ALSOK REPORT 2019

Fiscal Year Ended March 31, 2019

SOHGO SECURITY SERVICES CO., LTD.

Securities Code: 2331

ALSOK Charter
Management Philosophy

Based on two core principles exemplified by“arigato no kokoro” (a feeling of gratefulness and gratitude) and“bushi no seishin” (a samurai spirit), we devote ourselves to protecting thesafety and security of our customers and of society as a whole.
Management Guidelines

1. Fundamental Spirit

Under any condition that we face, we work hardto live by a fundamental spirit that reflects ourmanagement philosophy—as exemplified by afeeling of gratefulness and gratitude and a samurai
spirit based on toughness, fairness, andgenerosity—to be a highly principled company.

2. Priority

Our top priority is to provide products and servicesof the first rank, while cultivating the highest levelsof motivation in our employees and living up toshareholder expectations through attractive profit
growth.

3. Basic Strategy

While security services remain at the heart ofour business, as our basic strategy, we alsoseek to offer a diverse range of products andservices in new fields to satisfy the needs ofthe everchanging times.

4. Contributing to Society

Allying ourselves with public bodies charged withprotecting public safety and security, we commit
ourselves to developing value-adding products andservices, thereby always contributing to society.

Code of Conduct

1. We will devote ourselves to serving our customers and society as awhole in a way that reflects a feeling of gratefulness and gratitude.

2. We will embody a samurai spirit in everything we do based on

toughness, fairness, and generosity, standing firm in the face ofadversity and banding together to embrace success.

3. We will value autonomy in our actions, empowered by “yachoseishin”(the spirit of a wild bird)—which represents independence,
self-respect, perseverance, acuity, and tenacity—and takeresponsibility for delivering results.

4. We will carry out our day-to-day activities based on the principles ofsincerity, accuracy, strength, and speed.

5. We will know no complacency, always marching forward purposefully
while growing and refining our business to continue to provide value
to customers and to society as a whole, thereby continuing to be
relevant.

6. We will pursue perpetual self-improvement and remain highlycommitted to compliance, thereby attracting and nurturing humanresources of the caliber worthy of the industry leader.

C O NTEN TS

Strategy

19

ALSOK’s Business Operations

23

Special Feature: ALSOK’s Social
Contribution Activities

Overview 01

Management Philosophy

02

Message from the Chairman/Editorial Policy

03

Talk with the President

07

ALSOK’s History of Value Creation

09

Fiscal 2019 Highlights

39

Corporate Governance

11

Financial Highlights/Non-Financial Highlights

43

Directors, Audit & Supervisory Board Members,

13

The ALSOK Group’s Business Environment

15

ALSOK’s Strengths

17

ALSOK’s Value-Creation Model

ESG

27

CSR Management

29

Initiatives for Realizing Sustainable Improvementin Corporate Valueand Executive Officers

Vision01

47
Financial
Information 62

Financial Section
Corporate Information/Stock Information

Message from the Chairman

Value That the ALSOK Group
Needs to Provide to Society
ALSOK was founded in 1965, led by the experience of thefounder who was deeply involved in the operations of the1964 Tokyo Olympic Games in the previous year. ALSOK’s
founding Management Philosophy of providing impeccablesecurity with “arigato no kokoro” (a feeling of gratefulness
and gratitude) and “bushi no seishin” (a samurai spirit) as set
out in the ALSOK Charter has been passed down acrossgenerations among all ALSOK Group employees.
In recent years, threats facing society are growing morediverse as exemplified by, among others, crimes preying onchildren, senior citizens, etc., international terrorism, andnatural disasters. As a security services company responsible
for a critical component of social infrastructure supporting thesafety of society, we devote ourselves to the sustainable
creation of corporate value and further ensuring the safety
and security of people who live in society.
With the Olympic and Paralympic Games Tokyo 2020 withinsight, we consider it as an opportunity to reaffirm our founding
philosophy and aim to put all our efforts into fulfilling our
responsibility as a co-representative of the Olympic andParalympic Games Tokyo 2020 Security Consortium andcontributing to achieving a safe and secure event throughconcerted efforts of the industry.

Chairman and Representative Director
Chief Executive Officer (CEO)Atsushi Murai
Reporting MediaThe Company provides reports in the forms of a pamphlet and a
website, making full use of characteristics of the respective media. In
the pamphlet version, items are narrowed down to those of higher
importance or with greater interest among readers and the
explanations on them are provided in a manner that is easy to readand understand. Meanwhile, the website version comprehensively
includes financial information and the initiatives related to CSR andother matters in general.

Information for Shareholders
and Other Investors
ALSOK’s corporate website
includes detailed information on
the Company’s management
policies, financial position,business performance, andstocks as well as an assortment
of investor relations (IR)materials.

IR website: https://www.alsok.co.jp/en/ir/

CSR and Social
Contribution Activities
ALSOK REPORT

Comprehensive

Data and more detailed information on corporate
activities that were not included in this report areavailable on the Company’s corporate website.

Focused

Editorial Policy
ALSOK REPORT 2019 has been constructed as anintegrated report that compiles financial information on
the Company’s performance, business operations, andstrategies as well as non-financial information on its
corporate social responsibility (CSR) activities andother topics with the aim of obtaining the opportunity
to deepen our engagement with shareholders,investors, and other stakeholders. In addition todescribing the state of management from an economic
perspective, this report also explains the ALSOKGroup’s environmental, social, and governance (ESG)
initiatives as well as the various CSR activities theGroup carries out to contribute to the internationalsociety’s drive to achieve the United Nations’Sustainable Development Goals (SDGs), along with
the Group’s approach to achieving growth throughsustainable value creation and its business structurethat supports medium- to long-term management,
business strategies, and growth.

Investor Relations
CSR

Importance to the ALSOK Group and stakeholders

Detailed information on the CSR
and social contribution activities
that ALSOK is advancing as partof its business activities basedon ISO 26000 can be found on
its corporate website.

CSR website: https://www.alsok.co.jp/en/csr/

Note: ALSOK is a Tokyo 2020 Official Partner (Security Services and Planning).

02

Talk withthePresident

President and Representative Director
Chief Operating Ofﬁcer (COO)

Yukiyasu
AoyamaProﬁleMarch 1975
April
July

1975
1980
1992

July

1993

July

1994

August 1995
June

2000

Graduated from the University ofTokyo, Faculty of Law
Jointed the Ministry of FinanceDistrict Director of the Itako Tax Ofﬁce
Visiting Researcher at the
University of Oxford
Director, Minister’s Secretariat andResearch and Planning Division,
Minister’s Secretariat
Deputy Commissioner (Large
Enterprise Examination andCriminal Investigation), Tokyo
Regional Taxation Bureau
Chief of the Wakayama Prefectural
PoliceDirector of the Planning and
Coordination Division, Planningand Coordination Bureau,
Environment Agency

July
July

2002
2003

December 2005
July
2006
July
2008
August 2008
June

2009

April

2010

April

2012

CROSS

Director-General, Yokohama Customs
Counselor and Deputy Director-General of
the Customs and Tariff Bureau of the
Minister’s Secretariat
Visiting Professor at the University of Tokyo
Director-General, Customs and Tariff
BureauRetired from the post
Joined the Company as Senior Executive
OfﬁcerExecutive Vice President andRepresentative Director
Senior Executive Vice President andRepresentative Director
President and Representative Director(Current)

For ALSOK toContinue to bea Company Neededby Society
We have invited Mr. Mitsumaru Kumagai, Chief Economist and Executive Managing
Director, Deputy Head of Research Division of Daiwa Institute of Research Ltd., toseek his opinion on perspectives that ALSOK needs to have to continue to achievesustained growth, based on his deep knowledge of global as well as Japanese economic conditions.
03

TALK
ProﬁleDaiwa Institute of Research Ltd.
Executive Managing Director,
Deputy Head of Research Division
Chief Economist

Mitsumaru
Kumagai

Mitsumaru Kumagai was born in 1966 and graduated from the University ofTokyo, Faculty of Law with a bachelor’s degree in law in 1989 before he joined
the Industrial Bank of Japan (currently Mizuho Bank) and worked in, among
others, the Research Division of the Bank. He joined Daiwa Institute of
Research in 2007 and has held the current position since 2018. He received his
master’s degree in law from the University of Tokyo, Graduate School for Law
and Politics in 1993 (while he was dispatched from the Industrial Bank ofJapan) and completed the Harvard Business School Advanced Management
Program (AMP) in 2016. He has held a number of public positions including
those at the Ministry of Finance, the Cabinet Secretariat, the Ministry of Internal
Affairs and Communications, the Cabinet Ofﬁce, and the House of Councillors.
He also serves as the Director of the Keizai Doyukai (Japan Association of
Corporate Executives) and the Chairman of its Business Conditions ResearchCommittee. He is a regular commentator on TV Tokyo’s World Business
Satellite. He also appears frequently on NHK’s Sunday Debate and Yomiuri TV’s
Wake Up Plus and is the author of many books.

Changes in the Environment Surrounding ALSOK
Aoyama： ALSOK has continued to grow since its foundationand security is a signiﬁcant value in Japan. To protect safety

under the philosophy that we want to protect the safety of Japanand security means to protect the value of Japan. In this sense,

by Japanese hands. While the number of reported cases of

we can see great social signiﬁcance in ALSOK’s businesses. As

crimes has decreased signiﬁcantly from peak, various crimes

Mr. Aoyama has mentioned just now, we are seeing increasingthat have never been seen before are now occurring, and in thisdiversity in those who and those that need to be guarded. Withsituation, crime prevention measures just to prevent burglars

the advancement of global warming, it is now being acceptedfrom entering are not enough. We need to examine what kindamong people across the world as common sense that oneof security services we should provide going forward from theneeds to be prepared for natural disasters as a realistic risk. I

perspective of crime deterrence. In addition, work-style reforms

had an impression that ALSOK continues to steadily expand

and the labor shortage problem as social phenomena havethe domain of its core value of safety and security in the current

resulted in increases in outsourcing in various forms. The security

environment characterized by the frequent occurrence of newservices industry faces the same trend, and ALSOK must thinkrisks, such as international terrorism and cybercrime.

about how to grapple with it. Japan also faces heaps of otherissues including regional revitalization, declining birthrates andan aging population, the aging of facilities, building national

Aoyama： In the context of core value, safety and security of

local communities continues to be our ﬁrst priority. However, its

resilience, and disaster countermeasures against earthquakes,

contents have been changing. For example, our services aretyphoons, etc., and I think there is something that ALSOK canshifting from stationed security services to electronic security

contribute in regard to all of these issues.

services. Our cash transportation services at ﬁrst was just to
ride together with the customer, but now our services include

Kumagai： ALSOK has a very clear corporate core value: “To

cash transportation by ourselves as well as safe management.

support safety and security for customers and society.” All of its

These changes are the result of the expansion of the scope ofbusinesses are based on this value. It is clear, also from Tokyo’s

our “safety and security.” While it is difﬁcult to prevent natural

reputation as the safest city in the world as shown regularly indisasters from occurring, we can help minimize risks during andrankings given by economic magazines overseas, that safety

after such a disaster.

04

Talk withthePresident

CROSS TALKWith a very clear corporate
core value, ALSOK steadily
responds to major trendsof the times.

Aims of Medium-Term Management Plan Grand Design 2020 and
Expectations for the Future
Aoyama： As we are in a situation in which we must continue
to change to keep pace with the changes in society and theeconomic environment, we have set forth a long-term target toachieve Group net sales of ¥1 trillion. And as an interim target toachieve the long-term target, we are currently pushing forwardwith the Medium-Term Management Plan Grand Design 2020
(GD2020), which is due in ﬁscal 2021. As customer needs are
now highly diverse, as I mentioned earlier, we need not only
to expand the scope of our business but also to upgrade its
features. It is also essential for us to achieve synergy between
Long-Term Care Services, which is our new business, and
ALSOK’s core security services and to secure human resources
and promote labor saving as a foundation to support ourbusiness portfolio. Recognizing the importance of responding
quickly to new challenges in such an ever-changing environment,
we have formulated the current Medium-Term Management
Plan accordingly.
Kumagai： I see that the current Medium-Term Management
Plan is designed to help ALSOK respond aptly to major global
trends, while steadfastly guarding its core business of providing
integrated safety and security solutions. First of all, “diversity”
is an essential keyword in formulating management plans andbusiness plans for the future. The “Security + Equipment” initiative
using AI and other technologies is also important for productivity
improvement to counteract the progression of labor shortages,
declining birthrates, and an aging population. Even largerchanges are expected going forward, such as an increase inforeign travelers visiting Japan as the government promotes
Japan as a major tourist destination under its national policy,
and I see that the Medium-Term Management Plan is welldesigned to respond to these changes.
Aoyama： The government and KEIDANREN (Japan Business
Federation) are promoting the idea of Society 5.0. For ALSOK,
embedding AI and IoT in Electronic Security Services is to aim
to realize “ALSOK 5.0,” which is the next development stage of
security services that comes after Stationed Security Services
and Electronic Security Services. We aim to be a company toalways think about what can be done against various risks
before and after the fact and to provide solutions in various
forms, for example, by seeking collaboration with othercompanies to provide solutions that ALSOK cannot directly
provide. I see this as a new form of security services company.
Kumagai： Another keyword is 5G. To realize 5G ahead of therest of the world should be one of the major goals of Japan.
I expect ALSOK to lead its evolution in the ﬁeld of disasterprevention and mitigation.
Aoyama： We are currently pushing forward with various initiatives
jointly with telecommunications companies based on theapplication of, for example, image data to crime prevention anddisaster mitigation. We plan to proceed with such research
actively going forward.

Review of the Fiscal Year Ended March 31, 2019 and
the Coming Olympic and Paralympic Games Tokyo 2020
Aoyama： The ALSOK Group posted net sales of ¥443,535
million (up 1.7% year on year) and operating income of ¥32,280
million (up 7.2% year on year), achieving record sales andproﬁts. However, I regret to say that the results fell slightly shortof the plan. In particular, Electronic Security Services did not
grow as much as we expected, which indicates that we havenot been able to respond to changes in social needs sufﬁciently
yet. In any case, we have to raise our productivity dramaticallyamid the trends of labor shortages and work-style reforms. We
aim to realize a virtuous cycle in which productivity improvements05

will reduce cost and increase proﬁt. We also expect the cashlesstrend to affect our existing Transportation Security Services,and ALSOK has become the only security services company toregister as a cashless payment company, taking into consideration
the major trends of the times and the convenience of settlement.
I expect this to be an opportunity to provide a new form of safety
and security from the perspective of settlement to not only
foreign visitors to Japan but also small and medium-sizedbusiness operators both in Japan and overseas.

Kumagai： There is a theory called the “innovator’s dilemma,”
and what I heard just now is exactly that ALSOK has overcome
such a dilemma. Although Mr. Aoyama mentioned that the ﬁscal
2019 results fell short of the plan, sales growth for nine years ina row and growth of proﬁt attributable to owners of parent forseven years in a row, which resulted in record sales and proﬁts
at each level, deﬁnitely indicate that social needs for the services
that ALSOK provides are rising. Now, the challenge is to resolve
such problems as labor shortages as soon as possible.
Aoyama： With the Olympic and Paralympic Games Tokyo 2020
within sight, motivation is rising also among the on-site staff,
and we really want to achieve the plan set forth in GD2020.
ALSOK was founded in 1965, led by the experience of thefounder who was directly involved in the operations of the 1964
Tokyo Olympic Games in the previous year. We see theOlympic and Paralympic Games Tokyo 2020 next year as anopportunity to return the favor.

Kumagai： The Olympic Games are held to leave some kind of alegacy. I really expect ALSOK to realize the advancement of
security services using AI and IT as a legacy to leave to future
generations.
Aoyama： It is important to keep in mind how to prevent
accidents, terrorism, and crimes and how to minimize damage
once they occur. For the Paralympic Games next year, we also
have to think about how to realize security services that arefriendly to senior citizens, differently abled individuals, andvisitors from overseas including evacuation during a disaster. I
feel that ALSOK is challenged to show how much we can do at
this biggest event in history.

Initiatives to Realize Sustainable Growth
Kumagai： Last year marked the 10th year since the collapse of
Lehman Brothers, and I think that the Lehman Shock triggereda major transformation of capitalism itself. Society requires atype of sustainability from which a variety of stakeholders canreceive beneﬁts over the medium to long term rather thanfocusing myopically on short-term proﬁts, which is consistent
with the spirit of “sanpo-yoshi” in Japan, literally “three-way
satisfaction,” which advocates beneﬁts to the seller, to thebuyer, and to the community, and I think the core concept ofsuch sustainability is the United Nations’ Sustainable
Development Goals (SDGs). I was told that ALSOK has also
identiﬁed the SDGs as one of its major targets, and feel that
this is also in line with the major trends of the times.
Aoyama： In a situation in which the society or the environment
is no longer sustainable, our work also can no longer exist.
Therefore, we have to recognize that the symbiosis with nature
is a challenge in corporate activities. I have previous experiencein working to restrain illegal dumping of industrial waste as awatchdog when such illegal dumping was drawing attention in

the past. I think that ALSOK can also contribute much to the
SDGs on all fronts.
Kumagai： Japan already has the background to be able tobecome a major country to support the SDGs, but unfortunately
it has not been able to demonstrate it to the world that much.
With regard to the SDGs, I think what is important is the clear
tone of the top that convinces all employees from managers to
the workers on site.
Aoyama： The concepts of sharing a economy and circular
economy are drawing attention. Promoting the SDGs will
eliminate waste and lead also to cost reductions. I will continue
to explore daily the opportunities for ALSOK’s services tocontribute to the creation of a sustainable global environment.

Social and customer needs
have greatly diversified.
ALSOK’s businesses also needto expand and improve to ahigher level.
Note: ALSOK is a Tokyo 2020 Ofﬁcial Partner (Security Services and Planning).

06

ALSOK’s History of Value Creation

Since its foundation, ALSOK has consistently endeavored to protect the safety andsecurity of society. Throughout its history of half a century, ALSOK has pursued
technologies of security services, service quality, and education of human resources,
nurturing them as its strengths. We will continue to take on advanced challenges anddemonstrate originality to contribute to the solution of social issues.

¥181.2 billion¥153.9 billion

Net Sales¥120.1 billion■■ Net Sales of Security Services■■ Net Sales of Services Other Than Security Services¥0.7 billion¥0.15 billion
1966

1971

¥20.3 billion

1976

1965– Founding Era¥40.1 billion¥67.9 billion

1981

1986

Building Up andDeveloped and launched SOK Guard System inelectronic security services (currently ALSOK
Guard System) for corporate clients

January 1975

Developed and launched AMAND SYSTEM® forautomated management of ATMs

February 1980

Started to dispatch security guards to overseas
diplomatic establishments

March 1983

Received ﬁrst security business certiﬁcation fromthe Tokyo Metropolitan Public Safety
Commission

07

2001

1999– Second

April 1988

October 2002

July 1965

September 1967

1996

1985– Maintaining Era
Developed and launched
TAKURUS in electronic
security services forindividual customers

Foundation of SOHGO SECURITY SERVICES
CO., LTD. at 2-20 Uchisaiwaicho, Chiyoda-ku,
Tokyo with a capital of ¥25 million and the main
business purpose of providing contract security
services

1991

October 1997

Developed and launched
Cash Deposit Machine
On-line System, whichfacilitates the movementsof cash (sales proceeds
and change) andreduces related staff andequipment costs

Listed stock on the ﬁrst
section of the Tokyo Stock
Exchange

April 1998
January 1995

Responded to the Great
Hanshin-Awaji Earthquake

Developed and launched
SOK Home Security
system featuring
convenient functions fordaily life, including ﬁrst
aid information, homebanking, and healthconsultation, in addition
to crime and disasterprevention security
functions

July 2003

Changed corporate brandname from “SOK” to “ALSOK”

November 2004

Developed and launched
ALSOK Home Security 7 toprovide security services at areasonable price by adopting
wireless sensors andnarrowing down functions
to urgent intrusion and ﬁredetection and emergency calls¥443.5 billion¥248.3 billion¥279.2 billion¥267.5 billion

2003(Stocklisting)

2006

2011

Founding Era

2010– Third Founding Era

June 2005

March 2011

Developed and launched new
automated patrolling GUARDROBOT to realize arobot-based stationed
security service system

Responded to the Great
East Japan Earthquake

November 2005

Developed and launched
ALSOK Home Security X7
with enhanced features forlarger residential properties

December 2008

Developed and launched
ALSOK Home Security αwith enhanced security andconvenience featuresdesigned from the customer’s
perspective, such as
standard Internet security
services¥381.8 billion

May 2015

Developed and launched
new Cash Deposit andDispenser Machine On-line
System, which dispenses
and changes money at thestore and enables the store
to deposit sales proceeds
without physically moving
cash to a bank2016

Launched ALSOK-GV(read as “ALSOK G-ﬁve”)
security system forcorporate clients

February 2012

Started to provide stationed
security services at TOKYOSKYTREE TOWN®

October 2012

Launched new HOMEALSOK brand of services
for individual users

Launched MAMOLOOK
multifunctional mobile
security terminal to watch
over senior citizens, women,children, and other family
members outdoors

February 2011 Japan Facilio Co., Ltd.
April 2014

ALSOK Souei Co., Ltd.
Nippon Building
Maintenance Co., Ltd.

