Notice of Convocation
The 48th Ordinary General Meeting of Shareholders

The following is an English translation of the Notice of Convocation of the 48th
Ordinary General Meeting of Shareholders of SECOM CO., LTD. to be held on June25, 2009, except for the translation of the INSTRUCTION ON ONLINE VOTING and
the ACCESS MAP FOR THE PLACE OF THE MEETING in the Notice. The
Company provides this translation for your reference and convenience only andwithout any warranty as to its accuracy or otherwise.

Table of Contents
Notice of Convocation of the 48th Ordinary General Meeting of Shareholders ·········[Attached Documents]
Business Report ·············································································································I.
Outline of the Group’s Business ·······································································
1. The Current Business Development and Results of Operations ···················
2. Issues the Group Has to Cope with ··································································
3. Capital Investments ···························································································
4. Fund Raising ······································································································
5. Trends in Earnings and Assets ·········································································
6. Matters Concerning Principal Subsidiaries ····················································
7. Principal Business of the Group ·······································································
8. Principal Offices of the Group ·········································································
9. Matters Concerning Employees of the Group and the Company ·················
10. Primary Lenders ································································································
11. Other Important Matters Concerning the Group ··········································

4
7
7
7
10
11
11
12
14
15
16
16
17
17

II.
1.
2.
3.
4.
5.
6.

Matters Concerning the Company’s Shares and Shareholders ····················
Total Number of Shares to be Issued·································································
Total Number of Issued Shares ········································································
Number of Shareholders at the End of the Fiscal Year ·································
Number of Shares in a Unit ················································································
Major Shareholders ···························································································
Other Important Matters Concerning shares ·················································

19
19
19
19
19
19
20

III.
1.
2.
3.

Directors and Corporate Auditors·····································································
Names and Titles of Directors and Corporate Auditors ··································
Remuneration of Directors and Corporate Auditors·······································
Outside Corporate Auditors ·············································································

21
21
22
23

IV.
1.
2.
3.
4.

Accounting Auditors ···························································································Name of Accounting Auditors ············································································
Remuneration of Accounting Auditors ···························································
Non-Audit Duties ·································································································
Policy for Decision for Dismissal or Non-reappointment ································

24
24
24
24
24

V.

System under which the Company’s Business is Ensured to be Properly
Executed ··············································································································
Basic Policy regarding Internal Control System ··············································
Organization, etc. relating to Internal Control System ···································

26
26
32

1.
2.

[English Translation]2

Consolidated Balance Sheet ························································································
Consolidated Statement of Income ············································································
Consolidated Statement of Changes in Net Assets ···················································
Notes to Consolidated Financial Statements ·····························································
Non-Consolidated Balance Sheet ···············································································
Non-Consolidated Statement of Income ····································································
Non-Consolidated Statement of Changes in Net Assets ·············································
Notes to Non-Consolidated Financial Statements ····················································
Certified Copy of the Accounting Auditors’ Report (Consolidated) ························
Certified Copy of the Accounting Auditors’ Report (Non-Consolidated) ···············
Certified Copy of the Board of Corporate Auditors’ Report····································
Reference Document Concerning the General Meeting of Shareholders ··················(Note) This Table of Contents is for this abridged English translation only, and not the same as thatin the original Japanese documents.

[English Translation]
3

35
36
37
38
54
55
56
58
67
68
69
71

Stock Exchange Code: 9735
June 4, 2009

Notice of Convocation of
The 48th Ordinary General Meeting of Shareholders
Dear Shareholders:
You are cordially invited to attend the 48th Ordinary General Meeting of
Shareholders of SECOM CO., LTD. (the “Company”).
If you are unable to attend the aforesaid meeting, you are respectfully requested
to review the “Reference Document Concerning the General Meeting of Shareholders”
below and exercise your voting right on or before 6:00 p.m., Wednesday, June 24,2009 (Tokyo time), by either of the methods stated below:[By mail]
Please indicate on the Voting Right Exercise Form enclosed herewith yourconsent or dissent to the proposals on the agenda, and return the form to theCompany by mail so as to arrive us before the aforesaid deadline for the exercise
of voting right.
[Via the Internet]
Please access the designated website for exercising voting rights(http://www.evote.jp/) from your personal computers by using the “log in ID” and“temporary password” stated on the enclosed Voting Right Exercise Form. Then,please indicate your consent or dissent to the proposals on the agenda byfollowing the instructions on the display screen.
Yours very truly,
SECOM CO., LTD.
5-1, Jingumae 1-chome, Shibuya-ku,
Tokyo, Japan
By: KANEMASA HARAGUCHI
President and Representative Director(Note): Please note that shareholders with addresses outside Japan may not themselves
use these voting procedures. For these shareholders please consult their standing agentswithin Japan as to the exercise of voting rights.

[English Translation]
4

PARTICULARS

1.

Date and Time of the Meeting:Thursday, June 25, 2009 at 10:00 a.m.

2.

Place of the Meeting:
HARAJUKU QUEST HALL, on the 3rd floor of HARAJUKU QUESTBuilding
13-14, Jingumae 1-chome, Shibuya-ku, Tokyo, Japan

3.

Matters to be dealt with at the Meeting:
Matters to be Reported:
1. Report on the Business Report, the Consolidated Financial Statements forthe 48th Fiscal Year (from April 1, 2008 to March 31, 2009) and theResults on the Audits of Consolidated Financial Statements by the
Accounting Auditors and the Board of Corporate Auditors.
2. Report on the Non-Consolidated Financial Statements for the 48th Fiscal
Year (from April 1, 2008 to March 31, 2009).
Matters to be Resolved upon :First Item of Business:

Proposed Distribution of Surplus

Second Item of Business:

Partial Amendments to the Articles ofIncorporation

Third Item of Business:

Election of Eleven (11) Directors

Fourth Item of Business:

Presentation of Retirement Allowance toRetiring Director[English Translation]
5

4.

Matters related to Exercise of Voting Rights:(i) Non-uniform Exercise of Voting Rights

When the shares are owned by multiple owners but are registered in thename of a sole shareholder, each owner may want to exercise his/her voting rights
independently from other owners. The law permits non-uniform exercise of voting
rights by a registered shareholder in such a situation. In order to exercise
non-uniform voting, the registered shareholder shall notify the Company to makenon-uniform voting and the reason thereof 3 days before the general meeting ofshareholders.
(ii) Validity of the voting in the event of exercise of voting rights by a shareholder

both via return mail (Voting Right Exercise Form) and via the Internet
In the event that a shareholder exercises voting rights both via return mail(Voting Right Exercise Form) and via the Internet, the Company will consider the
exercise of voting rights via the Internet to be valid.
(iii) Validity of the voting in the event of exercise of voting rights by a shareholder via

the Internet more than once
In the event that a shareholder exercises voting rights via the Internet morethan once, the Company will consider the last exercise of voting rights to be valid.

(Notes)If you plan to attend the meeting, please submit the enclosed Voting Right
Exercise Form to the receptionist at the meeting.
(Notice)
If there occurs any changes in the contents of the Reference Document Concerning
the General Meeting of Shareholders, the Business Report, the Consolidated Financial
Statements for the 48th Fiscal Year (from April 1, 2008 to March 31, 2009) , theResults on the Audits of Consolidated Financial Statements by the Accounting
Auditors and the Board of Corporate Auditors, and the Non-Consolidated Financial
Statements for the 48th Fiscal Year (from April 1, 2008 to March 31, 2009), theCompany will announce such change on the Company's website(http://www.secom.co.jp/).

[English Translation]
6

Attached Documents

Business Report(Fiscal Year Ended March 31, 2009)
I. Outline of the Group’s Business1. The Current Business Development and Results of Operations
During the consolidated fiscal year ended March 31, 2009, Japanese economy
continued to face adverse economic conditions. The first half saw steep increases in
the prices of crude oil, raw materials and other resources as well as a continuation of
the economic downturn. In the second half, the worldwide financial crisis caused stock
market slumps and exchange rate fluctuations, whose effects rapidly spread to the real
economy, resulting in deterioration of corporate profits, a decrease in private-sector
capital investment, and a decline in personal consumption due to a worsening
environment for employment and personal income.
In this economic environment, a recent recurring of violent crimes and rampant
bank transfer scams has increased the diversity and sophistication of the safety andsecurity needs of society. In these circumstances, the SECOM Group (the “Group”)
pursued the aim of building a “Social System Industry” to realize a “society in whichpeople can live safely and peacefully everywhere at all times”. To that end, we strove
to provide high-quality services and products adapted to customer needs in the core
Security Services business as well as in the Fire Protection Services, Medical Services,
Insurance Services, Geographic Information Services, Real Estate Development andSales, Information and Communication Related and Other businesses.
As a result, consolidated revenue in the current fiscal year decreased by 0.6%
year-on-year to Yen 678.4 billion, reflecting lower revenue from the Real Estate
Development and Sales and Information and Communication Related and Other
businesses. Consolidated operating profit decreased by 16.3% to Yen 87.6 billion andconsolidated ordinary profit fell by 20.4% to Yen 90.9 billion, owing to a decrease in
the prices of condominiums and loss on revaluation of real estate inventories held by
the Real Estate Development and Sales business. Consolidated net income decreasedby 65.0% to Yen 21.5 billion owing to factors including a Yen 20.6 billion loss on
impairment of investment securities by the Company, Secom General Insurance Co.,
Ltd. and Nohmi Bosai Ltd.; a Yen 2.4 billion provision for reserve for litigation losses
by Pasco Corporation; a Yen 1.0 billion loss on settlement of litigation by Secom
General Insurance Co., Ltd.; and the decision to forgo the recognition of a portion ofdeferred tax assets.

[English Translation]
7

（Millions of Yen）
Consolidated
revenue

Consolidated
operatingprofitConsolidated
ordinary profit

Consolidated
net income

Current Fiscal
year (2008)

678,400

87,63490,92421,502Previous fiscal
year (2007)

682,619

104,706

114,278

61,506

A breakdown by business segments are as follows:
In Security Services business, we concentrated on centralized systems (online
security systems) for business facilities and private residences, static guard services,armored car services and sales of security products.
With regard to Security Service business for business facilities, we strove topromptly propose security services and security products accommodating to customer
needs and stepped up sales activities such as customer visits. In the home security
business, we are rigorously engaged in sales activities to accurately respond to
customer wants and needs thereby increasing the number of SECOM Home Security
contracts. We undertook customer service improvements by upgrading and expanding
security services and security products that can be connected to online SECOM Home
Security systems, such as the new Home Fire Sensor, which complies with the revised
Fire Service Act, and the provision of SECOM Home Service, a suite of lifestylesupport services for SECOM Home Security customers.
As a result of these operations, revenue rose 0.5% year-on-year to Yen 427.9
billion, while operating profit decreased by 3.2% to Yen 103.5 billion due to the cost
increment for service quality improvements.
In Fire Protection Services, we supplied a wide range of highly qualified fire
protection systems satisfying needs of customers, including automatic fire alarmsystems and fire extinguishing systems for a variety of environments, such as officebuildings, plants, tunnels, cultural properties, ships, and residences. Also weconcentrated to expand sales of fire alarm device for residence, which has became
mandatory requirement by revised Fire Service Act, and renewal of fire protection
systems accompanied by renovation in commercial and other facilities, taking
advantage of a wealth of installation expertise and relationship with customers
developed over many years. As a result, revenues of Fire Protection Services increased
1.9% year-on-year to Yen 84.1 billion and operating profit rose by 12.3% year-on-year
to Yen 5.7 billion.
In Medical Services, we supplied our core medical services such as home nursing
services and pharmaceutical dispensing and delivery services, the operation of nursing
homes, remote image diagnosis support services, electronic medical report systems,[English Translation]8

sales of medical equipment and devices, personal care services and real estate leasing
for medical institutions. Revenue in this segment increased by 1.1% year-on-year to
Yen 35.2 billion, and operating profit rose 5.9% to Yen 1.6 billion over the previous
year.
In the Insurance Services, we concentrated on sales of insurance policies that arecharacteristic of the Group, including Security Discount Fire Policy for commercial
facilities, the comprehensive fire insurance policies, SECOM Anshin My Home, forresidences, the comprehensive automobile insurance policy, New SECOM Anshin My
Car, that includes an on-site emergency services by SECOM’s emergency response
personnel in the event of an accident, and MEDCOM, an unrestricted cancer treatment
policy aimed at helping patients overcome cancer by giving access to the besttreatments. As a result, revenue of insurance services rose 7.7% year-on-year toamount to Yen 30.3 billion due to a rise in net premiums written and an improvement
in investment income. Operating loss was Yen 0.3 billion, compared with a loss of 2.4
billion in the previous consolidated fiscal year, reflecting a decrease in provision forreserve for natural disasters.
In Geographic Information Services, we are engaged in the most advanced GIS(Geographic Information System)-based operation support services for national andlocal governments and private sectors. We are able to collect and supply geographic
information in a speedy and precise manner, utilizing satellite images regardless of thetime of day or the weather. Revenue of Geographic Information Services rose 2.1%
year-on-year to Yen 40.2 billion. Operating profit grew 39.3% year-on-year to Yen 1.8
billion with efforts of renovation in production process, efficient management, andcost reduction.
In the Real Estate Development and Sales, we develop and sell condominiums thatplace emphasis on security. Amid a slump in the market for condominiums, we
actively promoted sales and sharply reduced inventories of real estate for sale byappropriate discounting. We implemented a flexible sales strategy with regard to realestate for sale in process, deciding on the basis of comprehensive consideration of thecharacteristics of individual properties such as temporarily suspending development ofproperties with good sales prospects in a near future or ceasing to develop properties
with unfavorable sales prospects. As a result, revenue from this segment decreased by
26.2% year-on-year to Yen 22.0 billion. Operating loss was Yen 16.7 billion opposed
to an operating profit of Yen 1.0 billion in the previous fiscal year due to lower
revenue and a Yen 8.3 billion loss on revaluation of real estate inventories.
Meanwhile, the Group established a new business segment, Real Estate Development
and Sales business in the current fiscal year, formerly included in Information andCommunication Related and Other Services, owing to the substantial decline inoperation profit. We have separated it out as an independent business segment
beginning from the current fiscal year.

[English Translation]
9

Information and Communication Related and Other Services covers informationand communication related services and real estate leasing, etc. We endeavored tooffer comprehensive information network services, focusing on information security
and disaster response services. As a result, revenue decreased to Yen 38.3 billion,
down 8.1% from the previous fiscal year. However, operating profit increased by
10.6% year-on-year to Yen 4.4 billion, by higher sales from high-margin businesses.
Sales by Business Segment (48th Fiscal Year – current consolidated fiscal year)(Millions of Yen)
Business segment
Security Services
Fire Protection Services
Medical Services
Insurance Services
Geographic Information
Services
Real Estate Development
and Sales
Information andCommunication Related
and Other Services
Total
Eliminations and Corporate
items
Consolidated revenue

Revenue
Customers

Inter-segment

Total

Operatingprofit (loss)

427,989
84,17435,22630,39640,206

9,077
5,658
123
2,919
117

437,067
89,83335,34933,31540,323

103,517
5,706
1,654
(333)
1,816

22,072

2,360

24,432(16,709)38,333

8,863

47,197

4,426

678,400-

29,119(29,119)

707,520(29,119)

100,077(12,443)

678,400-

678,400

87,634

With respect to the results by geographical area, revenue in Japan decreased by 0.4%
year-on-year to Yen 658.0 billion, and operating profit decreased by 15.0% to Yen
98.2 billion. In other regions, although revenue from subsidiaries that provide security
services increased on a local currency basis owing to efforts to reinforce the businessstructures in Southeast Asia, China and other areas where economic development
continues, revenue translated in Yen decreased by 6.7% year-on-year to Yen 20.3
billion because of the impact of Yen appreciation. Nevertheless, operating profit
increased by 15.6% to Yen 1.1 billion.

