

122

11,407
13,945¥135,248

12,30914,381¥138,041—
11,392¥13,009—
12,848¥14,479

In thousands of U.S. dollars
March 31, 2020
Available-for-sale
Cost

Held-to-maturity

Fair value

Cost

Fair value

Due within 1 year...... $  268,294 $  271,413
Due after 1 year
through 5 years.......
739,927
750,156
Due after 5 years
through 10 years.....
104,651
112,927
Due after 10 years.....
127,936
131,936$1,240,808 $1,266,432$ 13,761$ 13,844

1,073

1,119

—
104,514$119,348—
117,872$132,835

Proceeds from the sale of “available-for-sale” securities for the years
ended March 31, 2020, 2019 and 2018 were ¥35,559 million($326,229 thousand), ¥11,603 million and ¥26,488 million, respectively. On those sales, the gross realized gains and gross realized losses,
using a moving-average cost basis, for the years ended March 31,
2020, 2019 and 2018 are as follows:

Gross realized gains............
Gross realized losses............

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2020

2019

2018

2020

¥1,354273¥1,45753¥1,689268$12,422
2,505

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2020

2019

2020

Security-related products................... ¥ 9,123 ¥ 8,611
Fire protection-related products......... 11,422
12,160Real estate......................................... 26,738
36,607
Other-related products.......................
9,014
8,567
¥56,297 ¥65,945$ 83,697
104,789245,30382,697$516,486

Work in process for real estate inventories at March 31, 2020 and
2019, amounting to ¥21,807 million ($200,064 thousand) and¥30,743 million, respectively, are included in real estate.
The amount of write-down on real estate inventories included incost of sales for the years ended March 31, 2020, 2019 and 2018
were ¥66 million ($606 thousand), ¥580 million and ¥865 million,
respectively.
9. Credit Quality of Financing Receivables and Allowancefor Doubtful Accounts
The Company has financing receivables and classifies them into four­categories: “lease receivables,” “loans receivable resulting from medical s­ ervices,” “other loans receivable” and “other.” Financing receivables classified as “lease receivables” are resulting from leasetransactions of ­security ­merchandise and security systems.
The Company continuously monitors overdue financing receivables
which, the Company considers, have a risk of uncollectability. For­financing receivables with specific customer collection issues, theCompany individually evaluates their collectability in order to determine
the amount of allowance for doubtful accounts. For other financing
receivables, the Company categorizes these receivables into groups by
their nature and characteristics. The Company collectively evaluates thecollectability of each group, using its historical experience of write-offs
and ­determines the amount of allowance for doubtful accounts.

SECOM Financial Data 202013

Financing receivables and allowance for doubtful accounts at March
31, 2020 and 2019 are as follows:

In thousands of U.S. dollars
Year ended March 31, 2020

In millions of yen

Loansreceivable
resulting fromLease
medical Other loans
receivables
services receivableYear ended March 31, 2020
Loans
receivable
resulting fromLease
medicalreceivables
services

Allowance for
doubtful accounts:
Balance at
beginning of year.........
Provision (Reversal)....
Charge off.................
Other.........................
Balance at
end of year..................
Individually
evaluated................
Collectively
evaluated................
Financing receivables:
Individually
evaluated................
Collectively
evaluated................

Other
loans
receivable

Other

Total

¥   237(88)
55—¥2,367(2)——¥  48484(2)—¥1,162 ¥ 4,250
(49)
(55)
(23)
30
—
—

204

2,365

566

1,090

4,225

186

2,365

566

1,090

4,207

¥    18¥   —¥    0¥   —¥    18¥   297¥5,155¥  885¥1,262¥ 7,599

51,251

480

1,384

143

53,258¥51,548¥5,635¥2,269¥1,405¥60,857

In millions of yen
Year ended March 31, 2019

Allowance for
doubtful accounts:
Balance at
beginning of year.........
Provision (Reversal)....
Charge off.................
Other........................
Balance at
end of year..................
Individually
evaluated................
Collectively
evaluated................
Financing receivables:
Individually
evaluated................
Collectively
evaluated................

14

Lease
receivables

Loans
receivable
resulting frommedicalservices

Other
loans
receivable¥   275(70)
32—¥2,373(6)——¥  539
(55)
—
—

Other

Total

Allowance for
doubtful accounts:
Balance at
beginning of year......... $  2,174
Provision (Reversal)....
(807)
Charge off.................
505
Other.........................
—
Balance at
end of year..................
1,872
Individually
evaluated................
1,707
Collectively
evaluated................ $    165

Other

Total

$21,716 $ 4,440 $10,661 $ 38,991
(19)
771
(450)
(505)
—
(18)
(211)
276
—
—
—
—
21,697

5,193

10,00038,762

21,697

5,193

10,00038,597$    —$     0$    — $    165

Financing receivables:
Individually
evaluated................ $  2,724
Collectively
evaluated................ 470,193$47,293$ 8,120$11,578 $ 69,715

4,404

12,697$472,917$51,697$20,817

1,312

488,606$12,890 $558,321

The Company considers receivables are past due and the financial
position of the debtor to be credit quality indicators and classifies­financing receivables into Overdue and Current. Financing receivables
determined to have no prospects for collecting contractual interest on
the basis of being past due and other factors are placed on ­nonaccrual
status.
The aging analysis of the recorded financing receivables and financing receivables on nonaccrual status at March 31, 2020 and 2019 are
as follows:
In millions of yen
March 31, 2020

¥1,216 ¥ 4,403
(54)
(185)
(0)
32
—
—

Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Other

Total

¥51,251297¥5,60134¥1,406863¥  849556¥59,107
1,750

237

2,367

484

1,162

4,250

Current............................
Overdue...........................

169

2,367

484

1,162

4,182

Total:
Financing receivables.....

¥51,548¥5,635¥2,269¥1,405¥60,857¥    68¥   —¥    0¥   —¥    68

Financing receivables
on nonaccrual status......

¥    —¥    1¥  885¥   —¥   886¥   277¥5,142¥  832¥1,407¥ 7,658

50,374

579

1,277

199

52,429¥50,651¥5,721¥2,109¥1,606¥60,087

SECOM Financial Data 2020

In millions of yen
March 31, 2019
Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Other

Total

Current............................
Overdue...........................

¥50,374277¥5,68536¥1,310799¥  957649¥58,326
1,761

Total:
Financing receivables.....

¥50,651¥5,721¥2,109¥1,606¥60,087

Financing receivables
on nonaccrual status......

¥    —¥    3¥  833¥   —¥   836

In thousands of U.S. dollars
March 31, 2020
Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Other

Total

Current............................ $470,192
Overdue...........................
2,725$51,385 $12,900 $ 7,789 $542,266
312
7,917
5,101
16,055

Total:
Financing receivables..... $472,917$51,697 $20,817 $12,890 $558,321

Financing receivables
on nonaccrual status...... $     —$     9 $ 8,119 $    — $  8,128

Impaired receivables and the related allowance for doubtful
accounts at March 31, 2020 and 2019 are as follows:
March 31, 2020

Impaired receivables.........
Related allowance for
doubtful accounts..........

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2020

In millions of yen
Loansreceivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

10. Investments in Affiliated Companies
The Company has investments in affiliated companies that are
accounted for under the equity method. Investments principally consistof Taiwan Secom Co., Ltd., a 28.7 percent owned affiliate, which islisted on the Taiwan Stock Exchange; S1 Corporation, a 28.8 percent
owned affiliate, which is listed on the Korea Exchange; and Toyo Tech
Co., Ltd., a 27.9 percent owned affiliate, which is listed on the Second
Section of the Tokyo Securities Exchange.
Combined financial information for the affiliated ­companies
accounted for under the equity method is as ­follows:

Other

Total

¥297

¥5,155¥885¥1,262¥7,599

186

2,365

566

1,090

4,207

2019

2020

Current assets................................. ¥140,422 ¥133,699
Noncurrent assets........................... 189,945 188,009$1,288,275
1,742,615

Total assets................................. ¥330,367 ¥321,708$3,030,890

Current liabilities............................. ¥ 87,359 ¥ 78,969
Long-term liabilities.........................
37,61440,801Equity............................................. 205,394 201,938$  801,458
345,083
1,884,349

Total liabilities and equity............ ¥330,367 ¥321,708$3,030,890

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

In millions of yen
March 31, 2019
Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Impaired receivables.........
Related allowance for
doubtful accounts..........

2020
Other

Total

¥277

¥5,142¥832¥1,407¥7,658

169

2,367

484

1,162

4,182

2018

2020

Net sales........................ ¥292,856 ¥289,172 ¥283,066$2,686,752

Gross profit.................... ¥ 78,425 ¥ 81,096 ¥ 83,626$  719,495

Net income
attributable toaffiliated companies..... ¥ 23,549 ¥ 20,435 ¥ 25,266$  216,046

2019

In thousands of U.S. dollars
March 31, 2020
Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Impaired receivables.........
Related allowance for
doubtful accounts..........

Other

Total

$2,724$47,293$8,120 $11,578$69,715

1,707

21,697

5,193

38,597

10,000

The average amounts of impaired receivables for the year ended
March 31, 2020 are as follows:
In millions of yen
Loansreceivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Average amounts of
impaired receivables.......

¥287¥5,149

¥858

Other

Total

¥1,335¥7,629Dividends received from affiliated companies for the years ended
March 31, 2020, 2019 and 2018 were ¥4,112 million ($37,725­thousand), ¥4,390 million and ¥4,199 million, respectively.
Three listed affiliated companies accounted for under the equity
method with an aggregated carrying amount of ¥55,118 million($505,670 thousand) and ¥54,608 million at March 31, 2020 and
2019, respectively, had a quoted market value of ¥109,766 million($1,007,028 thousand) and ¥138,854 ­million at March 31, 2020 and
2019, respectively.
The amounts of goodwill included in the carrying amount of investments in affiliated companies were ¥4,545 million ($41,697 thousand)and ¥4,665 million at March 31, 2020 and 2019, respectively.

In thousands of U.S. dollars
Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Average amounts of
impaired receivables.......

$2,633$47,239

Other

Total

$7,872 $12,248$69,992

SECOM Financial Data 202015

A summary of transactions and balances with the affiliated­companies accounted for under the equity method is presented below:
In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2020

2019

2018

2020

Sales..............................

¥1,291¥1,422¥1,371$11,844

Purchases.......................

¥9,531¥6,965¥6,293$87,440

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2019

2020

2020

Notes and accounts
receivable, trade..............................

¥  401¥  490$ 3,679

Loans receivable.................................

¥  225¥  331$ 2,064

Notes and accounts payable...............

¥2,430¥3,128$22,294

Guarantees for bank loans.................

¥   —

¥   —

$    —The Company’s equity in undistributed income of affiliates at
March 31, 2020 and 2019 included in retained earnings was ¥41,752­million ($383,046 thousand) and ¥39,466 million, respectively.
11. Long-Lived Assets
The Company has assessed the potential impairment of its long-lived
assets. As a result of a significant decrease in revenue forecasts, theCompany principally recognized impairment losses on certain businessassets of the BPO and ICT services segment for the year ended March
31, 2020, on certain business assets of the geospatial information­services segment for the year ended March 31, 2019, and on certain­business assets of the BPO and ICT services segment for the year ended
March 31, 2018. The fair value was determined based on the e­ stimated­present value of future cash flows or appraisal value.
Impairment losses on long-lived assets by b
­ usiness segment for theyears ended March 31, 2020, 2019 and 2018 are as follows:

12. Goodwill and Other Intangible Assets
The components of acquired intangible assets, excluding goodwill,at March 31, 2020 and 2019 are as ­follows:
In millions of yen
March 31, 2020
Gross		Netcarrying Accumulated
carrying
amountamortization
amountAmortized intangible assets:
Software........................................ ¥ 68,867
Other............................................. 40,619
		¥109,486(¥41,187)(14,198)(¥55,385)¥27,680
26,421¥54,101

Unamortized intangible assets............ ¥  4,713¥    —¥ 4,713

In millions of yen
March 31, 2019
Gross		Netcarrying Accumulated
carrying
amountamortization
amountAmortized intangible assets:
Software........................................ ¥ 63,865
Other............................................. 40,765
		¥104,630
Unamortized intangible assets............ ¥  4,177(¥38,759)(12,156)(¥50,915)¥25,106
28,609¥53,715¥     —

¥ 4,177

In thousands of U.S. dollars
March 31, 2020
Gross		Netcarrying Accumulated
carrying
amountamortization
amountAmortized intangible assets:
Software.................................. $  631,807
Other.......................................
372,651
		
$1,004,458($377,862) $253,945(130,257) 242,394($508,119) $496,339

Unamortized intangible assets...... $   43,239$     — $ 43,239

		In thousands ofAggregate amortization expense for the years ended March 31,
In millions of yen
U.S. dollars
2020, 2019 and 2018 was ¥10,996 million ($100,881 thousand),Years ended
Year ended¥10,516 million and ¥9,299 million, respectively. Amortized intangible
March 31
March 31
assets are amortized using the straight-line method over their esti2020
2019
2018
2020
mated useful lives. The weighted average amortization period for
Security services.....................
¥201¥ 11 ¥ 47$1,844internal use software is ­approximately five years.
Fire protection services...........
48
23
15
440
The estimated aggregate amortization expense for i­ntangible assets
Medical services.....................
————
for the next five years is as follows:
Insurance services..................
Geospatial information
services................................
BPO and ICT services..............
Real estate andother services.......................
Corporate items.....................

		Total...............................

16

SECOM Financial Data 2020

—

—

—

—

259
437

545
16

364
415

2,377
4,009

7
—

—
—

—
—

64
—

¥952

¥595

¥841

$8,734		Years ending March 31
In millions of yen

2021......................................................
2022......................................................
2023......................................................
2024......................................................
2025......................................................