October 2014

HCM Corporation

February 2015 ALSOK Care & Support Co.,Ltd.

May 2016

Wisnet Co., Ltd.

November 2016 PT. ALSOK BASS Indonesia
Security Services

December 2016 ALSOK Vietnam Security
Services Joint Stock

October 2015

Developed and launchedHome Security Basic withthe latest features, such ascompatibility with diverse
communication
environments(FY)

Major M&A Activities

June 2015
April 20112019

Company

February 2017 ALSOK SHOJITSUSECURITY SERVICE
CO., LTD.

April 2017

ALSOK-TW East Japan Co.,Ltd.

July 2017

ALSOK KANTO DELIVERYCO., LTD.

08

Fiscal 2019 Highlights
In ﬁscal 2019, ALSOK developed and provided various technologies andservices that can contribute to the solution of issues in modern society.
In ﬁscal 2020, we will continue to work to realize the solution of social
issues.

Fiscal1Q

2019 HIGHLIGHTS

April
Established the Olympic
and Paralympic GamesTokyo 2020 Security
Consortium and assumed
the ofﬁce of its
co-representative

2Q

3Q

July

NovemberConducted veriﬁcation
tests of plant inspection
services using drone aerial
photography to support
more efﬁcient plantinspection

Launched ALSOK CashManagement Service
Launched Kawarini Homon(Visiting on Behalf of Family
Guardian) Service developed
jointly with Dai-ichi Life
Insurance Company, Limited

DecemberJune
Acquired the shares ofCare Plus Co., Ltd.

Launched 3D Laser
Radar with highly precise
detection performance tomeet the needs foradvanced security
services09

Launched Solution for
Improving the Safety ofInternet Usage Environment
to cope with increasingly
sophisticated cyberattacks
Promoted the Smart City
Project at Kakogawa City
to realize urban safety
and security

AugustLaunched ALSOKMulti-QR Payment
Solution

Acquired Sogokanzai Co.,
Ltd. and Health Support
Co., Ltd. as consolidated
subsidiaries
Initiatives to realize
sustainable corporate
value enhancement
The number of children
who participated in the
ALSOK ANSHINKYOSHITSU program
exceeded 1.5 million ona cumulative basis
Launched a new class“How to Use the Internet
Safely” in January 2019

Note: ALSOK is a Tokyo 2020 Ofﬁcial Partner (Security Services and Planning).

4Q
January
Launched ALSOK
Homepage Safety Management
Solution

March

May
Acquired Keihanshin Security
Services Co., Ltd. as aconsolidated subsidiary

June
Completed the registration asa cashless payment company
under the Cashless
Settlement Business under
the Point Reward Project for
the Consumers using
Cashless Payment

Developed a new security service
robot REBORG®-Z to realize
more advanced and efﬁcient
stationed security services







ALSOK will continue to work to realize

Launched ALSOK PaperlessSolution

1Q

2020 HIGHLIGHTS

the solution of social issues.

February

Fiscal

REBORG®-Z in service
guiding visitors andpatrolling at
commercial facility
SAKURA MACHI
Kumamoto in
Kumamoto City

10

Financial Highlights

Net Sales

Ordinary Income¥443.5 billion¥33.8 billion

Up 1.7% YOY

Up 6.2% YOY(Billionsof yen)¥443.5 billion

480(Billionsof yen)

40

360

30

240

20

120

10

0

2015

2016

2017

2018

0

2019

2016

2017

2019

(FY)

■ Total Net Assets

ROE

2018

Total Net Assets/ROE

7.6%

ROE
percentage

2015

(FY)

Ordinary Income Margin

Up 0.3 point¥33.8 billion

9.9%

Up 0.6 point

percentage

YOY

YOY

(Billionsof yen)

(%)
12.0

(%)

300
250

7.6%

9.0

¥257.0 billion

12.0

9.9%

200

6.0

15.0

9.0

150
6.0

100

3.0

3.0

50
0

0

2015

2016

2017

2019

2018

Total Assets/ROA

ROA

percentage

2016

2017

2018

2019

0
(As ofMarch 31)

Profit Attributable to Owners of Parent

8.4%

Up 0.2 point

2015

(FY)

¥22.2 billion
YOY■ Total Assets

ROA(Billionsof yen)(%)

500¥410.1

12.0

Up 15.1% YOY(Billionsof yen)25¥22.2 billion

billion

400

9.0

8.4%

300

20
15

6.0

200

10
3.0

100
0

11

2015

2016

2017

2018

2019

0
(As ofMarch 31)

5
0

2015

2016

2017

2018

2019

(FY)

Non-Financial Highlights

Environmental

CO2 Emissions Volume(Non-Consolidated)

34,238

t-CO2

(Down

5.7% YOY)

SocialNumber of Employees(Consolidated)

37,417

Fuel Usage

Electricity Consumption

8,299

27,254(Non-Consolidated)

kl

(Down

5.4% YOY)

Female Employees

4,794(Consolidated)

Up

2.7% YOY(Non-Consolidated)

MWh

(Down

3.4% YOY)

Average Number of Years ofContinuous Service by Gender(Non-Consolidated)

Male Employees

Female Employees

MaleFemale17.0 years 15.0 years
Up

0.4%

YOY

Up

0.2%

YOY

(Non-Consolidated)

1,172

Up

2.8% YOY

Governance

Number of Directors
and Audit & Supervisory
Board Members

16

Directors 12(of whom 4 are outside directors)

Number of Group
Companies That Used
the Internal Reporting
System72

Audit & Supervisory Board Members 4(of whom 3 are outside Audit & Supervisory Board members)

12The ALSOK Group’s Business Environment
Security Services Industry

Market Environment● The number of reported cases of crimes continue
to decline to the lowest level after World War II● Forms of crimes are changing as exemplified byincreases in crimes preying on senior citizens andwomen and cybercrimes● The risk of natural disasters such as earthquakes
and typhoons has risen● Medium- to long-term changes are expected in
the cash transportation market along withcashless● The whole security services industry faces aserious labor shortage

The number of reported cases of crimes in Japan declined for the

faced by society such as natural disasters, international terrorism,

16th consecutive year. Behind this situation lies the increased

cybercrime including cryptocurrency outflow, information leakage,recognition of the role of security services by society and theetc., have become diversified, and the perception of public safetyaccompanying increase in the number of security equipment
installed by security services companies at houses and facilities
has continued to increase in recent years and topped 3 million.
On the other hand, cases of fraud by organized groups, domestic
violence, and child abuse are on the increase. In addition, risks
Summary of Japanese Security Services Industry (as of December 31, 2018)

Number of Security
Services Companies

9,700

Approx.

companies

Approx.

¥3.5

trillion

555,000(of whom 34,000 are females)

Strategy for the Future● Provide various products and services relating to the safety
and security of individuals in a seamless manner● Promote business model transformation in response toincreasingly diverse and sophisticated needs, labor
shortages, etc.
● Increase value added per person by the application of newtechnologies such as ICT, multitasking, etc.
● Develop human resources with strong expertise13

The security services industry is expected to propose new forms
of security services to respond to these changes in the times andneeds to work with society even more closely than ever toprovide more extensive safety and security.
Number of Reported Cases of Crimes and Buildings Introducing
Electronic Security Services(Cases)Total Net Sales

Number of Security Guards
Approx.

remains low.

3,196,238

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

817,338
1,000,000

62,745500,000

0
2009

2010

2011

2012

2013

2014

2015

■ Number of reported cases ■ Cases of intrusion and theft among theof crimes (Total)

number of reported cases of crimes

2016
■

2017

2018 (Year)

Buildings introducing electronic
security services

Sources: “The White Paper on Police, 2018,” “Crime statistics materials for January to December 2018,”“Overview of the Security Industry in 2018,” National Police Agency

The ALSOK Group’s
Position

2

Net Sales of Security
Services

No.

Share of Sales in theJapanese Security
Services Industry(Calculated by ALSOK)

ALSOK

10%

Approx.

Building Maintenance Services Industry

Market Environment● The market is growing due to the expansionof inbound tourism demand and outsourcing
needs in recent years● The market is expected to continue to growin the future, but faces a serious labor
shortage

Building maintenance services provide cleaning, maintenance, operation ofequipment, and other maintenance and management services mainly forbuildings and other constructions and also cover a diverse range of otherbusiness activities including health-related inspections, facility installation, andrenovation.
The ALSOK Group commenced building cleaning services right after its
foundation and has gradually expanded the operations to cover air conditioning
and health facility installation, building maintenance services, etc., as anextension of the cleaning services. The concept of “general property
management” in which a safe and comfortable building environment is provided
in an integrated manner has a high affinity for security services.
Building Maintenance Services Industry
Market Size Estimates(Billions of yen)
4,000

3,520.0

Sales Breakdown of Building Maintenance
Services
Other Building
Maintenance
Services

3,590.0

General Cleaning
Services

12.3%

3,000

62.9%

Security
Services

7.5%

FY2018 Market Size

¥3,590.0 billion

2,000Strategy for the Future● Further expand the “Security + Equipment”
model● Recognize and meet outsourcing needs

Equipment
Management
Services

1,000

0

17.3%

2018 (FY)2017

Source: “BUILDING MAINTENANCE INFORMATION YEARBOOK 2019,”
The Japan Building Maintenance Association (JBMA)

Long-Term Care Industry

Market Environment● In 2065, one in about 2.6 people will beaged 65 or over and one in about 3.9
people will be aged 75 or over
● By 2065, both the child population andthe number of births will decline to half thecurrent level and the working-age population will decrease to 45.29 million● The shortage in care workers continues toincrease and the active job
openings-to-applicants ratio remains highas compared with the average in all job
categories
Strategy for the Future● Expand Long-Term Care Services todevelop it into one of the major pillars in ourbusiness portfolio● Further expand services for senior citizens→ Strengthen synergy between Security
Services and Long-Term Care Services

Presently, the number of persons requiring long-term care/needed support inJapan is approximately 6.58 million. The number is expected to top 8.1 million
in 2025 and an estimate indicates that one in five senior citizens will bediagnosed with dementia.
The long-term care industry covers a wide range of businesses including
sales and rental of nursing care equipment, life-support service, etc., in addition
to long-term residential care in facilities, day care, and home-visit care services
and has formed a market that boasts total annual sales of approximately ¥10trillion from services that use the public long-term care insurance system alone.
The market is expected to expand even more as the number of persons
requiring long-term care increases in the future.
Number of People Requiring Long-Term Care/Needed Support
thousand
6,582 (Provisional)(1,000 people)

7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019 (FY)

Sources: “Status Reports on Long-term Care Insurance (annual reports),” “Status Report on
Long-term Care Insurance (Provisional) (March 2019)” and “Annual Report on the Aging Society: 2019,”
Ministry of Health, Labour and Welfare; Report Compiled by “Study Group for Future Supply and
Demand of Elderly Nursing Care Systems,” Ministry of Economy, Trade and Industry

14

ALSOK’s Strengths

With its strengths that contribute to the safety
and security of customers and society,
ALSOK will work to create new values.
ALSOK Strength

1

Excellent Human Resources
That Embody ALSOK’s Philosophy
As ALSOK is in the business of providing value by protecting people and society, the most important
capital is its human resources.
For this reason, we need to develop human resources that can put ALSOK’s philosophy of “arigato no
kokoro” and “bushi no seishin” into their actual actions. ALSOK is also focusing on developing experts
who can propose optimal security solutions as security service professionals

Number of People Dispatched to Japanese Embassies,
Consulates Overseas, etc.
on a cumulative basis
as Security Staff Members Over760

Number of
Female Employees

4,794(12.8% of all employees)

15

Number of
Security Planners
Number of Security
Consultants

665
28

ALSOK Strength2

Organizational Capabilities
to Ensure Safety and Security
With the industry’s leading service network, ALSOK provides a sense of security to society and customers anddemonstrates the mobility to arrive on the scene of any emergency quickly.
We have also realized solutions that capitalize on group synergy. For example, we provide watch over services to the
ALSOK Group’s long-term care facilities, drawing on our know-how accumulated from security services.

Depots LocatedNationwide

2,400

Overseas
Operations

Number of Company Vehicles

Number of Employees

37,417 (33,137 in Japan and

4,280 overseas)

ALSOK Strength

10,189(including motorcycles and bicycles)

3

Trust Built from
Actions and Results
Electronic Security
Services Contracts
Annual Amount of
Cash Handled

9countries

Approx.

949,858¥393 trillion

Time to Arrive on the Scene

14.7minutes on
average

Based on the high reputation of ourperformance records and skills as a leading
security services company in Japan, ALSOK has
won a large number of security services
contracts both in Japan and overseas. ALSOK
has also been in charge of security operationsat numerous large-scale events.
In addition, to be a company trusted by both
local communities and society at large, ALSOK
actively engages in CSR and ESG activities.

(520,942 for corporate clients and428,916 for individual users*)* Approx. 1,170,000 housing units covered when including
contracts with housing complexes

Number of ALSOK ANSHINKYOSHITSU Classes Helda cumulativebasis
48,406 onExternal Assessment Eruboshi (The Highest Rating of Level 3), FTSE4Good (12 consecutive years)
Co-Representative of Olympic and Paralympic Games Tokyo 2020 Security Consortium

Note: ALSOK is a Tokyo 2020 Official Partner (Security Services and Planning).

16

ALSOK’s Value-Creation Model

Input of Capital (As of March 31, 2019)
Number of Employees

37,417

Depots LocatedNationwide

Overseas Operations

2,400

33,137 in Japan
4,280 overseas

Social Issues

9countries centeredon Southeast Asia

Management Philosophy

SocietyMore Diverse Threats Facing Society●International terrorism, information
leakage, threats in cyberspace“Protecting”

safety●Labor shortages due to decline and security
in the number of labor force
for customers●Crimes preying on senior citizens, and society●The aging of social infrastructurechildren, women, and differently
abled individuals●Natural disasters that cause greatdamageFour

Material
CSR Themes

17

Operating Practices:

Providing Trustworthy
Security Services

Based on two core

principles exemplified by“arigato no kokoro”(a feeling of gratefulness
and gratitude) and“bushi no seishin”(a samurai spirit),

we devote ourselvesto protecting the safety

and security of our customers
and of society as a whole.

Consumer:
Providing Products
and Services
That Help Resolve
Social Issues

Labour Practices:

Cultivating Human Resources
and Building a Comfortable
Workplace Environment

The ALSOK Group has continued to provide security services of impeccable quality for more than 50 years
since its establishment. The Group’s human resources, organizational capabilities, and the reliability recognizedby customers and society are one of its greatest strengths. The Company is reinforcing its operating foundations
with the aim of achieving consolidated net sales of ¥1 trillion and income of ¥100 billion. Although conditions
are changing rapidly both inside and outside of the Company, we remain committed to creating new value for“protecting” safety and security for customers and society while simultaneously increasing ALSOK’s earnings
capacity. By accomplishing these goals, we will achieve growth that meets the expectations of all stakeholders.

Capital Expenditures¥15.8 billion

Number of Company
Vehicles10,189ALSOK’sStrengths
Human
Resources
Organizational
Capabilities
Trust

Strategy
Medium-Term
Management Plan

Grand
Design2020

Trustworthy security
services based on
the experience andthe network that
we have cultivatedTotal management
services for the
maintenance,
management, andoperation of various
facilities
Extensive support
ranging from in-homecare services toin-facility care services
powered by the
introduction of security
systems

Responses to suchneeds as BCP
upgrading and thedeployment of AI
and ICT

Community:

Contributing to Local

Communities throughActive Communication+
Consideration
for the Global Environment

Building Safety and Security of Communities

Output/Outcome

Targets

1

Net Sales¥

trillion

Income100 billion¥

SDGs to which ALSOK has mademajor contributions

18

ALSOK’s Business Operations

Security Services
Electronic Security Services

Stationed Security Services

Sales
Composition

25.2%

Net SalesUp¥175.5 0.9% YOY
billionElectronic Security
ServicesUpbillion

14.0%

Net Sales¥111.9 1.7% YOY

Up¥62.2 3.4% YOY
billionIntroduction video(in Japanese only)

For corporate customers, the number of facilities that haveintroduced the electronic security services systems topped
520,000. We provide solutions that satisfy diverse needs,
including not only ALSOK-ST (read as “ALSOK Standard”),
a standard security system equipped with monitoring andmanagement services for intrusions, fires, equipment, etc.,
but also ALSOK-GV (read as “ALSOK G-five”), which allows
customers to monitor images, browse information related towhen employees arrive at and leave work, etc., and operate
equipment remotely through a website, on top of standard
security functions.
For individual customers, we proactively promote products
and services to protect the safety and security of residencesand daily life, and the number of households enrolled in
ALSOK’s home security services (including housing
complexes) has surpassed 1.17 million. The contract
numbers of “Home Security Basic,” the current standard
model in ALSOK’s home security lineup, “HOME ALSOK
Premium” which allows customers to check the camera
images themselves, and other services are steadily growing.

19

Sales
Composition

Sales
Composition

39.6%

Net Sales

Transportation Security Services

In addition, sales of “ALBO eye,” a personal security service
that requires no installation, and “HOME ALSOK MIMAMORISUPPORT,” which watches over the safe and healthy lives
of senior citizens with Emergency Reporting services, etc.,
are also increasing.
We aim to create, in the future, electronic security services
that go beyond conventional intrusion detection services tohelp prevent crimes and accidents before they happen byutilizing, for example, analysis of images from security cameras
using AI, facial recognition, 5G telecommunications, etc.

Stationed Security
Services

Introduction video(in Japanese only)

The Stationed Security Services segment continues todeliver solid performance as demand for security services isstrong due to such reasons as needs to outsource security
operations on the back of labor shortages particularly in the
manufacturing industry and needs for security services atnew buildings constructed as part of urban redevelopment
projects as well as for world-class sports events.
Going forward, we aim to improve our security services
capabilities and also optimize costs through the provision ofstate-of-the-art security services that enable fast responseto occurrences or signs of an incident and collaboration
between security guards armed with IoT equipment
combined with new ICT, and the accumulated know-how
of the Stationed Security Services.

Transportation
Security Services

Introduction video(in Japanese only)

There was a strong trend in orders for total services forfinancial institutions including the management of ATMs
based on their outsourcing needs. In addition, demand for
the Cash Deposit and Dispenser Machine On-Line System
for retail stores and restaurants, etc., is increasing with theprogression of work-style reforms and labor shortages as its
backdrop.
In the meantime, the trend of cashless payments is
accelerating in Japan, and the needs for such payments is
also increasing rapidly in line with the increased number of
inbound travelers. ALSOK is the only security services
company that is designated as a cashless payment
company under the Cashless Settlement Business under the Point Reward Project for the Consumers using Cashless Paymentof the Ministry of Economy, Trade and Industry and has started to provide QR settlement solutions.

ColumnLaunch of ALSOK Multi-QR Payment Solution
In August 2018, ALSOK launched services to provide QR payment solutions. They
feature all-in-one terminals and multi-payments, as well as the maintenance service
and the guarantee of security for funds transfer that only ALSOK can provide.
In October 2019, we started to sell a multi-payment terminal PAYGATE Station,
which can handle all magnetic credit card, contact
IC credit card, non-contact IC credit card, and QR
payment options, to improve the convenience of
cashless payments further.