2. Issues the Group Has to Cope with
As society undergoes constant change, people's demand for security and safety
increases, and such demand shows diversification and sophistication.
In view of this situation, the Secom Group is aiming to realize a "Social System
Industry" through providing various services and products, in Security Services, Fire
Protection Services, Medical Services, Insurance Services, Geographic Information
Services, Real Estate Development and Sales, and Information and Communication[English Translation]
10

Related and Other Services, that can help realize more secured, convenient, andcomfortable society. Moreover, by combining these services and products, the Groupendeavors to create and supply unique services and products, which are realized only
through such combination. To this end, we are striving to provide customer-oriented
services and high-quality systems that can earn the trust of our customers. Moreover,
we are working to provide comprehensive services, maximizing the SECOM Groupcapabilities. We are also continually improving operations throughout the Group toenhance management efficiency.
We look forward to the support of our shareholders in these and all of ourendeavor.

3. Capital Investments
Capital investment for the current fiscal year totaled Yen 48.6 billion (a breakdown isgiven below). A major portion, Yen 33.9 billion, was in system investments (including
those for security equipment and control stations), etc. in the Security Services
business.
Business segment(Millions of Yen)

Security Services

33,920Fire Protection Services

1,784

Medical Services

1,959

Insurance Services

1,993

Geographic Information Services

1,037

Real Estate Development and Sales

25

Information and Communication Related
and Other Services

10,850Subtotal

51,570Eliminations and Corporate items(2,883)

Total

48,687

4. Fund Raising
During the current fiscal year, no funds were raised by the Group in capital markets
through the issuance of corporate bonds or new shares.

[English Translation]
11

5. Trends in Earnings and Assets(1) Trends in Earnings and Assets of the Group(Millions of Yen except for net income per share)

45th fiscal

46th fiscal

47th fiscal

48th fiscal year

year

year

year

(current fiscal year)(4/1/2005–(4/1/2006–(4/1/2007–(4/1/2008–

3/31/2006)

3/31/2007)

3/31/2008)

3/31/2009)

Fiscal years
Category

Revenue

567,315

613,976

682,619

678,400

Operating profit

94,10997,840104,706

87,634

Ordinary profit

96,669102,720

114,278

90,924

Net income

52,99458,29961,506

21,502234.28259.14273.4096.69

Total assets

1,149,377

1,169,182

1,202,840

1,090,483

Net assets

496,164

601,116

630,274582,608

Net income per share(Yen)(2) Trends in Earnings and Assets of the Company(Millions of Yen except for net income per share)

45th fiscal year
(4/1/2005 3/31/2006)

46th fiscal year
(4/1/2006 3/31/2007)

47th fiscal year
(4/1/2007 3/31/2008)

48th fiscal year
(current fiscal year)(4/1/2008 3/31/2009)

Revenue313,096

326,076

337,611

336,893

Operating profit

72,17273,404

74,15572,616

Ordinary profit

70,96476,58379,18778,346

Net income

43,87947,24550,04632,414194.58210.00222.46145.76

Total assets

643,990654,791

673,043

679,858

Net assets

461,646494,154521,529504,932

Fiscal years
Category

Net income per share(Yen)

In the current fiscal year, the Company’s revenue decreased 0.2%
year-on-year to Yen 336.8 billion, operating profit fell by 2.1% to Yen 72.6
billion, ordinary profit decreased by 1.1% to Yen 78.3 billion, and net income[English Translation]
12

decreased by 35.2% to Yen 32.4 billion. Net income per share was Yen 145.76
from Yen 222.46 for the previous fiscal year.
Contract revenue accounted for 87.4% of total revenue, or Yen 294.3 billion,
and product and equipment sales accounted for 12.6% of total revenue, or Yen
42.5 billion.
Revenue from centralized system contracts, which is the core of revenue andprofit in contract revenue, grew steadily, totaling Yen 241.6 billion andaccounting for 71.7% of total revenue. Static guard contracts generated revenueof Yen 25.8 billion, and revenue from armored car services came to Yen 17.4
billion. The remaining contract revenue amounted to Yen 9.5 billion, of which the
majority came from fees paid by subsidiaries and other companies for advisory
services.
Product sales totaled Yen 30.9 billion, 9.2% of total revenue, and equipment
sales to subsidiaries and other companies totaled Yen 11.5 billion, 3.4% of total
revenue.
We put cost control measures in place to reduce sales and administrative
expenses materially. However, due to increase of costs for service quality
improvements, operating profit recorded Yen 72.6 billion.
Non-operating income was Yen 9.7 billion, which included interest anddividends received, while non-operating expenses, made up of expenses such as
interest paid and losses on the sales and disposal of fixed assets, totaled Yen 3.9billion. Therefore, ordinary profit was Yen 78.3 billion.
In addition, the Company recorded extraordinary losses of Yen 27.0
billion, including loss on impairment of subsidiaries’ and affiliates’
securities of Yen 14.1 billion. As a result, net income came to Yen 32.4
billion.

[English Translation]
13

Earnings by Business Category of the Company

Fiscal years

AmountSales

Contract revenue

Category

Centralized
systems
Static guard
services
Armored car
services
Other
Subtotal
Product
Equipment
Subtotal

Total

47th fiscal year
(4/1/2007–3/31/2008)

46 the fiscal year
(4/1/2006-3/31/2007)(millionsof Yen)%231,176

70.9

22,561

Change(%)

Amount(millionsof Yen)%3.4

238,507

70.6

6.9

3.1

25,48017,182

5.3

4.6

11,326282,247
29,533
14,295

3.5
86.6
9.0
4.4

43,82948th fiscal year
(Current fiscal year)(4/1/2008–3/31/2009)

Change(%)

AmountChange(%)(millionsof Yen)%3.2

241,618

71.7

1.3

7.6

12.9

25,8097.7

1.3

16,6844.9(2.9)

17,456

5.2

4.6

2.6
3.4
1.7
27.8

10,676291,350
31,905
14,355

3.2
86.3
9.4
4.3

(5.7)
3.2
8.0
0.4

9,502
294,386
30,987
11,518

2.8
87.4
9.2
3.4

(11.0)
1.0(2.9)(19.8)

13.4

9.0

46,261

13.7

5.5

42,506

12.6

(8.1)

326,076 100.0

4.1

337,611 100.0

3.5

336,893 100.0(0.2)

6. Matters Concerning Principal Subsidiaries

Company name

Issued capital

Percentage ofownership(percentage ofPrincipal business activity

voting rights)(Millions of Yen)

Secom Joshinetsu Co., Ltd.

3,530
(Millions of Yen)

Secom Techno Service Co.,
Ltd.

2,357
(Millions of Yen)

Secom Industries Co., Ltd.

499
(Millions of Yen)

Nohmi Bosai Ltd.

13,302(Millions of Yen)

Secom Medical System Co.,
Ltd.

6,545

[English Translation]
14

(%)
50.87
(50.88)(%)
67.79(67.83)(%)
100.00(100.00)(%)
50.36(50.92)

Security, safety
Installation and maintenance of
security systems
Manufacture of security systemequipment
Comprehensive fire protection
services(%)
100.00(100.00)

Remote image diagnosis support
services and home medical
services(Millions of Yen)

Secom General Insurance Co.,Ltd.

14,558(Millions of Yen)

Pasco Corporation

8,758(Millions of Yen)

Secom Trust Systems Co., Ltd.

1,468
(US$)

The Westec Security Group,
Inc.

301
(Thousands of

(%)
95.83
(96.23)(%)

Non-life insurance

69.84(73.06)

Surveying, measuring andgeographic information systemservices(%)
100.00(100.00)(%)
100.00(100.00)(%)

Information security services andsoftware development
Holding company in the U.S.

UK pounds)

Secom Plc

39,126100.00(100.00)

Security business in the U.K.

(Notes)1. The percentages of ownership (percentages of voting rights) are truncated to two decimal
places.
2. The percentages of ownership (percentages of voting rights) for Secom Joshinetsu Co.,
Ltd., Secom Techno Service Co., Ltd. and Nohmi Bosai Ltd. include those owned by theCompany's subsidiaries.
3. Secom General Insurance Co., Ltd. issued new shares of stock to a third party (cashcontribution) in December 2008, resulting in an increase in capital from Yen 8,093 million
to Yen 14,558 million. (Following the increase in capital, the Company's percentage ofownership rose from 89.62% to 95.83%)

7. Principal Business of the GroupThe principal business activities of the Group are as follows: Security Services
centering on contracted security services; Fire Protection Services centering oncomprehensive fire protection services; Medical Services, including home medical
services and remote image diagnosis support services; Insurance Services consisting
mainly of non-life insurance; Geographic Information Services that mainly entails theprovision of surveying and measurement operations; Real Estate Development andSales centering development and sales of security-conscious condominiums tohousehold family; and Information and Communication Related and Other Services
including security network services, services for the development and operation ofbusiness systems and information security services.

[English Translation]
15

8. Principal Offices of the Group(i) Headquarters of the Company:
5-1, Jingumae 1-chome, Shibuya-ku, Tokyo.
(ii) Regional Headquarters:
Hokkaido (Sapporo City), Tohoku (Sendai City), West Kanto (Saitama City),
East Kanto (Chiba City), Tokyo (Bunkyo-ku, Tokyo), Metropolitan Static Guard
Service (Shinjuku-ku, Tokyo), Metropolitan Armored Car Service (Shibuya-ku,
Tokyo), Kanagawa (Yokohama City), Shizuoka (Shizuoka City ), Chubu (Nagoya
City), Osaka (Osaka City), Kansai Static Guard Service (Osaka City), Kinki(Kyoto City), Hyogo (Kobe City), Chugoku (Hiroshima City), Shikoku(Takamatsu City), Kyushu (Fukuoka City).
(iii) Domestic Subsidiaries
Secom Joshinetsu Co., Ltd. (Niigata City), Secom Techno Service Co., Ltd.
(Nakano-ku, Tokyo), Secom Industries Co., Ltd. (Shiroishi City, Miyagi), Nohmi
Bosai Ltd. (Chiyoda-ku, Tokyo), Secom Medical System Co., Ltd. (Shibuya-ku,
Tokyo), Secom General Insurance Co., Ltd. (Chiyoda-ku, Tokyo), Pasco
Corporation (Meguro-ku, Tokyo), Secom Home Life Co., Ltd. (Shibuya-ku,
Tokyo), Secom Trust Systems Co., Ltd. (Shibuya-ku, Tokyo), Arai & Co., Ltd.
(Shibuya-ku, Tokyo).
(iv) Overseas Subsidiaries
The Westec Security Group, Inc. (Dover, Delaware, USA), Secom Plc (Kenley,
Surrey, UK), Secom (China) Co., Ltd. (Beijing, China).

9. Matters Concerning Employees of the Group and the Company(1) Matters Concerning Employees of the Group
Number of employees

Increase from the end of the previous fiscal year

34,0781,883(2) Matters Concerning Employees of the Company
Number of
employees
14,092

Increase from the end of
the previous fiscal year
701

Average age

Average years of service

38.8

12.1

Note: The number of employees refers to the number of full-time employees. Part-time or
temporary employees are not included.

[English Translation]
16

10. Primary Lenders
Balance at the endof the fiscal year

Lenders(millions of Yen)
29,602The Bank of Tokyo-Mitsubishi UFJ, Ltd.

(millions of Yen)

Mizuho Bank, Ltd.

22,927(millions of Yen)

Mitsubishi UFJ Trust and Banking Corp.

15,678(millions of Yen)

Sumitomo Mitsui Banking Corp.

12,905

11. Other Important Matters Concerning the GroupIn July 2004, Fujitsu Limited filed a lawsuit against Secom General Insurance Co.,
Ltd. in the Tokyo District Court, claiming compensation for costs related to a systems
development order in the amount of Yen 2,500 million. Secom General Insurance Co.,
Ltd. is not only contesting this lawsuit on the grounds that it is without merit, but has
also filed a countersuit claiming damages in the amount of Yen 1,000 million.
However, on January 16, 2009 Secom General Insurance Co., Ltd. resolved the matterby reaching a settlement involving the payment to Fujitsu Limited in the amount of
Yen 1,000 million, which was paid on January 30, 2009.
Pasco Corporation filed a lawsuit against Sumitomo Mitsui Banking Corporation
for a confirmatory judgment to the effect that it does not owe an obligation in theamount of Yen 2,010 million to Sumitomo Mitsui Banking Corporation with theTokyo District Court on October 31, 2005. Sumitomo Mitsui Banking Corporation
alleged that it made a loan to a third party and acquired from the third party its claim
against Pasco Corporation for an alleged sale of equipment to Pasco Corporation, as
collateral for the loan, and demanded Pasco Corporation to pay such claim to
Sumitomo Mitsui Banking Corporation. Furthermore, on December 5, 2005,
Sumitomo Mitsui Banking Corporation brought a cross action against Pasco
Corporation in relation to a demand for payment of a transferred receivable.
Subsequently, both actions were consolidated according to a court procedure. The oral
argument was concluded on October 31, 2008, and on March 27, 2009 Tokyo District
Court rendered the following judgment;(Contents of decision)[English Translation]17

1. Pasco Corporation must pay money for Sumitomo Mitsui Banking Corporation in an
amount of Yen 2,010 million as well as interest of the rate of 6 percent per annum on
Yen 600 million, from November 1, 2005, and on Yen 1,409 million, from December
1, 2005, up to the full payment of the respective amounts;
2. Pasco Corporation incurs the cost of lawsuits including the cost caused bysupplementary participation; and3. The judgment can be provisionally executed.
Pasco Corporation appealed the case to the Tokyo High Court on April 6, 2009.
Pasco Corporation has provided reserve for litigation losses of Yen 2,415 million
based on the judgment.

[English Translation]18

II. Matters Concerning the Company’s Shares and Shareholders
900,000,000

1. Total Number of Shares to be Issued:

2. Total Number of Issued Shares:
233,288,717(including 15,251,520 shares of treasury stock held by the Company)
3. Number of Shareholders at the End of the Fiscal Year:30,859100 shares

4. Number of Shares in a Unit:
5. Major Shareholders

No shareholder holds 10% or more of the total issued shares (excluding treasury stock).
The principal shareholders and information about their respective ownerships in the
Company are shown in the table below.
Investment in the Company

Shareholders
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Japan Trustee Services Bank, Ltd.
(Trust Account)
The State Street Bank and Trust Company
Japan Trustee Services Bank, Ltd.
(Trust Account 4 G)
The Master Trust Bank of Japan, Ltd.
(Retail Trust Account 820079214)
Makoto Iida
The Nomura Trust and Banking Co., Ltd.
(Trust Account 2052088)
SECOM Science and Technology Foundation
Trust & Custody Services Bank, Ltd.
(Security Investment Trust Account)
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Number of shares held(Thousands of shares)

Percentage of ownership(%)

15,762

7.22

15,4497.08

14,996

6.87

10,303

4.72

6,153

2.82

4,320

1.98

4,148

1.90

4,025

1.84

3,990

1.83

3,196

1.46

(Notes)1. The percentage of ownership is calculated on the basis of the total number of shares
outstanding after excluding treasury stock (15,251,520 shares). The percentage ofownership is truncated to two decimal places.

[English Translation]19

2. In the case of the above trust banks, banking business-related shares and trust
service-related shares are registered under different register names. Therefore, the numberof shares held under the register name of banking business is registered separately. .

6. Other Important Matters Concerning Shares
To enhance the return to shareholders and to attain flexible capital policy in thechanging business environment, between November 6, 2008 and December 22, 2008,
the Company acquired 6,923,400 shares for Yen 29,999 million in total, based on the
resolution of the Board of Directors held on November 5, 2008.

[English Translation]
20

III. Directors and Corporate Auditors
1.

Names and Titles of Directors and Corporate Auditors

Director

Makoto Iida

Field of responsibility, representation ofother companies and important otherposts
Supreme Advisor

Director

Juichi Toda

Supreme Advisor

Position

Name

Chairman and Director

Shohei Kimura

President andRepresentative Director

Kanemasa Haraguchi

Executive Director

Seiichiro Kobayashi

Executive Director

Katsuhisa Kuwahara

Executive Director

Shuji Maeda

Executive Director

Yasuo Nakayama

Executive Director

Koichi Sato

Director

Fumio Obata

Director

Takayuki Ito

Corporate Auditor

Teruo Ogino

Corporate Auditor

Ken Tsunematsu

Corporate Auditor

Hiroshi Yasuda

Corporate Auditor

Kohei Yamashita[English Translation]
21

Chairman of the Tokyo Security
Service Association, Outside Corporate
Auditor of Secom General InsuranceCo., Ltd.
Executive Officer, Outside Director of
Secom Joshinetsu Co., Ltd.
Executive Officer (in charge of liaison),President and Representative Directorof Secom Home Life Co., Ltd.
Executive Officer (general manager offinance division)
Executive Officer (in charge of researchand development and businessdevelopment, general manager oftechnology development division,
general manager of environment
division), Outside Director of Nohmi
Bosai Ltd.
Executive Officer (in charge of generalaffairs)
Executive Officer (in charge of liaison),President and Representative Directorof Secom Joshinetsu Co., Ltd.
Executive Officer (in charge of Medical
services), President and Representative
Director of Secom Medical System Co.,
Ltd.
Executive Officer (in charge ofmanagement control of the Group
companies), Outside Corporate Auditorof Secom Joshinetsu Co., Ltd.
Full-time Corporate Auditor
Attorney-at-law, Advisor of Nagashima
Ohno & Tsunematstu, Managing
Chariman of SECOM Science andTechnology Foundation
President and Director of Yasuda
Gakuen Kyoikukai
President and Representative Directorof Kokyo Tatemono Co., Ltd.