¥11,544
9,463
8,125
6,745
4,291

In thousands of
U.S. dollars$105,908
86,81774,541
61,88139,367

The changes in the carrying amount of goodwill by business­segment for the years ended March 31, 2020 and 2019 are as follows:
In millions of yen					
Security		services

Fire		 Geospatial		 Real estate
protection
Medical information BPO and ICT and otherservices
services
services
services
services

Total

Goodwill................ ¥62,788 ¥1,999 ¥9,399 ¥4,575 ¥35,114 ¥1,962 ¥115,837
Accumulated
impairment
losses................... (2,879)— (5,361)(775)(175) (135)(9,325)
March 31, 2018..... 59,909
1,999 4,038
3,800
34,939 1,827
106,512Goodwill acquired
during the year.... 1,623
—
—
—
—
—
1,623
Disposal.................
—
—
—
—
—
—
—
Impairment
losses...................
—
—
—
—
—
—
—
Translation
adjustment..........
(12)
—
—
(1)
—
—
(13)
Goodwill................ 64,399
1,999 9,399
4,574
35,114 1,962
117,447
Accumulated
impairment
losses................... (2,879)— (5,361)(775)(175) (135)(9,325)
March 31, 2019..... 61,520
1,999 4,038
3,799
34,939 1,827
108,122
Goodwill acquired
during the year.... 1,768
—
—
—
—
—
1,768
Disposal.................
—
—
—
(134)
—
—
(134)
Impairment
losses...................
(758)
—
—
—
—
—
(758)
Translation
adjustment..........
(72)
—
—
(1)
—
—
(73)
Goodwill................ 66,095
1,999 9,399
4,439
35,114 1,962
119,008
Accumulated
impairment
losses................... (3,637)— (5,361)(775)(175) (135)(10,083)
March 31, 2020.... ¥62,458 ¥1,999 ¥4,038 ¥3,664 ¥34,939 ¥1,827 ¥108,925
In thousands of U.S. dollars
					
Security		services

Fire		 Geospatial		 Real estate
protection
Medical information BPO and ICT and otherservices
services
services
services
services

Total

Goodwill................ $590,817 $18,339 $86,229 $41,963 $322,147 $18,000 $1,077,495
Accumulated
impairment
losses................... (26,413)— (49,183) (7,110)(1,606) (1,239)(85,551)
March 31, 2019..... 564,404 18,339 37,046 34,853 320,541 16,761
991,944
Goodwill acquired
during the year.... 16,220
—
—
—
—
—
16,220
Disposal.................
——— (1,229)——(1,229)Impairment
losses................... (6,954)
—
—
—
—
—
(6,954)
Translation
adjustment..........
(660)
—
—
(9)
—
—
(669)
Goodwill................ 606,377 18,339 86,229 40,725 322,147 18,000 1,091,817
Accumulated
impairment
losses................... (33,367)— (49,183) (7,110) (1,606) (1,239)(92,505)
March 31, 2020.... $573,010 $18,339 $37,046 $33,615 $320,541 $16,761 $   999,312

13. Bank Loans and Long-Term Debt
Bank loans of ¥39,002 million ($357,817 thousand) and ¥38,658
million at March 31, 2020 and 2019, respectively, are generally comprised of 30 to 365 day notes. The weighted average interest rate was
1.19 percent and 0.68 percent at March 31, 2020 and 2019, respectively. Substantially all of these loans are borrowed from banks. The
Company has entered into basic agreements with these banks whichstate that, with respect to all present or future loans with such banks,
collateral (including sums on deposit with such banks) or guarantors
shall be provided immediately upon request. Further, any collateral furnished pursuant to such agreements or otherwise will be applicable toall indebted­ness to such banks. The Company has not been requested
to submit such ­additional security.
At March 31, 2020, Nohmi Bosai Ltd. and Arai & Co., Ltd., subsidiaries of the parent company, had an unused committed line of credit
from a short-term arrangement of ¥6,800 million ($62,385 thousand).
The line of credit expires in March 2021. Under the agreement, Nohmi
Bosai Ltd. is required to pay commitment fees, at an annual rate of
0.15 percent, on the unused portion of the line of credit. The line ofcredit expires in April 2041. Under the agreement, Arai & Co., Ltd. isrequired to pay commitment fees, at an annual rate of 0.55 percent
and Japanese yen one month Tokyo Interbank Offered Rate (tibor), on
the unused portion of the line of credit. At March 31, 2020, theCompany had overdraft agreements with 39 banks and its unusedlines of credit amounted to ¥74,316 million ($681,798 thousand). The
Company incurs no fee on the unused portion of these overdraft
agreements. The overdraft agreements expire in the period from April
2020 to March 2021. The Company has the ­ability and intent toextend these overdraft agreements under ­similar terms and conditions.
Long-term debt at March 31, 2020 and 2019 comprises the ­following:		In thousands ofIn millions of yen

U.S. dollars

March 31

March 31

		
2020
2019
2020

Loans, principally from banks due
2019–2041 with interest rates
ranging from 0.07% to 29.00%:
Secured............................................. ¥10,729 ¥12,270
Unsecured......................................... 19,003 20,426
0.38% unsecured bonds due 2021.......
497
493
0.26% unsecured bonds due 2021.......
30
50
0.25% unsecured bonds due 2021.......
30
50
0.31% unsecured bonds due 2023.......
26
33
0.40% unsecured bonds due 2024.......
17
22
0.29% unsecured bonds due 2022.......
20
30
Unsecured bonds due 2019–2040
with floating interest rates basedon 6-month Japanese yen TIBOR......... 6,314
5,946
Obligations under finance leases,
due 2019–2043 (Note 19)................... 25,572 24,469
			................................................. 62,238 63,789
Less: Portion due within one year.......... (17,983) (18,447)
			 ................................................. ¥44,255 ¥45,342$ 98,431
174,339
4,560
275
275
239
156
183
57,926234,607
570,991(164,982)$406,009

Impairment losses on goodwill recognized in the above table aremainly due to decreases in the estimated fair value of reporting units
in each segment mainly caused by decreases in projected cash flows.
The fair value is deter­mined based on the estimated present value of
future cash flows.

SECOM Financial Data 202017

Assets pledged as collateral for bank loans and long-term debt at
March 31, 2020 and 2019 are as follows:

Net sales and operating revenue of Secom Insurance include net
realized investment gains and losses, including gains and losses onsales of securities, losses on other-than-temporary impairment of		In thousands ofinvestment securities and impairment losses on long-lived assets.
In millions of yen
U.S. dollars
Net realized investment gains and losses, including losses on otherMarch 31
March 31
than-temporary impairments, for the years ended March 31, 2020,
		
2020
2019
2020
2019 and 2018 were losses of ¥4,136 million ($37,945 thousand) andTime deposits......................................... ¥ 1,234 ¥ 1,349$ 11,321¥4,016 million, and gains of ¥694 million, respectively. Losses on otherShort-term and long-term receivables.... 6,194 6,166
56,826than-­temporary impairments of investment securities for the years
Investment securities.............................. 1,275 1,319
11,697
ended March 31, 2020, 2019 and 2018 were ¥4,802 ­million ($44,055
Property, plant and equipment............... 44,195 43,637
405,459­thousand), ¥5,032 million and ¥142 ­million, respectively.
Other intangible assets........................... ¥   818 ¥   818$  7,505
The aggregate annual maturities on long-term debt at March 31,
2020 are as follows:		Years ending March 31
In millions of yen

2021.....................................................
2022.....................................................
2023.....................................................
2024.....................................................
2025.....................................................
Thereafter..............................................
............................................................

¥17,983
12,392
10,366
6,255
3,703
11,539¥62,238

In thousands of
U.S. dollars$164,982
113,688
95,101
57,38533,972
105,863$570,991

14. Insurance-Related Operations
Secom General Insurance Co., Ltd. (“Secom Insurance”), a­subsidiary of the parent company, maintains accounting records as
noted in Note 2 in accordance with Japanese GAAP, which vary in certain respects from U.S. GAAP. Those differences are principally, (a) that
insurance acqui­sition costs are charged to expense when incurredunder Japanese GAAP whereas under U.S. GAAP, those costs aredeferred and amortized generally over the premium-­paying period of
the insurance policies, (b) that liabilities related to incurred but notreported claims are computed based on related regulations in Japan
whereas under U.S. GAAP, those liabilities are computed based on
past experience for ­unreported losses, and (c) that unearned premiums are calculated based on the documents authorized by theSupervisory Authorities in Japan whereas under U.S. GAAP, unearned
premiums are reflected based on the lapse and ­surrender over thecontract period.
In addition, under certain property and casualty insurance contracts
with a refund clause and long-term insurance policies that p­ rovide
refunds at maturity, such as personal accident and fire, the policyholder receives a refund if premiums have been fully paid unless a­substantial settlement (as defined in the ­policy) has occurred. The
Company has provided for such refundable amounts by classifying a
portion of the net pre­mi­ums written, together with interest thereon,as investment deposits by policyholders. Contract and policy terms are­principally five years.
For purposes of preparing the consolidated financial s­ tate­ments,
appropriate adjustments have been made to reflect such items in­accordance with U.S. GAAP.
The net equity of Secom Insurance at March 31, 2020 and 2019 was¥67,850 million ($622,477 thousand) and ¥72,174 million, respectively.

18

SECOM Financial Data 2020

15. Pension and Severance Costs
Employees of the parent company and its domestic ­subsidiaries
whose services are terminated are, under most ­circumstances, ­eligible
for lump-sum benefits and/or ­eligible for pension benefits.
The parent company and certain domestic subsidiaries have adopted
a cash balance pension plan and a defined contribution pension plan.
Benefits under the cash balance pension plan are ­calculated as a­certain percentage of employees’ annual income over their period ofservice, plus interest calculated as the 3-year average yield for 10-year
government bonds. The defined contribution pension plan was established in April 2003, by transferring a portion equivalent to 20 percentof the cash balance pension plan, including portions funded in priorperiods. A ­specified percentage of employees’ annual income is­contributed to the defined ­contribution pension plan.
In April 2005, the parent company and certain domestic subsidiaries
transferred an additional portion of the cash balance pension plan tothe defined contribution pension plan. Accord­ingly, the ratio of theaccumulated amount in the cash balance pension plan and the amountof contributions to the defined contribution pension plan changed to
70 percent and 30 percent, including portions funded in prior periods.
Net periodic pension and severance costs for the years ended
March 31, 2020, 2019 and 2018 are as follows.
The service cost component of net periodic pension cost and severance cost for the Company’s cash balance pension plan is included incost of sales and selling, general and administrative expenses in the
consolidated statements of income. The components other than the­service cost component are included in other income in the­consolidated s­tatements of income.

		
In thousands of2020

In millions of yen

U.S. dollars

Years ended
March 31

Year ended
March 31

2019

2018

Net periodic pension andseverance costs:
Service cost............................ ¥8,016 ¥7,787 ¥7,996
Interest cost...........................
314
398
404
Expected return onplan assets........................... (3,312) (3,254) (3,109)
Amortization of priorservice benefit......................
(1)(4) (306)
Recognized actuarial loss........
185
176
287
Transfer to the defined
contribution pension plan....
444——
		 Net periodic pension
		 and severance costs......... ¥5,646 ¥5,103 ¥5,272

2020$73,541
2,881(30,385)
(9)
1,697
4,073
$51,798

The changes in benefit obligation, plan assets and funded s­ tatus are
as follows:

Other changes in plan assets and benefit obligations ­recognized inother comprehensive income (loss) for the year ended March 31, 2020are summarized as follows:		In thousands ofIn millions of yen

U.S. dollars

Years ended
March 31

Year ended
March 31

		
2020
2019
2020

Change in benefit obligation:
Benefit obligation
at beginning of year................ ¥116,147 ¥113,324
Service cost...............................
8,016
7,787
Interest cost..............................
314
398
Actuarial (gain) loss...................
1,022
(154)
Prior service benefit...................
16—
Benefits paid.............................
(5,980)(6,586)
Acquisition................................
—
1,723
Transfer to the defined
contribution pension plan........
(617)
(140)
Transfer of the substitutional
portion of the welfare
pension fund..........................
—(205)
Other........................................
(3)—
Benefit obligation
at end of year......................... 118,915
116,147
Change in plan assets:
Fair value of plan assets
at beginning of year................ 123,723
125,349
Actual return on plan assets......
(1,745)(142)
Employer contribution...............
2,794
2,256
Benefits paid.............................
(4,387)(4,572)Acquisition................................
—
1,016
Transfer to the defined
contribution pension plan.......
(1,025)—
Transfer of the substitutional
portion of the welfare
pension fund..........................
—(260)
Other........................................
(48)
76
Fair value of plan assets
at end of year......................... 119,312
123,723
Funded status
at the end of year....................... ¥    397 ¥  7,576$1,065,569
73,541
2,881
9,376
147
(54,862)—		In thousands ofIn millions of yen

Current year actuarial loss........................
Amortization of actuarial loss...................
Transfer to the defined contribution
pension plan..........................................
Current year prior service benefit.............
Amortization of prior service benefit........
			

1,090,964$55,770(1,697)(35)
16
1¥5,876(321)
147
9$53,908

Amounts recognized in accumulated other comprehensive income(loss) at March 31, 2020 and 2019 consist of:		
In thousands of(5,661)—(27)

U.S. dollars¥6,079(185)

In millions of yen

U.S. dollars

March 31

March 31

		
2020
2019
2020

Actuarial loss......................................
Prior service benefit.............................
			Net amount recognized...........

¥9,675248¥9,923$88,7622,275$91,037¥3,816231¥4,047The estimated prior service benefit and actuarial loss for the defined
benefit pension plans that will be amortized from accumulated other
1,135,073
comprehensive income (loss) into net periodic benefit cost over the(16,009)
next year are ¥–27 million ($–248 thousand) and ¥202 million ($1,853
25,633­thousand), respectively.
(40,247)
The accumulated benefit obligation for the pension plan was—¥118,612 million ($1,088,183 thousand) and ¥115,843 million at(9,404)
March 31, 2020 and 2019, respectively.
The projected benefit obligation, accumulated benefit ­obligationand fair value of plan assets for the pension plans with ­accumulated—
benefit obligation in excess of plan assets were ¥52,018 million(440)($477,229 ­thousand), ¥51,714 million ($474,440 thousand) and¥22,071 million ($202,486 thousand), respectively, at March 31, 2020,
1,094,606
and ¥51,666 million, ¥51,362 million and ¥18,580 million, ­respectively,
at March 31, 2019.
$    3,642
The Company uses March 31 as the measurement date for the­domestic pension plan.
Amounts recognized in the consolidated balance sheets at
Weighted-average assumptions used to determine the benefit
March 31, 2020 and 2019 consist of:­obligation at March 31, 2020 and 2019 are as follows:		In thousands ofIn millions of yen

U.S. dollars

March 31

March 31

		
2020
2019
2020

Prepaid pension andseverance costs.............................
Accrued pension andseverance costs.............................
			Net amount recognized.......

¥31,790¥38,489$291,651(31,393) (30,913)¥   397 ¥ 7,576(288,009)$  3,642

		 March 31

Discount rate..............................................................
Rate of compensation increase....................................

2020

2019

0.4%
2.5%

0.3%
2.2%

Weighted-average assumptions used to determine net ­pension andseverance costs for the years ended March 31, 2020, 2019 and 2018
are as follows:
Years ended March 31

Discount rate..............................................
Expected return on plan assets....................
Rate of compensation increase....................