20

ALSOK’s Business Operations

Non-Security Operations
General Property Management
and Fire Protection Services

Long-Term Care Services

Sales
Composition

Sales
Composition

14.2%

Net SalesUp¥62.9 1.5% YOY
billion

Other Services

Sales
Composition

6.0%

Net SalesUp

Net Sales¥26.5 3.3% YOY
billionGeneral Property Management andFire Protection Services

1.0%

¥4.2

Up

8.3% YOY

billionIntroduction video(in Japanese only)

The ALSOK Group is working to provide comprehensive property management services, which encompass the maintenance,
management, and operation of various facilities, based on increased coordination between Group companies, and receiving
orders steadily for comprehensive building management services, cleaning
services, and equipment installation work. In addition, needs for disasterprevention and mitigation have increased due to natural disasters occurring
frequently throughout Japan, and sales of disaster preparedness items suchas stockpiles, batteries, and items for flood-control measures, and smoke
alarms for households are also growing.
Moreover, we maintain a high share in the domestic market for the
production of fire engines that arrive on a fire scene upon receiving a 119
emergency call and for the sales of AEDs, which have exceeded 170,000
units on a cumulative basis.
Outsourcing needs related to operation and management of buildings andfacilities are expected to keep increasing due to labor shortages. Accordingly,
we are committed to enhancing the contents of our products and services
including the ALSOK Security and Equipment Service Package.

Long-Term Care Services

Introduction video(in Japanese only)

The ALSOK Group has put in place a system to be able
to meet diverse customer needs by providing in-facility
services such as group homes and fee-based long-termcare facilities dealing with dementia, in-home services suchas home-visit nursing care and day care services, andvisiting massage services. As a result, there are at present
340 service bases and approximately 16,000 users (as ofMarch 31, 2019) mainly in the Tokyo metropolitan area andin other major cities, including Osaka, Nagoya, and Sendai.
In response to the increase in the number of senior citizens
with dementia and senior citizens requiring long-term care
forecasted to continue going forward, we will work to
expand the business further and enhance the quality oflong-term care services to meet also the rising needs ofusers for health promotion and maintenance.
We will strive to enhance our service lineup in collaboration
with security services so that our long-term care services

21

can live up to the expectations of users and their family
members and gain a high degree of trust by them for safety
and security as those provided by a security services company.

Other Services
In the field of information security that addresses cyberspace threats, the importanceof managing the logs of computer operations is further rising for governancepurposes (audit responses) and in response to the spread of telework. As a result,sales of the ALSOK PC Management Service with operational support have beenstrong.
An automated patrolling security robot REBORG®-Z is equipped with new
functions such as image analysis and has enhanced its functions to provide
security services and information. It can be used to increase efficiency and save
manpower in the operation of facilities such as office buildings and large shopping
complex and is currently used in large office buildings and public facilities such as
shopping malls and airports.
MAMOLOOK, a GPS-equipped multifunctional mobile security terminal, meetsneeds to watch over children and senior citizens outdoors. Needs for the productis also increasing as a tool to protect the safe working environment in such ways
as to ensure the safety of working women who meet their customers alone and toprevent employees working in factories and construction sites from getting involvedin accidents. Our watching over service involving a whole local community that uses
lightweight and miniature MIMAMORI Tags and a smartphone app is selected bymany municipal governments as a measure to watch over senior citizens withdementia, etc.
In addition, we are proactively promoting other services such as safety confirmation
systems, which are indispensable for corporate BCP, support for countermeasures against disasters caused by volcanic
eruptions, flooding, and harmful birds and animals, and telegram services that take advantage of the ALSOK Group’s nationwide
network, among other things.

ColumnFor the Success of the Olympic and Paralympic Games Tokyo 2020
The Olympic and Paralympic Games Tokyo 2020 will be held in summer 2020.
With the completion of the Olympic Stadium and other new competition
arenas within sight, transportation tests to ensure the safe and smoothtransportation of athletes and other persons concerned during the eventand test events that simulate actual completion are now being conducted one
by one.
As a Tokyo 2020 Official Partner and a co-representative of the Olympic
and Paralympic Games Tokyo 2020 Security Consortium, we are devoting
all our efforts to contribute to safe and secure Olympic Games operations inclose coordination with the authorities concerned and the Tokyo Organising
Committee of the Olympic and Paralympic Games.
The Olympic and Paralympic Games Tokyo 2020 will be the world’s largest
event. By anticipating all sorts of situations and risks that may occur during
the event and being well-prepared with various training and education andrepeated drills, we will strive to prevent any such situation from occurring.
Our security management also focuses on the minimization of risk should any
such situation occur.
We believe that the success of the Olympic and Paralympic Games Tokyo
2020 can be ensured by realizing “security services provided in a way
unique to Japan” under the “all-Japan structure.”

The Olympic Stadium under construction

Event security team kick-off ceremony for temporary
security services such as test events

Note: ALSOK is a Tokyo 2020 Official Partner (Security Services and Planning).

22

Special
FeatureALSOK’s Social Contribution Activities
Since its founding, the Company has continued todevelop its security services business based on its
fundamental spirit, which is defined by the two
principles set out in its Management Philosophy of“arigato no kokoro” and “bushi no seishin,” andwith a strong sense of commitment to protecting
the safety and security of customers and society.
To add to the safety and security of customers andsociety and give form to “arigato no kokoro”—partof ALSOK’s fundamental spirit—ALSOK will work
diligently to contribute to the resolution of thevarious issues faced by the communities it serves.

Community
safetyLabor
shortagesv er

an d adults

Families andliv

ntary and high school students
Eleme
U ni

ca re

Increase inchildren on
nursery school
waiting lists

dc

hild

In

23

e nt sAging
infrastructurer citizens
Senio

Decliningbirthrate andaging population

si

tu d
ty s

ing

Common crimes
preying onsenior citizens,
women, and children

Naturaldisastersfants

P r e g n a n c y,childbirth,anVulnerable
road users
Safety ofchildrenScams

Senior Citizens
As a company engaging in senior citizen support services and Long-Term Care Services, ALSOK
offers products and services to protect the safe and secure life of senior citizens. We also hold

ALSOK HOTTO LIFE KOZA visiting classes for senior citizens as part of our volunteer activities.

ALSOK HOTTO LIFE KOZA (FY2019)
Number of Classes Held

Number of Attendees

Long-Term Care Facilities Operated by ALSOK(As of March 31, 2019)47 times 1,337 340
Services and Initiatives

ALSOK HOTTO LIFE KOZA

The ALSOK HOTTO LIFE KOZA visiting class program has been developed basedon the advice of the Community Safety General Affairs Division of the Tokyo
Metropolitan Police Department and teaches senior citizens the latest trends ofcrimes targeting senior citizens, such as bank transfer scams, snatching, andburglary, and how to defend themselves against such crimes.

ALSOK’s Long-Term Care Services

Long-term care facilities operated by the ALSOK Group provide services
powered by ALSOK’s unique strengths, such as the latest security features,
security guards ready to arrive on the scene in the event of an emergency
or disaster, and the active promotion of emergency and evacuation drills.

VOICE

Realization That ALSOK Can Also Protect People’s Smiles

I conduct HOTTO LIFE KOZA classes for senior citizens by paying close attention to the volumeof my voice, the speed of speech, and body language, as well as the attendees’ facial
expression to make sure they understand. I notice from their feedback we receive after theclass that senior citizens have anxiety about many different issues, but I also realize that ALSOK
can also protect their smiles as I see them smiling when they find a clue to dispel such anxiety.

SOHGO SECURITY SERVICES CO., LTD.
Chief Manager of Sales Department,
Saitama-Chuo BranchToshihiro Kawano

24

Special
FeatureChildrenNot only the number of crimes preying onchildren staying alone at home or on a pathto and from school, but also the number ofInternet crimes targeting children is increasing
year by year. ALSOK provides opportunities
for crime prevention education that is up todate and in accordance with changes in thetimes to protect children from crime.

ALSOK ANSHIN KYOSHITSU (FY2019)
Number of Classes Held

Number of Children Attended

2,784 times 90,796 1.5
Initiatives

million on a
cumulative basis

ALSOK ANSHIN KYOSHITSU

We conduct ALSOK ANSHIN KYOSHITSU classes at elementary schools throughout Japan toteach children crime prevention tips when staying alone at home or going to and from school, how
to use an AED, cardiopulmonary resuscitation, the safe use of the Internet, etc., depending on
their grades.

Women
ALSOK Women’s Crime Prevention Seminar (FY2019)
Number of Seminars Held

Number of Attendees

31times 2,755
Initiatives

We offer services to provide safety and security
for women, such as dispatching security guards
on the scene as well as visiting seminars for
women to protect themselves against crimes
targeting them, such as wiretapping, taking
photos without consent, and stalking crimes.

ALSOK Women’s Crime Prevention Seminar

ALSOK Women’s Crime Prevention Seminar is designed to help women protect themselves against
crimes preying on them by familiarizing them with case studies of crimes particularly targeting
women and teaching the art of self-defense just in case.

25

Environment
Understanding that environmental issues affect all of humanity, ALSOK is working to reduce theenvironmental impact of its operations and has set goals for the reduction of CO2 emissions and otherenvironmental indicators and delivered favorable results. The Company shapes such initiatives basedon the United Nations Framework Convention on Climate Change and other global consensus andtargets (see Consideration for the Global Environment on p. 37).
We also work actively to realize a sustainable society by offering services to support the environmental
activities of our customers.

Short-, Medium-, and Long-Term Goals for CO2 Emission Reduction
Through fiscal year
ending March 31, 2021
(each year)

1.4

By 2050

Fiscal year ending
March 31, 2031

(From fiscal year
ended March 31,
2014)(From fiscal year
ended March 31, 2014)

26

80

Safe and Secure Promotionof Paperless Operations

Preventing Damage to Biodiversity
from Harmful Birds and Animals

Active Promotion of Energy
Saving at Customer Workplace

ALSOK leverages its know-how of cashtransportation and confidential
information management to provide
one-stop services to handle paper
collection, conversion into an electronic
form, and disposal in a seamless manner
to support not only the efforts of ourcustomers to reduce environment load
but also their efficiency improvement andwork-style reforms initiatives.

Damage to forests and crops fromharmful birds and animals is expanding
year by year and is now affecting theecosystem and human beings. ALSOK
provides comprehensive support tocombating such harmful birds andanimals ranging from trap setting toextermination to protect the beautiful nature.

We support energy conservation in thebusiness environment of our customers byproposing, selling, and installing optimalenergy-efficient equipment as a totalsolution that is suitable for the property
type (store, office, and plant), the industry,
and the actual usage of the customer, suchas the introduction of LED lighting and thereplacement of air conditioning equipment.

% reduction ▶

% reduction ▶

% reduction

Services and Initiatives

26

CSR Management
To ALSOK, CSR entails remaining ever mindful of the expectations of customers and society at large
and exercising its Management Philosophy based on the principles of “arigato no kokoro,” anever-present feeling of gratefulness and gratitude, and “bushi no seishin,” a strong and noble samurai
spirit that emphasizes toughness, fairness, and generosity as well as teamwork and unity.
Through our CSR activities, we will contribute to the achievement of the United Nations’Sustainable Development Goals (SDGs) .

ALSOK’S CSR Policy
Since its founding in July 1965, the Company has continued to develop its
security services business based on its fundamental spirit, which is deﬁned by
Management
the two principles set out in its Management Philosophy of “arigato no kokoro”
Philosophy
and “bushi no seishin,” and with a strong sense of commitment to protecting
the safety and security of customers and society.
Management
We believe that CSR entails protecting the safety and security of society by
Policies
contributing to the resolution of the issues faced by customers and society
through our business activities. To facilitate this undertaking, ALSOK has
established its management policies and code of conduct as well as a
Code of Conduct
framework of internal regulations and rules. Furthermore, the Company hasoutlined issues to address in its CSR activities, giving a clear structure to its
CSR ideals. The management policies set out the principles of how the
ALSOK Group should engage with its stakeholders. The code of conduct
Internal Regulations and Rulesdeﬁnes how all members of the Company, including employees and executiveofﬁcers, should act in carrying out their daily business activities. The Company
has also established various internal regulations and rules related to speciﬁc
issues. Based on these guidelines, we are incorporating CSR activities into allareas of our business operations.
In 2014, we deﬁned four material CSR themes as speciﬁc pillars of our CSR activity policy to pursue ongoing improvements in corporate
value while developing our business.
We also facilitate CSR activities to resolve social issues from a global perspective based on Sustainable Development Goals (SDGs),
which were adopted by the United Nations with the aim of resolving some of the major problems affecting the world.

CSR Promotion Framework
The ALSOK CSR Ofﬁce takes the initiative in strengthening

Reports, a series of yearly reports that compile, in an

the Company’s CSR promotion framework. In addition to oureasy-to-understand manner, both ﬁnancial and non-ﬁnancial

in-house quarterly ALSOK CSR Newsletter summarizing theinformation on the ALSOK Group’s activities to provide a morelatest information on CSR and ESG, we provide employees withintegrated view of the link between the Group’s businesse-learning programs and hold ESG seminars given by external

activities and CSR activities. Meanwhile, we provide morelecturers for general managers of each ofﬁce to cultivate arobust disclosure of information related to CSR activities

CSR-based mind-set in all employees.

and ESG initiatives through our corporate website.

Furthermore, we conduct CSR activity surveys of employees

As a result of these efforts, ALSOK has been recognized byat the Head Ofﬁce, branches, and all Group companies once

external institutions as a company that exercises its social

each year to collect quantitative and qualitative information on

responsibility from an ESG perspective. Such institutions havethe state of ESG matters within the Group. Since the ﬁscal year

thus selected the Company for inclusion in various

ended March 31, 2015, the Company has published ALSOK

investment indexes.

未
ALSOK has been included in the FTSE4Good

ALSOK is included in the FTSE Blossom

ALSOK is included in the MSCI Japan ESG Select Leaders Index,

Index Series, a socially responsible

Japan Index, an ESG investment index.

an ESG investment index.

investment index, for 12 consecutive years.

27

Initiatives for Realizing Sustainable Improvement in Corporate Value
Material CSR Theme

1

Providing Trustworthy
Security Services
Material CSR ThemeALSOK’s
CSR
ALSOK engages in CSR
activities based on
its Management Philosophy
aiming to contribute the also to
the achievement of the SDGs.

2

Providing Products
and Services That Help
Resolve Social Issues
Material CSR Theme

3

Material CSR Theme

4

Cultivating Human
Resources and Building a
Comfortable Workplace
Environment
Contributing to Local
Communities throughActive Communication

Consideration for the
Global Environment

Supply-Chain Management
CSR initiatives cannot be carried through to completion
through the efforts of the ALSOK Group alone. We ﬁrmly
believe that the success of these initiatives also rests on theunderstanding and cooperation of all of our stakeholders.

In order to support the protection of internationally proclaimed humanrights, we will respect the dignity and rights of all people and will not
wrongfully discriminate based on race, gender, religion, or any other reason.
In addition, we will engage in both internal and external human rights
awareness activities and work to ensure proper understanding of humanrights issues. Under no circumstances will we violate or infringe upon, or
participate in the violation or infringement upon, human rights, whether
directly or indirectly.
Remaining mindful that we should uphold the elimination of discriminationin respect of employment and occupation, we will not engage in or support
any form of forced or child labor (employing individuals below the minimum
age for admission to employment or neglecting to safeguard young
workers established in conventions and recommendations of theInternational Labour Organization (ILO)). Furthermore, we will lay down avariety of regulations, including rules of employment, that are compliant
with labor-related laws in each of the nations and regions in which we dobusiness. We will also observe minimum wage requirements, reduce long
working hours by conducting appropriate management of labor time,
holidays, and leave, and strive to provide comfortable working environments
through intimate communication between labor and management that is
considerate of the rights and freedoms of all employees.
We will consider the impact our corporate activities have on theenvironment and work to reduce CO2 emissions, prevent pollution,observe environmental laws and ordinances, and remain considerate ofwater resources and biodiversity. Furthermore, we will establish andmaintain self-imposed targets aimed at curtailing our use of resources andenergy, develop and circulate environmentally friendly products andservices, and disclose information regarding the progress and results ofour environmental preservation activities.
Additionally, the ALSOK Group will endeavor to secure occupationalsafety and health and conduct appropriate health management for all
employees while maintaining an understanding regarding occupational
hazards and illnesses and adopting necessary countermeasures.

It was based on this conviction that the ALSOK Group
created the ALSOK Supply Chain CSR Guideline. We
humbly request understanding from our suppliers concerning
ALSOK’s philosophy stated below and also for their
participation in efforts to achieve sustainable societies.
The ALSOK Group is aware of the importance of remaining accountablein its corporate activities. Accordingly, we strive to maintain transparency
in these activities and disclose related information appropriately,communicating closely with our stakeholders (suppliers, shareholders, local
communities, employees, etc.). Remaining mindful that we should always
work against corruption in all its forms, including extortion and bribery, we
will conduct fair and honest corporate activities, rejecting all connections
and relationships with anti-social forces and contributing to the sounddevelopment of society and the economy through fair market competition.

Respect for
Human Rights
Employment
and Labor

Fair Operating
Practices

Environment
and Safety

Appropriate
Information
Management
ClientSatisfaction

The ALSOK Group will provide customers and clients with accurate
information regarding products and services, adopt defensive measures toprotect against computer network threats (computer viruses, spyware, etc.)
and conduct management aimed at preventing harm to the ALSOK Groupand to other companies. Additionally, we will appropriately manage andsafeguard individual privacy as well as conﬁdential information received
from clients and third parties.

We will comply with client agreements, which represent promises made on
behalf of the ALSOK Group, and exhaust all possible efforts to ensure thesafety and quality of our products and services while continuously striving
to achieve client satisfaction through the promotion of interaction andresearch and development. Furthermore, we will utilize our quality
management system and comply with safety-related laws and ordinancesin order to conduct proper quality and safety assurance.

28

Initiatives for Realizing Sustainable
Improvement in Corporate Value
Relationship with the SDGs

Providing Trustworthy Security Services

ALSOK is expected to maintain high levels of social trust while acting in a highly ethical anddisciplined manner. We therefore position compliance and business continuity as management
issues of extreme importance, and are advancing various initiatives in relation to these matters.

Promotion of Compliancethroughout the Group

Measures for Protecting andManaging Information Assets

ALSOK has established a Compliance Committee headedby the executive officer in charge of compliance. The
committee strives to spread and install an unwaveringawareness of compliance in all executive officers andemployees based on compliance rules. We also promotecompliance throughout the Group with active campaigns,
education, and training.
In addition, the ALSOK Hotline was set up in 2004 toenable employees to report and receive consultation on any
illegal or other inappropriate conducts within the Group
without fear of detrimental treatment. As of March 31, 2019,
the ALSOK Hotline was available to the employees of
ALSOK and 71 Group companies.

Because the ALSOK Group handles material information ofcustomers in many occasions including security services, werecognize the appropriate protection and management of
information assets as an important management issue.
With this in mind, we established a Basic Information Security
Policy in 2004 to apply to all employees, including executive
officers, and all information assets. In addition, we are
implementing countermeasures against information leakage
risk. For example, we promote the acquisition of PrivacyMark®
and international certification for
information security management
systems and have established aninternal computer security incident
response team, ALSOK-CSIRT, as aprecaution for the risk of serious
information security breaches.

Compliance-Related Campaigns in the Fiscal Year Ended March 31, 2019

PeriodTheme

Apr.–May
Jun.–Jul.

Education on compliance
Thorough labor management (compliance with
Article 36 agreement, eradication of excessive work
hours and unpaid overtime work)
Thorough compliance with the Road Traffic Act
Thorough compliance with business-related laws andregulations
Prevention of information leaks through appropriate
use of information systems
Thorough compliance with industry-specific laws andregulations by the proper preparation of statutory
documents

Aug.–Sep.
Oct.–Nov.
Dec.–Jan.
Feb.–Mar.

