A Message to Shareholders

Founderof Shareholders. At the Ordinary General Meeting of Shareholders, held on June 25, 2015,
management proposed and shareholders approved the payment of a year-end cash dividendof ¥65.00 per share. Together with an interim dividend of ¥60.00, dividends for the full term
amounted to ¥125.00 per share, up ¥10.00 from the previous fiscal year.
In the period under review we also introduced a shareholder benefit program. Our objectives
here were twofold, namely, to reward shareholders for their ongoing support and to deepen theirunderstanding of what we do by giving them the opportunity to actually use SECOM products
and services.

Consolidated Operating Results

Understanding and Responding to Change

Buoyed by a weaker yen and rising share prices, the Japanese economy remained on a path ofgradual recovery in the fiscal year ended March 31, 2015, despite waning consumer spending in
the aftermath of Japan’s consumption tax hike. This was due mainly to improvements in ­corporate
earnings and in employment and personal income levels.
In this environment, we continued working toward the realization of our vision for the future,
the Social System Industry, in line with our goal of providing safety and security, as well as comfort and convenience, wherever and whenever necessary. To this end, we responded to the needsof customers through the provision of high-grade services and systems in our security services
segment, as well as in our other segments: fire protection services, medical services, insurance
services, geographic information services, information and communication related services, andreal estate and other services. We also pressed forward with efforts to apply the ALL SECOM­concept, maximizing synergies among our various independent businesses to strengthen theGroup as a whole, with a view to ­hastening our advance to a new stage of growth.
Consolidated net sales and operating revenue advanced 2.6%, or ¥24.1 billion, to ¥945.2­billion. Principal contributing factors included higher net sales and operating revenue in the­security services and medical services segments—the former underpinned by increased revenue
from on-line security systems and higher sales of large-scale security systems and security camera
systems and the latter by the expansion and rebuilding of hospitals and a robust performance by
the pharmaceuticals dispensing services business—and the inclusion of a full year of operating
results for a subsidiary newly consolidated in the fourth quarter of the fiscal year ended March31, 2014. Operating income rose 1.6%, or ¥1.9 billion, to ¥122.0 billion, bolstered by improvements in the insurance services and the security services segments ascribed to, respectively, adecline in losses incurred due to damage caused by natural disasters and the increase in net salesand ­operating revenue. Net income attributable to SECOM CO., LTD., was up 8.4%, or ¥6.2
­billion, to ¥80.2 billion, owing mainly to the increase in operating income and to lower income
taxes, which primarily reflected a statutory tax rate reduction that resulted from tax reform in Japan.

Needs for security, peace of mind, convenience and comfort are becoming more varied andsophisticated. Accordingly, we continue working to reinforce the three key components of ouroperating foundation, namely our technologies, our people and our operational structure, withthe goal of building an ever-broader portfolio of services and systems that position us to respondin a timely manner to increasingly diverse needs. In our core commercial security services business, the importance of reducing oper­ating costs and enhancing internal monitoring is growing,a trend that continues to encourage the adoption of our value-added security systems andsecurity cameras, underscoring the ­importance of optimizing services to meet evolving needs.
In the period under review, we expanded sales of such high-value-added offerings as SECOM
AX, a remote imaging on-line security system that features advanced image recognition technologies; SECOM LX, which combines on-line security and access control functions to facilitate
efficient personnel management, thus reducing costs; and SECOM FX, an on-line security andfacility control system.
Recent years have seen a sharp increase in the number of companies seeking to reinforce
security and internal monitoring by installing safety and production management systems for­factories and systems that prevent leaks of classified information and personal data. In response
to such needs, we are actively proposing systems that combine security cameras and accesscontrol. We recently introduced SECOM NVR, a next-generation security camera system that alsooffers optional access to SECOM Image Archive Service, enabling subscribers to store camera
images remotely at one of our data center facilities.
In the area of home security services, we continued to respond to growing needs for systems
that enhance comfort and convenience and provide security and peace of mind, as a result of
which in June 2014 the number of households in Japan that have installed SECOM Home Security
topped one million. We also sought to bolster sales of SECOM Home Security G-Custom, an
on-line residential security system that includes a number of added features that enhance everyday
convenience.
In our overseas security services business, we bolstered efforts to encourage broad acceptanceof SECOM-style security services, focusing on the rapidly growing economies of Southeast Asiaand the People’s Republic of China (PRC). These include establishing a presence in Myanmar.
“SECOM-style security services” is a term we use to describe comprehensive on-line security
systems that encompass the installation of security equipment at the subscriber’s premises,around-the-clock monitoring from a SECOM control center via telecommunications circuits andthe prompt dispatch of highly trained emergency response personnel in the event an irregularity
is detected.
In fire protection services, subsidiaries Nohmi Bosai Ltd. and Nittan Co., Ltd., two of Japan’s
leading fire protection services providers, leverage their respective business foundations andEnhancing Returns to Shareholders
We recognize that providing a fair return to shareholders is a crucial management task. In linewith our basic policy of ensuring a consistent and stable distribution of profits, we determine ourconsolidated dividend payout ratio based on an overall assessment of trends in our consolidated
operating performance. We make it a basic rule to distribute profits twice annually in the formof an interim dividend, introduced in the period under review, which is paid to shareholders ofrecord as of September 30 each year and a year-end dividend, which is paid to shareholders ofrecord as of March 31 the following year. The interim dividend is determined by the Board ofDirectors, while the year-end dividend is determined by shareholder vote at the General Meeting

6

SECOM Annual Report 2015

The Management

Makoto Iida

Looking to the future, we are working to expedite
development efforts under the ALL SECOM banner to realize
a broader range of services and systems that respond toincreasingly diverse and sophisticated needs and position us
for further growth.