2020

2019

2018

0.3%
3.0%
2.2%

0.4%
3.0%
2.6%

0.4%
3.0%
2.7%

The Company determines the expected long-term rate of return basedon the expected long-term return of the various asset categories in which
it invests. The Company considers the current expectations for future
returns and the actual ­historical returns of each plan asset category.

SECOM Financial Data 2020

19

The Company’s investment policy is designed to ensure that sufficient plan assets are available to provide future p­ ayments of pension
benefits to the eligible plan participants. Plan assets set target allocations for the individual asset categories and are invested primarily inequity and debt securities, and other assets such as real estate with theobjective to minimize risk and achieve the expected rate of return. The
investment results are ­periodically checked and asset allocation isadjusted to target allocations as necessary.
The following table represents the fair value of the Company’s­pension plan assets at March 31, 2020 and 2019. The three levels of
inputs used to measure fair value are more fully described in Note 22.
				 In millions of yen
				March 31, 2020

Cash and cash
equivalents................
Equity securities
Japanesecompanies.............
Foreigncompanies.............
Debt securities
Government
bonds....................
Non-government
bonds....................
Pooled funds................
Call loans.....................
Insurance contracts......
Other...........................

Level 1

Level 2

Level 3

Total

¥12,919¥    —¥    —¥ 12,919

2,799

—

424

3,223

2,538

—

—

2,538

2,592

113

—

2,705

—
384
—
—
8
¥21,240—
44,584
5,761
14,142282¥64,882—
32,058——708¥33,190—
77,026
5,761
14,142
998¥119,312* The plan’s government bonds include approximately 5% Japanese bonds and
95% f­ oreign bonds.
* The pension investment trust fund included in the plan’s pooled funds is classified
as Level 2, and invests approximately 30% in equity securities, 50% in debt
­securities and 20% in other investments. The unquoted beneficial certificate of
security investment trust included in the plan’s pooled funds is c­ lassified as Level 3.

In thousands of U.S. dollars
				March 31, 2020
Level 1

Cash and cash
equivalents................
Equity securities
Japanesecompanies.............
Foreigncompanies.............
Debt securities
Government
bonds....................
Non-government
bonds....................
Pooled funds................
Call loans.....................
Insurance contracts......
Other...........................

Level 1

Level 2

Level 3Total

¥ 6,618¥    —¥    —¥  6,618

22,944—424

23,368

5,240

—

—

5,240

2,485

414

—

2,899

—
411
—
—
2
¥37,700—
47,3453,770
13,493448¥65,470—
19,545——584¥20,553—
67,301
3,770
13,493
1,034¥123,723* The plan’s government bonds include approximately 10% Japanese bonds and
90% f­ oreign bonds.
* The pension investment trust fund included in the plan’s pooled funds is classified
as Level 2, and invests approximately 50% in equity securities, 40% in debt
­securities and 10% in other investments. The unquoted beneficial certificate of
security investment trust included in the plan’s pooled funds is c­ lassified as Level 3.

20

SECOM Financial Data 2020

Level 3Total$  118,523
29,56923,284
24,817—
706,661
52,853
129,743
9,156$1,094,606* The plan’s government bonds include approximately 5% Japanese bonds and95% ­foreign bonds.
* The pension investment trust fund included in the plan’s pooled funds is classified
as Level 2, and invests approximately 30% in equity securities, 50% in debt
­securities and 20% in other investments. The unquoted beneficial certificate of
security investment trust included in the plan’s pooled funds is c­ lassified as Level 3.

The following table represents the changes in Level 3 investments
for the years ended March 31, 2020 and 2019.
Level 3 investments, mainly in unquoted certificates of beneficial
interests in securities investment trust included in the plan’s pooled
funds, are at the ­discretion of the administrator of the fund. Their fair­values are estimated based on unobservable inputs provided by theadministrator of the fund.

In millions of yen

Year ended March 31, 2020
Equitysecurities
Japanesecompanies				 In millions of yen				 March 31, 2019

Level 2

Cash and cash
equivalents................ $118,523 $     — $     —Equity securities
Japanesecompanies.............
25,679—3,890
Foreigncompanies.............
23,284——
Debt securities
Government
bonds....................
23,7801,037—
Non-government
bonds....................
———
Pooled funds................
3,523
409,028 294,110
Call loans.....................
—
52,853—
Insurance contracts......
—
129,743—
Other...........................
73
2,588
6,495
$194,862 $595,249 $304,495

Balance at beginning of year......
Actual return on plan assets:
Relating to assets soldduring the year.....................
Relating to assets heldat end of year.......................
Purchases, sales andsettlements, net.......................
Transfer to (from) Level 3, net....
Balance at end of year...............

Pooledfunds¥424 ¥19,545

Other

Total

¥584 ¥20,553

—

729

28

757

—

(1,044)(12)(1,056)—
12,828——¥424 ¥32,058

108
12,936——¥708 ¥33,190

In millions of yen
Year ended March 31, 2019
Equitysecurities
Japanesecompanies

Balance at beginning of year......
Actual return on plan assets:
Relating to assets soldduring the year.....................
Relating to assets heldat end of year.......................
Purchases, sales andsettlements, net.......................
Transfer to (from) Level 3, net....
Balance at end of year...............

Pooledfunds

		In thousands of
Other

Total

¥ — ¥24,433 ¥1,234 ¥25,667
2020

—

552

79

631

—

141

(1)

140

—
(1,533) (728)(2,261)424(4,048)—(3,624)¥424 ¥19,545 ¥  
584 ¥20,553
In thousands of U.S. dollars
Year ended March 31, 2020
Equitysecurities
Japanesecompanies

Balance at beginning of year......
Actual return on plan assets:
Relating to assets soldduring the year.....................
Relating to assets heldat end of year.......................
Purchases, sales andsettlements, net.......................
Transfer to (from) Level 3, net....
Balance at end of year...............

17. Income Taxes
Total income taxes for the years ended March 31, 2020, 2019 and2018 are allocated as follows:

Pooled
funds

Other

Total

$3,890 $179,312 $5,358 $188,560
—

6,688

257

6,945

—

(9,578)(110)(9,688)— 117,688
990 118,678————$3,890 $294,110 $6,495 $304,495

The Company expects to contribute ¥6,047 million ($55,477­thousand) to its domestic defined benefit plans in the year e­ nding
March 31, 2021.
The following benefit payments, which reflect future s­ ervice, as­appropriate, are expected to be paid.
		Years ending March 31
In millions of yen

2021.....................................................
2022.....................................................
2023.....................................................
2024.....................................................
2025.....................................................
2026–2030............................................

¥ 5,646
5,869
6,270
6,462
6,362
33,277In thousands of
U.S. dollars$ 51,798
53,84457,52359,28458,367305,294

The parent company and certain subsidiaries have defined contribution pension plans. The contributions to the defined contribution pen­sion plans for the years ended March 31, 2020, 2019 and 2018 were¥2,127 million ($19,514 thousand), ¥1,963 million and ¥1,851 million,
respectively.

In millions of yen

U.S. dollars

Years ended
March 31

Year ended
March 31

2019

2018

Consolidated income taxes
from continuing
operations........................... ¥40,939 ¥35,124 ¥48,107
Shareholders’ equity—
accumulated othercomprehensive
income (loss):
Unrealized gains
on securities.....................
(102)
139
155
Pension liability
adjustments..................... (1,856)(986) 2,332
Foreign currencytranslation
adjustments.....................
—
(662)
662
		...................................... ¥38,981 ¥33,615 ¥51,256

2020$375,588(936)(17,028)—$357,624

The parent company and its domestic subsidiaries are subject to anumber of income taxes. The statutory income tax rate in Japan,
which was approximately 30.7 percent for the year ended March 31,
2018, decreased to approximately 30.5 percent for the years ended
March 31, 2020 and 2019.
Reconciliations of the differences between income taxes ­computed
at statutory tax rates and consolidated income taxes from continuing­operations are as follows:		In thousands of2020

In millions of yen

U.S. dollars

Years ended
March 31

Year ended
March 31

2019

2018

Income taxes computed
at statutory tax rate............. ¥40,881 ¥39,212 ¥46,293
Increase (decrease)resulting from:
Provision of valuation
allowance........................
273
215
2,116
Per capita tax.....................
916
882
882
Reversal of valuation
allowance........................ (1,440) (3,959)(835)
Net effect of changes incorporate tax rates...........
10
139
660
Other, net..........................
299 (1,365) (1,009)
		Consolidated income
		 taxes from continuing		 operations.................... ¥40,939 ¥35,124 ¥48,107

2020$375,055

2,503
8,404
(13,210)91
2,745$375,588

16. Exchange Gains and Losses
Other expenses for the years ended March 31, 2020, 2019 and2018 includes net exchange losses of ¥484 million ($4,440 t­ housand),¥169 million and ¥213 million, respectively.

SECOM Financial Data 2020

21

The significant components of deferred tax assets and liabilities
at­March 31, 2020 and 2019 are as follows:

assessment. Based upon the level of historical taxable income andprojec­tions for future ­taxable income over the periods in which thedeferred tax assets are deductible, the Company’s management
		In thousands ofbelieves it is more likely than not that the Company will realize the
In millions of yen
U.S. dollars­benefits of these deductible ­differences, net of the ­existing valuation
March 31
March 31
allowance at March 31, 2020 and 2019.
		
2020
2019
2020
Net deferred tax assets (liabilities) at March 31, 2020 and 2019 areDeferred tax assets:reflected in the accompanying consolidated balance sheets under the
Operating lease liabilities............... ¥ 44,235 ¥     — $  405,826­following captions:
Accrued pension andseverance costs...........................
9,243
8,354
84,798		In thousands ofIn millions of yen
U.S. dollars
Property, plant and equipment......
7,064
6,749
64,808
Accrued bonus..............................
6,460
6,181
59,266
March 31
March 31
Loss carryforwards.........................
6,381
6,527
58,541
		
2020
2019
2020
Adjustment of book value atDeferredincometaxes
the date of acquisition(Other assets).............................. ¥25,769 ¥22,060$236,413
		 Land and buildings....................
5,592
6,073
51,303
Deferred income taxes
		Other assets..............................
392
399
3,596
(Long-term liabilities)...................
(13,132) (16,041)(120,477)
Deferred revenue..........................
5,696
5,382
52,257
Vacation accrual............................
5,002
4,441
45,890		 Net deferred tax assets
Investment securities.....................
3,624
4,307
33,248		 (liabilities)............................ ¥12,637 ¥ 6,019$115,936
Unrealized intra-entity profit
on assets.....................................
3,549
3,521
32,560
The Company has not recognized deferred tax liabilities for a
Allowance for doubtful accounts...
1,634
1,714
14,991­portion of undistributed earnings of foreign subsidiaries of ¥36,817
Intangible assets...........................
1,507
1,549
13,826
million ($337,771 thousand) totaling ¥650 million ($5,963 thousand)Write-down on real estate
inventories..................................
317
595
2,908
at March 31, 2020 as they are not expected to be remitted in the
Other............................................
14,882 14,255
136,532­foreseeable future.
At March 31, 2020, the operating loss carryforwards of domestic
		 Gross deferred tax assets........... 115,578 70,047
1,060,350
		 Less: Valuation allowance..........
(20,103) (20,649)(184,431)­subsidiaries amounted to ¥13,465 million ($123,532 thousand) andare available for offsetting against future taxable earnings of such
		 Total deferred tax assets............
95,475 49,398
875,919­subsidiaries for up to ten years, as follows:
Deferred tax liabilities:
Operating lease
		 In thousands ofright-of-use assets.......................
(44,235)—(405,826)
Expires in the years ending March 31
In millions of yen
U.S. dollars
Adjustment of book value at
2021......................................................
¥   116$  1,064
the date of acquisition
2022......................................................
1,949
17,881
		Intangible assets........................
(8,081) (8,826)(74,138)2023......................................................
1,391
12,761
		 Land and buildings....................
(3,735) (3,904)(34,266)2024......................................................
2,388
21,908		Other assets..............................
(861)
(920)
(7,899)2025......................................................
3,525
32,339Prepaid pension and2026......................................................
1,895
17,385severance costs...........................
(9,777) (11,014)(89,697)2027......................................................
1,661
15,239Investments in affiliated2028......................................................
——
companies..................................
(6,223) (6,021)(57,092)2029......................................................
192
1,761
Unrealized gains on securities........
(5,115) (7,494)(46,927)2030......................................................
348
3,194
Deferred installation costs.............
(1,108)(888)(10,165)
Other............................................
(3,703) (4,312)(33,973)..............................................................
¥13,465$123,532
		 Gross deferred tax liabilities.......
(82,838) (43,379)(759,983)
The operating loss carryforwards of overseas subsidiaries at			 Net deferred tax assets
March 31, 2020 amounted to ¥8,554 million ($78,477 thousand), a			 (liabilities)............................ ¥ 12,637 ¥ 6,019 $  115,936
part of which will begin to expire in the year ending March 31, 2021.
The total amount of unrecognized tax benefits for the years ended
The valuation allowance principally relates to deferred tax assets ofMarch 31, 2020, 2019 and 2018 was insignificant. Also, there were no
subsidiaries with operating loss carryforwards, for tax purposes, that­significant movements in the gross amounts of unrealized tax benefits
are not expected to be realized. The net change in the total valuationand the amounts of interest and penalties recognized due to theallowance for the years ended March 31, 2020, 2019 and 2018 was a­unrecognized tax benefits during the years ended March 31, 2020,
decrease of ¥546 million ($5,009 ­thousand), and a decrease of ¥6,860
2019 and 2018.
and and an increase of ¥1,862 million, respectively.
Although the Company believes its estimates of unrecognized tax
In assessing the realizability of deferred tax assets, the Company’s
benefits are reasonable, uncertainties regarding the final determination
management considers whether it is more likely than not that someof income tax audit settlements and any related litigation could affectportion or all of the deferred tax assets will not be realized. The ultithe total amount of unrecognized tax benefits in future periods. Basedmate realization of deferred tax assets is dependent upon the generaon the information available as of March 31, 2020, the Company doestion of future taxable income during the periods in which those
not expect significant changes to the unrecognized tax ­benefits within
temporary differences become deductible. The Company’s managethe next twelve months.
ment considered the sched­uled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in m
­ aking this22