President

ALSOK-CSIRT Reporting Flow

Reporting

Each Executive Officer in Charge

Executive Officer in Charge of Information Asset Management
Cooperation

Reporting

Person responsible for response(GM of General Affairs Department or Information Systems Management Department)

Reporting

ReportingSummoned Members(Information Asset Management Committee Members)
ReportingContacting

ALSOK-CSIRT Secretariat(Including technical response staff)

Response Staff

Business Continuity
Management■ Business Continuity Plan andPreparation for Emergencies
ALSOK has established a business
continuity plan (BCP) in preparation fora wide range of potential disruptions
such as major earthquakes, typhoons,and other natural disasters, system
malfunctions, terrorism, and outbreaks of new strains of infections. Based on
this BCP, we acquired certification under ISO 22301, the international standard
for business continuity management system (BCMSs), in March 2014 to ensure
preparedness for all potential risks. For example, we have created our own
disaster manual and conduct comprehensive disaster response drills twice ayear as well as other drills such as drills for employees reporting to duty on footand for safety confirmation to prepare for natural disasters.

29

Comprehensive disaster response drills

Improvement of Security Service Quality and Customer Satisfaction■ In-House Competitions
The ALSOK Group has been holding the Sohgo Security
Alliance Quality Improvement Tournament every year since2010 to encourage employees to improve their service
execution skills as a way to enhance the quality of security
services. In this tournament, employees compete in various
events that are directly related to our actual services.
At the ninth tournament in November 2018, a total of 239
employees advanced from preliminary tournaments held
across Japan to put skills honed through daily operations
to the test in the main tournament’s 19 events including“arrive-on-the-scene services” and “first aid.”

List of① Search procedure after receiving alarm
Tournament ② Response to ATM failure
EventsTaking into account the expected increase of visitors fromabroad for international conferences and sports events, we
included events in language service and luggage inspection
categories in anticipation of the need to manage multilingual
services and accommodate wheelchair users.
After the tournament, videos of the winners of these
events demonstrating their skills are made available forviewing on the Company bulletin board as part of ourconcerted efforts to improve service executions skills andthe quality of security services.

⑥ Basic life support procedure⑪ Telephone manners contest⑯ Sales: Coaching⑦ Indoor fire hydrant operation⑫ Driving contest: Four-wheeler vehicle⑰ Language service③ Arrive-on-the-scene services⑧ Luggage inspection⑬ Driving contest: Three-wheeler vehicle⑱ Security command④ Technical services⑨ Security transportation: Responses to assaults⑭ Driving contest: Security transportation⑲ Team drills⑤ Funds: Opening work

⑩ Alarm response procedure at Guard Center⑮ Sales: New corporate customer developmentetc., drone contest as a pre-event■ Breakdown of Customer Input
Reports Compiled by ALSOK (Fiscal year ended March 31, 2019)
Customer feedback such as
opinions, requests, complaints,
and praises is reported to the
executive officer in charge and
the President on a daily basis
and is shared with all employees
to improve our services.

Reports ofPraise2,471
880

Reports ofComplaints

Changes in Customer Input Reports■ Reports of Praise(Cases)3,500■ Reports of Complaints

3,000
2,500
2,000
1,500
1,000
500
0

2016

2017

2018

2019

(Years ended March 31)

30

Initiatives for Realizing Sustainable
Improvement in Corporate Value
Relationship with the SDGs

Providing Products and Services That Help
Resolve Social Issues

ALSOK offers a multifaceted lineup of services that help resolve issues faced by customers
and society through an accurate understanding of changes in the natural environment andsocial trends by leveraging its security services expertise.

Responses to Declining Birthrate and Aging Population andWorking-Age Population Decline■ Pioneering Example: Building a Safe and Secure
Community Utilizing AI and Robots

Amid the progressing declining birthrate and aging population
and resulting population decline, labor shortages are becoming amore pressing social issue than ever. ALSOK is coping with theshortage of security guards by combining our traditional security
service know-how with our security robots powered by the latest
technologies, such as AI and IoT.
Our latest security robot REBORG®-Z provides
high-value-added and highly efficient security services with theability to communicate with humans through face recognition
and a large display monitor and to prevent accidents throughabnormality detection. At the Mt. Fuji Shizuoka Airport,
REBORG®-Z is in active service to realize further efficiency
improvement and sophistication in passenger terminal security
operations.

■ Drone Aerial Security and Photography
Services
ALSOK provides not only wide-area surveillance services
using drones but also facility inspection and survey services
using drones equipped with an infrared camera to bringsafety to dangerous work at a high place and to solve theshortage of skilled workers to do such work.
■ Mega Solar Inspection■ External Wall Survey■ Security

Can detect unevenness in tiles that cannot be detectedby visual inspection

An aerial photo of an industrial park taken
by a security drone

31

Inspection drone equipped with an infrared
camera新 型 警 備 ロ ボ ット

REBORG - Z®

■ Cash Management Services
Cash management is an important function in
the retail industry. While the industry faces various issues
including the shortage of change during daily operation andthefts during storage and transportation, retailers are now
required to realize more efficient store operation due to theprogression of declining birthrate and aging population andthe resulting labor shortages and the diversification ofbusiness operations in recent years. ALSOK cash
management services realize the linkage between cash
deposit and dispenser machines and POS data to realize thevisualization of the movements of cash and thereby support
reduction in personnel expenses associated with cash
management and efficiency improvement in store operation.

Solution to cash management problems at stores

Development of Communities Where Everyone Is Safe
■ Services for Children, Women, and Senior Citizens■ Long-Term Care Services

Our multifunctional mobile security terminal MAMOLOOK poweredby GPS is designed to meet the needs for watching over children,
women, and senior citizens. We also offer the Regional Protection
System using MIMAMORI Tags that is specialized in responding tosenior citizens with dementia, etc., wandering alone and HOMEALSOK MIMAMORI SUPPORT services to respond to increases
in households consisting only of senior citizens. These services
support senior citizens living by themselves away from other family
members and provide family members with an option to ask ALSOK
to arrive on site in the event of an emergency.

ALSOK provides a wide variety of long-term careservices ranging from in-home care services toin-facility care services as well as visiting medicalmassage mainly in the Tokyo metropolitan area. We
also provide our proprietary health management
programs such as ANSHIN TAISO and ANSHINYOGA exercise programs that can be performed
also by senior citizens without strain.

アタリ

Mobile MIMAMORI security terminal equippedwith call and safety confirmation functions toprovide security both indoors and outdoors

Simple watch over services using a MIMAMORITag and MIMAMORI Tag Detector■ Emergency Reporting System in Collaboration
with Municipalities

The emergency reporting service of municipalities has been introduced
to watch over senior citizens and differently abled individuals, andthe number of municipalities contracting with ALSOK to provide thisservice is increasing on the back of the lack of personnel and theincrease in operational burden. Our Emergency Reporting Systemallows our staff to visit and enter individual residences, with staff being
given spare keys, and also includes a health consultation service
provided by certified nurses and other personnel. This system ispopular and has been adopted by a number of municipalities.
Number of Municipal Governments

Using ALSOK’s Emergency
Reporting System

493[Number of Long-Term Care Facilities and Users]

135
183
22

In-Facility

facilities

Approx.

In-Homefacilities

Approx.

facilities

Approx.

Visiting
Massage

Total

340

3,700
7,000
5,300
users
users
users

16,000facilities Approx.

users(As of March 31, 2019)

Measures against Frequently Occurring Natural Disasters■ Flood Control Act Response Solutions■ Dispatching Vehicle-Based Mobile ATMs

In recent years, record-breaking torrential rain and powerful typhoons
have triggered river overflows and flooding on roads that caused
significant damage. ALSOK provides services to prevent water damage,for example, by preventing vehicles from entering underpasses, thestructure of which tends to cause water to collect there at the time offlooding, through the employment of air-operated blocking devices, andby monitoring the water level of a river with ultrasonic-type level gauges
and operating water gates properly at the time of a rising river.

ALSOK engages in the storage management andtransport of vehicle-based mobile ATMs. At thetime of the Heavy Rain Event of July 2018, we
dispatched them to the affected areas in Ehime,
Okayama, Hiroshima, and Yamaguchi prefectures,and we received words of appreciation from many
people who had been waiting for such services to
be available.

Underpassmonitoring service

At the time of flooding

River monitoring solutions

A vehicle-based mobile post office in operation
on a road covered with rubble, earth, and sandin Kure City, Hiroshima Prefecture

Vehicles in storage at the Transportation Security
Services Branch Kanagawa and employees
involved in transportation services

32

Initiatives for Realizing Sustainable
Improvement in Corporate Value
Relationship with the SDGs

Cultivating Human Resources and Building a
Comfortable Workplace Environment

ALSOK is constantly working to improve the workplace environment to enable human resources,
which are the base of sustainable growth for the Company, to fully exercise their talents through theenhancement of training systems, active support for career development, and the promotion of diversity.

Development of Human Resources That Embody ALSOK’s Philosophy
Aiming to develop human resources that embody ALSOK’s
philosophy, the ALSOK Group is constantly working to
improve its education and training programs. Immediately
after joining ALSOK, new employees receive introduction
training on such topics as ethics, the art of self-defense,
disaster prevention practice, and first aid to gain necessary
knowledge as a security guard.
We also encourage skills development of employees byenhancing ALSOK’s correspondence education programs,

incentivizing employees to acquire public qualification, andconducting personnel exchanges within the Group as wellas with central government agencies and other companies.
In addition, with the introduction of an e-learning system in
2018, we have realized the enhancement of educational
contents, a significant increase in the number of employees
who take courses by conducting decentralized education
programs, and a reduction in the burden for taking courses,
such as the need for traveling.
Introduction training for new employees

Correspondence Education Programs

120

coursesavailable(Up 10 courses YOY)

Employees Who Have CompletedFirst-Aid Training

Aggregate
total of19,527(As of March 31, 2019)

Respect for Human Rights
and Diversity
ALSOK has developed frameworks to enable diverse
human resources to fully exercise their talents. We
place importance on providing 4,794 female employees(as of March 31, 2019) with a workplace environmentthat empowers them. These efforts have received
a high degree of external recognition. In April 2018,
our efforts to ensure a working environment thatenables female employees to exercise their talents
were recognized by the Japan Productivity Centerwith the Encouragement Award of the 3rd Women
Empowerment Award.
In August 2018, ALSOK was certified as a Level 3(highest level) “Eruboshi” company by the Ministryof Health, Labour and Welfare in accordance with
the Act on Promotion of Women’s Participation andAdvancement in the Workplace.

33

Female technicalstaff at work

Eruboshicertification logo

■ Promotion of Overseas Employees’
Active Participation■ Creation of a Workplace That Develops
Each Individual’s Unique Talents

ALSOK promotes respect for human rights and different
cultures overseas. In Thailand, we actively promote theadvancement of female employees in the sales department,
and promote career development through the improvementof maternity leave system.
We also provide an in-house place of worship in Indonesia
for Muslim employees and make rotation plans to allow all
Muslim employees time for worship. ALSOK continues toprioritize consideration for the national culture of each country
in which it operates.

In 2010, ALSOK Business Support Co., Ltd., a speciallycertified subsidiary under the Act on Employment Promotionof Persons with Disabilities which undertakes business card
printing, print-on-demand (POD) business, etc., wasestablished as part of our efforts to normalize the presenceof differently abled individuals smoothly in the workplace
and promote diversity and inclusion.
Meticulous inspection of
printed materials to bedelivered

Active in a wide variety
of fields including
brochure printing andbusiness card printing
for employees

Female employees working at ALSOK BASS Indonesia

Work-Style Reforms and Work−Life Balance■ Enforcement of Welfare System■ Promotion of Health Management

ALSOK puts effort into improving the working environment
so that employees can continue to work with peace ofmind, while enjoying a better work–life balance. We provide
a wide range of welfare programs such as special discounts
for sports facilities and hotels, so that employees can enjoy
satisfying, high-quality leisure time. We also offer ALSOK
LTD, long-term disability insurance designed to help replace
lost income in the event that an employee is unable to work
for an extended period.

For a company to continue to grow, its employees musthave fulfilling professional and private lives; and the working
environment must energize employees. To realize highly
efficient and productive employee work styles, ALSOK
formulated and announced its 3-year Work-Style Reform
Action Plans starting from April 1, 2018. As part of its
implementation, we have introduced the Platinum Holiday
System to allow employees to take a long-term paid leaveof nine or more consecutive days off to raise the rate ofannual paid leave use.
Other health management initiatives include theparticipation as an action partner in the Ministry of Health,Labour and Welfare’s Action Plan for Companies Promoting
Cancer Prevention Program, the establishment of ALSOKSupport Line, a mental health help desk, and health events
held in collaboration with the ALSOK Health InsuranceSociety. Such health management initiatives were recognizedunder the 2019 Certified Health and Productivity Management
Organization Recognition Program (White 500) (sponsoredby the Ministry of Economy, Trade and Industry, and Nippon
Kenko Kaigi) for three consecutive years from 2017.
Rate of Annual Paid Leave Use

45.7%→53.0%

Supports a good balance between work and childcare

Percentage of Employees Returning toWork after Childcare Leave(As of March 31, 2019)

98.1%

Up

7.3 points YOY

percentage

34

Initiatives for Realizing Sustainable
Improvement in Corporate Value
Relationship with the SDGs

Contributing to Local Communities throughActive Communication

To give form to “arigato no kokoro” (a feeling of gratefulness and gratitude)—part of ALSOK’s fundamental
spirit—the Company acts as a good corporate citizen, diligently working to contribute to the resolutionof the various issues faced by the communities it serves.

Contributions to Safety for Communities Utilizing
the Know-How of Security Services
With the aim of responding to the requests andexpectations of local communities for safety and security,
the ALSOK Group dispatches its employees, who are safety
professionals, to elementary schools throughout Japan to
conduct the ALSOK ANSHIN KYOSHITSU program. This
program teaches children crime prevention and first-aid
skills. The program has been running for 15 years withthe participation of more than 1,510,000 children.
In April 2019, ALSOK held an exhibit at Manabi no Fes
2019 Spring, an annual hands-on education event forelementary school students and their parents sponsored by
The Mainichi Newspapers Co., Ltd. Under the theme of“protecting the property of others,” the exhibit included
activities to experience the importance of a sense of
responsibility and teamwork in carrying valuables while
guarding them safely.
ALSOK also actively accepts educational visits of students,
who are given explanations on latest security services anddaily crime prevention tips in the showroom of the Head
Office or in other offices.

In August 2019, we conducted a Business Training for
School Teachers (arranged by the Japan Institute for Socialand Economic Affairs) for elementary school and junior highschool teachers for the 10th time in the last six years. The
training was attended by 19 teachers from elementary
schools and junior high schools in Tokyo, who discussed
issues on the crime and disaster prevention status at schools
and received training on how to combat an intruder usinga sasumata (a weapon shaped like a forked stick). “It wasa good opportunity to reconsider crime and disasterprevention at school and in the local community,”commented one of the attendees after the training.
We also continue to hold ALSOK HOTTO LIFE KOZA
visiting classes that teach countermeasures against crimes
targeting senior citizens and first-aid skills and to make aconcerted effort to prevent senior citizens from becoming a
victim of bank transfer scams. In fiscal 2019, the ALSOKGroup helped to prevent 64 special-case scams andreceived appreciations from the organizations concerned forthese efforts.

Manabi no Fes: Children making a pose as
ALSOK team members

Sasumata training as part of theBusiness Training for School Teachers

VOICE

Children examining valuables

Receiving a letter of appreciation

Accepting a Visit of International Students Studying at Sophia University

We visited ALSOK as part of the class activities of the business Japanese course for international
students studying at Sophia University. The students were surprised at the latest security systems
in the showroom and were given an interesting explanation of ALSOK’s history, line of business,
and Management Philosophy at the industry andcompany briefing. As the students listened to a globally
recruited staff member telling how he was grapplingwith daily challenges in the workplace, the stereotyped
image of a Japanese company that they had wasdispelled and their motivation to learn Japaneserose. Each of them must have learned a lot from thisopportunity. I really appreciate your cooperation.
International students intently listening to ALSOK’s explanation

35

Sophia University
Center for Language
Education and Research
Project Associate Professor

Masako Yonezawa

Promotion Activities for Supporting Sports
ALSOK currently has a total of 10 sports clubs, including its prestigious judo club as well as its wrestling, weight lifting,marksmanship, and track and field clubs, as well as goalball athletes. These clubs have produced numerous national teamathletes and world champions. ALSOK is now also supporting para athletes.
ALSOK also contributes to sports promotion and the development of local communities by holding the Group’s internal
national judo and kendo tournaments and holding sports classes for children in local communities.

Sohgo Security Alliance Judo Tournament

Race walk class by an ex-Japan national team athlete

Post-Disaster Restoration Support
A number of natural disasters, including the Heavy Rain
Event in July 2018, large typhoons, and the Hokkaido
Eastern Iburi Earthquake, hit Japan one after another in
2018. We made a concerted effort in supporting thedisaster-stricken areas, including increased patrollingaround our contracts during power outage, cash collection
from ATMs, and employees’ volunteer activities.
Employees at Hokkaido Regional
Office assessing the damage
status amid power outage

Loaning a generator to
Atsuma-cho in Hokkaido,
where power outage continues

Support for the Next Generation andContribution to Culture and the Arts
Since 2017, ALSOK has
participated in the National
Movement to Support Children’s
Future promoted by the Cabinet
Office. ALSOK has donated a
portion of its profits from home
security-related products through the Fund to Support
Children’s Future. Our donations have been used forNPOs engaged in helping children suffering from poverty.
ALSOK also supports the continuation of traditional
events, encourages employee participation to contribute totheir success and provides patronage for local culture and arts.
In particular, the ALSOK SHISHIMAI (Lion Dance) CLUB’s
activities have been certified as a This is MECENAT 2019activity by the Association for Corporate Support of the Arts.
Members of this club receive instruction from a master of the
Daikagura lion dance and perform their dance at customer
companies and events.

The ALSOK Group has been engaging in restoration support
activities for regions heavily impacted by natural disasters
through partnerships. Through support goods purchasecooperation under the “Regional Restoration Matching”
program of the Reconstruction Agency and continued
participation in the “Watashitachi wa Wasurenai (We Will
Never Forget) – Carrying Rehabilitation Assistance into the
Future” disaster reduction and prevention project implemented
by the Japanese Red Cross Society, we will continue these
activities so as not to allow the lessons and experiences
accumulated in the past to be forgotten.
Annual Social Contribution
Expenditure

Approx.

¥390

million36

Initiatives for Realizing Sustainable
Improvement in Corporate Value
Relationship with the SDGs

Consideration for the Global Environment

Understanding that environmental issues affect all of humanity, ALSOK is working to reduce theenvironmental impact of its operations and has set goals for the reduction of CO2 emissions andother environmental indicators while engaging in initiatives to address climate change andpreserve the natural environment. The Company shapes such initiatives based on the United
Nations Framework Convention on Climate Change and other global consensus and targets.

■ Initiatives for Environmental Management Systems

Environment-related committee meetings using a low power consumption LCD multi-system with a large screen

Green Purchasing Guidelines

ALSOK endeavors to use resources more effectively in the security equipment it
employs and to limit waste. At the same time, the Company coordinates with business
partners to promote environmental preservation initiatives that encompass the
manufacturing, use, and disposal stages of the Company’s product lifecycles.

Environmental Policies

As a leader in providing security and other related services, ALSOK recognizes that
global environmental concerns are common issues for all of humanity. Exercising theprinciples of “arigato no kokoro” and “bushi no seishin” described in its Management
Philosophy, the Company formulates environmental policies and institutes ongoing
improvements to its environmental management system to contribute to the realizationof a sustainable society.

Recent years have seen increased movement
toward establishing global consensus andtargets related to the environment, including
the United Nations Framework Convention on
Climate Change and the Paris Agreement,
which was negotiated at the 2015 United
Nations Climate Change Conference. In April
2006, ALSOK established the Green Purchasing
Guidelines to guide it in developing its businesswhile exercising a greater degree of
responsibility for global environmental issues.
We coordinate with suppliers and business
partners (supply chains) in a drive to step up
environmental preservation initiatives thatencompass the manufacture, use, and disposal
stages of our product lifecycles.
Furthermore, the Company establishedenvironmental policies and acquired ISO 14001
certification for certain operating sites in 2016
to help realize a sustainable society. The
Environmental Committee plays a central rolein implementing a plan–do–check–act (PDCA)
cycle with regard to our environmental
management system in order to promote
eco-friendly action on a Companywide level.
In 2018, we expanded the coverage of thecertification to 64 regional offices nationwide.