(Notes)
1. Messrs. Ken Tsunematsu, Hiroshi Yasuda and Kohei Yamashita are Outside Corporate
Auditors as stipulated in Article 2 Item 16 of the Companies Act.
2. The Corporate Auditor, Mr. Teruo Ogino had been in charge of the Company's financial
affairs for 11 years and has considerable knowledge of finance and accounting matters.
3.

The Corporate Auditor, Mr. Ken Tsunematsu, has for many years been involved insecurities issuance businesses for domestic and overseas companies, public institutions
and organizations as a lawyer. He has experienced in the analysis and evaluation of thefinancial statements of these issuers, and has considerable knowledge of finance andaccounting matters.

4.

Movement in Directors during the current fiscal year
Director Shinobu Iida resigned at the expiration of the term at the close of the 47th
ordinary general shareholders’ meeting held on June 26, 2008.

2. Remuneration of Directors and Corporate Auditors

Directors

12

Combined total of
remuneration(millions of Yen)
492

Corporate Auditors

4

44

Total

16

537

Number of
Recipients(Notes)1. Of the above, the remuneration for the 3 outside Corporate Auditors' total
combined remuneration is Yen 24 million.
2. Included in the above total amount of remunerations are the Directors' bonuses of
Yen 68 million paid for the current fiscal year.
3. The total amount of Remuneration of Directors and Corporate Auditors shown
above includes Yen 49 million (Yen 47 million to Directors and Yen 1 million to
Corporate Auditors (including Yen 0 to outside Corporate Auditors), respectively)
as accrued retirement benefits for Directors and Corporate Auditors, which wereappropriated in the current fiscal year.
4. The total amount of Remuneration of Directors shown above includes amount paid
to Director who retired at the conclusion of the 47th ordinary general meeting ofshareholders held on the June 26, 2008.
5. In addition to the above, retirement benefits of Yen 29 million was paid to the
Director who retired at the conclusion of the 47th ordinary general meeting ofshareholders held on the June 26, 2008.(which includes the retirement allowanceapproved by a past general meeting of shareholders and an amount of accrued
retirement benefit that has been already disclosed).

[English Translation]
22

3. Outside Corporate Auditors

Name

Ken Tsunematsu

Hiroshi Yasuda

Kohei Yamashita

Attendanceof theBoard ofDirectors

Attendance of
the Board ofAuditors

13

11(out of 13)(out of 11)

12

11(out of 13)(out of 11)

13

11(out of 13)(out of 11)[English Translation]
23

Main Activities

He primarily offered advice andsuggestions in order to ascertain thevalidity or appropriateness of theBoard of Directors' decision making
from the perspective of complying
with laws and ordinances and the
Articles of Incorporation.
He offered advice and suggestions
based on his ample experience ofcompany
management
anddirectorships gained from previously
held positions. He also asked
questions and stated opinions in orderto clarify unclear issues.
In addition, with respect to themeetings for which he was absent, hereceived from the full-time Corporate
Auditor detailed reports on the
resolutions of the meetings so as toremain fully informed.
He offered advice and suggestions
based on his ample experience ofmanaging a global corporation. He
also asked questions and statedopinions in order to clarify unclear
issues.

IV. Accounting Auditors
1. Name of Accounting Auditors
KPMG AZSA & Co.

2. Remuneration of Accounting Auditors(1) Remuneration for duties relating to Article 2 Paragraph 1 ofCertified Public Accountants Law to be paid by the Company

Yen 200 million(2) Total cash and other remuneration to be paid by the Company
and subsidiaries to the accounting auditors

Yen 555 million(Notes)1. Based on the audit contract between the Company and the accounting auditors, theremuneration paid to auditors is not distinguished between those as the auditors under theCompanies Act and those as the auditors under the Financial Instruments and ExchangeAct, and furthermore they cannot in fact be distinguished, and therefore the amount givenin (1) is the combined total of these amounts.
2. Of the major subsidiaries of the Company, The Westec Security Group Inc. is auditedby PricewaterhouseCoopers LLP and Secom Plc by KPMG LLP.

3. Non-Audit Duties
Not Applicable

4. Policy for Decision for Dismissal or Non-reappointment
Whenever there occurs any material event which could be a substantial hazard to theperformance of audit duties of the Company, such as a case when it is deemed that theaccounting auditors have come to fall within the purview of Article 340 Paragraph 1 of
the Companies Act or the accounting auditors or the firm of accounting auditors is
subjected to the disposition of suspension of business by the supervisory authorities,
the Board of Corporate Auditors will examine the situation, and, when all the
Corporate Auditors have consented thereto, the Corporate Auditor will take action forthe dismissal of the subject accounting auditors or the subject firm of accounting
auditors. In such case, the Corporate Auditor selected by the Board of Corporate[English Translation]
24

Auditors will report the reasons for the dismissal at the general meeting ofshareholders convened for the first time after such dismissal.
In any other case, when there exits any situation where it is acknowledged that theaccounting auditors are not fit to act as accounting auditors, a proposal will, with theconsent of the Board of Corporate Auditors, be submitted to the general meeting ofshareholders for the dismissal or non re-appointment of the accounting auditors.

[English Translation]
25

V. System under which the Company’s Business is Ensured to be Properly
Executed
1. Basic Policy regarding Internal Control System
The Company’s basic policy regarding the internal control system, i.e. the “system
under which execution of duties by Directors is ensured to comply with laws andregulations and the Articles of Incorporation, and the system under which theCompany’s business is ensured to be properly executed” resolved on and approved by
the Board of Directors is set out below. (revised latest on August 30, 2007)(1) General
This resolution manifests the basic policy regarding the internal control
system of the Company to be specifically established by the President andRepresentative Director based on Article 362, Paragraph 5 of the Companies
Act.
The internal control system based on this resolution shall be establishedurgently by officers in charge, and shall be constantly reviewed andimproved.
(2)

System under which execution of duties by Directors and employees is
ensured to comply with laws and regulations and the Articles ofIncorporation.
(i) In order to ensure even more thorough compliance with laws and ordinances

and the Articles of Incorporation in the execution of duties, the Company has
integrated its compliance manual with SECOM Group Code of Employee
Conduct, which sets key ethical standards to be followed, and at the sametime, it has conducted a review of manuals on critical laws. SECOM Group
Code of Employee Conduct is based on the philosophy of SECOM, which wehave followed since the establishment of the business. These ethicalguidelines prescribe ideals covering the official and private affairs of all
executives and employees and action standards (including the blocking
relationships with anti-social forces) to be followed in the execution of
specific daily duties. As such, these guidelines provide the basis of all actions.
The compliance management system is as follows.

[English Translation]
26

(Ensuring compliance)
From the start, the compliance of laws and ordinances has been an
indispensable requirement of our business, and we have always sought tooperate in strict adherence to this spirit. Therefore, compliance is a part ofthe company's daily routines, which should not require a system in whicha specific section or manager is responsible for implementation. Each andevery employee is at the front line of promoting the code of conduct,
including legal compliance. The implementation of guidelines is carriedout by the line managers of the organization. Further control is provided
by the executive officers in charge of departments under their control,with the President and Representative Director providing companywide
control.
(Executive officers in charge)
The executive officers in charge of each area are responsible for having
thorough knowledge particularly of regulations related to their duties andthe relationships of such regulations with their own operations. They are
responsible for proposing responses to any revisions of laws to the
President and Representative Director. The Legal Affairs Department
supports them, providing cross-organizational coordination.
(Inspection)
Following the orders of the President and Representative Director, theAudit and Compliance Department provides cross-organizational
inspection in a timely manner, indicating how to improve morale throughobservance and at the same time pointing out matters that needcorrection. The findings of the inspection are reported promptly to the
President and Representative Director.
(Internal Report System)
When executives and employees of the company become aware ofunethical actions, they have the obligation to report such actions to theproper superior without hesitation. A "Hot Helpline" has been establishedto facilitate contact with the Audit and Compliance Department if
corrective actions are not taken even after reporting to superiors or it isdifficult to report. Such reports will remain strictly confidential,
preventing any harm to the reporter, and any necessary investigation andappropriate measures will be taken promptly.

[English Translation]
27

(Organizational Culture Committee)
The Company establishes a standing, active Organizational Culture
Committee, chaired by the President and representative Director. The
Organizational Culture Committee examines important organizational
culture-related issues (including compliance-related items), which are thecornerstone of developing and maintaining the corporate organization,and determines important official commendations and punishments.
(ii) Revisions of SECOM Group Code of Employee Conduct and/or criticalcompliance-related matters are undertaken after discussion with theOrganizational Culture Committee and subject to the approval of the Boardof Directors after obtaining opinions of the Corporate Auditors.
(iii)Basic plans and policies concerning internal controls related to financial
reporting are determined in accordance with the standards of the BusinessAccounting Council. Furthermore, an internal control system is being
developed by reinforcing information security and through other steps.
(3)

System under which information regarding execution of business byDirectors shall be maintained and controlled.
(i) Documents and other information regarding execution of duties such as thoseconcerned with decision making (hereinafter referred to as the “information
on executing duties”) shall be properly maintained, administered (including
destruction) pursuant to the Document Administration Regulation of theCompany, which will be amended upon reviewing the operating conditions if
necessary.
(ii) Information on executing duties shall be recorded on database with necessary
information protection measure so that a search system can be established toenable quick search as to whether or not the particular document exists or thecondition of storage of the particular document.
(iii)Any business related to the preceding two paragraphs shall be undertaken by
officers in charge, and in particular the status of examination and review of(i) above, and operation and management of the database of (ii) above shallbe reported to the President and Representative Director, the Board of
Directors, and the Board of Corporate Auditors.

[English Translation]
28

(iv) Establishment and important amendments of the Regulation regarding (i)above shall be subject to approval of the Board of Directors after obtaining
opinions of Corporate Auditors.

(4)

Regulation regarding control of risk of loss and other system(i) We will review the Company’s risk control regulations, and eachorganization corresponding to each risk shall constantly monitor the risks to
the full extent and, in addition, an officer in charge of each specified risk
shall be appointed. The officer in charge shall, pursuant to the risk control
regulations, be responsible to: (1) forecast and classify the risk, (2) develop asystem for emergency by which appropriate information shall be transmitted
promptly and appropriately in case of emergency, and (3) in cooperation with
the Audit and Compliance Department, audit the conditions of daily controlof risks.
(ii) The officer in charge shall report the President and Representative Director,
the Board of Directors and the Board of Corporate Auditors on mattersrelated to control of risk.
(iii)Any important changes of the risk control regulations shall be subject toapproval of the Board of Directors after obtaining opinions of Corporate
Auditors.
The Company’s risks shall be classified as follows:z Large scale calamity risk (System risk)z Security accident riskz Accounting treatment and clerical work riskz Compliance riskz Others(5)

System by which efficient execution of duties of Directors shall be ensured(i) All Directors of the Company shall carry out operation and execution ofbusiness on the basis of the “Constitution of SECOM’s Business andOperation” so that they may share the idea essential to execution of the duties
such as decision making for management by the Board of Directors, decision
making for execution of duties by the Directors.

[English Translation]
29

(ii) On the basis of the preceding, to implement execution of duties efficiently,
the system of executive officers has been introduced so that decision making
and execution of business shall be further facilitated.
(iii)In executing duties, in order to unify the power of the entire Company, asystem utilizing IT should be established and thereby, enabling an
information to be immediately disseminated to the entire Company to thefullest extent.
(iv) With respect to particular decision making or execution of duties, a systemutilizing IT should be established to carry out the decision making andexecution immediately and definitely.
(v) The Company will share the medium- and long-term business vision, and forthe purpose of accomplishment thereof, the Board of Directors will design anannual business plan and deliberate progress of the plan in each month.
(6)

System under which the Company and the Company Group consisting of
the parent company and subsidiaries is ensured to properly execute its
business(i) Abiding by the "Constitution of SECOM's Business and Operation," each of
the companies of the SECOM Group shares SECOM Group Code of
Employee Conduct, which applies to all executives and employees. United bythese guidelines, the executives and employees work to accomplish thecorporate goals in an appropriate manner.
(ii) The "Basic Rules for SECOM Group Corporate Management" provide
guidelines to enhance Group synergy, leading to the achievement of thebusiness vision by the entire SECOM Group. Covering criticaldecision-making by the companies, these basic rules clarify the coordinationof items to be approved in prior consultation with the parent company andensure the acknowledgement of such important items.
(iii)Each of companies of the SECOM Group carry out IT controls covering
administration and management information in conformance with the "Basic
Policy of the SECOM Group for Information Security." The Company's IT
executive officers conduct timely inspections covering the IT management ofmajor subsidiaries.

[English Translation]
30

(iv) The "SECOM Group Management Committee," which is chaired by theCompany's President and Representative Director and whose members arecomposed of the presidents of subsidiaries and other parties appointed by thechairperson, works to ensure that appropriate operations are carried out. It
accomplishes this goal by conducting discussions of issues related to theGroup's internal controls in an effort to share Group information andoperating philosophy. The President and Representative Director reports theresults of the Group Management Committee to the Board of Directors andBoard of Corporate Auditors.
(v) The President and Representative Director issues orders to the Audit andCompliance Department and the supervising executive officers at Group
companies to inspect subsidiaries, if necessary. The subsidiaries accept theinspection by the Company, which is the parent company, and at the sametime promote the understanding of compliance-related issues by exchanging
information with the Company.
(vi) The Corporate Auditors of the Company visit important subsidiaries andconduct audits regarding internal controls.
(vii) A liaison meeting with Group Corporate Auditors is established after
discussion with the Board of Corporate Auditors in an attempt to share
information.
(7)

Matters related to employees to assist duties of Corporate Auditors when
Corporate Auditors requests to do so
Corporate Auditors Office will be established and at least two employees will bemanned to assist audit duties of the Corporate Auditors.

(8)

Matters related to independence of the employees in the preceding item
concerned from Directors
Transfer and evaluation of assistants in the preceding item shall be subject toapproval of the Board of Corporate Auditors.
The assistants who received necessary instruction on audit duties by
Corporate Auditors shall not be subject to any instruction or order from
Directors, executive officers or employees with respect to the subject audit
duties, nor be obligated to report to them.

[English Translation]
31

(9)

System under which Directors and employees report to Corporate Auditorsand system under which any report is made to Corporate Auditors(i) Regulation providing for matters to be reported to Corporate Auditors shallbe established upon discussion with the Board of Corporate Auditors, andDirectors shall make reports with respect to the following matters: (1) matters
resolved by the Organization Culture Committee; (2) matters likely to bematerially harming the Company; (3) important matters relating to monthly
business conditions; (4) important matters relating to internal audit and risk
control; (5) material violation of laws and regulations or the Articles ofIncorporation; (6) condition of usage and content of the Hot Help Line; and(7) in addition, important matters from viewpoint of compliance.
(ii) If an employee finds a fact falling within the preceding paragraph, a systemby which the fact may be transmitted directly to the President andRepresentative Director through such means as the Hot Help Line shall bearranged and the President and Representative Director shall report toCorporate Auditors pursuant to the preceding paragraph.

(10)

System under which audit by Corporate Auditors is ensured to be
performed efficiently(i) The Board of Corporate Auditors shall regularly hold the meetings with the
President and Representative Director and Accounting Auditors, to exchange
opinions so that audit shall be performed efficiently.
(ii) The Company ensures that the Board of Corporate Auditors may retain
lawyers at its discretion and, if necessary, have opportunities to retain andconsult professional accountants with respect to their audit duties.