SECOM Financial Data 2020

The Company files tax returns in Japan and various foreign jurisdictions. In Japan, the Company is no longer subject to regular income tax
examinations by the tax authorities for years before 2012. In otherforeign tax jurisdictions, major subsidiaries are no longer subject toincome tax examinations by tax authorities for years before 2019, withsome exceptions.
18. Shareholders’ Equity(1) Additional Paid-In Capital
The change in additional paid-in capital includes the effect ofchanges in the Company’s ownership interest in its consolidated
subsidiaries.
The net income attributable to SECOM CO., LTD. and transfers from(to) noncontrolling interests for the years ended March 31, 2020, 2019and 2018 are as follows:(3) Common Stock in Treasury
The Company may repurchase its common stock from the market
pursuant to the Japanese Companies Act. There are certain restrictions
on payment of dividends in connection with the treasury stock­repurchased.
(4) Other Comprehensive Income (Loss)
Components of other compre­hensive income (loss) for the years
ended March 31, 2020, 2019 and 2018 are as follows:
In millions of yen
Pre-tax
amount

For the year ended March 31, 2020:
Unrealized gains on securities—
		 Unrealized gains or losses		In thousands of		 arising during the period.............. ¥  139In millions of yen
U.S. dollars
		Less: Reclassification
Years ended
Year ended
		Less: adjustment for gains
March 31
March 31		Less: or losses realized in
		
2020
2019
2018
2020
		Less: net income..........................
(504)
Pension liability adjustments—
Net income attributable
		 Unrealized gains or losses
to SECOM CO., LTD............... ¥87,136 ¥89,686 ¥96,623$799,413
		 arising during the period.............. (6,124)
Net transfers from (to)		Less: Reclassification
noncontrolling interests....... 1,506
26
24
13,817
		Less: adjustment for gains
		Less: or losses realized
Change from net income
		Less: in net income.......................
231
attributable to SECOM CO.,Foreign currency
LTD. and transfers from (to)translation adjustments.................... (2,934)
noncontrolling interests.......... ¥88,642 ¥89,712 ¥96,647$813,230
			Other comprehensive
			 income (loss)............................ (¥9,192)(2) Retained Earnings
The Japanese Companies Act provides that an amount equal to 10
For the year ended March 31, 2019:
percent of surplus distributed by the parent company and its Japanese
Unrealized gains on securities—
subsidiaries be appropriated as a legal reserve until the aggregate		 Unrealized gains or losses
amount of additional paid-in capital and legal reserve equals 25 ­		 arising during the period.............. ¥1,236
		Less: Reclassification
percent of the c­ ommon stock account.
		Less: adjustment for gains
The amount available for dividends under the Japanese Companies
		Less: or losses realized inAct ­is based on the amount recorded in the p­ arent company’s non­		Less: net income..........................
(823)
consolidated statutory financial statements in accordance with
Pension liability adjustments—
Japanese GAAP. Such amount was ¥650,875 million ($5,971,330
		 Unrealized gains or losses
thousand) at March 31, 2020.
		 arising during the period..............
(3,756)
Subsequent to March 31, 2020, the parent company’s Board of
		Less: Reclassification
		Less: adjustment for gains
Directors declared a year-end cash dividend of ¥85 ($0.78) per share,
		Less: or losses realized
totaling ¥18,552 million ($170,202 thousand), to shareholders of		Less: in net income.......................
204
record on March 31, 2020. The dividend declared was approved at theForeigncurrency
general shareholders’ meeting held on June 25, 2020. Dividends aretranslation adjustments....................
(5,570)recorded in the year they are declared.
			Othercomprehensive
The Company has made it a basic policy to distribute dividends
			 income (loss)............................ (¥8,709)
twice a year, the interim dividend whose record date is September 30
each year and commenced from the year ended March 31, 2015,
and the year-end dividend whose record date is March 31 each year.
The interim dividend is determined by the Board of Directors andthe ­year-end dividend is determined by the General Meetingof Shareholders.
Cash dividends per share are computed based on dividends paid forthe year.

Tax(expense)or benefit

Net-of-tax
amount(¥   34)¥  105

136

(368)

1,914

(4,210)

(58)

173

—

(2,934)¥1,958(¥7,234)(¥  359)¥  877

220

(603)

1,030

(2,726)

(44)

160

662

(4,908)¥1,509(¥7,200)

SECOM Financial Data 202023

In millions of yen
Tax(expense)or benefit

Pre-tax
amount

For the year ended March 31, 2018:
Unrealized gains on securities—
		 Unrealized gains or losses
		 arising during the period.............. ¥ 1,319
		Less: Reclassification
		Less: adjustment for gains
		Less: or losses realized in		Less: net income..........................
(908)
Pension liability adjustments—
		 Unrealized gains or losses
		 arising during the period..............
7,695
		Less: Reclassification
		Less: adjustment for gains
		Less: or losses realized		Less: in net income.......................
13
Foreign currencytranslation adjustments....................
2,614
			Other comprehensive
			 income (loss)............................ ¥10,733

Net-of-tax
amount		In thousands of(¥  413)

258

(650)

(2,315)

5,380

(17)

(4)

(662)

1,952

(¥3,149)¥7,584Tax(expense)or benefit

In millions of yen

U.S. dollars

Years ended
March 31

Year ended
March 31

		
2020
2019
2018

2020

¥  906In thousands of U.S. dollars
Pre-tax
amountReclassification adjustments for gains or losses realized in net income(pre-tax amount) included in the consolidated statements of income forthe years ended March 31, 2020, 2019 and 2018 are as follows:

Net-of-tax
amount

For the year ended March 31, 2020:
Unrealized gains on securities—
		 Unrealized gains or losses
		 arising during the period...........
$ 1,275 ($   312) $   963		Less: Reclassification
		Less: adjustment for gains
		Less: or losses realized in		Less: net income.......................
(4,624)
1,248(3,376)
Pension liability adjustments—
		 Unrealized gains or losses
		 arising during the period...........
(56,184) 17,560(38,624)
		Less: Reclassification
		Less: adjustment for gains
		Less: or losses realized		Less: in net income....................
2,119
(532)
1,587
Foreign currencytranslation adjustments.................
(26,917)—(26,917)
			Other comprehensive
			 income (loss)......................... ($84,331) $17,964 ($66,367)

Unrealized gains on
securities—
Net sales andoperating revenue............
Gain on sales of
securities, net...................
Loss on other-thantemporary impairment ofinvestment securities........
Pension liability
adjustments—
Net periodic pension
and severance costs(Note 15).........................
Equity in net income ofaffiliated companies.............

(¥422)(¥825)(¥694)($3,872)

82

(2)

(269)

752

(164)

4

55

(1,504)

184

172

(19)

1,688

¥ 47

¥ 32

¥ 32

$  431

19. Leases as lessee
The Company leases certain office space, employee residen­tial facilities, equipment for armored car services and transportation equipment.
Some leased buildings, and equipment for armored car services andtransportation equipment are held under finance leases. Other leases
are classified as o
­ perating leases.
A summary of leased assets under finance leases at March 31, 2020
and 2019 is as follows:		In thousands ofIn millions of yen

U.S. dollars

March 31

March 31

		
2020
2019
2020

Buildings and improvements..............
Machinery, equipment
and automobiles..............................
Other intangible assets.......................
Accumulated depreciation
and amortization.............................
		 ..................................................

¥ 9,546 ¥ 8,504$ 87,578

35,117 36,008
98
173

322,174899(22,084) (23,107)¥22,677 ¥21,578(202,606)$208,045

Depreciation and amortization expenses for assets under financeleases for the years ended March 31, 2020, 2019 and 2018 were
¥7,530 million ($69,083 thousand), ¥6,856 million and ¥6,313 ­million,­respectively.

24

SECOM Financial Data 2020

The following is a schedule by year of future minimum lease­ ayments under finance leases and the present value of the netp­minimum lease payments at March 31, 2020:		Years ending March 31
In millions of yen

2021........................................................
2022........................................................
2023........................................................
2024........................................................
2025........................................................
Thereafter.................................................
Total minimum lease payments.................
Less: Amount representing interest...........
Present value of net minimum
lease payments (Note 13)........................
Less: Current portion................................
Long-term finance leaseobligations..........................................

A summary of lease receivables under sales-type and direct-­financing leases at March 31, 2020 and 2019 is as follows:		In thousands ofIn thousands of
U.S. dollars¥ 7,309
5,836
4,536
3,197
1,871
9,614
32,363(6,791)$ 67,055
53,541
41,61529,33017,16588,202296,908(62,301)

25,572(6,684)

234,607(61,323)¥18,888$173,284

Operating lease expense for the year ended March 31, 2020 were¥22,317 million ($204,743 thousand).
Supplemental cash flow information is as follows:

In millions of yen

U.S. dollars

March 31

March 31

		
2020
2019
2020

Total minimum lease payments
to be received..................................
Estimated executory cost....................
Unearned income..............................
Lease receivables, net.........................
Less: Current portion.........................
Long-term lease receivables, net.....

¥60,638 ¥59,332(4,975) (5,004)(4,116) (3,678)
51,547 50,650(16,562) (17,257)¥34,985 ¥33,393$556,312(45,642)(37,762)
472,908(151,945)$320,963

The following is a schedule by year of future minimum lease­ ayments to be received under sales-type leases and direct-­financing
pleases at March 31, 2020:		Years ending March 31
In millions of yen

In thousands of
U.S. dollars

2021........................................................
¥18,737$171,899
2022........................................................
15,583142,9632023........................................................
11,996
110,055
		In thousands of2024........................................................
7,958
73,009In millions of yen
U.S. dollars
2025........................................................
4,095
37,5692020
2020
Thereafter.................................................
2,269
20,817
Cash paid for amounts included in
Total future minimum lease
the measurement of operating
payments to be received.....................
¥60,638$556,312
lease liabilities.........................................
¥20,424$187,376
Right of use assets obtained in exchange
A summary of investment in property under operating leases andfor operating lease liabilities....................
12,421
113,954
property held for lease at March 31, 2020 and 2019 is as follows:

The following is a schedule by year of the future minimum lease
payments under operating leases at March 31, 2020:		Years ending March 31
In millions of yen

In thousands of
U.S. dollars

2021........................................................
2022........................................................
2023........................................................
2024........................................................
2025........................................................
Thereafter.................................................
Total minimum lease payments.................
Less: Amount representing interest...........
Present value of net minimum
lease payments.......................................

¥ 19,275
13,927
10,8799,583
8,024
94,470156,158(12,690)$  176,835
127,771
99,807
87,91773,615
866,697
1,432,642(116,422)¥143,468$1,316,220

The following is remaining lease term and discount rate under­operating leases at March 31, 2020:
March 31, 2020

Weighted-average remaining lease term...........................
Weighted-average discount rate.......................................

217 months
0.64%

20. Leases as lessor
The Company’s leasing operations consist principally of leasing of
security merchandise, security systems and real estate for offices andmedical institutions. Most of the security merchandise and security
systems on lease are classified as sales-type leases or ­­direct-financing
leases. Other leases are ­classified as ­operating leases.

		In thousands ofIn millions of yen

U.S. dollars

March 31

March 31

		
2020
2019
2020

Land..................................................
Buildings and improvements..............
Other intangible assets.......................
Accumulated depreciation
and amortization.............................
		 ..................................................

¥35,395 ¥34,353
29,940 30,258
662
662$324,725
274,679
6,073(13,540) (13,398)¥52,457 ¥51,875(124,220)$481,257

The future minimum rentals under noncancelable operating leases
at March 31, 2020 are as follows:		Years ending March 31
In millions of yen

2021........................................................
2022........................................................
2023........................................................
2024........................................................
2025........................................................
Thereafter.................................................
Total future minimum rentals................

¥2,216
320
162
162
162
2,424
¥5,446In thousands of
U.S. dollars$20,330
2,936
1,486
1,486
1,486
22,239$49,963

SECOM Financial Data 202025

21. Fair Value of Financial Instruments
The following methods and assumptions were used to ­estimate thefair value of financial instruments in cases for which it is p
­ racticable.
The three levels of inputs used to measure fair value are more fully
described in Note 22.
(1) Cash and Cash Equivalents; Time Deposits; Cash Deposits forarmored car services; Notes and Accounts Receivable, Trade; Duefrom Subscribers; Short-Term Receivables; Bank Loans; Notes andAccounts ­Payable, Trade; Other Payables; Deposits Received;
Accrued Income Taxes; and Accrued ­Payroll
The carrying amounts approximate fair value because of the­short-term maturities of such instruments.
(2) Short-Term Investments; Investment Securities
The fair values of short-term investments and investment s­ ecurities
are principally based on quoted market prices.
(3) Long-Term Receivables Including Current PortionLong-term receivables, including the current portion, are classified
as Level 2 and fair value is estimated based on the present value of
future cash flows through estimated maturity, discounted using
estimated market discount rates.
(4) Long-Term Debt Including Current PortionLong-term debt, including the current p­ ortion, is classified as Level
2 and fair value is estimated based on the present value of future cash
flows of each instrument discounted using the C­ ompany’s current­incremental b­ orrowing rates for similar liabilities.

The carrying amounts and estimated fair values of finan­cial instruments, excluding, debt and equity securities, which are ­disclosed in
Notes 2 (7) and 7, at March 31, 2020 and 2019 are as follows:		

In millions of yen

		March 31

2020
Carrying
amountNon-derivatives:
Assets—		Long-term receivables
		 including current		 portion (Less allowance		 for doubtful accounts)..... ¥55,832
Liabilities—
		Long-term debt
		 including current		 portion............................ 62,238
		Investment deposits
		 by policyholders.............. 21,516
Derivatives:
Assets—		Forward exchange		 contract		 (Other current assets)......
—
Liabilities—
		 Interest rate swaps
		 (Other long-term
		 liabilities).........................
4

Estimated
fair value

2019
Carrying
amountEstimated
fair value¥56,084 ¥54,995¥55,414

62,23963,78963,78622,38823,61524,427

—

—

—

4

15

15

In thousands of U.S. dollars(5) Investment Deposits by Policyholders
The fair values of investment deposits by policyholders are ­classified
as Level 3 and estimated based on the present value of future cash
flows, d­ iscounted using the interest rates currently being offered for­similar contracts.
(6) Derivatives
The fair values of derivatives are estimated using current market­pricing models by obtaining quotes from f­ inancial institutions.

March 31, 2020
Carrying
amountNon-derivatives:
Assets—		 Long-term receivables including current		 portion (Less allowance for doubtful
		 accounts)................................................
Liabilities—
		 Long-term debt including current		 portion....................................................
		Investment deposits
		 by policyholders......................................
Derivatives:
Assets—		 Forward exchange contract		 (Other current assets)..............................
Liabilities—
		 Interest rate swaps (Other long-term
		 liabilities).................................................