Shuji Maeda
Chairman and Representative Director

Hiroshi Ito
President and Representative Director

SECOM Annual Report 2015

7

A Message to Shareholders

The Management

product development capabilities to provide high-grade automatic fire alarm systems and fire
extinguishing equipment, among others. Both companies also took steps to fortify their overseas
operations, such as introducing new products and strengthening collaboration with our security
services business.
Efforts in our medical services business continued to concentrate on Home Medical Services,which comprise home nursing and pharmaceutical dispensing services, as well as on the operation of residences for seniors, electronic medical reporting systems, sales of medical equipment
and pharmaceuticals, personal care services and support for associated hospitals. In addition, we
promoted initiatives directed at addressing needs engendered by Japan’s super-aged society, such as
opening SECOM Home Health Care Center Kamakura, a comprehensive senior care facility offeringhome nursing, home-based personal care, day services and home care support services, and Alive
Shinagawa–Oi, an Alive Care Home series’ nursing home in Tokyo that cooperates closely with local
hospitals, commercial facilities and organizations to provide support services for seniors.
In our insurance services business, we promoted sales of our distinctive non-life insurance
policies. These include the Security Discount Fire Policy, a fire insurance policy for commercialpremises, and SECOM Anshin My Home, a comprehensive fire insurance policy for homes, bothof which offer discounts to subscribers who have installed on-line security systems, recognizing
the risk-mitigating factors of such systems; MEDCOM, an unrestricted cancer treatment policythat covers all treatment costs; and SECOM Anshin My Car, a comprehensive automobile insurance policy that includes access to on-site support services provided by our emergency response
personnel in the event of an accident.
Our geographic information services business centers on the collection of geographic datafrom commercial satellite images, aerial photography and vehicle/ground surveying, which weintegrate, process and analyze to provide geospatial information services to public sector entities—including national and local governments—and private-sector customers in Japan. We also
extend these services to government agencies abroad, including those in emerging economies
and developing countries. In the period under review, we sought to provide services that respondto increasing domestic and overseas needs for geospatial information associated with, among
others, the construction and maintenance of critical infrastructure and the prevention and­mitigation of disasters.
We are also known for our broad range of information and communication related services,which focus on data center services and encompass BCP support services, information security­services and cloud-based services. In the period under review, we launched SECOM Premium Net,a system designed to protect against online banking scams, a mounting problem, and the SECOM
Minutes Digitization Service, which enables companies to digitize the minutes of board of directors’
meetings and entrust them to us for rigorously safe storage at one of our data center facilities.
Our real estate and other services business continued to emphasize the development and saleof condominiums equipped with distinctive security and contingency planning. Other services
include real estate leasing, construction and installation.

care, medical services, nursing care and personal care, is to accelerate efforts to develop new
medical services. Established in line with our super-aged society theme, the SECOM Medical
Support Center joins SECOM control centers (security) and the SECOM Anshin Information
Center (disaster preparedness/BCP/environmental preservation). Going forward, we will accelerate collaboration among the three facilities under the ALL SECOM banner with the aim ofenhancing comfort and convenience and ensuring security and peace of mind.
We remain committed to providing uniquely SECOM services that respond to evolving social
imperatives and increasingly diverse customer needs. For example, we are broadening ourselection of IC chip-embedded ID card services, which includes employee ID cards that allow
meticulous access control and management of employee attendance, as well as cashless payment
at, for example, company cafeterias—all of which can help reduce costs and improve operational
efficiency—our offerings now include cloud-based services and information security services.
In October 2015, Japan will introduce the My Number social security and tax identity system,
under which every resident of the country will be assigned a personal ID number. With the implementation of this system, companies will be required to collect and manage ID numbers of all of
their employees for procedures related to social security, income tax and disaster relief. We havealready introduced the SECOM Anshin My Number Service, which enables subscribers to entrust
employee My Number data to us for storage at a Secure Data Center facility, thereby ensuring
robust physical and cyber security.
Another recent highlight was the establishment of SECOM Lifestyle Partner Kugayama, afacility designed to help resolve a variety of worries for seniors, a key challenge in a super-agedsociety. Under the ALL SECOM banner, SECOM Lifestyle Partner Kugayama is collaborating withother SECOM Group facilities in the Kugayama area, as well as with local authorities and privatesector businesses, to enhance its menu of support services that help local seniors deal with issuesof concern in their lives. Recognizing demographic trends in Japan as an opportunity for growth,
we will direct our efforts toward creating new services that address the needs of Japan’s rapidly
aging population.
By rallying the capabilities of the SECOM Group, guided by the ALL SECOM concept, we will
step up efforts to develop forward-looking services and systems that respond to evolving social
imperatives. Through these efforts, we will continue to encourage people to turn to SECOM withthe confidence that doing so will help them resolve security and other concerns. Looking ahead,
our focus will be on making SECOM an ever-present and trusted part of our customers’ lives.
In line with our corporate message—“Providing reliable peace of mind”—we will accelerate
the realization of our Social System Industry vision by providing indispensable services that fulfill
the promise of the ALL SECOM concept. In all of our endeavors, we look forward to the ongoingsupport of shareholders.
June 25, 2015

ALL SECOM: The Way Forward
Guided by the ALL SECOM concept, we will press ahead with the development of innovative services that anticipate future needs in line with three key themes—security, a super-aged society
and disaster preparedness/BCP/environmental preservation. One key to the success of this effort
is our new SECOM Medical Support Center. The objective of this facility, which is staffed withnurses, public health counselors and dieticians and provides one-stop consultation on health8

SECOM Annual Report 2015

Makoto Iida
FounderShuji Maeda
Chairman and Representative Director

Hiroshi Ito
President and Representative Director

SECOM Annual Report 20159