2. Organizations, etc. relating to Internal Control System(1) Organizations within the Company
Board of Directors:
The Board of Directors consists of 11 Directors and is attended by 4
Corporate Auditors (including 3 outside Corporate Auditors). It isconvened once a month as a general rule. The Board of Directors
determines management policies and business execution policies in relation
to business in general, oversees the execution of duties by Directors, actively[English Translation]32

exchanges opinions and endeavors to make decisions in a precise and speedy
fashion.
Board of Corporate Auditors:
The Board of Corporate Auditors consists of 4 Corporate Auditors,
consisting of 1 full-time Corporate Auditor and 3 outside Corporate
Auditors. It is convened once a month as a general rule. Corporate
Auditors attend each meeting of the Board of Directors in addition to otherimportant conferences, exchange opinions relating to corporate managementin general, receive reports on the status of execution of duties from
Directors, etc. and conduct audits focusing on whether there are any facts ofviolations of laws, regulations, the Articles of Incorporation or shareholders’interests.
The Board of Corporate Auditors also conducts audits on operations ingeneral within the Company as well as its subsidiaries and affiliates
according to the audit plan.
Major Activities in the current fiscal year(i) Corporate Auditors’ attendance rate at meetings of Board of
Directors: 98.07%(ii) Corporate Auditors’ attendance rate at meetings of Board of
Corporate Auditors: 100%(iii) Conducted interviews with Directors, etc. of the Company andits subsidiaries and affiliates: 45 times(iv) Conducted on-site audits at business locations of the Company
and its subsidiaries, affiliates, etc.: 94 locations(2) Others
Periodic Meetings among Representative Director, etc. and Corporate
Auditors:
Corporate Auditors hold meetings with the President &Representative Director in the presence of Chairman & Director
periodically (once a month). At the meeting, Corporate
Auditors report the results of audits, etc. and exchange opinions
on important issues regarding management, to share mutual
recognition.
Conferences, etc. among Corporate Auditors and Accounting Auditor:
Corporate Auditors hold periodical meetings with Accounting
Auditor 6 times a year and have ones additionally as necessary,[English Translation]
33

and exchange opinions and information. Corporate Auditors andthe Board of Corporate Auditors receive explanation andexchange opinions regarding the audit plan and audit results*
from the Accounting Auditor. In addition, Corporate Auditorspresent as a witness during visiting audits and audit review
conducted by the Accounting Auditor as necessary. (Witness
frequency: 24 times in the current fiscal year)* including the results of quarterly reviews and the result ofannual audit, etc.
Cooperation with Internal Audit Division, etc.:
Corporate Auditors hold conferences with the Audit andCompliance Department periodically (once a month), arereported audit results and exchange opinions with them. And
Corporate Auditors endeavor to conduct audits in an efficientmanner such as requesting the internal audit division, etc. toconduct an investigation as necessary.

[English Translation]
34

Consolidated Balance Sheet(As of March 31, 2009)(Millions of Yen)ITEM
ASSETSAMOUNTITEM
LIABILITIESAMOUNT

Current Assets:
Cash on hand and in banks
Cash deposits for armored car services
Call loan
Notes and accounts receivable, trade
Due from subscribers
Short-term investments
Lease receivables and investment in leased
assetsInventories
Real estate for sale
Deferred income taxes
Short-term loans receivable
Other
Allowance for doubtful accounts

473,445
127,476
56,66736,50077,39820,13916,786

Current Liabilities:
Notes and accounts payable, trade
Bank loans
Current portion of straight bonds
Lease obligations
Payables - otherAccrued income taxes

256,655
28,37485,383
5,036
202
23,19518,983

14,993

Accrued consumption taxes

2,932

28,27967,127
11,135
4,125
15,578(2,762)

Accrued expenses
Deferred revenue
Accrued bonuses
Reserve for litigation losses

3,534
31,29812,741
2,415

Other

42,558Fixed Assets:
Tangible Assets:
Buildings and improvements
Security equipment and control stations
Land
Other

616,698
263,267
85,41565,63189,29722,923

Intangible Assets:
Software
Goodwill
Other21,331
13,9344,109
3,287

Investments and Others:

332,099

Long-term Liabilities:
Straight bonds
Long-term loans
Lease obligations
Guarantee deposits received
Deferred income taxes
Accrued pension and severance
costs
Accrued retirement benefits for
Directors and Corporate
Auditors
Investment deposits bypolicyholders, unearned
premiums and other insurance
liabilities
Other
Total Liabilities

251,218
12,673
15,338571
34,2103,740
13,8072,244

167,011
1,621
507,874

NET ASSETS
Investment securities
Long-term loans receivable
Long-term prepaid expenses
Prepaid pension and severance costs
Deferred income taxes
Other
Allowance for doubtful accounts
Deferred Assets:
Other

201,92359,88018,817
18,876
24,41327,311(19,122)
338
338

TOTAL ASSETS

1,090,483[English Translation]
35

Shareholders’ Equity:
Common Stock
Capital Surplus
Retained Earnings
Common Stock in treasury, at cost
Valuation, Translation Adjustments
and Others:
Unrealized losses on securities
Deferred losses on hedges

552,891
66,377
83,054478,355(74,896)(33,937)(3,901)(27)

Foreign currency translation
adjustments(30,008)

Minority Interests in Subsidiaries:

63,654

Total Net Assets

582,608

TOTAL LIABILITIES AND NET
ASSETS

1,090,483

Consolidated Statement of Income(Fiscal Year from April 1, 2008 to March 31, 2009)(Millions of Yen)ITEM

AMOUNT

Revenue
Costs of revenue
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income:Interest income
Dividends income
Gain on sales of investment securities
Net gains from investment in affiliated companies
accounted for under the equity method
Gain on private equity investments
Other
Non-operating expenses:
Interest expenses
Loss on sales and disposal of fixed assets
Exchange loss
Write-off of long-term prepaid expenses
Other
Ordinary profit
Extraordinary profit:
Gain on reversal of price fluctuation reserve
Gain on sales of subsidiaries’ and affiliates’
securities
Gain on sales of fixed assets
Gain on sales of investment securities
Other
Extraordinary loss:
Loss on impairment of investment securities
Provision for allowance for doubtful accounts
Provision for reserve for litigation losses
Loss on settlement of litigation
Impairment loss on fixed assets
Loss on sales of subsidiaries’ and affiliates’
securities
Loss on liquidation of subsidiaries
Loss on sales of fixed assets
Other
Income before income taxes
Income taxes – current
Income taxes – deferred
Minority interests in subsidiaries
Net income[English Translation]
36

678,400
444,771
233,628
145,994
87,634
1,847
463
731
4,626
3,099
2,188
2,080
2,038
1,564
990
2,994

12,957

9,666
90,924

379
52
46
3
0

482

20,639
2,650
2,415
1,000
76
71
31
8
983
41,768(3,244)27,87563,531
38,5233,504
21,502

Consolidated Statement of Changes in Net Assets(Fiscal Year from April 1, 2008 to March 31, 2009)(Millions of Yen)
Shareholders’ equity
Common stock

Total

in treasury, atshareholders’costequityRetained
Common stock

Capital surplus
earnings

Balance as of March 31, 2008

66,377

83,056475,987(44,877)

580,543

Effect of application of the Practice
(11)

(11)

Cash dividends(19,122)(19,122)

Net income

21,50221,502

Issues Task Force No. 18
Changes during the period:

Purchase of treasury stock
Disposal of treasury stock(2)(30,031)(30,031)12

9Transfer of loss on disposal of
0

(0)

-

-

(1)

2,379

(30,018)(27,640)

66,377

83,054478,355(74,896)

552,891

treasury stock
Net changes of items other thanshareholders’ equity
Total changes during the period
Balance as of March 31, 2009

Valuation, translation adjustments and others
Unrealized

Deferred

gains (losses)

gains (losses)

on securities

on hedges

Balance as of March 31, 2008

(3,306)(90)

Foreigncurrencytranslation
adjustments(9,907)

Total
valuation,translation
adjustments

Minority
interests in
subsidiaries

Total net
assetsand others(13,304)

63,035630,274

Effect of application of the Practice(11)
Issues Task Force No. 18
Changes during the period:
Cash dividends(19,122)

Net income

21,502

Purchase of treasury stock(30,031)

Disposal of treasury stock

9

Transfer of loss on disposal of-treasury stock
Net changes of items other than

(595)

63

(20,101)(20,632)

619(20,013)

Total changes during the period

(595)

63

(20,101)(20,632)

619(47,654)

Balance as of March 31, 2009

(3,901)(27)(30,008)(33,937)

63,654

582,608

shareholders’ equity[English Translation]
37

Notes to Consolidated Financial Statements
Notes to Significant Items for Preparation of Consolidated Financial Statements

1. Scope of Consolidation(1) Number of Consolidated Subsidiaries: 164
Names of major consolidated subsidiaries:
Secom Joshinetsu Co., Ltd., Nohmi Bosai Ltd., Secom Medical System
Co., Ltd., Secom General Insurance Co., Ltd., Secom Techno Service Co.,
Ltd., Secom Industries Co., Ltd., Secom Trust Systems Co., Ltd.,
Pasco Corporation, Secom Home Life Co., Ltd., Arai & Co., Ltd., The
Westec Security Group, Inc.
(2) Descriptions of Non-consolidated Subsidiaries
Names of major non-consolidated subsidiaries:
FM-International Laos Co., Ltd., Nohmi Kosaku Co., Ltd., Nohmi
Facilities Co., Ltd., Eishin Denshi Co., Ltd., Nohmi Baoli (Beijing)Intelligent Fire Protection Co., Ltd., and 2 other companies(The reason for exclusion from consolidation)
All of these 7 non-consolidated subsidiaries are of a small size, so that theaggregate amounts of total assets, revenue, net income/loss (an amountprorated to ownership) and retained earnings (an amount prorated toownership) and others do not have a significant effect on the consolidated
financial statements.
(3) Names of other companies owing majority of voting rights not regarded as
subsidiaries
US Collections, Inc., Switchcraft Holdco, Inc., Global Sales Training, Inc.,
CLP Auto Interior Corp., US Juice Partners, LLC, Gold Canyon Mining &Construction, LLC(The reason for not regarded as subsidiaries)
These companies were acquired by subsidiaries of The Westec Security
Group, Inc. through normal course of business with the objective ofinvestment, not with the objective of control.
2. Equity Method(1) Number of equity method affiliates: 31
Names of major affiliated companies accounted for under the equity method:
Japan Nuclear Security System Co., Ltd., S1 Corporation, Toyo Tec Co.,
Ltd., Tokyo Biso Kogyo Corporation, Taiwan Secom Co., Ltd.
(2) Number of non-equity method affiliates: 6(The reason for not applying the equity method)[English Translation]
38

These companies are not accounted for under the equity method because
their effect on net income/loss (an amount prorated to ownership) andretained earnings (an amount prorated to ownership) during the current
fiscal year is slight as a whole.
(3) Names of other companies owing between 20% and 50% of voting rights
not regarded as affiliates
Global T&M Holdings, LLC(The reason for not regarded as an affiliate)This company was acquired by a subsidiary of The Westec Security Group,
Inc. through normal course of business with the objective of investment,
not with the objective of control.
3. Changes in Scope of Consolidation and Companies Accounted for under the
Equity Method
Consolidation
Newly consolidated subsidiaries: 6
Fujian Secom Security Co., Ltd.: (Newly establishment)
Secom Home Life Kanri Co., Ltd. and 4 other companies:(Acquisition)
Excluded from consolidation: 5
Secom Maintenance Joshinetsu Co., Ltd. and 1 other company: (Merger)
Beijing Secom Information Technology Co., Ltd. (Liquidation)
Laboratory for Innovators of Quality of Life: (Divestiture)
IPC Pasco Lingtu Corporation: (Moved to equity method affiliates)
Equity Method
New affiliates accounted for under the equity method: 2
Gain Inc.: (Acquisition)
IPC Pasco Lingtu Corporation: (Moved from consolidated subsidiaries)
Exclusion from affiliates accounted for under the equity method: 2
Taiwan Lines Co., Ltd.: (Liquidation)
New City Property Services Co., Ltd.: (Divestiture)
4. Closing Dates of Consolidated Subsidiaries and Equity Method Affiliates
With respect to overseas consolidated subsidiaries, etc., 9 U.S. subsidiaries
such as The Westec Security Group Inc., 4 U.K. subsidiaries such as SecomPlc, 13 Chinese subsidiaries such as Secom (China) Co., Ltd., 3 Australiansubsidiaries such as Secom Australia Pty. Ltd., P.T. Nusantara Secom
Infotech, P.T. Secom Indopratama, Pasco Thailand Co., Ltd., Thaisecom
Pitakkij Co., Ltd., Pasco Philippines Corp., Secom Vietnam Co.,Ltd.,
FM-International Oy, Nohmi Taiwan Ltd., Base Aerofotogrametria E
Projectos S.A. and Pasco Do Brasil Participacoes Ltda. close theiraccounting as of December 31 each year, and the financial statements as ofthis date are used for preparation of the consolidated financial statements.
With respect to domestic consolidated subsidiaries, etc., while 15companies such as Ena Urbane Properties, Co., Ltd. close their accounting asof December 31 each year, the financial statements prepared pursuant to theprovisional closing of accounts conducted as of March 31 are used for
preparation of the consolidated financial statements.
With respect to equity method affiliates, S1 Corporation, Taiwan
Secom Co., Ltd. and 12 other companies close their accounting as ofDecember 31 each year, and the financial statements as of this date are used[English Translation]
39

for preparation of the consolidated financial statements. While Koatsu Co.
Ltd. closes its accounting as of September 30 each year, the financial
statements prepared pursuant to the provisional closing of accounts
conducted as of March 31 are used for preparation of the consolidated
financial statements.
The necessary adjustments related to the consolidation are made forany major transactions which arise between the consolidated closing dates.
The closing dates of other consolidated subsidiaries and equity method
affiliates are the same as the consolidated closing date.
5. Significant Accounting Policies(1) Valuation policies and methods for significant assets
1) Securities
a. Held-to-maturity debt securities are carried at amortized cost.
b. Available-for-sale
Securities with fair value
Stock and beneficiary securities: At fair value based on the average
market price one month prior to the fiscal year-end.
Others: At fair value based on market price at fiscal year-end
Net unrealized gains and losses of securities are reported, net of
applicable income taxes, directly in net assets. The cost of securities
sold is primarily calculated by the moving average method.
Securities with no fair value
At cost, principally based on the moving average method.
2) Derivatives
Derivatives are stated at fair value.
3) Inventories
Inventories are principally stated at cost based on the moving averagemethod (or at the net realizable value (NRV) calculated by writing
down the book value to reflect a decrease in the NRV).
(Change to the accounting policy)
Inventories were principally stated at cost based on the moving averagemethod for the previous fiscal years. As the “Accounting Standard for
Measurement of Inventories” (ASBJ Statement No. 9, issued on July 5,2006) has become applicable from the current fiscal year, they are
principally stated at cost based on the moving average method (or at the
net realizable value calculated by writing down the book value to reflect
a decrease in the NRV).
The effect of this change on operating profit, ordinary profit and income
before income taxes is insignificant.
4) Real estate for saleStated at cost by the specific cost method (or at the net realizable value
calculated by writing down the book value to reflect a decrease in the
NRV).
(Change to the accounting policy)
Real estates for sale were principally stated at lower of cost or market
by the specific cost method for the past fiscal years. As the “AccountingStandard for Measurement of Inventories” (ASBJ Statement No. 9,
issued on July 5, 2006) has become applicable from the current fiscal[English Translation]40