Estimated
fair value$512,220 $514,532
570,990571,000

197,394

205,394

—

—

37

37

Limitation:
Fair value estimates are made at a specific point in time based on
relevant market information and information about financial
instruments. These estimates are s­ ubjective in nature and involve
uncertainties and matters of significant ­judgment and therefore
cannot be determined with precision. Changes in assumptions could
significantly affect the estimates.

26

SECOM Financial Data 2020

22. Fair Value Measurements
ASC 820, “Fair Value Measurements and Disclosures,” defines fairvalue as the price that would be received to sell an asset or paid totransfer a liability (an exit price) in the principal or most advantageous
market for the asset or ­liability in an orderly transaction between market participants at the measurement date. This accounting standard
establishes a three-level fair value hierarchy that prioritizes the inputs
used to measure fair value as follows:
Level 1— Inputs are quoted prices in active markets for i­denticalassets or liabilities.
Level 2— Inputs are quoted prices for similar assets or liabilities in
active markets, quoted prices for identical or similar
assets or liabilities in markets that are not active, inputs
other than quoted prices that are observable, and inputs
that are derived principally from or corroborated byobservable market data by correlation or other means.
Level 3— Inputs are derived from valuation techniques in which
one or more significant inputs or value drivers are­unobservable, which reflect the reporting entity’s own
assumptions about the assumptions that market­participants would use in establishing a price.
The following table represents the Company’s assets and liabilities
that are measured at fair value on a recurring basis at March 31, 2020
and 2019. Transfers between levels are recognized at the end of the­respective reporting periods.
In millions of yen
March 31, 2020
Level 1

Level 2

Level 3Total¥     —

¥     —¥  1,358

In millions of yen
March 31, 2019
Level 1

Level 2

Level 3Total¥     —

¥     —

¥     88

Assets:Cash equivalents...... ¥     88Short-term
investments andinvestment
securities................
147,516
Derivatives(Other current
assets)....................
—
Total assets.................. ¥147,604

52,84013,372

213,728—¥52,840—¥13,372—¥213,816

Liabilities:
Derivatives(Other long-term
liabilities)................ ¥      —Total liabilities.............. ¥      —¥    15¥    15¥     —
¥     —

¥     15¥     15

In thousands of U.S. dollars
March 31, 2020
Level 1

Level 2

Level 3Total$     —$   12,459

Assets:Cash equivalents...... $   12,459 $      —Short-term
investments andinvestment
securities................ 1,266,430 479,358
Derivatives(Other current
assets)....................
——
Total assets.................. $1,278,889 $479,358

95,101

1,840,889—$95,101—$1,853,348

Liabilities:
Derivatives(Other long-term
liabilities)................ $        — $     37Total liabilities.............. $        — $     37$     —
$     —

$       37$       37Assets:Cash equivalents...... ¥  1,358
Short-term
investments andinvestment
securities................
138,041
Derivatives(Other current
assets)....................
—
Total assets.................. ¥139,399

52,25010,366200,657—¥52,250—¥10,366—¥202,015

Liabilities:
Derivatives(Other long-term
liabilities)................ ¥     —Total liabilities.............. ¥     —Cash Equivalents
All highly liquid investments with initial maturities of three months orless are considered to be cash equivalents, and principally valued using
quoted prices for identical assets in markets that are not active.

¥     4¥     4¥     —
¥     —

¥      4¥      4

Short-Term Investments and Investment Securities
Equity securities and debt securities classified as Level 1 assets arevalued using unadjusted quoted market prices in active markets with
sufficient volume and frequency of transactions.
Level 2 assets comprise principally debt securities, which are valued
using quoted prices for similar assets in active markets, or quoted
prices for identical or similar assets in markets that are not active.
Non-marketable securities classified as Level 3 assets are valued
based on unobservable inputs as the market for the assets was not
active at the measurement date. The fair value is determined by using
a valuation technique, such as the discounted cash flow model, which
best reflects the nature, characteristics and risks of each asset. Thesesignificant unobservable inputs contain discount rates, exit timing andan EBITDA multiple. An increase (decrease) in the discount rates, thelater (earlier) exit and a decrease (increase) in the EBITDA multiple
would result in a decrease (increase) in the fair value of nonmarketable securities.

SECOM Financial Data 2020

27

The Company’s Level 3 investment securities that are measured
at fair value on a recurring basis at March 31, 2020 and 2019,
amounting to ¥10,366 million ($95,101 thousand) and ¥13,372
million, respectively, are primarily private equity investments. The
valuation technique and significant unobservable inputs are as follows:
March 31, 2020
Valuation techniqueSignificant unobservable inputs

Range

Discounted cash flows
			
			
		

Discount rate
Exit timing
EBITDA multiple

15%–25%2020–2024(4.0)x–14.2x

Valuation techniqueSignificant unobservable inputs

Range

Discounted cash flows						

Discount rate
Exit timing
EBITDA multiple

15%–30%2019–2023
3.4x–26.6x

March 31, 2019

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Non-marketable equity securities with a carrying amount of ¥12,004
million ($110,128 thousand) were written down to their fair value of¥11,911 million ($109,275 thousand), resulting in an other-than-­temporary impairment charge of ¥93 million ($853 thousand), which
was included in earnings for the year ended March 31, 2020. For theyear ended March 31, 2019, non-marketable equity ­securities with acarrying amount of ¥10,891 million were written down to their fairvalue of ¥10,890 million, resulting in an other-than-temporary impairment charge of ¥1 million, which was included in earnings. All impaired
non-marketable equity securities were classified as Level 3 assets as theCompany uses unobservable inputs such as future cash flows to value
these investments.
Long-lived assets (Note 11) and goodwill (Note 12) are also­measured at fair value on a nonrecurring basis. All impaired long-lived
assets and goodwill were classified as Level 3 assets as the Company
uses ­unobservable inputs to value these assets. These Level 3 assets are
not significant.

Derivative Financial Investments
Derivative financial instruments comprise forward exchange c­ ontracts,
interest rate swaps and others. These derivative instruments are valued
using observable market data and classified as Level 2 liabilities.

23. Derivative Financial Instruments(1) Risk Management Policy
The Company utilizes derivative financial instruments in the normal
course of business to reduce exposure to fluctuations in interest rates.
The Company assesses interest rate risk by con­tinually monitoring
The following table represents the changes in Level 3 assetschanges in the exposure and by evaluating hedging opportunities. The­measured on a recurring basis for the years ended March 31, 2020
Company does not hold or issue derivative financial instruments forand 2019.
trading purposes. The Company is also exposed to credit-related losses		In thousands ofin the event of non-­perfomance by counterparties to derivative finanIn millions of yen
U.S. dollars
cial instru­ments, but it is not expected that any counterparties will failYears ended
Year ended
to meet their obligations, because most of the counterparties are
March 31
March 31internationally recognized financial institutions and contracts are
		
2020
2019
2020
diversified amongst a ­number of major financial institutions.
Balance at beginning of year............. ¥13,372 ¥29,815$122,679
Total gains or losses(2) Risk Management(realized and unrealized):
The Company has exposure to the market risk of changes in interest
		 Included in earnings..................
93
5,285
854
rates which relates p­ rimarily to its debt obligations. The Company
		 Included in otherprincipally enters into interest rate swap agreements to manage
		 comprehensive income............
———
fluctuations in cash flows resulting from changes in interest rates.
Purchases......................................
3,017
6,048
27,679
Sales.............................................
(5,941) (27,243)(54,505)
Interest rate swaps are used to change floating rates on debt obligaRedemptions.................................
———
tions to fixed rates by entering into receive-floating, pay-fixed interest
Cancellation of contract................
———
rate swaps under which the Company receives floating interest rate
Foreign currency translation­proceeds and makes fixed interest rate payments, thereby ­effectively
adjustments................................
(175)
(533)
(1,606)
creating fixed-rate debt.
Balance at end of year...................... ¥10,366 ¥13,372$ 95,101
Changes in unrealized gains
or losses relating to instruments
still held at end of year:
		 Included in earnings.................. (¥ 4,030) (¥   776)($ 36,972)

Total gains or losses (realized or unrealized) related to short-term
investments and investment securities are primarily included in net
sales and operating revenue or gain/loss on private equity investments,
in the consolidated statements of income.

28

SECOM Financial Data 2020

(3) Cash Flow Hedges
The Company d­ esignates interest rate swap agreements as cash flow
hedges for variability of cash flows originating from floating rateborrowings. The ­effective portion of changes in fair values of derivative
instruments designated as cash flow hedges of these debt obligations
are reported in other comprehensive income (loss). These amounts arereclassified into current income in the same period that hedged items
affect current income. The ineffective portion of changes in fair values
are reported in income immediately.

(4) Derivative Instruments Not Designated as Hedges
The Company enters into interest rate swap agreements to reduce
exposure to fluctuations in interest rates relating primarily to debt
obligations and other agreements. Changes in fair value of thesederivative financial instruments, which are not d­ esignated as hedges,
are reported in current income.

25. Revenue(1) Disaggregation of revenue
Revenue from contracts with customers and other sources for theyears ended March 31, 2020 and 2019 are as follows:

Fair values of derivative instruments reflected in the c­ onsolidatedbalance sheets as of March 31, 2020 and 2019 are as follows:

In millions of yen

In thousands of
U.S. dollars

Year ended
March 31

Year ended
March 31

2019

2020

2020

Revenue recognized from
Derivatives not designated as hedging instruments
contracts with customers....... ¥1,090,879 ¥1,045,995 $10,008,064
		In thousands ofRevenuerecognized from
In millions of yen
U.S. dollars
other sources.........................
69,82865,605
640,624

Assets:Forward exchange
contract
Liabilities:
Interest rate swaps
		March 31

March 31

Location

2020

2019

2020

Other current
assets¥—¥—$—Other long-term
liabilities

4

15

37

Effects of derivative instruments on the consolidated statements
of income for the years ended March 31, 2020, 2019 and 2018 are
as follows:

Total........................................ ¥1,160,707 ¥1,111,600 $10,648,688

The disaggregation of revenue by operating segments is describedin Note 27.
Revenue recognized from other sources primarily comprises revenue
recognized from lease contracts and insurance contracts.
(2) Contract balances
Contract balances arising from contracts with customers at March
31, 2020 and 2019 are as follows:

Derivatives not designated as hedging instruments
		In thousands ofLocation

Forward exchange
contract
Other income
Interest rate swaps Other income

In millions of yen

U.S. dollars

Years ended
March 31

Year ended
March 31

2020

2019

2018

2020

¥—
11

¥—
17

¥—
27

$ —
101

24. Commitments and Contingent Liabilities
The Company has commitments outstanding at March 31, 2020 forthe ­purchase of property, plant and equipment of a­ pproximately¥6,152 million ($56,440 thousand).
The Company provides guarantees to third parties mainly withrespect to bank loans extended to its affiliated companies and otherentities. Such guarantees are provided to enhance the credit standingof the affiliated companies and other entities. For each guarantee provided, the Company would have to per­form under the guarantee if
the affiliated companies and other entities default on a payment
within the guaranteed period of one to five years. The maximum
amount of undiscounted pay­ments the Company would have to makein the event of default amounts to ¥772 million ($7,083 thousand) at
March 31, 2020. The carrying amounts of the liabilities recognized as
the Company’s obligations under these g­ uarantees at March 31, 2020
and 2019 were deemed insignificant.
It is not anticipated that damages, if any, resulting from legal actions
will have a material impact on the Company’s consolidated financial
statements.

Receivables*1...........................
Contract assets*2.....................
Contract liabilities*3.................

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2020

2019

2020

¥195,208
34,51652,198¥188,182
31,69950,116$1,790,899
316,661
478,881*1 R
 eceivables are included in notes and accounts receivable, trade, due from subscribers in the accompanying consolidated balance sheets. These amounts are
before d­ educting allowance for doubtful accounts.
*2 C ontract assets are included in notes and accounts receivable, trade, in theaccompanying consolidated balance sheets. These amounts are before­deducting allowance for doubtful accounts.
3* C ontract liabilities are included in deferred revenue, other current liabilities and­long-term deferred revenue in the accompanying consolidated balance sheets.

Revenue recognized for the fiscal year ended March 31, 2020 thatwas included in the contract liability balance as of March 31, 2019 was¥38,493 million.
(3) Transaction price allocated to the remaining performanceobligations
The aggregate amounts of transaction price allocated to unsatisfied
performance obligations related to contracts that have original
expected durations in excess of one year at March 31, 2020 and 2019are as follows:

Due within 1 year....................
Due after 1 year.......................

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2020

2019

2020

¥150,321
208,004¥156,933
221,605$1,379,092
1,908,294¥358,325¥378,538$3,287,386

SECOM Financial Data 202029

26. Supplemental Cash Flow Information
Supplemental cash flow information is as follows:from the year ended March 31, 2019. Reportable segments are notreclassified as a result of this change.
The Company changed the designation of information and commu		
In thousands ofnication related services, which focused primarily on ICT related services
In millions of yen
U.S. dollars
and data center services, to BPO and ICT services with the acquisition
Years ended
Year ended
March 31
March 31of TMJ, Inc., a subsidiary newly consolidated from October 2017. The­Company acquired all shares in TMJ, Inc. which provides various BPO
2020
2019
2018
2020
related services including operation of call center services with the aim
Cash paid during theof expanding its business capabilities through integrating BPO related
year for:services with existing information and communication related services.
Interest............................. ¥ 1,044 ¥ 1,114 ¥ 1,278$  9,578
Income taxes....................
40,584 52,021 55,970
372,330
Reportable segments are not reclassified by this change.
Non-cash investing and
The security services segment provides various types of secu­rity serfinancing activities:
vices by utilizing the Company’s unique security systems and manufacAdditions to obligations
turing and selling security merchandise. The fire protection services
under finance leases.......
7,568
7,225
6,355
69,431
segment provides various types of fire protection equipment, such as
Increase in land, buildings
automatic fire alarm and fire extinguishing and other fire protection
and improvements bysystems for office buildings, plants, tunnels, ships, residences and culoffsetting long-term
receivables.....................
————
tural monuments. The medical ser­vices segment provides intravenous
Significant acquisitions
solutions to patients at home, home-based ­nursing care services, medi(Note 4)—cal data trans­mission services by utilizing the Company’s network and		Assets acquired..............
—— 34,570—
leas­ing of real estate for medical institutions. In addition, the VIE, of		Liabilities assumed.........
——(8,020)—which the Company is the primary beneficiary manage hospitals and		Considerations forhealth ­care-related institutions. The insurance services ­segment
		 equity..........................
—— 26,550—
includes the non-life insurance-related underwriting business in the		 Cash and cash
Japanese market. The geospatial information services segment includes		 equivalents on hand....
——(2,654)—surveying and measuring services and GIS services. The BPO and ICT
		Total considerations....... ¥      — ¥     — ¥23,896$       —services s­ egment includes various BPO related services, data center services, b­ usiness continuity plan support, information security services
27. Segment Informationand cloud ­services. The real estate and other services segment includes
The Company discloses financial and descriptive i­nformation
development and sales of condominiums equipped with security andabout the Company’s reportable operating segments. The ­operating
contingency planning features, leasing of real estate, ­construction andsegments reported below are the segments of the Company for which
installation services and other services.
separate financial information is available and for which operating
Corporate expenses consist principally of general and administrative
profit/loss amounts are evaluated regu­larly by ­management in deciding
expenses of the planning, personnel and admin­istrative departments of
how to allocate resources and assess performance.
the parent company and administrative departments of the foreign
The Company has seven reportable business segments: security ser­holding company.
vices, fire protection services, medical services, insurance services, geoIntersegment sales are priced on a basis intended to ­approximate
spatial information services, BPO and ICT services, and real estate andamounts charged to unaffiliated customers.
other services.
Identifiable assets are those assets used exclusively in the operations
Pasco Corporation, the principal company in the geographic inforof each segment or which are allocated when used jointly. Corporate
mation services, released “Pasco Group’s Medium-Term Management
assets, which are held by the parent company and the foreign holding
Plan 2018–2022” on May 9, 2018, expressing its aim to become acompany for general and administra­tive facilities, c­ onsist principally ofcomprehensive company in geospatial information industry pursuing
cash and cash equivalents, short­-term investments, investment securia business model that capitalizes on positional information including
ties, land, buildings and improvements, machinery, equipment and­various related events. Accordingly, the segment name was changed
automobiles.
from g­ eographic information services to geospatial information services