■ New Environmental Targets
The Japanese government has announced its Plan for Global Warming Countermeasures. With the fiscal year ended March 31,
2014 as the base year, this plan puts forth a medium-term target of achieving a 26% reduction in total greenhouse gas
emissions by the fiscal year ending March 31, 2031, and a long-term target of accomplishing an 80% reduction by 2050.
Following this example, in 2017 ALSOK set a new short-term target of achieving a year-on-year decrease of 1.4% in CO2emissions each year leading up to the fiscal
year ending March 31, 2021. (Results of the
CO2 Emissions Reduction Targets (Total Emissions and Emissions per Sales)fiscal year ended March 31, 2019 revealed aand New Short-Term Targets and Performance
5.7% reduction compared with the previous(t-CO )
term.) We also set a new medium-term
New target
38,0000.19
Achieveeachtarget of achieving a 26% reduction for the
36,649% yeardecrease of
36,291
fiscal year ending March 31, 2031, from the
36,0000.17level in the fiscal year ended March 31,
34,238
2014, and a new long-term goal of reducing
34,0000.15
CO2 emissions by 80% of this year’s level by
0.156
2050. In 2018, we have set a new goal of
32,0000.13
0.145
reducing CO2 emissions per sales by 1.4%
0.00
0every year (we have achieved a 7.0%
2017
2018
2019
2020
2021
(FY)
year-on-year reduction in the fiscal year
■ CO Emissions
Total Emission ■ CO Emissions per Sales
Per Sales Targets
ended March 31, 2019).
(Non-Consolidated)
Targets(Non-Consolidated)
2

1.4

2

37

■

2

■ ■

■ “3Rs” and Energy Conservation Initiatives
ALSOK is advancing Companywide initiatives based on the“3Rs,” or reduce, reuse, and recycle. We cooperate withgarbage separation and ink cartridge collection programs,
and also reuse and recycle various types of equipment. For
example, articles to be disposed of at branches in the Tokyo
metropolitan area are accumulated at our repair center in
Shin Yokohama, which categorizes, repairs, ships, andproperly disposes of or recycles these items. In the year
under review, the average ratio of items reused at all
branches across Japan as a result of these initiatives cameto approximately 39%, an increase of 4 percentage points
over the previous year.
In addition, the rechargeable nickel-cadmium batteries
used in our various power supply equipment are recycled forreuse, and approximately 33,000 batteries were recycled inthis manner during the year under review. These initiatives
are featured on the Plastics Smart campaign website of the
Ministry of the Environment.

Mindful that we have many offices, facilities, and vehicles
for business use throughout Japan, we are making a
concerted effort to reduce electricity usage and vehicle fuelconsumption volumes. In the fiscal year ended March 31,
2019, we worked to cultivate a mind-set focused onelectricity conservation among employees while actively
introducing fuel-efficient vehicles and motorcycles into our
fleet. At the same time, with the aim of reducing vehicle
traveling distance, we developed more efficient routes foruse by sales staff on sales visits and lowered the number oftechnicians placed on night duty. As a result, we achieved a
5.4% reduction in fuel usage reduced and a 3.4% reduction
in electricity usage in comparison with the previous fiscal
year. Vehicle fuel consumption also improved by 8.1% fromthe previous fiscal year.

Implemented
electric vehicles■ Environmental Consideration
ALSOK seeks to limit the use of certain hazardous
substances and promote environmentally friendly designin procurement and development activities.
In procurement operations, we consider raw ingredients,
reduction of hazardous substances, product reuse andeasy-to-reuse design, improvement of durability (lifespan),
packaging, energy-saving measures, and reduction ofenvironmental load in waste disposal. In addition, we also
work toward the reduction of CO2 emissions during theprovision of services. One of our approaches is thedigitalization of business logs and security reports.

In addition to approaches through business activities, weparticipate in the Tokyo 2020 Medal Project—making
medals out of discarded devices such as mobile phones(sponsored by the Tokyo
2020 Organizing
Committee) and the ALSOKGroup as a whole has
supplied 5,149 discarded
mobile phones.
Collection box

Note: ALSOK is a Tokyo 2020 Official Partner (Security Services and Planning).

■ Ongoing Reforestation Activities inDisaster-Stricken Areas

Underbrush weeding

In 2015, we conducted reforestation activities in collaboration
with the NPO Laboratory of Earth Conscious Life, planting
approximately 2,000 Japanese black pine saplings on the
Hasunuma coastline in Sammu City, Chiba Prefecture, an areathat suffered severe damage in the Great East Japan
Earthquake, as part of our social contribution initiatives
commemorating ALSOK’s 50th anniversary. The aimof these activities was to help preserve the coastline
environment and revive a forest that had previously played
an important part in limiting disaster damage. After planting
saplings, underbrush must be cleared for at least several
years to ensure healthy development. Such activities wereconducted for the fourth time in September 2018. In addition
to helping preserve the environment, this can truly be calleda unique social contribution activity leading to the security andsafety of the disaster-stricken areas.

38

Corporate Governance
Basic Policies and Systems
Based on its management philosophy exempliﬁed by theprinciples of “arigato no kokoro” (a feeling of gratefulness andgratitude) and “bushi no seishin” (a samurai spirit), ALSOK
devotes itself to protecting the safety and security of its
customers and of society as a whole. The ALSOK Groupalso advocates “contributing to society” as one of its
management policies. Meanwhile, to continue to be a

corporate group that is trusted by all stakeholders, we strive
to reinforce Groupwide corporate governance with measuresthat separate managerial execution and oversight functions,allow swifter decision making, encourage strong corporate
ethics, and provide transparency in business management.

Revisions to the Rules

History of ALSOK’s Corporate GovernanceYear
Board of Directors

Number ofmembers

Audit &
Supervisory Board

Number ofmembers

2003

2013

June 20022015

November 2002
December 2002

2007

2009

2013

2015

2016

2018

7

8

7

8

10

12

2009

2016

2017

2018

1

2

3

4

Outside

2008

2009

2018

4

5

4

April 2004
August 2004
September 2004
December 2004
May 2006

2003

2006

2018

July 20093

2

3

April 2016

OutsideIntroduction of the Executive Ofﬁcer
SystemFormulation of the Compliance Rules
Formulation of the Risk Management
Rules
Setting up of the ALSOK Hotline
Formulation of the Basic Information
Security Policy
Establishment of Information AssetManagement Committee
Formulation of the Personal
Information Security Policy
Formulation of the Basic Policy
Related to the Internal Control System
Formulation of Information AssetManagement Rules
Setting up of an external reporting
hotline under the ALSOK Hotline

Overview of Corporate Governance Systems and Reasons for Adoption
The Company has adopted the Company with Audit &Supervisory Board structure described in the Companies Act
of Japan. By implementing the following systems, the Company
afﬁrms that effective and complete audits are conducted byAudit & Supervisory Board members and that management isbeing appropriately governed. The Company has appointed 12
directors, four of which are outside directors, and four Audit &Supervisory Board members, three of which are outside Audit& Supervisory Board members.
The Board of Directors meets once a month, in principle, todecide on basic management policies and important matterspertaining to operational execution and to supervise the executionof duties by directors and executive ofﬁcers. The Management

Committee, which is chaired by the chairman and representative
director, meets twice a month, in principle, to determine theagenda items to be presented to the Board of Directors and to
discuss the operational execution policies formulated based on
Board of Directors’ decisions.
The Audit & Supervisory Board meets once a month, inprinciple, to discuss and make decisions based on reports onimportant matters related to audits. One Audit & Supervisory
Board member attends meetings of the Management Committee
to provide appropriate oversight for management.
We have adopted the current system based on the judgmentthat it effectively ensures the impartiality and transparency ofmanagement.

General Shareholders’ Meeting
Board of Directors’ Meetings (Monthly)

4 Outside Directors
8 Internal Directors Total: 12

Discussions about Operational Policies on Business Affairs
Management Committee (Twice monthly)

Chairman and Chief Executive Ofﬁcer (CEO)President and Chief Operating Ofﬁcer (COO)

Committees
Risk Management Committee
Compliance Committee
Information Asset Management Committee

Discussions about Operational Policies on Business Affairs

39

Executive Ofﬁcers
7 Directors and Executive Ofﬁcers
13 Executive Ofﬁcers
Total: 20

Internal Control
Operations

Outside Audits by an Independent
Auditing Corporation: Accounting Audits
Conducted by Grant Thornton Taiyo LLC

Internal Audits
Inspection Department

Operating Committeeof the Company(Twice monthly)

Audit & Supervisory Board
3 Outside Audit & Supervisory Board Members
1 Internal Audit & Supervisory Board Member
Total: 4 (Includes two part-time Audit &Supervisory Board Members)

Legal Consultation

Advisory Contracts with
Attorneys in Specialized Fields

Legal Ofﬁce
As of June 25, 2019

Reasons for Appointment and Duties of Outside Directors and Outside
Audit & Supervisory Board Members
Outside directors and outside Audit & Supervisory Board
members are assumed to cover the functions of observationand supervision of the management team with objective andneutral standpoints.
Outside directors and outside Audit & Supervisory Board
members attend meetings of the Board of Directors, atwhich they offer their opinions on the matters at hand. They
receive from general managers in charge of each businessand others brieﬁngs on the issues to be discussed at meetingsof the Board of Directors the day prior to the meeting,allowing them to more effectively monitor management. The
outside Audit & Supervisory Board members conduct audits
at the premises of regional ofﬁces and subsidiaries in thesame manner as other Audit & Supervisory Board members.
They also coordinate with the Inspection Department andthe independent auditing corporation employed by theCompany in regard to supervision by outside directors,

audits by Audit & Supervisory Board members, internal
audits, and accounting audits. To facilitate this coordination,
the outside Audit & Supervisory Board members periodicallyexchange information with these bodies.
The participation of the outside directors in meetings of theBoard of the Directors enables them to monitor the operational
execution of other directors with regard to Internal Control
Operations and other matters from an independent standpoint.
The outside Audit & Supervisory Board members also
evaluate the legality of the measures implemented byInternal Control Operations in the same manner as other
Audit & Supervisory Board members. To this end, they
perform both operational and accounting audits of theorganization and review all relevant documents. The Company
employs four outside directors and three outside Audit &Supervisory Board members; applications have been
submitted to the Tokyo Stock Exchange, identifying each ofthese individuals as independent ofﬁcers.

Reason for Election as an Outside Director
Name

Attendance at Board of
Directors Meetings(FY2019)

Reason for Election

Masakazu
Iwaki

Mr. Masakazu Iwaki possesses abundant experience and insight, and advanced ability, developed
as a manager at a major steel manufacturer over many years. He can be expected to contributeto enhancing and strengthening the corporate governance of the Group and further improvement
in corporate value, through providing valuable opinions from a broad perspective regarding
management, and therefore the Company has elected him again as an Outside Director.

14/14 times

Seiei
Ono

Mr. Seiei Ono possesses abundant international experience and insight, and advanced ability,
developed as a manager at a major trading company and elsewhere over many years. He can be
expected to contribute to enhancing and strengthening the corporate governance of the Groupand further improvement in corporate value, through providing valuable opinions from a broad
perspective regarding management, and therefore the Company has elected him again as an
Outside Director.

14/14 times

Hideharu
Kadowaki

Mr. Hideharu Kadowaki possesses abundant experience and insight, and advanced ability,
developed as a manager at a major ﬁnancial institution and elsewhere over many years. He can be
expected to contribute to enhancing and strengthening the corporate governance of the Groupand further improvement in corporate value, through providing valuable opinions from a broad
perspective regarding management, and therefore the Company has elected him again as an
Outside Director.

11/11 times(After the assumption ofofﬁce in June 2018)

ToyoakiAndo

Mr. Toyoaki Ando possesses abundant experience and insight, and advanced ability, developed
through serving in important positions at a major non-life insurance company over many years. He
can be expected to contribute to enhancing and strengthening the corporate governance of theGroup and further improvement in corporate value, through providing valuable opinions from a
broad perspective regarding management, and therefore the Company has elected him as a new
Outside Director.

ー(Assumed ofﬁce
in June 2019)

Observation of Japan’s Corporate Governance Code
The Company observes the principles put forth by Japan’s
Corporate Governance Code, which was formulated by the
Tokyo Stock Exchange, using these policies as guidelines
for corporate governance and carrying out detailed
inspections and reviews of organizational structures. In
addition, we submit a Corporate Governance Report to theTokyo Stock Exchange, on a yearly basis and post thisreport on our corporate website. This report contains
information on our efforts to observe the Corporate
Governance Code.
Going forward, we will continue to examine possible
measures for our various systems in order to create anorganizational structure that features more effective
corporate governance.

40

Corporate Governance
Policies and Methods for Deciding
Compensation Amounts
Annual limits of ¥400 million for the compensation of
directors and ¥120 million for the compensation of Audit &Supervisory Board members have been set at the General
Shareholders’ Meeting.
The compensation of directors includes a ﬁxed amount,calculated according to their positions and whether they are
an outside director or not, as well as a performance-linked
amount, calculated based on an evaluation of theoperational execution performance of individual directors
in the previous ﬁscal year conducted in accordance withpredetermined standards. Decisions regarding the exact
amounts of compensation of directors are made by the
Board of Directors.
The compensation of Audit & Supervisory Board members
is paid as a ﬁxed amount, and the exact amounts ofcompensation are decided in accordance with standards
set by the Audit & Supervisory Board.

Internal Control System
Based on the Companies Act and the Financial Instruments
and Exchange Act, the Company has established systems
to ensure directors perform duties in compliance withall relevant laws and regulations and its articles ofincorporation. In addition, the Company has in placesystems for guaranteeing that proper operating practices
are observed by other listed companies and the corporategroups consisting of these companies and their subsidiaries.
The management of the ALSOK Group carried out anevaluation of the Group’s internal control system as ofMarch 31, 2019, based on the Financial Instruments andExchange Act. This evaluation found that the internal control
system is effective, which has been noted in the reporton the inter,nal control system. The independent auditing
corporation, Grant Thornton Taiyo LLC, has also expressed
the opinion that the result of the evaluation by the
management noted in the internal control report is accurate.

Compliance
The Company has established the Compliance Committee,
which is headed by the executive ofﬁcer in charge ofcompliance, to promote legal compliance. The committee
strives to inculcate an unwavering awareness of compliancein all executive ofﬁcers and employees based on thecompliance rules formulated in 2002, and periodicallyveriﬁes the status of compliance in business and otheractivities. Furthermore, the Company conducts activities
to promote compliance on a Groupwide basis. Moreover,together with the Education & Training Department, theCompliance Committee is implementing corporate ethics
training and taking other steps to cultivate and thoroughly
entrench a compliance-based mind-set.
The ALSOK Hotline was set up in April 2004 to facilitate
early identiﬁcation and prevention of corporate ethics
issues. This hotline allows executive ofﬁcers and employees
to report any illegal, inappropriate, or unethical behavior

41

they may witness via email, telephone, or written statement
without fear of suffering disadvantageous treatment. On April
1, 2016, the Company established an external reporting
hotline to add to the already existing internal hotline.

Risk Management
The Company places particular importance on risk
management, which is central to its business of protecting
the safety and security of society. Accordingly, the Company
formulated risk management rules in 2002. The Company
then established the Risk Management Committee basedon these risk management rules and assigned the executiveofﬁcer in charge of risk management as its chairperson. In
addition, individual risk management assessment bodies
have been set up at the Head Ofﬁce and each individual
business ofﬁce to undertake Companywide risk
management activities, such as the identiﬁcation andevaluation of risks and the formulation of preventative
measures and countermeasures. The Risk Management
Committee also contains subcommittees for risks in speciﬁcareas. These subcommittees gather information on the risks
in their designated area, analyze and evaluate these risks,and draft measures to mitigate these risks. Furthermore, theCompany has developed organizational structures to ensurethat it can respond quickly should a serious emergency
occur. Through such structures, the Company is able torelay urgent orders throughout the organization, set up a
response headquarters, or take other emergency response
measures.

Disclosure and IR Activities
ALSOK has formulated its Disclosure Policy based on which
it actively conducts impartial and timely information
disclosure. In addition, the Company has revised its investor
relations (IR) website to provide stakeholders with greater
ease in ﬁnding the information they seek. We also aim tofoster a deeper understanding among overseas institutional
investors of the security services industry in Japan and thegrowth strategies of the ALSOK Group. To this end, we
provide English-language translations of ﬁnancial summaries
and other documents on our English-language IR website.
The Company’s IR Website

https://www.alsok.co.jp/en/ir/

Message from an Outside Director

For Further Growthand Corporate Value
Enhancement
Outside Director

Toyoaki Ando

ProﬁleJoined Tokio Marine & Fire Insurance (currently Tokio Marine &Nichido Fire Insurance Co., Ltd.) after graduating from Osaka
University. After working in the Casualty Service Operation
Department and serving as the General Manager of the Risk
Management Department and the Retail Products Operation
Department, he was appointed as an Executive Ofﬁcer in 2009,Managing Executive Ofﬁcer in 2011, and Managing Director in 2013.
In 2015, he assumed ofﬁce as Managing Director of the General
Insurance Rating Organization of Japan. He has been serving asan Outside Director of ALSOK since June 2019.

Changes in Society and Responding to Them
I have been engaged in the business of property insurance for 40 years in total, of which 36 years at a property & casualty
insurance company and four years at an industry association. In recent years, risks facing those throughout the world havechanged and grown. For example, most ﬁre insurance claims are now paid for damages as a result of natural disasters such as
typhoons. At the same time, technological innovations such as self-driving and the fact that people are living longer now bringabout new risks.
While insurance is basically to provide after-the-fact monetary compensation for various damage, insurance companies havetraditionally provided incidental loss prevention services, such as risk diagnosis for ﬁre prevention and safe driving instructions,as before-the-fact accident prevention activities. In this sense, insurance can be seen as risk management services in a broad
sense similar to security services.
I see that responding quickly to customer needs for safety and security that are increasing and diversifying in recent years,
ALSOK is actively entering into new business ﬁelds such as long-term care and cybersecurity services, applying state-of-the-art
technologies such as AI and robotics to its business.

Impression of ALSOK
I have not had many opportunities to talk directly with individual employees of ALSOK, but all of them I met were well-manneredand gave me the impression that they are properly disciplined as can be seen, for example, from their meticulous administrative
work. I imagine that this reﬂects the tone of the top and they have been through strict education as a person engaging insecurity services in which customers’ trust is the most important thing of all.

For Further Growth in the Future
In recent years, well-established large corporations with a long history have been frequently involved in accidents, scandals, andcompliance violations of a kind that is hard to believe. In these cases, although speciﬁc circumstances differ, the underlying
structural or psychological factors at the root of these corporations appear to be similar.
As ALSOK continues to grow in size, there may be a risk that there will be a small crack in the current disciplined operations
and the Company will be caught off guard.
As an Outside Director, drawing on my experience in risk management at a property & casualty insurance company, I will strive
to check such risks and make recommendations as necessary, while paying attention to the interest of various stakeholders andcontributing to further growth and corporate value enhancement of ALSOK.