year, they are principally stated at cost by the specific cost method (orat the net realizable value calculated by writing down the book value toreflect a decrease in the NRV).
The effect of this change on operating profit, ordinary profit, andincome before income taxes is insignificant.
(2) Depreciation and Amortization of Depreciable and Amortizable Fixed Assets
1) Tangible Assets (except for leased assets)a. Security equipment and control stations
Security equipment and control stations are depreciated over theiraverage estimated useful service lives (5–8 years) by the
declining-balance method.
b. Other tangible fixed assets
Other tangible fixed assets are depreciated by the straight-line method.
Their main useful service lives are as follows:
Buildings and improvements: 22–50 years
Tools and equipments: 2–20 years(Change to the accounting policy)
In past fiscal years, tangible assets (except for buildings (other thanleasehold improvements) acquired after April 1, 1998) were principally
depreciated by the declining balance method; from the current fiscal year,
this method has been changed to the straight-line method, except for
security equipment and control stations. The Company reviewed thedepreciation method of assets when it made the decision to switch capital
investments from leases to purchase from January 2008, andconsequently determined that the straight-line method was morereasonable, given the stable accrual of cost corresponding to revenue, andthus sought to unify the Group’s accounting policy.
Due to this change, operating profit, ordinary profit, and income before
taxes increased by Yen 2,203 million, respectively compared with theformerly adopted depreciation method.
2) Intangible Assets (except for leased assets)
Intangible fixed assets are amortized by the straight-line method.
The software used in the Company is amortized by the straight-line
method based on the useful service lives within the Company (5 years).
3) Leased Assets(i)Leased assets related to ownership-transfer finance lease transactions
Depreciated, using the same depreciation method applied to fixed assets
in possession.
(ii) Leased assets related to non-ownership-transfer finance leasetransactions
Depreciated, using the straight-line method over a useful life equal to thelease period with a residual value of zero.
In addition, non-ownership-transfer finance leases entered into on or
before March 31, 2008 are treated using the method applicable tooperating lease transactions.
4) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.
With respect to the installation costs related to security equipment at thecustomer premises, any portion exceeding the amount received from thecustomer is included in “long-term prepaid expenses” and amortized by
the straight-line method over the contract period (5 years).
(3) Basis for Significant Allowances[English Translation]
411) Allowance for Doubtful Accounts
To prepare for losses from bad debts such as losses on trade receivables
and loans, the allowance for doubtful accounts provides an estimatedamount of uncollectables. It is determined based on the historical loss ratewith respect to ordinary accounts, plus an estimate of uncollectableamounts respectively determined by reference to specific doubtful
accounts from customers who are experiencing financial difficulties.
2) Accrued Bonuses
The accrued bonuses are provided for the bonus payments to employees,
at an amount incurred during the current fiscal year.
3) Accrued Pension and Severance Costs
To prepare for the retirement benefits of employees, the Company and its
domestic consolidated subsidiaries, etc. appropriate an amount of accrued
pension and severance costs and prepaid pension and severance costs at
the end of the current fiscal year, based on the estimated amount ofprojected retirement benefit obligations and plan assets as of the end of
the current fiscal year.
Prior service liability is recognized as profit or loss in the year ofoccurrence.
Actuarial gains and losses are amortized from the following year ofoccurrence, using the straight-line method over certain years within the
average remaining service period (mainly 10 years).
4) Accrued Retirement Benefits for Directors and Corporate Auditors
To prepare for outlays for retirement benefits of Directors and Corporate
Auditors of the Company and certain domestic consolidated subsidiaries,
a necessary amount at the end of the current fiscal year is appropriatedbased on the rules of the Directors and Corporate Auditors’ retirement
benefits.
5) Reserve for Litigation Losses
To prepare for litigation losses, an accrual is provided based on theestimated potential losses.
(4) Revenue and Cost Recognition
Revenue from the contract business of Pasco Corporation and its subsidiaries,
etc. is recognized under the percentage of completion method. Revenue fromthe contract business of Secom Techno Service Co., Ltd. and its subsidiaries
for which the construction price per transaction exceeds Yen 500 million isrecognized under the percentage of completion method.
With respect to finance lease revenue, the Company applies the method
to recognize revenue and cost upon receipt of lease payments.
(5) Accounting for Major Hedges
1) Hedge Accounting Policy
The Company principally applies deferred hedging accounting. Theinterest rate swaps that fulfill requirements for exceptional treatments
permitted for interest rate swaps are accounted for using exceptional
treatments.
2) Hedging Instruments and Hedged Items
Hedging instruments: Interest rate swaps[English Translation]42

Hedged items:

Loans payables

3) Hedging Policy
The risks for forward interest rate fluctuation are to be hedged principally
pursuant to the risk management policy of the Company.
4) Assessment of Hedge EffectivenessHedge effectiveness is assessed by comparing the cumulative totals of
price fluctuations of the hedging items and hedging instruments from the
beginning of hedging to the effective point of assessment, taking thechanges of both the hedging items and hedging instruments into account.
However, when an item is judged to fulfill requirements for exceptional
treatments, the assessment of hedge effectiveness is omitted.
(6) Accounting for Consumption Tax
In relation to consumption tax and regional consumption tax, the Company
has adopted the tax-exclusive method.
6. Valuation of Assets and Liabilities of Consolidated Subsidiaries
Assets and liabilities of consolidated subsidiaries, etc. are fully measured at fairvalue at acquisitions.
7. Amortization of Goodwill and Negative Goodwill
Goodwill and negative goodwill are amortized by the straight-line method over a
5–10 year period.
8. Changes in Significant Items for Preparation of Consolidated Financial Statements(1) Accounting Standard for Lease Transaction
In past fiscal years, for non-ownership-transfer finance leases, an accounting
treatment substantially similar to the method applicable to operating leasetransactions was used. From the current fiscal year, the Company applies the“Accounting Standard for Lease Transaction” (ASBJ Standard No. 13, issued
on June 17, 1993 (First Subcommittee of the Business Accounting Council)
and as revised on March 30, 2007) and the “Guidance on AccountingStandard for Lease Transactions” (ASBJ Guidance No. 16, issued on January
18, 1994 (Accounting System Committee of the Japanese Institute ofCertified Public Accountants) and as revised on March 30, 2007) andchanged the accounting treatment to one similar to the method applied tocommon sale and purchase transactions.
(As a Lessee)
Leased assets are booked for non-ownership-transfer finance leases.
Additionally, non-ownership-transfer finance leases starting on or before
March 31, 2008 are continuously treated under a method applicable tooperating lease transactions.
The effect of this change on operating profit, ordinary profit, and income
before taxes is insignificant.
(As a Lessor)
Investment in leased assets is booked for non-ownership-transfer financeleases.
Additionally, with respect to the non-ownership-transfer finance leasetransactions of Secom Credit Co., Ltd., －the Company’s consolidated
subsidiaries whose major business is leasing － starting on or before March
31, 2008, the appropriate book value of fixed assets (after deducting
accumulated depreciation) at the end of the year immediately preceding the[English Translation]43

first fiscal year when the accounting standard is to be applied, is transferredto the beginning balance of investment in leased assets in the current fiscal
year, and the total amount equivalent to interest expense on the said
investment in leased assets is prorated equally over the remaining period after
the said accounting standard is applied.
Non-ownership-transfer finance leases for consolidated subsidiaries otherthan Secom Credit Co., Ltd. starting on or before March 31, 2008 arecontinuously treated under the method similar to a method applicable tooperating lease transactions.
The effect of this change on operating profit, ordinary profit, and income
before taxes for the current fiscal year is insignificant.
(2) Application of the Tentative Treatment for Overseas Subsidiaries in
Preparing the Consolidated Financial Statements
From the current fiscal year, the Company applies the “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements” (Practical Issues Task Force (PITF) No.
18, issued on May 17, 2006) and has made necessary consolidation
adjustments.
The effect of this change on operating profit, ordinary profit, and income
before taxes is insignificant.
9. Changes of Presentation Methods(Consolidated Statements of Income)(1) Exchange Loss
“Exchange loss” was included in “Other” of non-operating expense until theprevious fiscal year; as they exceeded ten hundredths of the total amount of
non-operating expenses, they are separately listed from the current fiscal
year.
Exchange losses included in “Other” of non-operating expenses in theprevious fiscal year amounted to Yen 825 million.
(2) Write-off of Long-term Prepaid Expenses“Write-off of long-term prepaid expenses” was included in “Other” of
non-operating expenses until the previous fiscal year; as they exceeded ten
hundredths of the total amount of non-operating expenses, they are separately
listed from the current fiscal year.
“Write-off of long-term prepaid expenses” included in “Other” of
non-operating expenses in the previous fiscal year amounted to Yen 941
million.

[English Translation]
44

Notes to Consolidated Balance Sheet
1. Cash Deposits for Armored Car Services, Short-term Bank Loans
For financial institutions, the Company and some of the domestic consolidated
subsidiaries provide cash collection from and cash filling to cash dispensers
located outside of financial institution facilities. The balance of cash deposits forarmored car services includes cash on hand and cash in banks representing a totalof Yen 33,971 million connected with such services, which is restricted as to useby the Company group. The short-term bank loan balance includes Yen 7,899
million financed for the cash collection and filling services.
Furthermore, the balance of cash deposits for armored car services
includes Yen 22,696 million connected with cash collection administration
services, which is also restricted as to use by the Group. Also, the short-term bankloan balance includes Yen 18,993 million financed in connection with the same
services.
2. Accumulated Depreciation of Assets
Accumulated Depreciation of Tangible Assets: Yen 287,496 million
3. Assets Pledged as Collateral and Collateral-related Liabilities:(1) Assets Pledged as Collateral(Millions of Yen)
Cash on hand and in banks (time deposit)
1,282
Short-term loans receivables
14
Other current assets (receivable -other)
672
Buildings and improvements
29,943Land
27,272Intangible assets (leasehold)818
Investment securities
745
Long-term loans receivable
408
Other fixed assets (long-term deposit)
200
Total
61,357(2) Collateral-related Liabilities(Millions of Yen)
16,5695,036
12,673
13,25047,529Bank loans
Current portion of straight bonds
Straight Bonds
Long-term loans
Total

In addition to the above liabilities, investment securities and long-term loans arepledged as collateral for the debts of affiliated companies and other debts.
4. Change in the Purpose of Ownership of Real Estate for Sale
Real estate for sale in the amount of Yen 2,353 million has been transferred to“Land” due to a change in the purpose of ownership.
5. Investment in Non-consolidated Subsidiaries and Affiliated Companies:(Fixed assets)
Investment in securities (shares) amounted to Yen 38,690 million.
6. Contingent Liabilities:(1) The Company guarantees loans payable and amounts payable held for lease,etc. of the affiliated companies, etc. amounted to Yen 8,314 million.

[English Translation]45

(2) Lawsuits:
In July 2004, Fujitsu Limited filed a lawsuit against Secom General
Insurance Co., Ltd. in the Tokyo District Court, claiming compensation forcosts related to a systems development order in the amount of Yen 2,500
million. Secom General Insurance Co., Ltd. is not only contesting this lawsuiton the grounds that it is without merit, but has also filed a countersuit
claiming damages in the amount of Yen 1,000 million. However, on January
16, 2009, Secom General Insurance Co., Ltd. resolved the matter by reachinga settlement involving the payment to Fujitsu Limited in the amount of Yen
1,000 million, which was paid on January 30, 2009.
Pasco Corporation filed a lawsuit against Sumitomo Mitsui Banking
Corporation for a confirmatory judgment to the effect that it does not owe anobligation in the amount of Yen 2,010 million to Sumitomo Mitsui Banking
Corporation with the Tokyo District Court on October 31, 2005. Sumitomo
Mitsui Banking Corporation alleged that it made a loan to a third party andacquired from the third party its claim against Pasco Corporation for an
alleged sale of equipment to Pasco Corporation, as collateral for the loan, anddemanded Pasco Corporation to pay such claim to Sumitomo Mitsui Banking
Corporation. Furthermore, on December 5, 2005, Sumitomo Mitsui Banking
Corporation brought a cross action against Pasco Corporation in relation to ademand for payment of a transferred receivable. Subsequently, both actions
were consolidated according to a court procedure. The oral argument was
concluded on October 31, 2008, and on March 27, 2009 Tokyo District Court
rendered the following judgment;(Contents of decision)
1. Pasco Corporation must pay money for Sumitomo Mitsui Banking
Corporation in an amount of Yen 2,010 million as well as interest of the rateof 6 percent per annum on Yen 600 million, from November 1, 2005, and on
Yen 1,409 million, from December 1, 2005, up to the full payment of therespective amounts;
2. Pasco Corporation incurs the cost of lawsuits including the cost caused bysupplementary participation; and3. The judgment can be provisionally executed.
Pasco Corporation appealed the case to the Tokyo High Court on April 6,
2009.
Pasco Corporation has provided reserve for litigation losses of Yen 2,415
million based on the judgment.
7. Presentation of Goodwill and Negative Goodwill
Goodwill and negative goodwill are presented in netted amount. Listed below
are the amounts before offset.
Goodwill
Yen 5,588 million
Negative goodwill
1,479
Net amount
4,109

Notes to Consolidated Statement of Income
1. Loss on revaluation of real estate inventories included in Cost of Revenue
Yen 8,366 million[English Translation]46

Notes to Consolidated Statement of Changes in Net Assets
1. Classes and Total Number of Issued Shares and Treasury Stocks(Unit：1 share)

Number of sharesat the end of theprevious
consolidated fiscal
year

Increase in thenumber of shares in
the current
consolidated fiscal
year

Decrease in thenumber of sharesin the current
consolidated fiscal
year

Number of sharesat the end of thecurrent
consolidated
fiscal year

233,288,717――

233,288,717

Issued shares
CommonstocksTreasury stocks
8,323,599
6,930,313
2,392
15,251,520
Commonstocks(Outline of reasons for change)
The increase of 6,930,313 in the number of common stocks is due to thepurchase of 6,913 shares constituting less than one unit and due to the purchaseof 6,923,400 shares as treasury stock pursuant to a resolution of the Board of
Directors held on November 5, 2008.
The decrease of 2,392 in the number of common stocks is due to requests tosell such number of shares as will constitute, together with the sharesconstituting less than one unit of shares already held, one full unit.
2. Items Related to Dividends(1) Amount of Dividend Paid
Resolution
Ordinary General
Meeting of
Shareholders on
June 26, 2008

Classes ofSharesCommonstock

Total amountof dividend

Cash dividend
per share(Millions of Yen)

(Yen)

19,12285

Record date

Effective
date

March 31,2008

June 27,
2008(2) Of the dividends whose record date belongs to the current fiscal year, thefollowing are those dividends of which the effective date belongs to the next
fiscal year.
The matters to be resolved on the general meeting of shareholders are as follows.
Resolution

Ordinary General
Meeting of
Shareholders on
June 25, 2009Classes ofSharesCommonstock

Source ofdividend

Retainedearnings

Total
amount ofcash
dividend

Record dateCashdividend per
share(millions of
Yen)

(Yen)

18,53385[English Translation]
47

March 31,2009

Effective
date

June 26,2009Notes to Deferred Tax Accounting
1. The Significant Components of Deferred Tax Assets and Deferred Tax Liabilities
Deferred tax assets:(Millions of Yen)
Operating loss carryforwards
13,505
Eliminations of unrealized gain
10,661
Allowance for doubtful accounts
8,074
Adjustment of book value of land and buildings of subsidiaries,
etc. at fair value at the date of consolidation
7,475
Accrued pension and severance costs
5,205
Accrued bonuses
5,120
Write-down on fixed assets
4,721
Investment deposits by policyholders, unearned premiums and4,307
other insurance liabilities and provision for outstanding claims
Impairment loss
3,097
Loss on impairment of investment securities
2,751
Loss on revaluation of real estate inventories
2,702
Unrealized losses on securities
1,187
Other
9,139
Gross deferred tax assets
77,951
Valuation allowance(29,667)
Total deferred tax assets
48,283
Deferred tax liabilities:
Prepaid pension and severance costs
Adjustment of book value of other fixed assets of subsidiaries,
etc. at fair value at the date of consolidation (land andbuildings)
Adjustment of book value of other fixed assets of subsidiaries,
etc. at fair value at the date of consolidation (Other fixed
assets)
Other
Total deferred tax liabilities
Net deferred tax assets(7,392)(6,404)(2,522)(156)(16,475)
31,807

2. Summary of the Reconciliation between the Effective Tax Rate Reflected in theConsolidated Financial Statements and the Statutory Tax Rate :Statutory tax rate
(Reconciliation)
Unrecognized tax benefits fromsubsidiaries in deficit
Net gains from investment in affiliatedcompanies accounted for under theequity method
Impairment loss on the investments andloans of subsidiaries and affiliatedcompanies
Increase in valuation allowance
Permanently nondeductible expenses
such as entertainment expenses[English Translation]48