30

SECOM Financial Data 2020		In thousands ofInformation by business and geographic segments for the years
ended and as of March 31, 2020, 2019 and 2018 is as follows:(1) Business Segment Information

2020

		
In thousands of2020

In millions of yen

U.S. dollars

Years ended
March 31

Year ended
March 31

2018

2020

2019

Net sales andoperating revenue:
Security services—
		Customers................... ¥  577,252 ¥  563,739 ¥  562,272 $ 5,295,890
		Intersegment................
3,207
3,428
3,144
29,422
			.................................
580,459
567,167
565,416
5,325,312
Fire protection services—
		Customers...................
151,861
140,139
136,559
1,393,220
		Intersegment................
4,050
3,942
4,170
37,156
			.................................
155,911
144,081
140,729
1,430,376
Medical services—
		Customers...................
187,101
181,705
175,318
1,716,523
		Intersegment................
220
168
185
2,018
			.................................
187,321
181,873
175,503
1,718,541
Insurance services—
		Customers...................
43,515
41,63744,683399,220
		Intersegment................
3,413
3,120
3,034
31,312
			.................................
46,92844,75747,717
430,532
Geospatial information
services—
		Customers...................
53,53551,51050,906491,147
		Intersegment................
201
386
176
1,844
			.................................
53,73651,89651,082492,991
BPO and ICT services—
		Customers...................
97,51588,06569,569894,633
		Intersegment................
13,422
13,2097,275
123,138
			.................................
110,937
101,274
76,844
1,017,771
Real estate andother services—
		Customers...................
49,92844,80543,485458,055
		Intersegment................
1,271
1,787
2,004
11,661
			.................................
51,19946,59245,489469,716
Total............................... 1,186,491 1,137,640 1,102,780
10,885,239
Eliminations....................
(25,784)(26,040)(19,988)(236,551)
		 Total net sales and		 operating revenue...... ¥1,160,707 ¥1,111,600 ¥1,082,792 $10,648,688

In millions of yen

U.S. dollars

Years ended
March 31

Year ended
March 31

2018

2020

¥114,469$  999,294

15,7304,034
6,221

163,459
57,174(39,624)

1,676
8,133

27,79897,4686,910
157,173

55,0091,360,578(17,062)¥140,111
13,454(2,775)(162,743)$1,197,835
91,569(59,724)¥150,790$1,229,680

2019

Operating income (loss):
Security services............... ¥108,923 ¥110,146
Fire protection
services..........................
17,817
14,188
Medical services...............
6,232
5,782
Insurance services............
(4,319)(4,856)
Geospatial information
services..........................
3,030
1,878
BPO and ICT services........
10,624
9,390
Real estate andother services.................
5,996
5,084
Total................................ 148,303
141,612
Corporate expenses
and eliminations............ (17,739)(17,901)
Operating income............ ¥130,564 ¥123,711
Other income...................
9,981
11,246
Other expenses................
(6,510)(6,394)
		Income from		 continuing operations
		 before income taxes.... ¥134,035 ¥128,563

		In thousands ofIn millions of yen

U.S. dollars

March 31

March 31

		
2020
2019
2020

Assets:Security services............. 		
¥  853,101 ¥  768,128
Fire protection
services........................ 		
175,854
162,549
Medical services............. 		
201,449
178,755
Insurance services.......... 		
231,650
235,773
Geospatial information
services........................ 		
68,516
67,768
BPO and ICT services...... 		
243,152
152,777
Real estate andother services............... 		
137,425
142,750
Total.............................. 		
1,911,147 1,708,500
Corporate items............. 		
105,473
107,513
Investments inaffiliated companies..... 		
64,50063,697
Total assets.................... 		
¥2,081,120 ¥1,879,710$ 7,826,615
1,613,339
1,848,156
2,125,229
628,5872,230,752
1,260,780
17,533,458
967,642591,743$19,092,843

SECOM Financial Data 202031

(2) Geographic Segment Information		In thousands ofIn millions of yen
U.S. dollars
Net sales and operating revenue attributed to countries based onYears ended
Year ended
the geographical location of customers for the years ended 2020,
March 31
March 312019 and 2018 and long-lived assets as of March 31, 2020 and 2019
2020
2019
2018
2020
were as f­ ollows:
Depreciation andamortization:
Security services.............
Fire protection
services........................
Medical services.............
Insurance services..........
Geospatial information
services........................
BPO and ICT services......
Real estate andother services...............
Total..............................
Corporate items.............
		Total depreciation
		 and amortization.......
Capital expenditure:
Security services.............
Fire protection
services........................
Medical services.............
Insurance services..........
Geospatial information
services........................
BPO and ICT services......
Real estate andother services...............
Total..............................
Corporate items.............
		Total capital		 expenditures.............

		In thousands of¥50,383¥49,409¥54,091$462,231

2,537
8,321
2,290

2,375
8,684
1,792

2,128
8,675
1,808

23,27576,33921,0091,700
10,644

2,249
9,075

2,540
7,813

15,59697,651

842
76,717857

953
74,537763

1,066
78,121
834

7,725
703,826
7,862

2020

Year ended
March 31

2018

2020

2019

		
In thousands ofIn millions of yen

U.S. dollars

March 31

March 31

¥77,574¥75,300¥78,955$711,688

		
2020
2019
2020

¥44,930¥48,451¥44,404$412,202

2,569
8,778
4,440

2,269
4,750
2,972

3,910
5,276
1,900

23,56980,532
40,734Long-lived assets:
Japan................... 		
¥772,155
Other................... 		
13,122
		Total................. 		
¥785,277

2,987
12,894

2,420
9,085

1,701
31,987

27,404
118,294

2,121
78,7191,116

4,550
74,4971,291

1,690
90,868349

19,459722,194
10,239¥79,835¥75,788¥91,217$732,433

In millions of yen

U.S. dollars

Years ended
March 31

Year ended
March 31

2018

2020

¥347,156 ¥344,297 ¥341,157$3,184,917

2020

2019

70,02966,26559,030642,468

63,60262,41761,089583,505

96,46590,760100,996

885,000¥577,252 ¥563,739 ¥562,272$5,295,890

SECOM Financial Data 2020

¥618,061 $7,083,991
11,699120,385¥629,760 $7,204,376

There are no individually material countries other than Japan withrespect to net sales and operating revenue and long-lived assets.
28. Subsequent Events
The Company has evaluated subsequent events through July 30,
2020, the date at which the financial statements were available to beissued, and determined there is no item to disclose.

		In thousands of

32

U.S. dollars

Years ended
March 31

Net sales andoperating revenue:
Japan................... ¥1,111,521 ¥1,063,223 ¥1,034,228 $10,197,440
Other...................
49,186
48,37748,564451,248
		Total................. ¥1,160,707 ¥1,111,600 ¥1,082,792 $10,648,688

The capital expenditures in the above table represent the ­additions
to property, plant and equipment and intangible assets of eachsegment.
The Company has no single customer that accounts for more than
10 percent of total revenues.
The following table is a breakdown of security services revenue toexternal customers by service category. The security services businessis managed as a single operating segment by the ­Company’s­management.

Electronic security
services........................
Other security services:
Static guard
services....................
Armored car
services....................
Merchandise andother...........................
Total security
services....................

In millions of yen

Independent Auditors’ Report

The Board of Directors and Shareholders
SECOM CO., LTD.:
We have audited the accompanying consolidated financial statements of SECOM CO., LTD. and its subsidiaries, which comprise the consolidatedbalance sheets as of March 31, 2020 and 2019, and the related consolidated statements of income, comprehensive income, changes in equity, andcash flows for each of the years in the three-year period ended March 31, 2020, and the related notes to the consolidated financial statements.

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中に、他のオブジェクトやテキストが入らないよう、ご留意ください。
Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally
accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such
opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting­estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of SECOM
CO., LTD. and its subsidiaries as of March 31, 2020 and 2019 and the results of their operations and their cash flows for each of the years in thethree-year period ended March 31, 2020, in accordance with U.S. generally accepted accounting principles.
Convenience Translations
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2020 are presented
solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation
has been made on the basis described in Note 3 to the consolidated financial statements.

Tokyo, Japan
July 30, 2020

SECOM Financial Data 2020

33

OTHER FINANCIAL DATA

Contents
Summary of Selected Financial Data....................................... 35
Common Stock Data.............................................................. 37

34

SECOM Financial Data 2020

Summary of Selected Financial Data
SECOM CO., LTD. and Subsidiaries
Years ended/as of March 31
In millions of yen
2020

2019

2018

2017

2016

2015

Composition of consolidated net sales andoperating revenue by segment
Net sales and operating revenue..................................................... ¥1,160,707 ¥1,111,600 ¥1,082,792 ¥1,031,261¥983,428¥945,238
Security services:.........................................................................
577,252
563,739562,272
543,524
505,058
487,063				 As a percentage of net sales and operating revenue........
49.7%
50.8%
51.9%
52.7%
51.4%
51.5%
		 Electronic security services.......................................................
347,156
344,297
341,157
338,744
330,843
326,300				 As a percentage of net sales and operating revenue........
29.9
31.0
31.5
32.8
33.6
34.5
		 Other security services—			Static guard services............................................................
70,02966,26559,03056,41755,90753,788				 As a percentage of net sales and operating revenue........
6.0
6.0
5.5
5.5
5.7
5.7
			Armored car services...........................................................
63,60262,41761,08957,87332,99021,010				 As a percentage of net sales and operating revenue........
5.5
5.6
5.6
5.6
3.4
2.2
					Subtotal.......................................................................
133,631
128,682
120,119
114,290
88,897
74,798
		 Merchandise and other...........................................................
96,46590,760100,996
90,49085,31885,965				 As a percentage of net sales and operating revenue........
8.3
8.2
9.3
8.8
8.7
9.1
Fire protection services................................................................
151,861
140,139
136,559
126,232
131,743
121,189				 As a percentage of net sales and operating revenue........
13.1
12.6
12.6
12.2
13.4
12.8
Medical services..........................................................................
187,101
181,705
175,318
168,819
163,538
155,884				 As a percentage of net sales and operating revenue........
16.1
16.3
16.2
16.4
16.6
16.5
Insurance services.......................................................................
43,515
41,63744,683
43,78040,654
38,259				 As a percentage of net sales and operating revenue........
3.8
3.8
4.2
4.3
4.1
4.1
Geospatial information services...................................................
53,53551,51050,906
51,60952,55352,760				 As a percentage of net sales and operating revenue........
4.6
4.6
4.7
5.0
5.4
5.6
BPO and ICT services...................................................................
97,51588,06569,56949,681
48,29447,412				 As a percentage of net sales and operating revenue........
8.4
7.9
6.4
4.8
4.9
5.0
Real estate and other services.....................................................
49,92844,80543,48547,616
41,58842,671				 As a percentage of net sales and operating revenue........
4.3
4.0
4.0
4.6
4.2
4.5
Net income attributable to SECOM CO., LTD., cash dividends
and SECOM CO., LTD. shareholders’ equity
Net income attributable to SECOM CO., LTD. ................................ ¥   87,136 ¥   89,686 ¥   96,623 ¥ 91,387
Cash dividends paid(2)......................................................................
37,10434,922
32,73830,557
SECOM CO., LTD. shareholders’ equity........................................... 1,088,738
1,044,184 1,000,277
929,242
Consolidated financial ratios
Percentage of working capital accounted for by:
Debt—
		Bank loans..............................................................................
		 Current portion of long-term debt..........................................
		Straight bonds........................................................................
		 Other long-term debt..............................................................
			Total debt............................................................................
SECOM CO., LTD. shareholders’ equity.......................................
			Total capitalization...............................................................
Return on total assets (percentage)(a)...............................................
Return on equity (percentage)(b)......................................................
Percentage of net sales and operating revenue absorbed by(c):Depreciation and amortization....................................................
Rental expense under operating leases........................................
Ratio of accumulated depreciation to depreciable
assets (percentage).......................................................................
Net property turnover (times)(c)........................................................
Before-tax interest coverage (times)(c) (d)............................................

¥ 84,072
28,373865,278¥ 80,184
38,197
825,969

3.3
1.5
0.3
3.4
8.5
91.5
100.0

3.4
1.6
0.4
3.6
8.9
91.1
100.0

3.5
1.7
0.5
4.1
9.8
90.2
100.0

4.0
1.9
0.7
4.5
11.1
88.9
100.0

5.6
1.8
0.8
5.3
13.5
86.5
100.0

4.7
1.4
0.9
4.9
11.9
88.1
100.0

4.2
8.0

4.8
8.6

5.3
9.7

5.2
9.8

5.0
9.7

5.3
9.7

5.7
2.4

6.8
2.5

7.3
2.3

7.6
2.5

7.4
2.5

7.3
2.4

65.3
2.73
117.5

65.4
2.67
109.6

64.6
2.63
123.0

63.2
2.49
107.1

62.8
2.38
89.2

61.6
2.38
93.8

Note: Installation revenue is included in the corresponding electronic security services.