42

Directors, Audit & Supervisory Board Members,
and Executive Officers (As of June 25, 2019)

Back row, from left

Makoto Uenoyama Takeshi Oiwa Shinichiro Nakano
Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)

Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)

Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)

Akira Kono

Ikuji Kayaki

Audit & Supervisory Board Member

Vice President and Representative Director
Senior Executive Vice President
Head of ALSOK In-house Company

Front row, from left

43

Hideharu Kadowaki

Masakazu Iwaki

Atsushi Murai

Director (Outside Director)

Director (Outside Director)

Chairman and Representative Director
Chief Executive Officer (CEO)Hirohisa Hokari Tsuyoshi Murai Shigeki Nomura
Director
Executive Vice President

Director
Executive Vice President

Director
Senior Executive Officer

Masato Yagi

Motohisa Suzuki

Director
Senior Executive Officer

Director
Senior Executive Officer

Yukiyasu Aoyama

Seiei Ono

Toyoaki Ando

President and Representative Director
Senior Executive President
Chief Operating Officer (COO)

Director (Outside Director)

Director (Outside Director)

44

Directors, Audit & Supervisory Board Members,
and Executive Officers (As of June 25, 2019)
Atsushi Murai

Yukiyasu Aoyama

Ikuji Kayaki

Chairman and Representative Director
Chief Executive Officer (CEO)President and Representative Director
Senior Executive President
Chief Operating Officer (COO)

Vice President and Representative Director
Senior Executive Vice President
Head of ALSOK In-house Company
Chief Officer of Business Promotion Affairs
East Japan Area
Corporate Customer
Business Promotion in East Japan Area

Sep. 1995: Director-General, Chubu Regional Police Bureau(Resigned in Jun. 1996)
Jun. 1996: Deputy Governor, Deposit Insurance Corporation ofJapan (Resigned in Sep. 1997)
Sep. 1997: Joined the Company as a consultant
Jun. 1998: Senior Executive Vice President and Representative
Director
Jun. 2001: President and Representative Director
Jul. 2003: Chief Officer of Business Promotion Division
Apr. 2004: Chief Officer of Security Operations Division
Apr. 2011: Chief Executive Officer (Current)
Apr. 2012: Chairman and Representative Director (Current)

Jul. 2006: Director-General, Customs and Tariff Bureau,
Ministry of Finance Japan (Resigned in Jul. 2008)
Aug. 2008: Joined the Company as Senior Executive Officer,
Chief Officer of Security Operations Division
Apr. 2009: In charge of Human Resources, Security
Operations, and Corporate Ethics
Jun. 2009: Executive Vice President and Representative
Director
Apr. 2010: Senior Executive Vice President and Representative
Director
Apr. 2011: Chief Operating Officer (Current)
Apr. 2012: President and Representative Director (Current)
Senior Executive President (Current)

Apr. 1982: Joined the Company
Apr. 2011: Chief Officer of Regional Division (Ⅳ)
Apr. 2012: Executive Officer
Apr. 2014: Deputy Chief Officer of Security Operations
In charge of Structural Reform(Transportation Security Services)
Apr. 2015: Senior Executive Officer
Chief Officer of Security Operations
Jun. 2017: Director and Senior Executive Officer
Apr. 2018: Executive Vice President and Representative
Director (Current)
Head of ALSOK In-house Company (Current)
In charge of East Japan (Current)
Deputy Chief Officer of Business Promotion
Affairs in charge of Corporate Customers
Apr. 2019: Vice President and Representative Director(Current)
Senior Executive Vice President (Current)
Chief Officer of Business Promotion Affairs
in charge of Corporate Customers (Current)
In charge of Business Promotion in East
Japan Area (Current)(Term of office as Chairman of the All Japan Security Service
Association)
May 2006 to May 201045

(Term of office as Chairman of the All Japan Security Service
Association)
Jun. 2014 to Jun. 2019

Hirohisa Hokari

Tsuyoshi Murai

Shigeki Nomura

Director
Executive Vice President
Deputy Chief Officer of Business Promotion Affairs
Chief Officer of International Affairs
International Affairs
Business Planning & Management
Sales Promotion
Financial Affairs

Director
Executive Vice President
Human Resources
General Affairs/PR
Tokyo 2020 Olympic and Paralympic Games Promotion
Affairs in Charge of Promotion
Corporate Ethics
Compliance
Risk Management
Information Assets Management

Director
Senior Executive Officer
Deputy Chief Officer of Business Promotion Affairs
West Japan Area
Business Promotion in West Japan Area

Apr. 2010: Director-General of Operations Department at Bankof Japan (Resigned in Jun. 2011)
Jun. 2011: Joined the Company as Executive Officer
In charge of Business Planning and Financial
Institution
Marketing & Sales Promotion
General Manager of Business Planning Department
Feb. 2012: Senior Executive Officer
Deputy Chief Officer of Business Promotion Affairs(Current)
In charge of Business Planning & Management
Apr. 2012: In charge of Financial Institution Services andTransportation Security Services
Apr. 2014: In charge of General Affairs/Corporate Planning,
Financial Institution Services, Compliance, Risk
Management, and Information Asset Management
Jun. 2014: Director and Senior Executive Officer
Apr. 2016: In charge of Corporate Planning & Administration,
Strategic Business, Business Planning &Management (Current) and Financial Affairs (Current)
Apr. 2018: Executive Vice President and Director (Current)
In charge of Sales Promotion (Current)
Apr. 2019: In charge of International Affairs (Current)
Chief Officer of International Affairs (Current)

Jul. 1997: Joined the Company
Jun. 2007: Chief Officer of Home Marketing Division
Apr. 2010: Executive Officer
Chief Officer of Regional Division ( Ⅰ )Feb. 2011: In charge of General Property Management
Mar. 2011: President and Representative Director, Japan FacilioCo., Ltd. (Seconded, resigned in Mar. 2014)
Apr. 2014: Senior Executive Officer
Deputy Chief Officer of Business Promotion Affairs
In charge of Business Planning & Management andRegional Financial Institution Services
Apr. 2016: In charge of Human Resources (Current) andCorporate Ethics (Current)
Jun. 2016: Director and Senior Executive Officer (Current)
Apr. 2018: In charge of General Affairs/PR (Current),
Compliance (Current), Risk Management (Current)
and Information Assets Management (Current)
Chief Officer of Tokyo 2020 Olympic and Paralympic
Games Promotion Affairs
May 2018: In charge of Central Japan Area
Deputy Chief Officer of Business Promotion Division
In charge of Business Promotion in Central Japan
Area
Apr. 2019: Executive Vice President and Director (Current)Tokyo 2020 Olympic and Paralympic
Games Promotion Affairs in charge of Promotion(Current)

Apr. 1984: Joined the Company
Apr. 2011: General Manager of Human Resources
Department
Jun. 2011: Executive Officer
In charge of Human Resources
Apr. 2014: Senior Executive Officer
In charge of Central Japan Area
Deputy Chief Officer of Business Promotion
Affairs
In charge of Business Promotion in Central
Japan Area
Chief Officer of Regional Division (Ⅲ)
Apr. 2017: Chief Officer of Regional Division (Ⅶ)
Jun. 2017: Director and Senior Executive Officer(Current)
May 2018: In charge of West Japan Area
Deputy Chief Officer of Business Promotion
Affairs
In charge of Business Promotion in Kansai
Area
Apr. 2019: Deputy Chief Officer of Business Promotion
Affairs (Current)
In charge of Business Promotion in WestJapan Area

Masato Yagi

Motohisa Suzuki

Director
Senior Executive Officer
Chief Officer of Regional Division ( Ⅰ )Deputy Chief Officer of Business Promotion Affairs
Metropolitan Area

Director
Senior Executive Officer
Chief Officer of Tokyo 2020 Olympic and Paralympic Games
Promotion Affairs
Security Operations
Structural Reform (Transportation Security Services)

Apr. 1979: Joined the Company
Apr. 2011: Chief Officer of Regional Division (Ⅶ)
Apr. 2012: Executive Officer
Apr. 2015: Chief Officer of Regional Division (Ⅰ) (Current)
Apr. 2016: Senior Executive Officer
Apr. 2018: In charge of Metropolitan Area (Current),
Deputy Chief Officer of Business Promotion
Affairs (Current)
Jun. 2018: Director and Senior Executive Officer (Current)

Jan. 2015: Director of Traffic Bureau, National Police Agency(Resigned in Jan. 2016)
Apr. 2016: Joined the Company as Senior Executive Officer(Current)
In charge of General Affairs/PR and Procurement
Second in charge of Security Operations
In charge of HOME ALSOK, Compliance, Risk
Management and Information Asset Management
Deputy Chief Officer of Business Promotion Affairs
Apr. 2018: In charge of Security Operations (Current)
In charge of Structural Reform (Transportation
Security Services) (Current)
Deputy Chief Officer of Tokyo 2020 Olympic andParalympic Games Promotion Affairs
Apr. 2019: Chief Officer of Tokyo 2020 Olympic and Paralympic
Games Promotion Affairs (Current)
Jun. 2019: Director and Senior Executive Officer (Current)Masakazu Iwaki

Seiei Ono

Hideharu Kadowaki

Director (Outside Director)

Director (Outside Director)

Director (Outside Director)

Jun. 2010: Representative and Executive Vice President,
Nippon Steel Corporation (Currently NIPPONSTEEL CORPORATION, resigned in Mar. 2014)
Apr. 2014: Member of the Board, NIPPON STEEL &SUMITOMO METAL CORPORATION(Currently NIPPON STEEL CORPORATION,
resigned in Jun. 2014)
Jun. 2014: Executive Advisor, NIPPON STEEL &SUMITOMO METAL CORPORATION
Jun. 2016: Joined the Company as Outside Director(Current)
Jul. 2016: Advisor, NIPPON STEEL & SUMITOMO METALCORPORATION (Currently NIPPON STEELCORPORATION, resigned in Jun. 2017)

Apr. 2009: Executive Vice President, Mitsubishi Corporation(Resigned in Mar. 2013)
Apr. 2010: President, Mitsubishi International Corporation(Resigned in Mar. 2012)
Apr. 2012: Regional CEO, North America (Concurrently)
President, Mitsubishi Corporation (Americas)(Resigned in Mar. 2013)
Dec. 2013: Executive Vice President and Representative
Director, Mitsubishi Research Institute, Inc.
Dec. 2014: Executive Vice President and Representative
Director, Mitsubishi Research Institute, Inc.
(Resigned in Dec. 2016)
Dec. 2016: Executive Advisor, Mitsubishi Research Institute,
Inc. (Resigned in Dec. 2017)
Jun. 2017: Joined the Company as Outside Director(Current)

Apr. 2001: Representative Director, Senior Managing Director,
and Senior Managing Executive Officer, Sumitomo
Mitsui Banking Corporation (Resigned in Nov. 2002)
Dec. 2002: Representative Director and Senior Managing
Director, Sumitomo Mitsui Financial Group, Inc.
Jun. 2003: Deputy President and Representative Director,
Sumitomo Mitsui Financial Group, Inc.
(Resigned in Mar. 2004)
Jun. 2004: Chairman, The Japan Research Institute, Limited(Resigned in Jun. 2008)
Jun. 2008: Special Adviser and Senior Fellow, The Japan
Research Institute, Limited (Current)
Jun. 2018: Joined the Company as Outside Director (Current)

Toyoaki Ando

Akira Kono

Shinichiro Nakano

Director (Outside Director)

Audit & Supervisory Board Member

Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)

Jun. 2009: Executive Officer, Tokio Marine & Nichido Fire
Insurance Co., Ltd.
Jun. 2011: Managing Executive Officer, Tokio Marine &Nichido Fire Insurance Co., Ltd.
Jun. 2013: Managing Director, Tokio Marine & Nichido Fire
Insurance Co., Ltd. (Resigned in Mar. 2015)
Apr. 2015: Advisor, Tokio Marine & Nichido Fire InsuranceCo., Ltd. (Resigned in Jun. 2015)
Jun. 2015: Managing Director, General Insurance Rating
Organization of Japan (Current)
Jun. 2019: Joined the Company as Outside Director(Current)

Apr. 1980: Joined the Company
Jun. 2012: General Manager of Business Management
Department
Apr. 2014: General Manager of Human Resources
Department
Apr. 2016: Executive Officer, in charge of Human
Resources
Apr. 2017: Chief Officer of Regional Division (V)Jun. 2019: Standing Audit & Supervisory Board Member(Current)

Jun. 2008: General Manager of Risk Management Division,
The Norinchukin Bank
Jun. 2012: General Manager of Planning Management Division,
The Norinchukin Bank
Jun. 2014: Managing Director, The Norinchukin Bank
(Resigned in Mar. 2019)
Director, Norinchukin Value Investments Co., Ltd.
(Resigned in Mar. 2018)
Director, The Norinchukin Trust & Banking Co., Ltd.
(Resigned in Mar. 2019)
Auditor, Kyodo Housing Loan Co., Ltd.
(Resigned in Jun. 2019)
Apr. 2019: Standing Advisor, The Norinchukin Bank
(Resigned in Jun. 2019)
Jun. 2019: Joined the Company as Outside Audit & Supervisory
Board Member (Current)

Takeshi Oiwa

Makoto Uenoyama

Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)

Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)

Apr. 2007: Managing Executive Officer, Sompo Japan
Insurance Inc. (Currently Sompo Japan
Nipponkoa Insurance Inc.)
Jun. 2007: Director and Managing Executive Officer, Sompo
Japan Insurance Inc. (Currently Sompo Japan
Nipponkoa Insurance Inc.)
Jun. 2010: Director and Senior Managing Executive Officer,
Sompo Japan Insurance Inc. (Currently Sompo
Japan Nipponkoa Insurance Inc.)
Jan. 2011: Deputy President and Director, Sompo Japan
Insurance Inc. (Currently Sompo Japan Nipponkoa
Insurance Inc., resigned in Mar. 2011)
Apr. 2011: Audit & Supervisory Board Member, Nippon
Export and Investment Insurance(Resigned in Mar. 2017)
Jun. 2011: Joined the Company as Outside Audit &Supervisory Board Member
Jun. 2017: Joined the Company as Standing Audit & Supervisory
Board Member (Outside)
Jun. 2019: Joined the Company as Outside Audit & Supervisory
Board Member (Current)

Jun. 2007: Director, Matsushita Electric Industrial Co. Ltd.
(Currently Panasonic Corporation)
Apr. 2010: Managing Director, Panasonic Corporation(Resigned in Jun. 2012)
Jun. 2012: Managing Executive Officer, Panasonic
Corporation (Resigned in Mar. 2013)
Apr. 2013: Corporate Advisor, Panasonic Corporation(Resigned in Mar. 2015)
Jun. 2013: Joined the Company as Standing Audit & Supervisory
Board Member (Outside)
Apr. 2015: Associate, Panasonic Corporation (Current)
Jun. 2017: Joined the Company as Outside Audit & Supervisory
Board Member (Current)

Executive Officers
Kazuhide Shigemi

Takashi Kumagai

Koji Kishimoto

Kazumi Suzuki

Norihiko Mizutani

Senior Executive Officer
Corporate Planning &Administration
Strategic Business

Senior Executive Officer
Deputy Chief Officer ofBusiness Promotion Affairs
Long-term CareManagement Company
HOME ALSOK
Second in Charge of R&D
Engineering Affairs

Senior Executive Officer
Financial & Accounting
Internal Control
Procurement

Senior Executive Officer
R&D Engineering
Affairs

Senior Executive Officer
Executive Officer
Deputy Chief Officer of
Human Resources
Business Promotion
Affairs
Central Japan Area
General Property
Management and Installation
Business Promotion in Central
Japan Area
Business Promotion of General
Property Management andInstallation

Naoki Hyakutake

Seiji Ono

Yasuhiro Yoshimoto

Yoshio Kumazaki

Ken Takahashi

Yoshiharu Nagashima

Atsushi Komori

Executive Officer
Business Planning andSales Promotion

Executive Officer
General Property
Management and Fire
Protection Services

Executive Officer
Chief Officer of Regional
Division (Ⅲ)

Executive Officer
Chief Officer of Regional
Division (Ⅴ)

Executive Officer
Chief Officer of Regional
Division (Ⅵ)

Executive Officer
Chief Officer of Regional
Division (Ⅶ)

Hiroyoshi Yoshida
Executive Officer
Tokyo 2020 Olympic
and Paralympic Games
Promotion Affairs

46

Financial Section
Management Indexes

2009

2010

2011

2012

Net sales

285,004

278,579

279,272

304,723

Cost of sales

215,711210,097

209,364

232,812Gross profit

69,292

68,482

69,90871,910

Selling, general and administrative expenses

59,34959,211

59,555

61,100Operating income

9,943

9,270

10,352

10,810Ordinary income

10,63010,81911,765

12,558

Profit attributable to owners of parent

4,224

4,563

4,706

3,903

Gross profit margin (%)

24.3

24.6

25.0

23.6

Operating income margin (%)

3.5

3.3

3.7

3.5
4.1

Fiscal years ended March 31

Profit and loss (Millions of yen)

Profitability

Ordinary income margin (%)

3.7

3.9

4.2

Return on assets (ROA) (%)

3.6

3.8

4.2

4.4

Return on equity (ROE) (%)

3.1

3.3

3.3

2.7

3.0

2.3

1.4

1.4

47.7

50.9

50.3

51.3

＊

EV/EBITDA (Times)
Stability

Equity capital ratio (%)

29.5

39.4

32.0

34.8

66,24751,31849,311

39,270

20.7

24.0

20.1

34.1

Total asset turnover ratio (Times)

1.0

1.0

1.0

1.1

Shareholders’ equity turnover ratio (Times)

2.1

2.0

2.0

2.1

Tangible fixed assets turnover ratio (Times)

5.0

4.9

4.9

5.2

1,364.33

1,397.90

1,421.67

1,446.93

41.90

45.39

46.82

38.83

Price-book value ratio (Times)

0.6

0.8

0.6

0.7

Price earnings ratio (Times)

20.2

23.9

19.3

25.3

Dividends per share (Yen)

20

20

20

20
51.5

Equity capital ratio on market-value basis (%)
Interest-bearing liabilities (Millions of yen)Interest coverage ratio (Times)
Efficiency

Per share information
Net assets per share (Yen)Profit attributable to owners of parent per share (Yen)Consolidated dividend payout ratio (%)

47.7

44.1

42.7

Closing stock price (Yen)

845

1,083

905

982

26,96027,322

27,79027,868

11.9

12.3

12.7

13.3

—

92.2

90.2

93.3

—

40,871

39,96838,022Other information
Number of employees (Consolidated)
Average number of years of continuous service (Non-consolidated)
Percentage of employees returning to work after childcare leave(Non-consolidated, total for male and female employees)
CO2 emissions volume (Non-consolidated, t-CO2)＊

Method of calculation for EV/EBITDA is as follows:
EV (Enterprise value) = Market capitalization + Interest-bearing liabilities – Short-term liquidity (Cash and deposits + Short-term investments securities)
EBITDA (Earnings before interest, tax, depreciation and amortization) = Operating income + Depreciation and amortization

Note: Based on the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 2018), financial information for FY2018 and subsequent years has also been restated.

47

2013

2014

2015

2016

2017

2018

2019

315,564

328,209

365,749

381,818

413,343435,982

242,410

248,900

276,116

282,880

310,704

330,493

73,15379,30889,632

98,937

102,639

105,489443,535
334,197
109,338
77,05732,28033,881
22,26961,36360,37566,66069,901

74,21775,378

11,79018,932

22,971

29,03628,422

30,111

14,741

20,74524,70030,66730,30931,913

8,574

10,955

13,534

17,86818,33019,344

23.2

24.2

24.5

25.9

24.8

24.2

3.7

5.8

6.3

7.6

6.9

6.9

4.7

6.3

6.8

8.0

7.3

7.3

5.1

6.5

6.9

8.5

8.2

8.2

5.7

7.0

7.8

9.9

9.7

9.3

2.7

5.3

10.1

13.4

8.7

10.7

52.1

46.2

48.4

51.9

51.0

55.0
134.3

46.5

63.5

110.1

175.4

108.2

37,45571,66673,69947,21065,59952,658

36.9

36.4

28.5

30.1

54.2

25.8

1.1

1.0

1.0

1.1

1.1

1.1

2.1

2.1

2.1

2.1

2.2

2.1

5.4

5.2

5.4

5.3

5.1

4.9

1,536.30

1,574.74

1,800.15

1,805.09

1,956.25

2,155.74

85.30

108.99134.65177.77182.37191.93

0.9

1.4

2.3

3.4

2.1

2.4

16.1

19.9

30.4

34.3

22.8

27.5

24.7
7.3
7.6
8.4
9.9
8.7
56.8
119.0
47,412
18.1
1.1
2.0
5.0
2,302.38
219.98
2.1
21.9
66
30.0
4,820

55

60

30.2

31.3

6,100

4,155

5,260

31,221

31,446

36,69337,519

14.4

14.9

15.4

15.9

16.4

97.6

92.4

96.6

93.7

91.3

98.3

37,417
16.8
98.1

38,587

41,377

39,21237,39036,64936,291

34,238

25

30

38

50

29.3

27.5

28.2

28.1

1,373

2,164

4,095

28,05428,091

13.8

48

Financial Section
Management’s Discussion and Analysis
Analysis of Business Performancefor safety and security. The ALSOK Group is planning to introduce

Operating Environment

allowing all on-site staff to work with the “eyes of security guards” andConsolidated Financial Results for the Fiscal Year Ended

form networks as security communities. These systems, which thesystems that support the safe and secure execution of events byMarch 31, 2019 (April 1, 2018–March 31, 2019)

Company aims to implement at the Rugby World Cup 2019 andDuring the year under review, the Japanese economy sustained a

Olympic and Paralympic Games Tokyo 2020, include ALSOK Zone

modest recovery overall. However, the business sentiments of large

Security Management, which provides comprehensive andcompanies took a turn for the worse due to deceleration in thethree-dimensional monitoring using various ICT equipment, such as

Chinese economy and stagnation in IT demand that have continued

sensors, surveillance cameras, and robots, and ALSOK Hyper Security

since the New Year. In addition, a sense of uncertainty regarding future

Guard, security guards who are also armed with ICT equipment,

business conditions continues to spread, spurred on by trade conflicts

including wearable cameras. Moving forward, the Company will aim to

between the United States and China, deceleration in the Chinese

develop its services in order to provide swifter and more wide-ranging

economy, confusion in the European economy centered on concerns

security capabilities and achieve an optimized cost efficiency.

regarding the United Kingdom’s decision to leave the European Union,

As a result, consolidated net sales rose 1.7% year on year,

geopolitical risks related to conditions on the Korean Peninsula andto ¥443,535 million; operating income grew 7.2%, to ¥32,280 million;in the Middle East, and unstable financial markets.

ordinary income rose 6.2%, to ¥33,881 million; and profit attributableto owners of parent expanded 15.1%, to ¥22,269 million.