40.5 (%)
19.7
(2.9)
(2.7)
2.5
1.6

Per capita levy of corporate inhabitanttax
Amortization of goodwill
Research and development tax credits
Tax rate difference with consolidated
subsidiaries
Utilization of tax loss carryforwards
Other
Effective tax rate after the adoption ofdeferred tax accounting

1.3
1.0
(0.6)
0.5
(0.3)
0.0
60.6 (%)

Notes to Fixed Assets Used under Leases
1. Finance lease transactions commencing on or before March 31, 2008 other thanthose deemed to transfer the ownership of the leased assets to the lessees(1) As a Lessee
Besides the ones booked as fixed assets on the balance sheet of the Company,
some of buildings, automobiles, machinery and equipment, tools, furniture andfixtures and software are used based on the finance lease contracts other thanthose deemed to transfer the ownership of the leased assets to the lessees.
1) The Amount Equivalent to Acquisition Cost, the Amount Equivalent to
Accumulated Depreciation, and the Amount Equivalent to Year-End Balanceof Leased Properties(Millions of Yen)
Amount equivalent to acquisition cost
Buildings and improvements
5,184
Tangible assets (other)
11,266
Intangible assets (software)
1,180
Total
17,631
Amount equivalent to accumulated depreciation
Buildings and improvements
Tangible assets (other)
Intangible assets (software)
Total

2,273
7,209
605
10,088Amount equivalent to year-end balance
Buildings and improvements
Tangible assets (other)
Intangible assets (software)
Total

2,911
4,057
574
7,543

2) The Amount Equivalent to Year-End Balance of Future Minimum Lease
Payments(Millions of Yen)
Within 1 year
Over 1 year
Total

2,394
6,270
8,664

3) Lease Payment Expenses, the Amount Equivalent to Depreciation Expenses,
and the Amount Equivalent to Interest Expenses[English Translation]49

Lease payment expenses
Amount equivalent to depreciation expenses
Amount equivalent to interest expenses(Millions of Yen)
3,594
3,213
391

4) Calculation Method of the Amount Equivalent to Depreciation Expenses andthe Amount Equivalent to Interest Expenses
Calculation Method of the amount equivalent to depreciation expenses
Depreciation expenses are calculated using the straight-line method whichassumes that the period of the lease is the useful service life of the asset andsets the residual value to zero.
Calculation Method of the amount equivalent to interest expenses
The amount equivalent to interest expenses is calculated as the difference
between total lease payments and the amount equivalent to the acquisition costof leased properties, and the interest method is used as the allocation method
for each fiscal period.
(2) As a Lessor
1) The Acquisition Cost, Accumulated Depreciation, and Year-End Balance forLeased Properties Included in Fixed Assets(Millions of Yen)

Acquisition cost
Buildings and improvements
Tangible assets (other)
Total

11,377
7,842
19,219

Accumulated depreciation
Buildings and improvements
Tangible assets (other)
Total

1,761
4,213
5,974

Year-End balance
Buildings and improvements
Tangible assets (other)
Total

9,616
3,628
13,2452) The Amount Equivalent to the Year-End Balance of Future Minimum Lease
Payments to be received(Millions of Yen)
Within 1 year
1,258Over 1 year
13,448
Total
14,7063) Received Lease Payments, Depreciation Expenses, and the Amount Equivalent
to Received Interest(Millions of Yen)
Received lease payments
2,823
Depreciation expenses
1,953
Amount equivalent to received interest
1,416[English Translation]504) Calculation Method of the Amount Equivalent to Interest
The amount equivalent to interest is calculated as total lease payments plus
total estimated residual value minus the purchase price of the leased properties,
and the interest method is used as the allocation method for each fiscal period.
2. Finance Leases(As a Lessor)
1) Investment in Leased Assets(Current assets)
Gross lease receivables
Amount equivalent to received interest
Investment in leased assets(Millions of Yen)
24,251(9,881)
14,3702) Estimated collection schedule for gross lease payments to be received for leasereceivables and leased investment assets(Millions of Yen)

(Current assets)
Lease receivables
Within 1 year56

1 year to 2 year

56
56
56
56
454

2 year to 3 year
3 year to 4 year
4 year to 5 year
Over 5 year

Investment inleased assets
8,252
6,533
4,734
2,869
984
876

(Note) With regard to non-ownership transfer finance lease transaction forwhich the lease transaction commenced on or before March 31, 2008
among the lease transactions of consolidated subsidiary, Secom Credit
Co., Ltd., whose principal business is leasing, it has recorded theappropriate book value of fixed assets (after deducting accumulated
depreciation) as of the end of the fiscal year immediately preceding to
the application of the accounting standard as of the beginning balanceof investment in leased assets of the current fiscal year. The book value
is included in the balance of investment in leased assets above.
3. Operating Leases
1) As a Lessee
Future lease payments
Within 1 year
Over 1 year
Total

(Millions of Yen)
2,420
28,29630,7172) As a Lessor
Future lease payments to be received
Within 1 year
Over 1 year
Total

[English Translation]
51(Millions of Yen)
3,452
21,90525,357

Notes to Retirement Benefits
1. Outline of the Retirement Benefit Plan Adopted by the Company:
Employees of the Company and its consolidated domestic subsidiaries whose
services are terminated are, under most circumstances, eligible for lump-sum
severance indemnities and/or eligible for pension benefits.
The Company and those of its domestic consolidated subsidiaries with the sameretirement benefit plan have adopted a severance indemnity plan and a defined
contribution pension plan. The method of calculating the severance indemnity
under the severance indemnity plan is to pay out to the employees an amount equal
to a certain percentage of their annual income over their period of service, plus
interest which is calculated as the 3-year average yield of applicants for 10-year
government bonds (though subject to transitional measure),. The defined
contribution pension plan was established in April 2003, a portion equivalent to 20
percent of the severance indemnity plan so far accumulated was transferred to thenew plan, and a specified percentage of annual income is contributed thereto. The
Company transferred an additional portion of the severance indemnity plan funds tothe defined contribution pension plan in April 2005, and accordingly, the ratio of
the accumulated amount in the severance indemnity plan and the amount ofcontributions to the defined contribution pension plan, including the past reserve,changed to 70 percent and 30 percent, respectively.
The majority of the consolidated overseas subsidiaries have adopted a variety ofpension plans that essentially cover all employees. Most of these plans are defined
contribution pension plans.
2. Items Concerning the Retirement Benefit Obligation (As of March 31, 2009):(1) Projected benefit obligation(2) Plan assets *1(3) Unfunded projected benefit obligation ((1)+(2))(4) Unappropriated difference at the time of changein accounting standard(5) Unrecognized actuarial gains or losses(6) Unrecognized prior service liability(7) Net retirement benefit obligation recognized in
the consolidated balance sheet((3)+(4)+(5)+(6))(8) Prepaid pension and severance costs(9) Accrued pension and severance costs ((7)-(8))(Millions of Yen)
(70,734)
54,715(16,019)
21,088
5,069
18,876(13,807)(Note) *1. Plan assets include the asset of Yen 235 million of the retirement benefit
trust.

3. Components of Pension and Severance Costs (April 1, 2008–March 31, 2009)(1) Service cost *1(2) Interest cost(3) Expected return on plan assets(4) Amortization of actuarial gains or losses(5) Pension and Severance Costs ((1)+(2)+(3)+(4))(6) Gains or losses on additional transfer to adefined contribution pension plan *2(7) Other *3
Total[English Translation]
52(Millions of Yen)
4,386
1,429
(1,818)
1,032
5,030
242
1,468
6,741

(Notes) *1. Pension and severance costs for consolidated subsidiaries, etc. adopting thesimplified method are included in (1) “Service cost.”*2. Pasco Corporation, the Company’s consolidated subsidiary, transferred a
portion of retirement benefit plan to a defined contribution pension plan in
March 2009.
*3. “Other” represents the amount payable as premiums to the defined
contribution pension plan.

4. Assumptions Used in Accounting for Retirement Benefits(1) Attribution of projected benefit Straight-line method over the estimated years
obligationof services of the eligible employees(2) Discount rates
Principally 2.0% at beginning of fiscal year
Principally 2.1% at end of fiscal year(3) Expected rates of return on
Principally 3.0% for plan assets
plan assets
0.0% for retirement benefit trust(4) Amortization period of priorPrior service liability is amortized in the year
service liability
incurred.
(5) Amortization period of
Amortizing actuarial gains and losses from theactuarial gains or losses
following fiscal year of occurrence, using thestraight-line method over certain years within
the average remaining service period (mainly
10 years).

Notes to Business Combination
Not applicable

Notes to Per-Share Information
Net assets per share:
Net income per share:

Yen 2,380.12
Yen 96.69[English Translation]
53

Non-Consolidated Balance Sheet(As of March 31, 2009)(Millions of Yen)ITEM
ASSETSAMOUNTITEM
LIABILITIESAMOUNT

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

134,801
31,14954,258389
11,630
6,732
2,415
455
5,652
1,101
2,034
4,446
11,821
3,280(567)

Current Liabilities:
Accounts payable
Bank loans
Lease obligations
Payables – otherAccrued income taxes
Accrued consumption taxes
Accrued expenses
Deposits received
Deferred revenue
Payables – construction
Accrued bonuses
Other150,704
2,319
60,89343
10,981
11,8491,622
597
28,451
22,735
3,742
5,537
1,928

Fixed Assets:
Tangible Assets:
Buildings and improvements
Automobiles

545,056
121,825
23,055386

Long-term Liabilities:
Lease obligations
Guarantee deposits received
Accrued pension and severance costs
Accrued retirement benefits for
Directors and Corporate Auditors
Other
Total Liabilities
NET ASSETS

24,221
192
18,146
4,766

Security equipment and control stations
Machinery and equipment
Tools, furniture and fixtures
Land
Construction in progress
Other
Intangible Assets:
Software
Other
Investments and Others:
Investment securities
Investment securities and investments
in subsidiaries and affiliates

63,064
1,071
3,717
28,306
1,588
634
7,121
6,578
542
416,110
21,267

143,145

Lease deposits
Long-term prepaid expense
Prepaid pension and severance costs

8,702
26,412
14,561

Deferred income taxes

14,763

Insurance funds
Other
Allowance for doubtful accounts

4,896
1,065
(13,354)

TOTAL ASSETS

12
174,926

Shareholders’ Equity:
Common Stock
Capital Surplus:
Additional paid-in capital
Retained Earnings:
Legal reserve504,883
66,377
83,054
83,054
430,347
9,028

Other retained earnings

421,318

194,649

Long-term loans receivable

1,104

Reserve for systems development
General reserve
Accumulated earnings carriedforwardCommon Stock in treasury, at cost
Valuation, Translation Adjustments andOthers:Net unrealized gains on securities

Total Net Assets
TOTAL LIABILITIES AND NET
ASSETS

679,858[English Translation]
54

800
2,212
418,306(74,896)48
48

504,932
679,858

Non-Consolidated Statement of Income(Fiscal Year from April 1, 2008 to March 31, 2009)(Millions of Yen)ITEM

AMOUNT

Revenue

336,893

Costs of revenue

193,842

Gross profit

143,050

Selling, general and administrative expenses

70,434

Operating profit

72,616

Non-operating income:Interest income

2,437

Dividends income

6,712

Other

571

9,721

Non-operating expenses:
Interest expenses

673

Loss on sales and disposal of fixed assets

1,622

Write-off of long-term prepaid expenses

902

Other

792

Ordinary profit

3,990
78,346Extraordinary profit:
Gain on sales of subsidiaries’ and affiliates’
securities
Gain on sales of fixed assets
Other

44
21
0

Extraordinary loss:
Loss on impairment of subsidiaries’ andaffiliates’ securities
Provision for allowance of doubtful accounts

14,188Loss on impairment of investment securities

6,312

Other

67

6,520
46

Income before income taxes

27,06851,345

Income taxes – current

26,756

Income taxes – deferred(7,825)

Net income

18,931
32,414[English Translation]
55

Non-Consolidated Statement of Changes in Net Assets(Fiscal Year from April 1, 2008 to March 31, 2009)(Millions of Yen)
Shareholders’ equity
Retained
Capital surplus
earnings
Common stock

Balance as of March 31,
2008

Additional

Other capital

Total capitalLegalpaid-in capitalsurplussurplusreserve

66,377

83,054

1

83,056

(2)

(2)

0

0

9,028

Changes during the period:
Cash dividends
Net income
Purchaseoftreasurystock
Disposal of treasury stock
Transfer

of

loss

on

disposal of treasury stock
Net changes of items
other than shareholders’equityTotal changes during the

-

-

(1)

(1)

-

66,377

83,054-

83,054

9,028

periodBalance as of March 31,
2009(Millions of Yen)
Shareholders’ equity
Retained earnings
Other retained earnings
Reserve forsystems

General reserve

development
Balance as of March 31, 2008

Accumulated

Total retained

earnings carriedearnings

forward

800

2,212

405,015

417,055

Cash dividends(19,122)(19,122)

Net income

32,41432,414(0)(0)

Changes during the period:

Purchase of treasury stock
Disposal of treasury stock
Transfer of loss on disposal oftreasury stock
Net changes of items other thanshareholders’ equity
Total changes during the period--

13,291

13,291

Balance as of March 31, 2009

800

2,212

418,306

430,347[English Translation]
56

(Millions of Yen)
Valuation, translation

Shareholders’ equity

adjustments and others
Total

Common stock

Total

Unrealized

valuation,in treasury, atshareholders’gains (losses)

translation

cost

equityon securities

adjustments

Total net
assetsand others
Balance as of March 31, 2008

(44,877)

521,612

(82)

(82)

521,529

Changes during the period:
Cash dividends(19,122)(19,122)

Net income

32,41432,414Purchase of treasury stock(30,031)(30,031)(30,031)

Disposal of treasury stock

12

9

9

-

-

Transfer of loss on disposal oftreasury stock
Net changes of items other thanshareholders’ equity

131

131

131

Total changes during the period(30,018)(16,729)131131(16,597)