SECOM Financial Data 2020

35

2020

2019

2018

2017

2016

2015

Number of shares outstanding
Issued......................................................................
Owned by the Company..........................................

233,293,998
15,033,588

233,292,219
15,031,867

233,290,441
15,030,573

233,288,717
15,028,470

233,288,717
15,026,824

233,288,717
15,024,812

Balance....................................................................

218,260,410

218,260,352

218,259,868

218,260,247

218,261,893

218,263,905¥  399.23
170.00¥  410.91
160.00¥  442.70
150.00¥ 418.71
140.00¥ 385.19
130.00¥ 367.37
175.004,988.25
533.88
1.80
22.48
16.81
8,974

4,784.12
590.91
1.98
23.08
16.05
9,482

4,582.96
649.44
1.73
17.89
12.20
7,920

4,257.50
631.91
1.87
19.03
12.61
7,969

3,964.40
582.27
2.11
21.72
14.37
8,366

3,784.27
557.88
2.12
21.84
14.38
8,025

Per share information
Net income attributable to SECOM CO., LTD.
per share (in yen) (1) ................................................
Cash dividends paid per share (in yen) (2) ...................
SECOM CO., LTD. shareholders’ equity
per share (in yen) (3) ................................................
Cash flow per share (in yen) (1) (e) ................................
Price/Book value ratio...............................................
Price/Earnings ratio..................................................
Price/Cash flow ratio................................................
Stock price at year-end (in yen)................................

Notes: (a) Net income attributable to SECOM CO., LTD. / Total assets(b) Net income attributable to SECOM CO., LTD. / SECOM CO., LTD.
shareholders’ equity(c) Including discontinued operations(d) (Income before income taxes and equity in net income of affiliatedcompanies + Interest expense) / Interest expense(e) (Net income attributable to SECOM CO., LTD. + Depreciation andamortization – Dividends approved) / Average number of shares
outstanding during each period

36

SECOM Financial Data 2020

(1) Per share amounts are based on the average number of shares
outstanding during each period.
(2) Subsequent to March 31, 2020, cash dividends of ¥18,552 million(¥85 per share) were approved at the general shareholders’ meetingon June 25, 2020 (see Note 18 of the accompanying notes toconsolidated financial statements).
(3) Per share amounts are based on the number of shares outstanding at
the end of each period, less treasury stock.

Common Stock Data
SECOM CO., LTD.
As of March 31

SHAREHOLDER INFORMATION
Number of shareholders...........................................
Common shares held by:
Financial institutions.............................................
Securities firms.....................................................
Other domestic corporations................................
Foreign investors..................................................
Individuals and others...........................................
Treasury stock.......................................................
Total.................................................................

2020

2019

2018

2017

2016

2015

23,29724,02326,80925,20024,97524,85238.65%
1.95
2.50
42.76
7.70
6.44
100.00%37.14%
3.30
2.46
42.74
7.92
6.44
100.00%35.94%
1.63
2.53
44.85
8.61
6.44
100.00%35.05%
3.89
2.51
43.42
8.69
6.44
100.00%32.50%
3.52
2.92
44.46
10.16
6.44
100.00%29.89%
3.43
3.16
44.95
12.13
6.44
100.00%

PRICE INFORMATION (TOKYO STOCK EXCHANGE)
2018
2019

2020

April–June...............................................................................
July–September.......................................................................
October–December.................................................................
January–March.......................................................................
April–June...............................................................................
July–September.......................................................................
October–December.................................................................
January–March.......................................................................

Price per share (in yen)
High
Low

¥8,550
9,368
9,827
9,684
9,670
10,005
10,095
9,965¥7,751
8,130
8,765
8,781
8,830
8,149
9,288
7,188

Nikkei Stock Average (in yen)
High
Low

¥23,002.37
24,120.04
24,270.62
21,822.04
22,307.58
22,098.84
24,066.12
24,083.51¥21,292.29
21,546.99
19,155.74
19,561.96
20,408.54
20,261.04
21,341.74
16,552.83

SECOM Financial Data 2020

37

COMMON STOCK ISSUES			
Shares				
Date

Additional
shares issued(In thousands)

outstanding
after issue(In thousands)

Share capital
after issue(In thousandsof yen)Allotment ratio
to shareholders

June 15, 1974
Dec. 21, 1974
May 21, 1975
May 21, 1975
Dec. 1, 1975
May 31, 1976
June 1, 1976
Dec. 1, 1976
Nov. 30, 1977
Dec. 1, 1977
Dec. 1, 1978
June 1, 1981
Dec. 1, 1981
Jan. 20, 1983
Nov. 30, 1983
Nov. 30, 1984
Nov. 30, 1985
Jan. 20, 1986
Nov. 30, 1986
Nov. 30, 1987
Jan. 20, 1988
Nov. 30, 1988
Nov. 30, 1989
Jan. 19, 1990
Mar. 31, 1990
Mar. 31, 1991
Mar. 31, 1992
Mar. 31, 1993
Mar. 31, 1994
Mar. 31, 1995
Mar. 31, 1996
Mar. 31, 1997
Mar. 31, 1998
Mar. 31, 1999
Nov. 19, 1999
Mar. 31, 2000
Mar. 31, 2001
Mar. 31, 2002
Mar. 31, 2003
Mar. 31, 2005
July 27, 2017
July 26, 2018
July 26, 2019
July 22, 2020

1,968
2,760
1,196
1,244
4,320
1,880
2,060
6,798
2,042
6,300
7,560
3,000
4,836
5,320
194
1,418
186
6,031
2,878
1,609
3,541
439
1,808
22,986
1,446
2,949
2,035
267
6,986
477
613
1,825
29
159
116,410
273
25
175
6
8
1
2
2
2

9,200
11,96013,156
14,40018,72020,60022,66029,45831,50037,80045,36048,36053,19658,51658,71060,12860,314
66,34569,22370,832
74,37374,812
76,62099,606
101,052
104,001
106,036
106,303113,289
113,766
114,379
116,204
116,233
116,392
232,802
233,075
233,100
233,275
233,281
233,289
233,290
233,292
233,294
233,296¥00,460,000
598,000
657,800
720,000
936,000
1,030,000
1,133,000
1,472,900
1,575,000
1,890,000
2,268,000
2,418,000
2,659,800
3,000,000
3,280,942
5,329,282
5,602,945
5,602,945
11,269,932
15,021,200
15,021,200
16,063,099
21,573,139
21,573,139
25,070,104
32,244,732
37,338,751
37,991,568
56,756,263
58,214,178
59,865,105
65,253,137
65,327,060
65,709,927
65,709,927
66,096,852
66,126,854
66,360,338
66,368,827
66,377,829
66,385,263
66,392,692
66,401,083
66,410,237—
3 for 10
1 for 10—
3 for 10—
1 for 10
3 for 10—
2 for 10
2 for 10—
1 for 10
1 for 10———
1 for 10——
0.5 for 10——
3 for 10
—
—
—
—
—
—
—
—
—
—
10 for 10*
—
—
—
—
—
—
—
—
—

Remarks

Issue at market price (¥900)
Stock split
Stock split
Issue at market price (¥1,134)
Stock split
Issue at market price (¥2,570)
Stock split
Stock split
Issue at market price (¥1,700)
Stock split
Stock split
Issue at market price (¥2,230)
Stock split
Stock split
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Stock split
Conversion of convertible bonds
Conversion of convertible bonds
Stock split
Conversion of convertible bonds
Conversion of convertible bonds
Stock split
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Stock split
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Issue of new shares as restricted stock compensation
Issue of new shares as restricted stock compensation
Issue of new shares as restricted stock compensation
Issue of new shares as restricted stock compensation

Note: The above is a record of SECOM’s common stock issues since the common stock was listed on the Tokyo Stock Exchange in June 1974.
*One share was split into two.

38

SECOM Financial Data 2020

CONSOLIDATED FINANCIAL DATA(BASED ON JAPANESE GAAP) [REFERENCE]

Contents
Condensed Consolidated Balance Sheets(Based on Japanese GAAP)................................................... 40
Condensed Consolidated Statements of Income(Based on Japanese GAAP)................................................... 42
Consolidated Statements of Comprehensive Income(Based on Japanese GAAP)................................................... 42

SECOM Financial Data 2020

39

Condensed Consolidated Balance Sheets (Based on Japanese GAAP)SECOM CO., LTD. and Subsidiaries
As of March 31
In millions of yen

ASSETS
Current assets:
Cash on hand and in banks...................................................
Cash deposits for armored car services..................................
Call loans..............................................................................
Notes and accounts receivable, trade.....................................
Due from subscribers............................................................
Short-term investments.........................................................
Lease receivables and investments in leased assets................
Merchandise and products....................................................
Real estate inventories...........................................................
Work in process....................................................................
Costs on uncompleted construction contracts.......................
Work in process for real estate inventories.............................
Raw materials and supplies...................................................
Deferred income taxes..........................................................
Short-term loans receivable...................................................
Other....................................................................................
Allowance for doubtful accounts...........................................
				Total current assets....................................................

2019

2018

¥  414,199 ¥  350,319 ¥  317,267 ¥
140,905
142,335
135,808———
141,609
133,659
129,984
40,74541,61635,27232,442
25,382
17,36042,76841,82645,544
13,862
14,146
12,321
4,930
5,864
4,766
5,237
5,872
5,057
10,78010,971
10,44121,80630,74339,688
10,927
10,398
8,849
—
—
—
4,525
4,398
5,196
31,40031,00026,352(1,677)(1,775)(1,818)914,465
846,759
792,094

2017

2016

2015

302,364 ¥
130,619—
119,801
33,09029,38743,974
11,915
5,223
4,913
8,979
22,2838,385
14,003
4,942
23,684(1,766)
761,804

228,458 ¥ 232,221
128,267
50,395—
15,500122,048
114,071
31,812
26,31634,44828,51739,542
39,242
13,09914,163
3,527
3,063
5,557
4,031
9,070
9,460
23,024
21,058
8,579
7,913
12,72812,808
4,086
2,268
27,375
21,111(1,883)(1,997)689,744
600,146

Fixed assets:
Tangible assets:
		 Buildings and improvements, net.......................................
		 Security equipment and control stations, net.....................
		Land...................................................................................
		Other, net..........................................................................
				Total tangible assets...................................................

153,30774,309117,720
40,970386,308

148,693
71,715
116,876
41,115
378,401

148,62270,872
114,287
39,907
373,689

150,254
69,569116,825
39,886
376,536

148,828
71,447
116,613
39,415376,305

148,375
70,478
119,604
23,702
362,161

Intangible assets....................................................................

124,767

128,215

131,028

112,131

119,505

49,411

Investments and others:
		Investment securities.........................................................
		 Long-term loans receivable................................................
		 Net defined benefit asset...................................................
		 Deferred income taxes.......................................................
		Other................................................................................
		 Allowance for doubtful accounts.......................................
				Total investments and others......................................
				Total fixed assets........................................................
Deferred assets......................................................................
				Total assets................................................................

40

2020

SECOM Financial Data 2020

252,299
269,575
280,659
280,974
264,400
284,322
34,35135,28435,28438,40339,40142,904
31,78938,48841,40935,28230,79635,01031,554
27,46921,658
9,592
8,602
4,874
52,232
53,952
52,33251,43654,97849,382(12,647)(13,042)(13,033)(15,990)(15,698)(17,525)
389,580
411,728
418,311399,698
382,482
398,969
900,656
918,346
923,029
888,367
878,293
810,541
—
—
—
4
14
26
¥1,815,121 ¥1,765,105 ¥1,715,123 ¥1,650,176 ¥1,568,052 ¥1,410,715

In millions of yen

LIABILITIESCurrent liabilities:
Notes and accounts payable, trade.......................................
Bank loans...........................................................................
Current portion of straight bonds.........................................
Lease obligations..................................................................
Payables—other...................................................................
Accrued income taxes..........................................................
Accrued consumption taxes.................................................
Accrued expenses................................................................
Deposits received for armored car services............................
Deferred revenue.................................................................
Accrued bonuses..................................................................
Provision for losses on construction contracts.......................
Other...................................................................................
				Total current liabilities...............................................
Long-term liabilities:
Straight bonds......................................................................
Long-term loans...................................................................
Lease obligations..................................................................
Guarantee deposits received................................................
Deferred income taxes..........................................................
Accrued retirement benefits for directors andaudit and supervisory board members................................
Net defined benefit liability..................................................
Investment deposits by policyholders, unearned
premiums and other insurance liabilities.............................
Other...................................................................................
				Total long-term liabilities...........................................
				Total liabilities...........................................................
NET ASSETS
Shareholders’ equity:
Common stock....................................................................
Capital surplus.....................................................................
Retained earnings................................................................
Common stock in treasury, at cost........................................
				Total shareholders’ equity..........................................

2020

2019

2018

2017

2016

2015

¥   47,409 ¥   45,826 ¥   43,929 ¥ 44,635 ¥ 41,794 ¥ 43,160
38,364
39,126
41,55844,96955,28344,965
2,916
2,009
795
1,460
2,582
1,414
4,702
4,875
4,932
4,752
4,724
503
42,92742,645
40,102
37,46938,37633,84924,74022,76725,89627,55722,34121,063
11,666
7,209
7,959
5,765
6,611
12,878
7,294
7,329
7,084
5,315
5,562
4,653
118,302
121,086
113,830
107,878
101,306
16,94531,22430,43830,30930,552
31,38931,34818,213
17,255
16,20915,447
15,524
14,652
2,391
2,913
2,436
2,532
1,397
1,612
24,12925,97522,49925,596
20,73820,707374,284
369,458
357,544
353,933
347,633
247,755

4,143
8,674
11,86532,632
7,866

4,702
10,063
11,96032,9558,735

5,322
12,721
11,902
33,181
14,217

7,003
14,123
11,77733,907
21,9438,251
20,033
11,95435,002
14,026

8,413
20,602
3,712
36,00013,554794
23,710

1,046
22,953

1,421
21,8491,306
22,4281,387
22,816

1,415
18,504

174,602
4,052
268,343642,627

172,866
4,406
269,691
639,150

172,345
3,403
276,366
633,910

166,155
4,342
282,989
636,922

159,636
4,166
277,274
624,907150,119
3,295
255,618
503,374¥   66,401 ¥   66,392 ¥   66,385 ¥ 66,377 ¥ 66,377 ¥ 66,377
81,87480,36080,32880,29780,32680,265960,828
908,852
851,764
797,493743,353694,688(73,775)(73,759)(73,748)(73,731)(73,717)(73,701)
1,035,328
981,846924,729
870,437
816,340
767,630

Accumulated other comprehensive income:Unrealized gains on securities...............................................
Deferred losses on hedges....................................................
Foreign currency translation adjustments..............................
Remeasurements of defined benefit plans, net of taxes........
				 Total accumulated other comprehensive income.......