With regard to public safety in Japan, the number of reported
crimes continues to decrease yearly. However, people’s everyday lives

Sales by Business Segment

continue to be affected by crimes, including malicious crimes andspecial-case scams targeting senior citizens and differently abledindividuals, such as theft through telephone fraud; stalking; crimes

During this fiscal year, the Company reorganized its reportable

aimed at women and children; and automobile attacks of pedestrians

segments and revised its method of allocating certain earnings andin busy commercial areas. In addition, risks surrounding society

expenses. For purposes of year-on-year comparison, operating

at large are diversifying and include successive cases of natural

performance for the preceding fiscal year has been restated to match

disasters, international terrorism, cybercrime, and information leaks.

the revised categories and allocation methods.

Operating Results

Security Services

In this environment, the ALSOK Group formulated its Medium-Term

Electronic Security Services

Management Plan, Grand Design 2020, in May 2018. In accordanceWithin the Security Services segment, the Company has provided

with this plan, the Company is aiming to become an integrated safety

services for corporate clients that offer solutions that respond to theand security solutions provider that supports the safety and security

varied needs of each of these clients through its Electronic Securityof customers and society. It is also striving for further evolution andServices business. These services include ALSOK-ST (read as

deepening of its Security Services business and other related“ALSOK-Standard”), a standard security system equipped withbusinesses in order to respond to each customer’s and social needs

monitoring and management systems designed to deal with matters

Net Sales

Ordinary Income/Ordinary Income Margin

Fiscal years ended March 31

Fiscal years ended March 31

Millions of yen

480,000¥443,535 million

360,000(%)

Millions of yen

12.0

40,000(%)

12.0¥33,881 million
9.0

30,000

9.0

7.6% 9.0
240,000

6.0

20,0006.0

120,000

3.0

10,000

3.0

0
FY

15

16

17

18

19

0

0
FY

15

Ordinary Income

49

16

17

Ordinary Income Margin

18

19

0

such as intrusions, fires, and equipment issues, and ALSOK-GV (readsuch as retail stores and restaurants for the Cash Deposit andas “ALSOK G-five”), which offers more than simply standard functions;

Dispenser Machine On-Line System, which reflected progress

The additional functionality this service provides allows for remotein work-style reforms and a continuing labor shortage.

operation of equipment through the Web, access to various

As a result of these factors, sales in the Security Services segment

security-related information, including information related to when

expanded 1.6%, to ¥349,707 million, while operating income grew

employees arrive at and leave work, and image monitoring. In addition

5.0%, to ¥34,295 million.

to these services, the Company is also proceeding with initiatives
aimed at offering ALSOK-G7, which is equipped with an image

General Property Management and Fire Protection Services

monitoring service that utilizes advanced image analysis technology.

In the General Property Management and Fire Protection Services

In services for individual customers, sales were positive for both Home

segment, the Company worked to provide comprehensive

Security Basic, the Company’s standard model service for private

management services related to the maintenance, management, andhomes, and for HOME ALSOK Premium, which offers even more

operation of various facilities through enhanced intra-Group

fine-tuned functionality to meet the diverse needs of household

coordination, which led to strong performance in orders for generalcustomers and various household environments. In addition, theproperty management and cleaning services. As a result, sales rose

Company is working to promote HOME ALSOK MIMAMORI

1.5%, to ¥62,952 million, and operating income jumped 12.5%, to

SUPPORT, a service that watches over the elderly and contributes to¥6,404 million.

a society characterized by falling childbirths and an aging population,and its MIMAMORI Tag Service, which supports the construction ofLong-Term Care Services

regional watch over networks.

In the Long-Term Care Services segment, the Company worked to
improve care worker productivity in the wake of labor shortages, as

Stationed Security Services

well as occupancy ratios, and experienced positive impact from M&A.

In the Stationed Security Services business, outsourcing of security

These factors led sales to rise 3.3%, to ¥26,599 million, and operating

operations in manufacturing and other sectors is increasing inincome to soar 129.9%, to ¥272 million.

the wake of labor shortages while the need for security in newly
constructed buildings is growing stronger as urban redevelopment

Analysis of Individual Items

progresses. In addition, upward trends in prices are spreading,In the year under review, net sales increased ¥7,552 million, or 1.7%,

reflecting rising personnel expenses. Furthermore, the Company

year on year, to ¥443,535 million.

developed and launched its new security robot, REBORG®-Z, which

Cost of sales was ¥334,197 million, primarily due to a ¥138 million
increase in labor costs and a ¥3,911 rise in miscellaneous expenses,

enhances and streamlines stationed security services.

which included subcontract expenses.
Transportation Security Services

Selling, general and administrative expenses were ¥77,057 million

In the Transportation Security Services segment, outsourcing orders

and were mainly the result of increases of ¥224 million in welfare

for comprehensive management of ATM-related and other matters at

expenses, ¥206 million in rent expenses, and ¥163 million in

financial institutions performed strongly, as did orders from businesses

amortization of goodwill.

Number of Electronic Security Services Contracts

Number of Contracts for Individual Users

Fiscal years ended March 31

Fiscal years ended March 31

Contracts(%)

949,858 contracts12.0

1,000,000

750,000

9.0

500,000

6.0

Contracts

500,000

428,916 contracts

400,000

300,000

200,000
250,000

0
FY

3.0

15

16

17

18

19

0

100,000

0
FY

15

16

17

18

19

50

Financial Section

March 31, 2020. Success under these difficult conditions will require

Ordinary income rose by ¥1,967 million, or 6.2%, to ¥33,881

that we promote the further differentiation of our products and services.

million, accompanying an increase in operating income.
Extraordinary income increased due to ¥829 million in gain on sales

ALSOK has always been a company that protects the bodies, lives,of noncurrent assets and ¥79 million in reversal of provision for loss on

and assets of its customers, and it has continued to build upon its

dissolution of the employees’ pension fund.

security services track record since its establishment. In addition to

Extraordinary loss rose as a result of a ¥286 million increase in loss

develop businesses in peripheral fields going forward. At the sameon valuation of investment securities.
In line with the growth in ordinary income, profit attributable totime, we will strive to provide new products and services that utilize

owners of parent increased ¥2,924 million, or 15.1%, to ¥22,269

cutting-edge technologies, endeavor to bolster productivity, andmillion.

achieve sustainable growth for the Group.

Comprehensive income decreased by ¥3,167 million, or 12.4%,

Consequently, the ALSOK Group forecasts net sales of ¥465,000

to ¥22,346 million. This was due to a ¥4,609 million decrease inmillion for the fiscal year ending March 31, 2020, up 4.8% year on

remeasurements of defined benefit plans, net of tax, and a decline

year. We expect operating income to grow 7.2%, to ¥34,600 million,of ¥1,176 million in valuation difference on available-for-sale securities,

ordinary income to rise 7.7%, to ¥36,500 million, and profit attributable

which combined to offset an increase of ¥2,717 million in net income.

to owners of parent to expand 3.3%, to ¥23,000 million.

Forecast for the Fiscal Year Ending March 31, 2020

Financial Position

In the fiscal year ending March 31, 2020, we expect the Japanese
economy to continue its moderate recovery, thanks to the effects ofAssetsvarious government measures. However, we will need to pay careful

Total assets at the end of the year under review increased ¥13,477

attention to factors such as changes in trade issues and overseas

million, or 3.4%, from the previous fiscal year-end, to ¥410,113 million.

economies, uncertainty regarding government policies, fluctuation in

Total current assets rose ¥13,513 million, or 6.9%, to ¥208,047

financial and exchange markets and trends in corporate businessmillion, while total noncurrent assets decreased only slightly by ¥35

confidence.

million, or 0.0%, to ¥202,066 million.

In addition to conventional security needs, we expect the security

The increase in current assets was primarily caused by increases

industry to see growing needs for safety and security in response toof ¥6,302 million in cash and deposits, ¥3,831 million in cash forchanges in internal and external environments. We also anticipate

Transportation Security Services, and ¥2,640 million in notes andexpanding business opportunities due to increased needs arising fromaccounts receivable—trade.

the accelerated development of both tangible and intangible social

The decrease in noncurrent assets occurred despite a ¥937 million

infrastructure as part of preparations for large-scale events. On theincrease in net defined benefit assets that was due to a rise inother hand, increasingly severe labor shortages and decreases invaluation of assets under management and a ¥2,952 million expansion

earnings among financial institutions resulting from Japan’s negativein other intangible assets, including software in progress, which grewinterest rate policy are forecast to harshen the operating environment

as a result of investment in a backbone system slated for completion

surrounding the security services market during the fiscal year endingin an upcoming fiscal year. These positive factors were offset by a

Total Assets/ROA

Total Net Assets/ROE

Fiscal years ended March 31

Fiscal years ended March 31¥410,113 million %Millions of yen

400,000

12.0

300,000

8.4%

200,0000FY

9.0¥257,098 million

Millions of yen

250,000%

15.0

200,000

12.0

9.9%

150,000

9.0

6.0

100,000

3.0

15

Total Assets

51

growing its security services operations, the entire Group will actively

16
ROA

17

18

19

0

100,000

6.0

50,000

3.0

0
FY

15

Total Net Assets

16
ROE

17

18

19

0

¥2,029 million drop in machinery, equipment and vehicles and a¥2,019 million slide in long-term deposits and other items includedin the “other” category underneath investments and other assets.

Cash flows from financing activities

Net cash used in financing activities was ¥10,934 million (down 18.6%
year on year). Major uses of cash were ¥6,176 in cash dividends paid
(up 6.9%) and ¥3,856 million in repayments of lease obligations (down

Liabilities

12.8%).

Total liabilities at the end of the year under review decreased ¥2,238
million, or 1.4%, from the previous fiscal year-end, to ¥153,015 million.

Dividend Policies

Total current liabilities rose ¥10 million, or 0.0%, to ¥92,505 million,

The ALSOK Group considers the return of earnings to shareholders

and total noncurrent liabilities fell ¥2,248 million, or 3.6%, to ¥60,509

to be a top management priority, and its basic policy is to distribute

million.

profits to shareholders based on its operating results while fortifying

The rise in current liabilities occurred due to increases of ¥1,973

internal reserves. The Group uses internal reserves for investments inmillion in accounts payable—other and ¥709 million in accrued

R&D required for future growth and development, qualitative upgrades

consumption taxes, despite a ¥2,114 million drop in short-term loans

to information systems, and capital investment for new businesses aspayable.

it works to improve corporate value.

Noncurrent liabilities decreased due to a ¥2,240 million decline inlong-term loans payable.

Also, it is the policy of the ALSOK Group to issue dividends fromretained earnings twice a year as interim and year-end dividends. The
year-end dividend is decided at the General Shareholders’ Meeting,

Net Assets
Total net assets as of March 31, 2019, were up ¥15,716 million, or
6.5%, from the previous fiscal year-end, to ¥257,098 million.

while the interim dividend is decided by the Board of Directors.
Accordingly, for the fiscal year ended March 31, 2019, in
consideration of results in the year under review, results forecasts forthe current fiscal year, and capital investment plans, the Company paid

Cash and Cash Equivalents

an annual dividend of ¥66.00 per share, including an interim dividend

The balance of cash and cash equivalents (hereafter referred to asof ¥31.00 per share, for a consolidated payout ratio of 30.0%.

“cash”) at March 31, 2019, was ¥43,435 million, up 7.3% year on
year.

Risk Information
In relation to the ALSOK Group's business and accounting

Cash flows from operating activities

circumstances, the following items can potentially have significant

During the year under review, net cash provided by operating activities

effects on the judgment of investors. Future-related information

amounted to ¥28,771 million, 12.8% more than in the preceding fiscal

mentioned below was deemed appropriate by the Group as of June

year. Principal sources of cash were ¥34,474 million in income

25, 2019, the date on which the 54th Securities Report was filed.

before income taxes (up 8.3% year on year) and ¥15,077 million in
depreciation and amortization (up 6.7%). Major uses of cash were

1. Sales Depending on a Specific Business Sector¥11,237 million in income taxes paid (down 3.1%), a ¥7,730 increase

Sales from the financial institutions sector accounted for approximately

in assets and liabilities for Transportation Security Services (down

20% of the Group’s total sales in the fiscal year ended March 31,

43.3%), and a ¥2,075 million increase in notes and accounts

2019. Consequently, trends in the economic environment surrounding

receivable—trade (down 4.6%).

financial institutions, including significant price cuts and the possible

Decrease (increase) in assets and liabilities for Transportation

cancellations of existing security service contracts due to the

Security Services includes the increases and decreases in cash forelimination or consolidation of branch locations, can have aTransportation Security Services and funds procured for Transportationconsiderable effect on the Group’s operating performance. However,

Security Services that are included in short-term loans payable.

the Group will continue to contribute to building platforms that support
financial infrastructure while aggressively advancing sales promotion

Cash flows from investing activities

toward other business sectors in order to find new clients.

Net cash used in investing activities totaled ¥14,911 million, down
22.0% from the preceding fiscal year. Major uses of cash were

2. Electronic Security Services Business¥11,360 million for the purchase of property, plant and equipment

Of the Group’s total sales, approximately 40% are dependent on(down 3.5%), ¥2,538 million for the purchase of intangible assets

the Electronic Security Services business. Should our responses to(down 6.6%), and ¥1,740 million for the purchase of shares oftechnological progress such as AI, 5G, and IoT and the accompanying

subsidiaries resulting in change in scope of consolidation (down 70.9%).

changes in business model fall behind the changes, the Group’s
operating performance could be negatively affected. For this reason,

52

Financial Section

the Group is working on the advancement of security models that

communications, devices, and other technologies.

actively use cutting-edge technologies.by developing next-generation
security services using image analysis technology and urban space

6. Management of Client Information

security with 5G.

In order to conclude a security service contract with clients, the Groupobtains a significant amount of information about them including their

3. Transportation Security Services

names, addresses and phone numbers of related parties, as well as

Should the need for cash transportation decline as the cashless trend

various information about the clients’ premises where security services

progresses in Japan, the Group’s operating performance could be

are to be provided, and utilizes that essential information for thenegatively affected. Even in such a situation, the Group is actively

execution of security services and business activities. If any problem,

developing products in line with the progress of a cashless society

whether inevitable or not, should arise, the Group may suffer forwhile expanding the scope of Transportation Security Services forunfavorable reputation and legal claim for damages. We, therefore,

valuables and others. The Group uses its own funds or funds financed

have managed client information properly through employee education

through overdrafts as cash to be used in the CD machines installed byrelated to regulations such as the Personal Information Protection Act

the subsidiaries of financial institutions in their business partners' storesand careful observation of subcontractors. These measures enable us

and offices or cash used to deposit advances for Cash Deposit

to avoid leaking, losing, or damaging personal information.

Machine On-Line System contracts. For this reason, though the Groupendeavors on the efficient operations of the fund, should there be an

7. Ensuring Human Resources

increase in interest rates associated with cash procured for theseIn a situation where the Group operates labor-intensive businesses

purposes, the Group must renegotiate the pricing conditions definedsuch as security services and long-term care and the working-age

in contracts between the Group and its clients.

population continues to decline in Japan, if the Group should fail tosecure high-quality human resources and therefore be unable to staff

4. Dependency on a Specific Equipment Supplierappropriately, its operating performance could be negatively affected.

The Group mostly depends on some companies for development andIn order to respond to these risks, the Group is striving to secureprovision of the center equipment installed in the Guard Centers.

human resources by promoting work-style reforms and improving labor

Should any difficulty arise in the provision of such center equipment

productivity while improving staff compensation and strengthening

due to natural disasters or other reasons, the normal operation of thethe recruitment system. In addition, we implement flexible personnel

Guard Centers could be affected. As for provision involving the center

management, such as promoting personnel exchanges throughout

equipment as well as main equipment used for the offer of Electronic

the Group for the purpose of revitalizing the organization and

Security Services, the Group enters into a master agreement fordeveloping employee skills, expanding job assignments of femalecommodity purchases to provide for anticipated quantities of items.

employees, and reinforcing multitasking. Furthermore, we are striving

Furthermore, the Group holds certain levels of spare items forto secure a high-quality workforce by adopting a system in which

maintenance to allow for emergencies.

retired employees with abundant work experience can work in
the Group for a long time after their retirement.

5. Adaptation to Changes in the Technological Environment
The development of new products and services utilizing AI, IoT, robots,

8. Legal Restrictions

and ICT technology are indispensable to the Group’s adequate

In order to provide our clients with various security and other services,

provision of security services, since we need to deal with “brutal and

the Group is subject to a variety of legal restrictions, including major

sophisticated crimes such as terrorism and cyberattack,” “ the rapidly

ones stated in the table below. Should any of these legal restrictions

aging population and declining population,” “heinous crimes andbe amended or abolished, or any new legal provisions established, thespecial-case scams preying on senior citizens, stalking crimes, andGroup’s operating performance could be affected.

crimes preying on children and women,” “natural disasters that wreak
great damage such as earthquakes, and typhoons,” and “aging ofsocial infrastructure.” Should our adaptation to technological progress
fall behind the changes in the technological environment, the Group’s
operating performance could be negatively affected. Therefore, the
ALSOK Group continues to make efforts in the development of
security-related equipment and advanced technologies such as AI,
IoT, and 5G with the aim of digital transformation. At the same time, we
work to avoid risk by staying abreast of the latest technology trends in53

Major Operation

Relevant Laws
Security Business Law

Electronic Security Services
Stationed Security Services
Transportation Security Services

Road Traffic Law
Act against Delay in Payment of Subcontract
Proceeds, Etc. to Subcontractors
Telecommunications Business Law
Radio Law

Electronic Security Services
General Property Management
and Fire Protection Services

Electronic Security Services

Competent Authorities, etc.
National Public Safety Commission
Japan Fair Trade Commission/
Small and Medium Enterprise Agency
Ministry of Internal Affairs and Communications

Construction Business Act

Ministry of Land, Infrastructure, Transport and Tourism

Act on Ensuring Fair Electric Business Practices

Ministry of Economy, Trade and Industry

Act for Promoting Proper Tendering andContracting for Public Works

Ministry of Land, Infrastructure, Transport and Tourism

Electrical Appliance and Material Safety Act

Ministry of Economy, Trade and Industry

The Specified Commercial Transaction Act

Ministry of Economy, Trade and Industry/
Consumer Affairs Agency

Consumer Contract Act

Consumer Affairs Agency

Truck Transport Business Law

Transportation Security Services
Other Services

Freight Forwarding Business Law

Transportation Security Services

Warehousing Business Law

Ministry of Land, Infrastructure, Transport and Tourism

Stationed Security Services

Act on Penal Detention Facilities and Treatment
of Inmates and Detainees

Ministry of Justice

Act on Special Districts for Structural Reform

Cabinet OfficeFire and Disaster Management Act

Ministry of Internal Affairs and Communications

Fire Prevention Ordinance

Each municipality

Pharmaceutical and Medical Device Act
Act on Maintenance of Sanitation in Building
Waste Disposal Act
General Property Management andFire Protection Services

Ministry of Land, Infrastructure, Transport and Tourism

Road Trucking Vehicle Law

Ministry of Health, Labour and Welfare
Ministry of the Environment

Building Lots and Buildings Transaction
Business Law
Architect Act

Ministry of Land, Infrastructure, Transport and Tourism

Act on Advancement of Proper
Condominium Management
Electricity Business Act
Act on the Securing of Safety
and the Optimization of Transaction ofLiquefied Petroleum Gas