Balance as of March 31, 2009

(74,896)504,88348

48

504,932[English Translation]
57

Notes to Non-Consolidated Financial Statements
Notes to Significant Accounting Policies
1. Valuation Policies and Methods for Securities(1) Held-to-maturity debt securities
Amortized cost method(2) Investment Securities in Subsidiaries and Affiliates
Valued at cost, based on the moving average method.
(3) Available-for-sale Securities
Securities with fair value
Stock and beneficiary securities: At fair value based on the average market
price one month prior to the fiscal year-end.
Others: At fair value based on market price at fiscal year-end
Net unrealized gains and losses of securities are reported, net of applicable
income taxes, directly in net assets. The cost of securities sold is primarily
calculated by the moving average method.
Securities with no fair value
At cost, based on the moving average method
2. Valuation Policies and Methods for Inventories
Merchandise and supplies are stated at cost determined by the moving averagemethod.
(Change to the accounting policy)
Inventories were principally stated at cost based on the moving average method
for the previous fiscal years. As the “Accounting Standard for Measurement of
Inventories” (ASBJ Statement No. 9, issued on July 5, 2006) has become
applicable from the current fiscal year, they are principally stated at cost basedon the moving average method (or at the net realizable value calculated bywriting down the book value to reflect a decrease in the NRV).
The effect of this change on operating profit, ordinary profit and income before
income taxes is insignificant.
3. Depreciation and Amortization of Depreciable and Amortizable Fixed Assets(1) Tangible Assets: (except for leased assets)a. Security equipment and control stations
Security equipment and control stations are depreciated over their average
estimated useful service lives (5–8 years) by the declining-balance method.
b. Other tangible fixed assets
Other tangible fixed assets are depreciated by the straight-line method.
Their main useful service lives are as follows:
Buildings and improvements: 22–50 years(Change to the accounting policy)
In past fiscal years, tangible assets (except for buildings (other than leasehold
improvements) acquired after April 1, 1998) were principally depreciated by[English Translation]
58

the declining balance method; from the current fiscal year, this method has
been changed to the straight-line method, except for security equipment andcontrol stations. The Company reviewed the depreciation method of assets
when it made the decision to switch capital investments from leases topurchase from January 2008, and consequently determined that the straight-line
method was more reasonable, given the stable accrual of cost corresponding torevenue, and thus sought to unify the Group’s accounting policy.
Due to this change, operating profit, ordinary profit, and income before taxes
each increased by Yen 1,369 million compared with the formerly adopted
depreciation method.
(2) Intangible Assets
Intangible fixed assets are amortized by the straight-line method.
The software used in the Company is amortized by the straight-line method
based on the useful service lives within the Company (5 years).
(3) Leased Assets(i)Leased assets related to ownership-transfer finance lease transactions
Depreciated, using the same depreciation method applied to fixed assets inpossession.
(ii) Leased assets related to non-ownership-transfer finance lease transactions
Depreciated, using the straight-line method over a useful life equal to the lease
period with a residual value of zero.
In addition, non-ownership-transfer finance leases entered into on or before
March 31, 2008 are treated using the method applicable to operating leasetransactions.
(Change to the accounting policy)
For non-ownership-transfer finance leases, an accounting treatment
substantially similar to the method applicable to operating lease transactions
was used. From the current fiscal year, the Company applies the “AccountingStandard for Lease Transaction” (ASBJ Standard No. 13, issued on June 17,1993 (First Subcommittee of the Business Accounting Council) and as revisedon March 30, 2007) and the “Guidance on Accounting Standard for Lease
Transactions” (ASBJ Guidance No. 16, issued on January 18, 1994
(Accounting System Committee of the Japanese Institute of Certified Public
Accountants) and as revised on March 30, 2007) and changed the accounting
treatment to one similar to the method applied to common sale and purchasetransactions.
The impact of this change on operating profit, ordinary profit, and income
before taxes is insignificant.
(4) Long-term Prepaid Expenses: Straight-line method
Long-term prepaid expenses are amortized by the straight-line method. With
respect to the installation costs related to security equipment at the customer
premises, any portion exceeding the amount received from the customer is
included in “long-term prepaid expenses” and amortized by the straight-line
method over the contract period (5 years).
4. Basis for Significant Allowances(1) Allowance for Doubtful Accounts
To prepare for losses from bad debts such as losses on trade receivables andloans, the allowance for doubtful accounts provides an estimated amount of
uncollectables. It is determined based on historical loss rate with respect to[English Translation]59

ordinary accounts, and an estimate of uncollectable amounts, respectively
determined by reference to specific doubtful accounts from customers who areexperiencing financial difficulties.
(2) Accrued Bonuses
Accrued bonuses are provided for the bonus payments to employees, at an
amount incurred during the current fiscal year.
(3) Accrued Pension and Severance Costs
To prepare for the retirement benefits of employees, the Company appropriates
an amount of accrued pension and severance costs and prepaid pension andseverance costs at the end of the current fiscal year, based on the estimatedamount of projected benefit obligation and plan assets as of the end of thecurrent fiscal year.
Prior service liability is recognized as profit or loss in the year of occurrence.
Actuarial gains and losses are amortized from the following year of occurrence,using the straight-line method over certain years within the average remaining
service period (mainly 10 years).
(4) Accrued Retirement Benefits for Directors and Corporate Auditors
To prepare for outlays for retirement benefits of Directors and Corporate
Auditors of the Company, a necessary amount at the end of the current fiscal
year is appropriated based on the rules of the Directors and Corporate
Auditors’ retirement benefits.
5. Other Significant Accounting Policies(Consumption Tax)In relation to consumption tax and regional consumption tax, the Company has
adopted the tax-exclusive method.
6. Changes of Presentation Methods
Not applicable

Notes to the Non-Consolidated Balance Sheet
1. Cash and Deposits for Armored Car Services, Short-term Bank Loans
For financial institutions, the Company provides cash collection from and cash
filling to cash dispensers located outside of financial institution facilities.
The balance of cash and deposits for armored car services includes cash on
hand and cash in banks of representing a total of Yen 31,562 million connectedwith such services, which is restricted as to use by the Company. The short-termbank loan balance includes Yen 7,899 million financed for the cash collection andfilling services.
The balance of cash deposits for armored car services includes Yen 22,696
million connected with cash collection administration services, which is also
restricted as to use by the Company. Also, the short-term bank loan balance
includes Yen 18,993 million financed in connection with the same services.

[English Translation]60

2. Assets Pledged as Collateral and Collateral-related Liabilities(1)Assets pledged as collateral(Millions of Yen)
Short-term loans receivable
14
Investment securities
277
Investment securities in subsidiaries and45
affiliates
Long-term loans receivable
408
Total
745
(2)Collateral-related liabilities
Nil
Short-term loans receivables, investment securities, investment securities insubsidiaries and affiliates, and long-term loans receivable are pledged ascollateral for the debts of subsidiaries and affiliated companies and other debts.
3. Accumulated Depreciation of Assets
Accumulated depreciation of tangible asset:

Yen 216,723 million

4. Contingent Liabilities(1) Guarantees
Liabilities for the below entities and employees are guaranteed.
(Millions of Yen)
Alive Medicare Co., Ltd.
1,872
Secom Home Life Co., Ltd.
570
Seikeikai (Medical institution)
482
Sanwakai (Medical institution)
332
Other
371
Employees
218
Total
3,848
(2) Net Assets Maintaining Agreement
The Company entered into a net assets maintaining agreement with Secom
General Insurance Co., Ltd., under which the Company is obligated to provide
funds to Secom General Insurance Co., Ltd. if and when the net assets ofSecom General Insurance Co., Ltd. become lower than the specified amount or
its current assets necessary for the payment of its liabilities are insufficient. The
total liabilities of Secom General Insurance Co., Ltd. at the end of the current
fiscal year are Yen 176,909 million, including Yen 172,097 million of
investment deposits by policyholders, unearned premiums and other insurance
liabilities, and the total assets are Yen 188,547 million.
However, this agreement is not construed as the Company’s guarantee withrespect to payment obligations of Secom General Insurance Co., Ltd., andSecom General Insurance Co., Ltd. maintained net assets above the required
level and its current assets were not insufficient at the end of the current fiscal
year.

[English Translation]
61

5. Financial Receivables/Payables of Subsidiaries and Affiliated Companies(excluding those separately presented)(Millions of Yen)
15,409
Short-term receivables
Long-term receivables
Short-term payables
Long-term payables

139,258
8,984
186

Notes to Non-Consolidated Statement of Income
Transactions with Subsidiaries and Affiliated Companies
Operating transactions(Millions of Yen)
Revenue
15,305
Amount of purchased costs and sub-contract costs
68,270Non-operating transactions
8,634

Notes to Non-Consolidated Statements of Changes in Net Assets
Classes and Total Number of Treasury Stocks
Classes of
Number of
Increase insharesshares at the
number ofend of theshares in theprevious fiscal current fiscal
year
year
Common stock
8,323,599
6,930,313(Unit: 1 share)
Decrease in
Number of
number ofshares at theshares in theend of thecurrent fiscal
current fiscal
year
year
2,392
15,251,520(Outline of reasons for change)
The increase of 6,930,313 in the number of common stocks is due to the purchase of
6,913 shares constituting less than one unit and due to the purchase of 6,923,400
shares as treasury share pursuant to a resolution of the Board of Directors held on
November 5, 2008.
The decrease of 2,392 in the number or common stocks is due to requests to sell such
number of shares as will constitute, together with the shares constituting less than one
unit of shares already held, one full unit.

Notes to Deferred Tax Accounting
1. The Significant Components of Deferred Tax Assets and Deferred Tax Liabilities:
Deferred tax assets:(Millions of Yen)
Impairment loss on Subsidiaries’ and Affiliates’ securities
6,626[English Translation]
62

Allowance for doubtful accounts
Impairment loss
Accrued bonuses
Accrued pension and severance costs
Write-down on fixed assets
Other
Total deferred tax assets

5,415
2,458
2,242
2,025
1,943
4,429
25,140

Deferred tax liabilities:
Prepaid pension and severance costs
Other
Total deferred tax liabilities(Millions of Yen)
(5,897)(33)(5,930)Net deferred tax assets(Millions of Yen)
19,2102. Summary of the Reconciliation between the Effective Tax Rate Reflected in the
Financial Statements and the Statutory Tax Rate.
Statutory tax rate
(Reconciliation)
Permanently nondeductible expenses
Foreign tax credit
Per capita levy of corporate inhabitant tax
Research and development tax credits
Other
Effective tax rate after the adoption of deferred tax accounting

40.5%
(3.1)
(0.7)
0.7
(0.8)
0.3
36.9%

Notes to Fixed Assets under Leases
1.

Finance lease transactions commencing on or before March 31, 2008 other thanthose deemed to transfer the ownership of the leased assets to the lessees
Besides the ones booked as fixed assets on the balance sheet of the Company,
some of buildings, automobiles and tools, furniture and fixtures are used based on
the finance lease contracts other than those deemed to transfer the ownership of theleased assets to the lessees.
1) The Amount Equivalent to Acquisition Cost, the Amount Equivalent to
Accumulated Depreciation, and the Amount Equivalent to Year-End Balanceof Leased Assets(Millions of Yen)
Amount equivalent to acquisition cost
Buildings
5,184
Automobiles
1,700
Tools furniture and fixtures
936
Total
7,821

[English Translation]
63

Amount equivalent to accumulated depreciation
Buildings
Automobiles
Tools furniture and fixtures
Total
Amount equivalent to year-end balance
Buildings
Automobiles
Tools furniture and fixtures
Total(Millions of Yen)
2,273
1,059
725
4,059
(Millions of Yen)
2,911
640
210
3,762

2) The Amount Equivalent to Year-End Balance of Future Minimum Lease
Payments(Millions of Yen)
641
4,108
4,749

Within 1 year
Over 1 year
Total3) Lease Payment Expenses, the Amount Equivalent to Depreciation Expenses,
and the Amount Equivalent to Interest Expenses
Lease payment expenses
Amount equivalent to depreciation expenses
Amount equivalent to interest expenses(Millions of Yen)
1,166
953
238

4) Calculation Method of the Amount Equivalent to Depreciation Expenses andthe Amount Equivalent to Interest Expenses
Calculation Method of the amount equivalent to depreciation expenses
Depreciation expenses are calculated using the straight-line method whichassumes that the period of the lease is the useful service life of the asset andsets the residual value to zero.
Calculation Method of the amount equivalent to interest expenses
The amount equivalent to interest expenses is calculated as the difference
between total lease payments and the amount equivalent to the acquisition costof leased properties, and the interest method is used as the allocation method
for each fiscal period.
2.

Operating Leases
1) Lessee
Future lease payments
Within 1 year
Over 1 year
Total

(Millions of Yen)
2,171
27,11329,285[English Translation]642) Lessor(Millions of Yen)

Future lease payments to be received
Within 1 year
Over 1 year
Total

769
8,637
9,407

Notes to Transactions with Related Parties
Type

Name ofCompany

Address

Capital(Millionsof
Yen)

Business
content

VotingRights HeldbyCompany(Indirect)(%)

Subsidiary

Secom
TechnoService Co.,
Ltd.
Secom
MedicalSystem Co.,Ltd.

Nakano
-ku,
Tokyo

2,357

Installationof security
systems

67.8
(0.0)

Relationship
Concurrent Businessposts ofrelationshipDirectors
andCorporate
Auditors
Construction
subcontractor

Shibuya
-ku,
Tokyo

6,545

Medicalservice100.0

3 persons

Loan andinvestmentof funds

Subsidiary

Secom
Home Life
Co., Ltd.

Shibuya
-ku,
Tokyo

3,700

Real estatedevelopment
and sales

99.9

2 persons

Loan andinvestmentof funds

Subsidiary

SecomCredit Co.,Ltd.

Shibuya
-ku,
Tokyo

400

Lease

100.0

2 persons

Loan andinvestmentof funds

Subsidiary

Secom
GeneralInsurance
Co., Ltd.

Chiyoda-ku,
Tokyo

14,558Non-life
insuranceservice96.2

1 personsinvestmentof funds

Subsidiary

Transactions

Secom Techno
Service Co.,Ltd.

Installation costs(Note 2)

Amount ofTransactions(Millions ofYen)
39,810Account

Payable-other
Payable-construction[English Translation]
65

Year-end
Balance(Millions of
Yen)
3,295
1,087

Secom Medical
System Co.,Ltd.

Secom Home
Life Co., Ltd.

Secom Credit
Co., Ltd.

Secom General
Insurance Co.,
Ltd.

Execution ofloans(Collection ofloans)
Receipt ofinterests (Note 3)
Execution ofloans(Collection ofloans)
Receipt ofinterests (Note 3)
Execution ofloans(Collection ofloans)
Receipt ofinterests (Note 3)
Investment

Short-term loans receivable

3,817

538

long-term loans receivable

37,802

82,940Long-term loans receivable(Note 4)63,883Long-term loans receivable

19,600Investments in subsidiaries
and affiliates

27,686

8,745(4,338)(24,717)821
11,300(10,700)
459
12,931(Notes)1. Consumption taxes are not included in the transaction amounts listed above. However,consumption taxes are included in the year-end balances.
2. The installation costs are determined by price negotiations, taking market prices into
consideration.
3. The Interest in the above loans is determined by making reference to market interest rates andother factors.
4. The amount of Yen 6,520 million has been accrued as allowance for doubtful accounts for the
long-term loans receivable to Secom Home Life Co., Ltd. in the current fiscal year.
5. The Company subscribed to a capital increase through third-party allotment conducted by Secom
General Insurance Co., Ltd. at Yen 193 per share.

Notes to the Business Combination
Not applicable

Notes to Per-Share Information
Net assets per share:
Net income per share:

Yen 2,315.81
Yen 145.76[English Translation]
66

Certified Copy of the Accounting Auditors’ Report (Consolidated)[English Translation of the Auditors' Report Originally Issued in the Japanese
Language]
Independent Auditors' Report
Date May 19, 2009
The Board of Directors
SECOM Co., Ltd.
KPMG AZSA & Co.
.
Toshiya Mori (Seal)
Designated and Engagement Partner
Certified Public Accountant
Kentaro Maruta (Seal)
Designated and Engagement Partner
Certified Public Accountant
We have audited the consolidated statutory report, comprising the consolidated balance sheet,the consolidated statement of income, the consolidated statement of changes in net assets andthe related notes of SECOM Co., Ltd. as of March 31, 2009 and for the year from April 1,2008 to March 31, 2009 in accordance with Article 444(4) of the Companies Act. The
consolidated statutory report is the responsibility of the Company’s management. Our
responsibility is to express an opinion on the consolidated statutory report based on our audit
as independent auditors.
We conducted our audit in accordance with auditing standards generally accepted in Japan.
Those auditing standards require us to obtain reasonable assurance about whether the
consolidated statutory report is free of material misstatement. An audit is performed on a test
basis, and includes assessing the accounting principles used, the method of their applicationand estimates made by management, as well as evaluating the overall presentation of theconsolidated statutory report. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the consolidated statutory report referred to above presents fairly, in allmaterial respects, the financial position and the results of operations of SECOM Co., Ltd. andits consolidated subsidiaries for the period, for which the consolidated statutory report was
prepared, in conformity with accounting principles generally accepted in Japan.
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants Act of Japan.

[English Translation]
67

Certified Copy of the Accounting Auditors’ Report(Non-Consolidated)[English Translation of the Auditors' Report Originally Issued in the Japanese
Language]
Independent Auditors' Report
Date May 19, 2009
The Board of Directors
SECOM Co., Ltd.
KPMG AZSA & Co.
.
Toshiya Mori (Seal)
Designated and Engagement Partner
Certified Public Accountant
Kentaro Maruta (Seal)
Designated and Engagement Partner
Certified Public Accountant
We have audited the statutory report, comprising the balance sheet, the statement of income,the statement of changes in net assets and the related notes, and its supporting schedules of
SECOM Co., Ltd. as of March 31, 2009 and for the 48th business year from April 1, 2008 to
March 31, 2009 in accordance with Article 436(2)(i)of the Companies Act. The statutory
report and supporting schedules are the responsibility of the Company’s management. Our
responsibility is to express an opinion on the statutory report and supporting schedules basedon our audit as independent auditors.
We conducted our audit in accordance with auditing standards generally accepted in Japan.
Those auditing standards require us to obtain reasonable assurance about whether the statutory
report and supporting schedules are free of material misstatement. An audit is performed ona test basis, and includes assessing the accounting principles used, the method of theirapplication and estimates made by management, as well as evaluating the overall presentationof the statutory report and supporting schedules. We believe that our audit provides areasonable basis for our opinion.
In our opinion, the statutory report and supporting schedules referred to above present fairly,
in all material respects, the financial position and the results of operations of SECOM Co., Ltd.
for the period, for which the statutory report and supporting schedules were prepared, inconformity with accounting principles generally accepted in Japan.
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants Act of Japan.