12,095(15)(13,388)
1,096
(212)

18,157(21)(10,683)
6,421
13,87323,759(24)(5,774)
9,933
27,89425,125(30)(7,954)
4,423
21,563

19,964(40)(2,196)(783)
16,94426,981
(34)
1,477
4,390
32,815

Noncontrolling interests.......................................................

137,378

130,234

128,589

121,253

109,859

106,895

				Total net assets.........................................................
				 Total liabilities and net assets.....................................

1,172,494 1,125,954 1,081,213 1,013,253
943,144907,341¥1,815,121 ¥1,765,105 ¥1,715,123 ¥1,650,176 ¥1,568,052 ¥1,410,715

SECOM Financial Data 2020

41

Condensed Consolidated Statements of Income (Based on Japanese GAAP)SECOM CO., LTD. and Subsidiaries
Years ended March 31

In millions of yen
2020

Revenue		 Percentage change from prior year.............................

2019¥1,060,070 ¥1,013,823
4.6%
4.5%

2018

2017

2016

2015

¥970,624
4.6%¥928,098
5.3%¥881,028
4.8%¥840,722
2.2%

Costs of revenue................................................................
		 As a percentage of revenue........................................

722,54668.2

692,21168.3

652,67367.2

621,412
67.0

586,53966.6

557,884
66.4

Gross profit........................................................................
		 As a percentage of revenue........................................

337,52331.8

321,61131.7

317,95032.8

306,686
33.0

294,48833.4

282,837
33.6

Selling, general and administrative expenses......................
		 As a percentage of revenue........................................

194,66418.4

191,39718.9

182,50218.8

175,63618.9

165,906
18.8

159,222
18.9

Operating profit.................................................................
		 As a percentage of revenue........................................

142,85813.5

130,21312.8

135,44814.0

131,050
14.1

128,582
14.6

123,615
14.7

Non-operating income.......................................................
Non-operating expenses....................................................

13,778
5,281

19,646
4,970

13,152
4,281

22,371
6,388

11,3805,136

18,366
5,293

Ordinary profit...................................................................
		 As a percentage of revenue........................................

151,356
14.3

144,889
14.3

144,31814.9

147,033
15.8

134,826
15.3

136,688
16.3

Extraordinary profit............................................................
Extraordinary losses............................................................

3,471
6,971

1,909
2,838

2,471
2,545

516
5,697

1,584
15,003

1,962
11,384

Income before income taxes..............................................
		 As a percentage of revenue........................................

147,855
13.9

143,960
14.2

144,24514.9

141,852
15.3

121,40813.8

127,265
15.1

Income taxes—current.......................................................
Income taxes—deferred.....................................................

45,488128

47,001(7,808)54,811(9,314)43,3262,369

39,150(526)

43,156(37)

Net income........................................................................

102,238

104,766

98,74896,15682,784

84,146

Net income attributable to noncontrolling interests............

13,15812,757

11,755

11,986

5,745

8,754

Net income attributable to owners of the parent................
		 As a percentage of revenue........................................
		 Percentage change from prior year.............................

89,080
8.4(3.2)

92,0099.1
5.8

86,9939.0
3.4

84,170
9.1
9.3

77,0398.7
2.2

75,3929.0
7.9

Consolidated Statements of Comprehensive Income (Based on Japanese GAAP)SECOM CO., LTD. and Subsidiaries
Years ended March 31

42

In millions of yen
2020

2019

2018

2017

2016

2015

Net income........................................................................
Other comprehensive income (losses):
Unrealized gains (losses) on securities.............................
Deferred gains (losses) on hedges...................................
Foreign currency translation adjustments........................
Remeasurements of defined benefit plans......................
Share of other comprehensive income (losses) ofaffiliated companies accounted for underthe equity method.......................................................

¥102,238¥104,766¥ 98,748¥ 96,156¥ 82,784¥ 84,146(6,288)—(1,236)(5,695)(5,740)(0)(2,616)(3,056)(1,649)0(1,003)
5,595

5,324
—
(3,539)
4,698(7,103)—(1,616)(6,163)

15,058
—
9,527
8,581

(1,468)(3,439)3,876(1,327)(2,743)

3,676

		 Total other comprehensive income (losses)..................

(14,688)(14,853)

6,819

5,155

(17,626)

36,843Comprehensive income......................................................

87,55089,913

105,568

101,31265,157

120,990

Comprehensive income attributable to:
Owners of the parent company......................................
Noncontrolling interests.................................................

74,994
12,55577,988
11,924

93,323
12,24488,78912,522

61,1683,989

110,128
10,861

SECOM Financial Data 2020

NONCONSOLIDATED FINANCIAL DATA(BASED ON JAPANESE GAAP) [REFERENCE]

Contents
Condensed Nonconsolidated Balance Sheets(Based on Japanese GAAP)................................................... 44
Condensed Nonconsolidated Statements of Income(Based on Japanese GAAP)................................................... 46

SECOM Financial Data 2020

43

Condensed Nonconsolidated Balance Sheets (Based on Japanese GAAP)SECOM CO., LTD.
As of March 31

In millions of yen

ASSETS

2020

2019

2018

2017

2016

2015

Current assets:
Cash on hand and in banks........................................
Cash deposits for armored car services.......................
Notes receivable.........................................................
Due from subscribers.................................................
Accounts receivable, trade.........................................
Receivables—other.....................................................
Short-term investments..............................................
Merchandise..............................................................
Supplies.....................................................................
Prepaid expenses........................................................
Deferred income taxes...............................................
Short-term loans receivable........................................
Other.........................................................................
Allowance for doubtful accounts................................
				Total current assets.........................................

¥164,370
36,730586
18,241
12,280
4,353
1,499
7,144
2,111
2,432
—
42,4739,208(89)
301,340¥120,815
39,504723
17,931
11,516
4,714
—
7,047
1,686
2,599
—
35,2504,530(101)
246,218¥ 85,009
38,347523
17,286
10,995
4,387
—
5,628
1,767
2,556
—
28,0171,712(105)
196,128¥ 87,387
37,869621
16,48010,650
3,088
—
5,312
1,722
2,323
3,710
27,5391,804(117)
198,394¥ 45,433
40,877592
16,22910,996
4,454
3,444
6,453
1,676
2,172
3,736
22,255
1,698(152)
159,867¥ 93,569
48,396640
16,066
11,202
3,054
437
6,694
1,379
2,210
4,415
20,4231,772(216)
210,048

Fixed assets:
Tangible assets:
		 Buildings and improvements, net............................
		Automobiles, net....................................................
		 Security equipment and control stations, net..........
		 Machinery and equipment, net...............................
		 Tools, furniture and fixtures, net.............................
		Land........................................................................
		 Construction in progress.........................................
		Other, net...............................................................
				Total tangible assets........................................

17,427492
71,533
114
4,193
22,281
3,433
1,725
121,203

16,263
501
69,049143
3,566
21,952
4,721
1,827
118,025

16,160611
67,746
162
2,861
22,077
4,812
72
114,504

16,282709
65,997
179
3,173
21,9782,195
69
110,585

16,572795
67,624170
3,424
22,0151,564
18112,187

16,458824
67,715
192
3,326
28,303
1,714
12
118,548

Intangible assets:
		Software................................................................
		Other.....................................................................
				Total intangible assets.....................................

8,181
1,602
9,783

8,560
920
9,480

5,903
741
6,644

6,125
400
6,526

5,794
574
6,369

4,644
730
5,375

17,74921,982

24,58323,083

20,58829,725353,592

353,375

350,551

323,993

325,104

239,120

2,179
81,174
7,564
20,876
22,614
5,306
4,227
2,408
(2,826)514,866
645,853¥947,194

2,149
113,221
7,578
20,461
21,410
5,442
4,109
2,458
(4,442)547,748675,254¥921,472

2,098
138,277
7,650
20,622
20,763
—
4,046
2,613
(4,440)566,767
687,917¥884,045

2,098
134,796
7,559
20,847
21,643
—
4,294
2,560
(5,532)535,344
652,456¥850,851

1,938
146,716
7,642
21,244
23,177
—
4,294
2,545
(5,551)
547,700
666,256¥826,124

1,938
150,955
7,526
22,126
21,530
—
4,294
2,534
(17,946)
461,806
585,730¥795,778

Investments and others:
		Investment securities..............................................
		 Investment securities in subsidiaries and		 affiliated companies.............................................
		 Investments in subsidiaries and		 affiliated companies.............................................
		 Long-term loans receivable.....................................
		Lease deposits........................................................
		 Long-term prepaid expenses...................................
		 Prepaid pension and severance costs......................
		 Deferred income taxes............................................
		Insurance funds......................................................
		Other.....................................................................
		 Allowance for doubtful accounts............................
				Total investments and others...........................
				Total fixed assets.............................................
				Total assets.....................................................

44

SECOM Financial Data 2020

In millions of yen

LIABILITIES

2020

2019

2018

Current liabilities:
Accounts payable.......................................................
Bank loans.................................................................
Lease obligations........................................................
Payables—other.........................................................
Payables—construction..............................................
Accrued income taxes................................................
Accrued consumption taxes.......................................
Accrued expenses......................................................
Deposits received for armored car services..................
Deferred revenue.......................................................
Accrued bonuses........................................................
Other.........................................................................
				Total current liabilities.....................................

¥  4,125
22,565271
17,381
4,127
11,8485,106739
14,192
20,147
6,849
4,902
112,258¥  3,820
21,211309
19,7695,437
11,2103,221
747
18,34819,9496,488
2,590
113,104¥  4,108
21,940229
16,708
3,897
13,162
3,817
691
16,446
20,3006,300
2,623
110,226¥

3,604
22,703215
14,476
4,018
14,3452,883
697
15,187
20,6296,278
4,014
109,053¥

3,641
36,923
198
15,698
3,980
9,479
2,718
737
13,97520,923
6,246
4,177
118,699¥

Long-term liabilities:
Lease obligations........................................................
Guarantee deposits received......................................
Deferred income taxes...............................................
Accrued pension and severance costs.........................
Other.........................................................................
				Total long-term liabilities.................................
				Total liabilities.................................................

3,867
16,347—1,517
326
22,058134,316

3,971
16,462—
1,788
343
22,566135,670

2,358
16,640
3,575
2,164
91
24,830135,057

2,477
16,804
6,642
2,506
103
28,533
137,5872,601
17,038
6,213
2,835
378
29,068
147,768

2,661
17,286
3,400
3,241
408
26,998145,646¥ 66,401¥ 66,392¥ 66,385¥ 66,377¥ 66,377¥ 66,377

83,077
083,07883,0690
83,06983,061
0
83,062

83,0540
83,054

83,0540
83,054

83,0540
83,054

9,028

9,028

9,028

9,028

9,028

9,028

800
2,212
721,639
733,679(73,775)
809,383

800
2,212
692,935
704,976(73,759)
780,679800
2,212
653,840
665,881(73,748)
741,579

800
2,212
618,887
630,927(73,731)706,629800
2,212
586,082
598,122(73,717)673,836800
2,212
556,013568,053(73,701)
643,784

3,494

5,122

7,408

6,634

4,518

6,347

3,494
812,878¥947,1945,122
785,801¥921,472

7,408
748,988¥884,045

6,634
713,263¥850,851

4,518
678,355¥826,124

6,347
650,132¥795,778

NET ASSETS
Shareholders’ equity:
Common stock..........................................................
Capital surplus:
		 Additional paid-in capital........................................
		 Other capital surplus..............................................
				Total capital surplus.........................................
Retained earnings:
		Legal reserve..........................................................
		 Other retained earnings:
			 Reserve for system developments........................
			General reserve...................................................
			 Accumulated earnings carried forward................
				Total retained earnings....................................
Common stock in treasury, at cost..............................
				Total shareholders’ equity................................
Valuation, translation adjustments and others:
Unrealized gains on securities.....................................
				Total valuation, translation adjustments				 and others....................................................
				Total net assets...............................................
				 Total liabilities and net assets...........................

2017

2016

2015

3,172
29,416
185
15,675
4,480
10,826
7,088
800
15,124
21,2696,296
4,311
118,647

SECOM Financial Data 2020

45

Condensed Nonconsolidated Statements of Income (Based on Japanese GAAP)SECOM CO., LTD.
Years ended March 31

In millions of yen
2020

46

2019

2018

2017

2016

2015

Revenue...........................................................................
		Percentage change from prior year...........................

¥398,929¥394,181¥387,881¥382,476¥376,044¥370,663
1.2%
1.6%
1.4%
1.7%
1.5%
1.8%

Costs...............................................................................
		As a percentage of revenue......................................

236,39759.3

234,04659.4

229,33259.1

227,204
59.4

223,18959.4

221,441
59.7

Gross profit......................................................................
		As a percentage of revenue......................................

162,53140.7

160,13440.6

158,54940.9

155,271
40.6

152,855
40.6

149,221
40.3

Selling, general and administrative expenses....................
		As a percentage of revenue......................................

85,654
21.5

83,30121.1

80,38020.7

78,988
20.7

77,191
20.5

76,046
20.5

Operating profit...............................................................
		As a percentage of revenue......................................

76,87719.3

76,833
19.5

78,16820.2

76,28319.9

75,66420.1

73,17419.8

Non-operating income.....................................................
Non-operating expenses..................................................

16,9503,289

15,006
2,866

14,9782,064

13,3893,130

13,6392,691

11,714
3,316

Ordinary profit.................................................................
		As a percentage of revenue......................................

90,53822.7

88,972
22.6

91,083
23.5

86,54322.6

86,61223.0

81,57222.0

Extraordinary profit..........................................................
Extraordinary losses..........................................................

1,651
2,092

87
203

1,896
324

651
100

3,064
6,733

1,670
2,805

Income before income taxes............................................
		As a percentage of revenue......................................

90,09722.6

88,85522.5

92,65523.9

87,09422.8

82,94322.1

80,437
21.7

Income taxes....................................................................
		Effective tax rate......................................................

24,28927.0

14,838
16.7

24,962
26.9

23,83327.4

24,50029.5

22,94528.5

Net income......................................................................
		As a percentage of revenue......................................
		Percentage change from prior year...........................

65,80816.5(11.1)

74,01618.8
9.3

67,69217.5
7.0

63,26016.5
8.2

58,44215.5
1.7

57,492
15.5
11.6

SECOM Financial Data 2020