Ministry of Economy, Trade and Industry

Long-term Care Insurance Act
Act on Social Welfare for the Elderly
Long-Term Care Services

The Act on Massage and Finger Pressure
Practitioners, Acupuncturists, Moxibustion
Practitioners, etc.
Correspondence Delivery Act
Worker Dispatching Act
Employment Security Act
Insurance Business Law
Financial Instruments and Exchange Act

Other Services

Ministry of Health, Labour and Welfare/
Each prefecture/Each municipality

Ministry of Internal Affairs and Communications
Ministry of Health, Labour and Welfare
Financial Services Agency

Act on Prevention of Transfer of Criminal Proceeds
Law About the Adequacy of Duties of the
Detective Business

National Public Safety Commission

Personal Information Protection Law

Personal Information Protection Commission

Act on Special Measures to Prevent andCorrect Shift for Consumption Tax

Japan Fair Trade Commission/Small and Medium
Enterprise Agency/Consumer Affairs Agency

Act against Unjustifiable Premiums andMisleading Representations

Consumer Affairs Agency

Antique Dealings Act

National Police Agency

54

Financial Section

9. Risk Related to Massive Disasters

items and developed a flexible nationwide response network. It also

Should a major earthquake occur, or there be wind and flood damage,

conducts periodic disaster prevention training and education and otherand following disasters such as long-term power failure occur, theprecautionary measures. The Group has located two data centers

Group’s networks or other operational infrastructure could stopeach in East Japan and West Japan in terms of business continuity,

functioning, which may disrupt its ability to provide security and otherand has made backup system by mutual monitoring as well as

services. Moreover, such disasters could damage the Group’sbuilding backup environment of important systems. For theassets, such as security equipment located on clients’ premises,

preparation in the occurrence of large-scale disaster, by taking

forcing the Group to repair or replace those assets, and the Group’s

measures in a phased manner, the Group works for further risk

operating performance or financial position could be adversely

aversion.

affected.
Therefore, the Group has developed a number of precautionary
measures based on its wealth of security-related experience andexpertise. It has formulated disaster response rules in accordance withdisaster response regulations, established a business continuity planand other response manuals, stockpiled necessary disaster prevention

55

Consolidated Statements of Income andConsolidated Statements of Comprehensive Income
Consolidated Statements of Income
Fiscal years ended March 31

Net sales
Cost of sales
Gross proﬁt
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Gain on sales of investment securities
Rent income
Gain from insurance claim
Share of profit of entities accounted for using equity method
Penalty income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of investment securities
Loss on retirement of noncurrent assets
Financing expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on sales of shares of subsidiaries
Gain on sales of noncurrent assets
Gain on bargain purchase
Reversal of provision for loss on dissolution of the employees’ pension fundTotal extraordinary income
Extraordinary loss
Loss on valuation of investment securities
Impairment loss
Loss on sales of noncurrent assets
Total extraordinary loss
Income before income taxes
Income taxes—current
Income taxes—deferred
Total income taxes
Net income
Proﬁt attributable to non-controlling interests
Proﬁt attributable to owners of parent

Millions of yen

2018

2019

435,982
330,493
105,489
75,37830,111

443,535
334,197
109,338
77,05732,280

176
613
86
311
87
1,292
300
942
3,810

180
656
29
307
124
1,263
316
1,194
4,071

987
1
198
295
525
2,008
31,913

1,588
9
254
298
318
2,470
33,881

1
―
―
―
―
1

17
1
829
9
79
937

1
73
―
74
31,841
11,366(473)
10,893
20,948
1,603
19,344

287
1
55
345
34,474
10,953(144)
10,80823,665
1,395
22,269Consolidated Statements of Comprehensive Income
Fiscal years ended March 31

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of deﬁned beneﬁt plans, net of tax
Share of other comprehensive income (loss) of associates accounted for using equity method
Total other comprehensive income (loss)
Comprehensive income(Contents)
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

Millions of yen

2018

2019

20,94823,665

56
(61)
4,462
108
4,566
25,514(1,119)
(72)
(146)
20
(1,318)22,34623,761
1,752

21,021
1,324

56

Financial Section
Consolidated Balance Sheets
Millions of yen

2018

2019

47,57368,71552,286
4,535
338
5,708
456
6,526
8,620
(226)

53,87572,54654,926
4,798
361
5,488
371
5,986
9,939
(247)

194,533

208,047

48,096(26,191)
21,905
136,429(114,244)
22,18522,74033,291(14,475)
18,815662
17,049(12,111)
4,937

48,385(25,840)
22,545
138,517(118,361)
20,15522,301
31,723(13,747)
17,976
1,243
18,190(12,970)
5,220

Total property, plant and equipment
Intangible assets

91,24689,442

3,207
21,108
5,996

3,158
20,952
8,948

Total intangible assets
Investments and other assets

30,31333,05942,597
337
8,447
1,679
4,250
10,695
12,913(380)

41,649
302
8,832
1,647
5,187
11,491
10,894(441)

80,542
202,102396,635

79,564
202,066
410,113

As of March 31

AssetsCurrent assets
Cash and deposits
Cash for Transportation Security Services
Notes and accounts receivable—trade
Lease receivables and investment assets
Short-term investment securities
Raw materials and supplies
Costs on uncompleted construction contracts
Advances paid
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in progress
Other
Accumulated depreciation
Other, net

Software
Goodwill
Other

Investment securities
Long-term loans receivable
Lease and guarantee deposits
Insurance funds
Net deﬁned beneﬁt asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

57Millions of yen
As of March 31

2018

2019

23,42014,435
3,176
24
22,762
4,511
5,769
3,762
2,189
118
12,32422,993
12,3202,948
1424,735
4,587
5,355
4,471
2,124
102
12,851

92,49592,505

23
8,493
21,993280
314
27,327
1,806
101
2,417

9
6,253
21,279312314
27,619
1,881
454
2,384

62,758155,253

60,509153,015

18,67534,243
171,161(1,069)18,67534,243
186,248(1,069)223,010238,097

7,358(5,286)4(6,850)(4,773)23,144
241,382396,635

6,315(4,281)(72)(6,978)(5,015)24,016
257,098
410,113

Liabilities
Current liabilities
Notes and accounts payable—trade
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
Accounts payable—other
Lease obligations
Income taxes payable
Accrued consumption taxes
Provision for bonuses
Provision for directors’ bonuses
Other
Total current liabilities
Noncurrent liabilities
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Net deﬁned beneﬁt liability
Provision for directors’ retirement beneﬁts
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities

Net Assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of deﬁned beneﬁt plans
Total valuation and translation adjustments
Non-controlling interests
Total net assets
Total liabilities and net assets

58

Financial Section
Consolidated Statements of Changes in Net Assets
Millions of yen

Balance as of April 1, 2017
Changes of items during the period
Dividends from surplus
Proﬁt attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stockReversal of revaluation reserve for land
Purchase of shares of consolidated subsidiaries
Capital increase of consolidated subsidiaries
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2018

Capitalstock

CapitalsurplusRetainedearnings

18,67531,485

157,596(5,780)19,344

3,422

Shareholders’ equity
Total
Treasury shareholders’stockequity(2,019)

(1)
952

(668)
4
―
18,675

2,758
34,243

13,564
171,161

205,737(5,780)19,344
(1)
4,374
―
(668)
4

950
(1,069)17,273223,010

Total valuationand translation
adjustments

Non-controllinginterests

Total net
assets(9,114)25,607222,230(2,462)(2,462)
23,144(5,780)19,344
(1)
4,374
―
(668)
4
1,878
19,151
241,382

Accumulated other comprehensive income

Balance as of April 1, 2017
Changes of items during the period
Dividends from surplus
Proﬁt attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stockReversal of revaluation reserve for land
Purchase of shares of consolidated subsidiaries
Capital increase of consolidated subsidiaries
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2018

Valuationdifference on
available-for-salesecurities

7,306

51
51
7,358

Revaluation
reserve for land

(5,286)――(5,286)

Foreign currency Remeasurements
translation of defined benefit
adjustment
plans, net of tax

69

(64)
(64)
4

(11,204)

4,354
4,354
(6,850)

4,341
4,341
(4,773)

Millions of yen
Shareholders’ equity

Balance as of April 1, 2018
Changes of items during the period
Dividends from surplus
Proﬁt attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stockReversal of revaluation reserve for land
Purchase of shares of consolidated subsidiaries
Capital increase of consolidated subsidiaries
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2019

Capitalstock

CapitalsurplusRetainedearnings

Treasurystock

18,67534,243

171,161(1,069)(6,176)22,269(1,005)―
18,675―34,24315,087
186,248

(0)
0

Total
shareholders’equity223,010(6,176)22,269(0)0(1,005)――(0)(1,069)15,087238,097

Total valuationand translation
adjustments

Non-controllinginterests

Total net
assets(4,773)23,144

241,382871
871
24,016(6,176)22,269(0)0(1,005)――628
15,716
257,098

Accumulated other comprehensive income

Balance as of April 1, 2018
Changes of items during the period
Dividends from surplus
Proﬁt attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stockReversal of revaluation reserve for land
Purchase of shares of consolidated subsidiaries
Capital increase of consolidated subsidiaries
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2019

59

Valuationdifference on
available-for-salesecurities

7,358(1,042)(1,042)
6,315

Revaluation
reserve for land

(5,286)

1,005
1,005
(4,281)

Foreign currency Remeasurements
translation of defined benefit
adjustment
plans, net of tax

4

(76)
(76)
(72)

(6,850)

(128)
(128)
(6,978)

(242)
(242)
(5,015)

Consolidated Statements of Cash Flows
Millions of yen
Fiscal years ended March 31

Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net deﬁned beneﬁt liability
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ bonuses
Interest and dividends income
Interest expenses
Share of loss (profit) of entities accounted for using equity method
Loss (gain) on sales of noncurrent assets
Loss (gain) on retirement of noncurrent assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on valuation of derivatives
Decrease (increase) in notes and accounts receivable—trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable—trade
Decrease (increase) in net deﬁned beneﬁt asset
Decrease (increase) in assets and liabilities for Transportation Security Services
Other
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Income taxes refunded
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments for transfer of business
Purchase of shares of subsidiaries resulting in change in scope of consolidation
Purchase of shares of subsidiaries and associates
Decrease (increase) in short-term loans receivable
Payments of long-term loans receivableCollection of long-term loans receivable
Other
Net cash provided by (used in) investing activities
Net cash provided by (used in) ﬁnancing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Redemption of bonds
Purchase of treasury stock
Repayments of lease obligations
Cash dividends paid
Cash dividends paid attributable to non-controlling interests
Net cash provided by (used in) ﬁnancing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting from inclusion of subsidiaries in consolidation
Cash and cash equivalents at end of period

2018

2019

31,841
14,133
73
1,627
17
(329)
210
17
(790)
987
(1,292)
9
198
(87)
1
20
(2,175)
(323)
5,033
438
(13,630)
1,014
36,996
1,056(989)(11,591)
23
25,49634,474
15,077
1
1,791
80
45
(72)
(15)
(836)
1,588
(1,263)
(772)
254
(37)
286
6
(2,075)
309
(419)
(876)
(7,730)561
40,377
1,114(1,579)(11,237)
96
28,771

947(11,776)
22(2,718)(1,987)1,544(43)(5,973)
(108)
25
(45)
76
911
(19,125)(1,350)(11,360)
1,624(2,538)(1,048)1,143―(1,740)
―
(3)
(58)
105
314
(14,911)196
586(3,456)(54)(1)(4,420)(5,780)(500)(13,429)(7)(7,064)47,549―40,484

2,234
660(3,317)(24)(0)(3,856)(6,176)(453)(10,934)(6)
2,918
40,48432
43,43560

Financial Section
Breakdown of Sales/Number of Contracts
Net Sales by Service Type

Billions of yen

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Electronic Security Services

138.9

138.4

142.9

147.1

151.8

160.4

167.1

170.5

174.0

175.5

Stationed Security Services

70.6

71.3

71.3

73.8

77.2

88.4

93.9

100.4

110.0

111.9

Transportation Security Services
General Property Management
and Fire Protection Services1

46.8

47.6

49.8

50.8

51.0

52.3

54.6

56.1

60.2

62.2

―

17.0

36.6

40.6

44.8

58.3

54.9

57.8

61.9

62.9

―

―

―

―

―

―

7.5

24.9

25.7

26.5

Other Services

22.1

4.7

4.0

3.0

3.2

6.2

3.5

3.4

3.9

4.2

Total

278.5

279.2

304.7

315.5

328.2

365.7

381.8

413.3

435.9

443.5

Fiscal years ended March 31

Security Services

Long-Term Care Services2

1. General Property Management and Fire Protection Services was converted to a reportable segment in the fiscal year ended March 31, 2012, and accordingly net sales amounts for this segment are displayed separately from the fiscal year ended
March 31, 2011, and onward. Net sales amounts for fiscal years ended March 31, 2010, and prior are included under “Other Services.”
2. Long-Term Care Services was converted to a reportable segment in the fiscal year ended March 31, 2017, and accordingly net sales amounts for this segment are displayed separately from the fiscal year ended March 31, 2016, and onward.
Net sales amounts for fiscal years ended March 31, 2015, and prior are included under “Other Services.”

Net Sales by Client TypeFiscal years ended March 31

2010

Billions of yen

2011

2012

2013

2014

2015

2016

2017

2018

2019

Business corporations

163.1

160.9

178.4

186.5

196.7

224.9

234.3

244.9

263.6

271.2

Financial institutions

85.7

88.3

90.7

89.8

90.5

91.3

92.3

91.7

92.0

91.4

Public institutions

19.5

19.3

20.5

22.0

22.8

26.4

26.2

29.7

31.5

31.2

Individuals

10.1

10.6

14.9

17.1

18.0

22.9

28.9

46.8

49.0

49.7

Total

278.5

279.2

304.7

315.5

328.2

365.7

381.8

413.3

435.9

443.5

3

3. Sales of HOME ALSOK APARTMENT AND CONDOMINIUM PLAN and HOME ALSOK MIMAMORI SUPPORT have been included under “Individuals,” even for contracts in which the customer is a business corporation or government office.

Number of Contracts

Contracts

2011

2012

2013

2014

2015

2016

2017

2018

2019

Electronic Security Services 524,708

541,654580,263

630,977

677,672

803,601

854,083

888,955

922,928

949,858

Corporate Clients

388,853

396,580

406,261

422,676

440,028

463,053478,925

493,035

508,374

520,942

Individual Users

135,855

145,074

174,002

208,301

237,644

340,548

375,158

395,920

414,554428,916

2,785

2,866

2,934

3,020

3,227

3,597

3,871

4,213

4,357

4,485

Transportation Security Services 35,963
General Property Management―
and Fire Protection Services4

39,06548,284

51,69855,42059,134

62,14665,75572,45475,652

44,212

47,91354,90363,00473,89881,90889,67098,044104,254

―

―

―

―

―

―

12,804

22,62821,23425,364

Other Services

42,909

8,307

8,957

11,98913,72522,477

18,21722,28525,26325,896

Total

606,365

636,104

688,351

752,587

813,048962,707 1,033,029 1,093,506 1,144,280 1,185,509

Fiscal years ended March 31

2010

Security Services

Stationed Security Services

Long-Term Care Services5

4. General Property Management and Fire Protection Services was converted to a reportable segment in the fiscal year ended March 31, 2012, and accordingly the number of contracts for this segment is displayed separately from the fiscal year
ended March 31, 2011, and onward. The number of contracts for fiscal years ended March 31, 2010, and prior is included under “Other Services.”
5. Long-Term Care Services was converted to a reportable segment in the fiscal year ended March 31, 2017, and accordingly the number of contracts for this segment is displayed separately from the fiscal year ended March 31, 2016, andonward. The number of contracts for fiscal years ended March 31, 2015, and prior is included under “Other Services.”
6. If contracts for individual households in housing complexes are included, this figure would be approximately 1,170,000.

61

6Corporate Information/Stock Information (As of March 31, 2019)
Corporate Information
Corporate Name
Head Office
Established
CapitalFiscal Year-End
Employees
Business Operations

Distribution of Shares by Shareholder TypeSOHGO SECURITY SERVICES CO., LTD.
1-6-6 Motoakasaka, Minato-ku, Tokyo
107-8511, Japan
July 16, 1965
¥18,675 million
March 31(Consolidated) 37,417(Non-consolidated) 11,793
Head Office/64 Branches/37 Offices/253 Sales
Offices/75 Consolidated Subsidiaries (Including
10 Overseas Subsidiaries)/11 Companies
Accounted for by the Equity Method

Securities Companies 0.8%

Treasury Stock
0.8%

Financial Institutions
33.4%

Individuals
and Other
19.3%
Foreign Investors
21.7%

Domestic Corporations
24.1%

Major Shareholders (Top 10)
Number of Controlling
Shares Held
Share
(Thousand shares) (%)

Name

Stock Information
Total Number of
Shares Authorized
Number of Shares Issued
Number of Shareholders
at the End of the Preceding
Fiscal Period
Stock Listing
Securities CodeMinimum Trading Lot

SOHGO CORPORATION
7,388
Saitama Machinery Co., Ltd.
5,283
Japan Master Trust Bank, Ltd. (Trust account)
4,442
Trust & Custody Services Bank, Ltd.
(as trustee for Mizuho Bank Ltd.
4,261
Retirement Benefit Trust Account re-entrusted
by Mizuho Trust and Banking Co., Ltd.)
Kamakura Corporation
4,150
Employees Shareholding Association
4,138
Japan Trustee Services Bank, Ltd. (Trust account) 3,542
STATE STREET BANK AND
3,110
TRUST COMPANY 505223
Kizuna Corporation
2,950
Atsushi Murai
2,885

300,000,000
102,040,042(including 781,701 shares of treasury stock)

13,876First Section of Tokyo Stock Exchange
2331
100

7.29
5.21
4.38
4.20
4.09
4.08
3.49
3.07
2.91
2.84

* Each controlling share is calculated based on the total number of shares excluding the number of treasury stock(781,701 shares).

Stock Chart
（Yen）
8,000

（Yen）
24,0006,000

18,000

4,000

2,000

Nikkei Stock Average

12,0006,000

Our Closing Price (Left axis)00（Thousand shares）
18,000
Trading Volume

12,0006,000
02009/3

2010/3

2011/3

2012/3

2013/3

2014/3

2015/3

2016/32017/3

2018/3

2019/3

ALSOK is a Tokyo 2020 Official Partner.
In October 2015, ALSOK concluded an agreement with the Tokyo Organising Committee of the Olympic andParalympic Games to become a Tokyo 2020 Official Partner in the category of “Security Services and Planning.”
The Company has long contributed to the promotion of sports in Japan by producing many of the athletes who haverepresented the country in such Olympic sports as judo and wrestling. Leading up to Olympic and Paralympic GamesTokyo 2020, we will continue to support the efforts of our athletes. During the event itself, we will contribute to theevent’s success through rigorous security provided by an all-Japan team.

62

SOHGO SECURITY SERVICES CO., LTD.

・REBORG is a registered trademark of SOHGO SECURITYSERVICES CO., LTD.

1-6-6 Motoakasaka, Minato-ku,
Tokyo 107-8511, Japan
URL https://www.alsok.co.jp/en/

・Tokyo SKYTREE and Tokyo SKYTREE TOWN are
registered trademarks of Tobu Railway Co., Ltd. and
TOBU TOWER SKYTREE CO., LTD.

IR OfficeCSR Office

TEL +81-3-3423-2331
FAX +81-3-3470-1565
TEL +81-3-3470-1972
FAX +81-3-5411-1636

・PrivacyMark and PrivacyMark System are registeredtrademarks of JIPDEC.

・THE INCLUSION OF SOHGO SECURITY SERVICES CO.,LTD. IN ANY MSCI INDEX, AND THE USE OF MSCILOGOS, TRADEMARKS, SERVICE MARKS OR INDEXNAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF SOHGO
SECURITY SERVICES CO., LTD. BY MSCI OR ANY OF ITS
AFFILIATES. MSCI AND THE MSCI INDEX NAMES AND
LOGOS ARE TRADEMARKS OR SERVICE MARKS OF
MSCI OR ITS AFFILIATES.