[English Translation]
68

Certified Copy of the Board of Corporate Auditors’ Report[English Translation of the Auditors’ Report Originally Issued in the Japanese Language]

Audit Report
May 20, 2009

Mr. Kanemasa Haraguchi
President and Representative Director
SECOM Co., Ltd.

Board of Corporate Auditors of
SECOM Co., Ltd.
Teruo Ogino (Seal)
Corporate Auditor (full-time)
Ken Tsunematsu (Seal)
Outside Corporate Auditor
Hiroshi Yasuda (Seal)
Outside Corporate Auditor
Kohei Yamashita (Seal)
Outside Corporate Auditor
The Board of Corporate Auditors has received the audit reports of the performance of
duties of the Directors during the 48th business term from April 1, 2008 through March 31,
2009 from each of the Corporate Auditors. After deliberating such reports, we have preparedthis Audit Report and report as follows.
1. Method and Details of Audit Performed by Corporate Auditors and the Board of Corporate
Auditors
The Board of Corporate Auditors established the audit policy and audit plan for thecurrent fiscal year, received reports on the status and results of audits from each Corporate
Auditor, received reports on the status of execution of duties from Directors and accounting
auditors, and requested explanations when necessary.
Each of the auditors, in accordance with the audit policy of the current fiscal year andaudit plan, etc. set up by the Board of Corporate Auditors, worked to communicate with
Directors, the internal audit division and other employees, made efforts to gather informationand establish the audit environment, in addition to attending the meetings of the Board of
Directors and other important meetings, receiving reports from the Directors and othermanagers on their duties, requesting explanations when necessary, inspecting documents
concerning matters such as important decisions, and investigating the conditions of thebusiness and financial conditions at the head office and the principal offices. Furthermore, toensure the execution of the duties of Directors complied with laws and regulations and the
Articles of Incorporation and to ensure appropriate joint-stock company operations, Corporate
Auditors also monitored and investigated the details of the resolution of the Board of Directors
on the establishment of a system stipulated in Paragraph 1 and Paragraph 3 of Article 100 of
the Ordinances for Enforcement of the Companies Act and the status of the system (internal
control system) established based on such resolution. We worked to communicate andexchange information with the Directors and Corporate Auditors of subsidiaries and received
reports on operations from subsidiaries when necessary. The above methods were used to
examine the business report and accompanying schedule for the current fiscal year.
The Board of Corporate Auditors received reports on internal control regarding financial
reports from Directors and KPMG AZSA & Co. about discussion between Directors and theaccounting auditors, evaluation of internal control of the Company and audit circumstance,[English Translation]69

also requested explanations when necessary. With respect to subsidiaries, Corporate Auditors
has endeavored to exchange information and promote understanding and, whenever deemednecessary, obtained reports from Directors and Corporate Auditors of subsidiaries.
On the basis of the forgoing procedures, the Board of Corporate Auditors has considered
the Business Report and accompanying schedules.
Furthermore, in addition to monitoring and examining whether the accounting auditors
maintained an independent position and performed auditing appropriately, we received reports
from the accounting auditors on the execution of their duties and requested explanations whennecessary. In addition, we received notice from the accounting auditors that “The systems for
ensuring the proper execution of duties” (set forth in each Item of Article 131 of the Ordinancefor Corporate Accounting) is organized in accordance with the “Standers for Quality Controlof Audit” (Business Accounting Council, October 28, 2005) and other relevant standards, andsought explanations whenever necessity arose. Based on the above methods, we examined thefinancial statements (balance sheet, statement of income, statement of changes in net assets,
notes to financial statements), supporting schedules, and the consolidated financial statements(consolidated balance sheet, consolidated statement of income, consolidated statement ofchanges in net assets, notes to consolidated financial statements) for the current fiscal year.
2. Result of audit(1) Result of audit of business report, etc.
i) The Business Report and accompanying schedules fairly represent the condition of thecompany in accordance with laws and regulations and the Articles of Incorporation of theCompany.
ii) We have determined that there were no serious occurrences of unjust activity or
violations of any laws or regulations or the Articles of Incorporation of the Company by
any of the Directors in carrying out their duties.
iii) We believe the contents of the resolution of the Board of Directors regarding theinternal control system are appropriate. We found no matters to note regarding theexecution of duties of Directors regarding the internal control system, as well as theinternal control system regarding financial reports.
(2) Result of audit of financial statements and accompanying schedules
In our opinion, the audit procedures and audit results of the accounting auditor KPMG
AZSA & Co. are appropriate.
(3) Result of audit of consolidated financial statements
In our opinion, the audit procedures and audit results of the accounting auditor KPMG
AZSA & Co. are appropriate.

[English Translation]
70

Reference Document Concerning the General Meeting of Shareholders

Proposals and Reference Items
First Item of Business:

Proposed Distribution of Surplus

The Company considers the return of the Company profits on a long-term basis
to shareholders the most important task of the management. Management determines
the dividend payout ratio and the level of internal reserves in overall consideration of
the future expansion of the Company’s business and profitability while keeping in linewith the basic policy that ensures the continued and stable dividend payments.
Our basic policy of distribution of surplus in the form of dividend payment isto propose annual year-end cash dividends to the ordinary general meeting ofshareholders. Furthermore, in order to reflect the operating conditions of the Company
as a consolidated group, the Company’s dividend is determined on the basis of its
consolidated results of operation.
The Company intends to use internal reserves for investments required forincreased new customer contracts, research and development and other strategic
investments so as to ensure to strengthen our corporate structure and expand ourbusiness.
Based on the aforesaid policies, it is proposed that the year-end cash dividends
for the 48th Business Term (from April 1, 2008 through March 31, 2009) be Yen 85
per share, to meet shareholders continued support, as set for below:(1) Kind of dividend: cash(2) Dividend and total amount thereof:
Yen 85 per share of common stock; the total amount: Yen 18,533,161,745(3) Commencement date of distribution of dividend: June 26, 2009[English Translation]
71

Second Item of Business:
1.

Partial Amendments to the Articles of Incorporation

Reasons for the amendments
By virtue of coming into force of the “Law for Partial Amendments to the Law
Concerning Book-Entry Transfer of Corporate Bonds and Other Securities for
the Purpose of Streamlining the Settlement for Trade of Stocks and Other
Securities” (Law No.88, 2004) (hereinafter referred to as the “Settlement
Streamlining Law”) on January 5, 2009, all the shares of the Company became
subject to the book-entry transfer system. It is proposed to make necessary
amendments to the Articles of Incorporation to comply with this change, as
stated below:(1) Since under the new system the Company no longer is permitted to issue
share certificates and accordingly is deemed to have adopted a resolution
to amend the Articles of Incorporation by deleting the provisions to issue
share certificates on the effective date of the Settlement Streamlining Law,
the Company will delete the provisions to issue share certificates. At thesame time, the Company will delete the provisions concerning thedenomination of share certificates, certificates for shares constituting lessthan one unit and the register of lost share certificates. (Article 7,
Paragraph 2; Article 7, Paragraph 3; Article 11, Paragraph 3).
In addition, the register of lost share certificates has to be preparedand maintained until the day on which one year has elapsed from the day
following the effective date of the “Settlement Streamlining Law”. The
Company will, as an interim measure, establish the supplemental
provision for handling of the register of lost share certificates. This
supplemental provision will be deleted on January 6, 2010.
(2) In line with the abolition of the “Law Concerning Central Securities
Depository and Book-Entry Transfer”, the Company will delete theprovisions relating to beneficial shareholders and beneficial shareholders’register from the Articles of Incorporation. (Article 8; Article 11,
Paragraph 3)

2.

Details of amendments:
The details of amendments are as follows:[English Translation]
72

(The underlined parts are changed parts.)
Current Articles of Incorporation

Proposed changes(Number of Shares per Unit and Non-Issuance of Share (Number of Shares per Unit)
Certificates for Shares Constituting Less Than One
Unit)
Article 7. The number of shares of the Company per Article 7. The number of shares of the Company per
one unit shall be 100 shares.
one unit shall be 100 shares.
(Deleted)
2. The Company shall issue certificates forshares. The denomination of shares to beissued by the Company shall be governed by
the Share Handling Regulations establishedby the Board of Directors.
(Deleted)
3. Notwithstanding the preceding Paragraph,
the Company may not issue share certificatesfor Shares Constituting Less Than One Unit.
(Additional Purchase of Shares Constituting Less Than (Additional Purchase of Shares Constituting Less
One Unit)
Than One Unit)
Article 8. The shareholders (including beneficial Article 8.
The shareholders may request theshareholders; the same hereinafter applicable)
Company to sell them the number of shares that
may request the Company to sell them thetogether with those Shares Constituting Less
number of shares that together with those SharesThan One Unit already held shall constitute one
Constituting Less Than One Unit already heldfull unit in accordance with the Share Handlingshall constitute one full unit in accordance with
Regulations.
the Share Handling Regulations.
(Administrator of Shareholder’s Register)(Administrator of Shareholder’s Register)
Article 11. The Company shall have an administrator Article 11.
The Company shall have anof the shareholders’ register.
administrator of the shareholders’ register.
2.
The administrator of the shareholders’2.
The administrator of the shareholders’register and the place of business shall be
register and the place of business shall be
determined by resolution of the Board of Directors
determined by resolution of the Board ofand a public notice therefor shall be given.
Directors and a public notice therefor shall be
3.
Preparation and maintenance of thegiven.
shareholders’ register (including the beneficial
3.
Preparation and maintenance of theshareholders’ register; the same hereinafter
shareholders’ register and the register of stock
applicable), the register of lost share certificatesacquisition rights of the Company, and otherand the register of stock acquisition rights of thebusiness relating to the shareholders’ register andCompany, and other business relating to thethe register of stock acquisition rights shall beshareholders’ register, the register of lost sharehandled by the administrator of the shareholders’certificates and the register of stock acquisition
register and the Company shall not handle any ofrights shall be handled by the administrator of thesuch business directly.
shareholders’ register and the Company shall nothandle any of such business directly.
(Newly provided)

Supplemental provision:
Preparation and maintenance of the register oflost share certificates, and other business relating
to the register of lost share certificates shall behandled by the administrator of the shareholders’register and the Company shall not handle any ofsuch business directly.

[English Translation]
73

Third Item of Business:

Election of Eleven (11) Directors

The term of office of all of the eleven (11) Directors will expire at the close ofthis meeting. Therefore, it is proposed to reelect ten (10) Directors and elect a new
Director.
The candidates are as follows:1

Name(Date of Birth)
Makoto Iida
(April 1, 1933)

2

Juichi Toda
(March 7, 1932)

3

Shohei Kimura(May 2, 1943)

4

Kanemasa Haraguchi(August 7, 1950)*

5

Katsuhisa Kuwahara(May 9, 1948)*

6

Shuji Maeda(September 27, 1952)*

Profile(Title, Responsibility, and Representatives for Other Companies)

Jul 1962
Feb 1976
Jun 1997
Jul 1962
Feb 1976

President and Representative Director (Founder)
Chairman and Representative Director
Supreme Advisor and Director (currently)
Senior Executive Director (Co-founder)
Executive Vice Chairman and Representative
Director
Jun 1997
Supreme Advisor and Director (currently)
Apr 1967
Joined SECOM Co., Ltd.
Feb 1985
Director
Feb 1988
Executive Director
Jun 1995
Senior Executive Director
Apr 2002
President and Representative Director
Jun 2004
President and Representative Director andExecutive Officer
Apr 2005
Chairman and Director (currently)(Representatives for other companies, etc.)
Chairman, Tokyo Security Service Association
Apr 1974
Joined SECOM Co., Ltd.
Jun 1990
Director
Jun 1995
Executive Director
Jun 1997
Senior Executive Director
Jun 2002
Director and Executive Vice President
Jun 2004
Director and Executive Vice President andExecutive Officer
Apr 2005
President and Representative Director (currently)
Apr 1971
Joined SECOM Co., Ltd.
Jun 1990
Director
Jun 1995
Executive Director
Jun 2004
Director and Managing Executive Officer
Apr 2005
Executive Director (currently)
Jan 1981
Joined SECOM Co., Ltd.
Jun 1997
Director
Jun 2000
Executive Director
Jun 2004
Director and Managing Executive Officer
Apr 2005
Executive Director (currently)[English Translation]
74

The number of
Shares Held
4,320,500

3,152,216

37,300

10,544

3,500

5,200

7

Name
(Date of Birth)
Yasuo Nakayama(November 1, 1952)*

Profile(Title, Responsibility, and Representatives for Other Companies)

Jul 2001
Jul 2003
Jul 2005
Apr 2007

8

Koichi Sato
(February 5, 1953)*

May 2007Jun 2007
Apr 1976
Apr 2004
Jun 2004
Jun 2005
Jun 2007Jun 2008

9

Fumio Obata(July 6, 1946)*

Apr 1996

Nov 1998
Mar 2000
Jun 2000
Jun 2000
Mar 2002
10

Takayuki Ito(January 2, 1954)*

Jun 2004
Jun 2000
Jul 2002

11

Hiroshi Ito(February 7, 1952)*

Jun 2005
Jun 2006
Jun 2007
Feb 1979
May 1989
Jun 2000
Jun 2003
Jun 2004
Jun 2008

Advisor to the Governor, Secretariat of the Policy
Board, The Bank of Japan
Branch Manager, Nagoya Branch, The Bank ofJapan
Director-General, Secretariat of the Policy Board,
The Bank of Japan
Personnel and Corporate Affairs Department, The
Bank of Japan
Advisor, SECOM Co., Ltd.
Executive Director (currently)
Joined SECOM Co., Ltd.
General Manager, Operations Department
Executive Officer
Managing Executive Officer
Executive Director (currently)
President and Representative Director, Secom
Joshinetsu Co., Ltd. (currently)
General Manager, Business Development
Department, The Mitsubishi Bank, Ltd.
(Presently The Bank of Tokyo-Mitsubishi UFJ,Ltd.)
Senior Executive Director, The Long-Term Credit
Bank of Japan (under state control then; presently
The Shinsei Bank, Ltd.)
Associate Manager, Strategic Planning Division,
SECOM Co., Ltd.
General Manager, Medical Services Department
Director (currently)
President and Representative Director, Secom
Medical System Co., Ltd. (currently)
Executive Officer (currently)
General Manager, Hibiya Branch, The Sanwa
Bank, Ltd. (presently The Bank ofTokyo-Mitsubishi UFJ, Ltd.)
General Manager, Muromachi Branch andCorporate Sales Department, UFJ Bank Limited.
(presently The Bank of Tokyo-Mitsubishi UFJ,
Ltd.)
Advisor, SECOM Co., Ltd.
Executive Officer (currently)
Director (currently)
Joined SECOM Co., Ltd.
Executive Director, Secom Mie Co., Ltd.
Director (up to Jun 2004)
President and Representative Director, Secom
Information System Co., Ltd. (currently Secom
Trust Systems Co., Ltd.) (Currently)
Executive Officer (currently)
General Manager, Human Resource Department(currently)

The number of
Shares Held
2,300

(Notes) 1.There is no particular interest between the Company and each of the said candidates.
2.Asterisk marks (*) indicate incumbent Executive Officer of the Company.

[English Translation]
75

1,488

2,400

200

3,100

Fourth Item of Business:

Presentation of Retirement Allowance to Retiring
Director

It is proposed that retirement allowance be paid to Mr. Seiichiro Kobayashi whowill resign as a Director upon the expiration of the term at the close of this general
meeting of shareholders, in reasonable amount determined in accordance with thespecified standards of the Company to reward his meritorious service to the Company.
It is also proposed that the determination of the amount, the date of payment thereof,
the methods and other matters in relation thereto be entrusted to the Board of
Directors.
The profile of the retiring Director is as follows:
Name
Seiichiro Kobayashi

ProfileFeb 1988

Director

Jun 1997

Executive Director

Jun 2004

Retired Executive Director

Jun 2007

Executive Director (currently)-End-[English Translation]76