The
Next
Stage

ALSOK REPORT 2015
Fiscal year ended March 31, 2015

SOHGO SECURITY SERVICES CO., LTD.

Securities Code: 2331

Half a Century of Responding toChanging Social Needs
Since its establishment in 1965, the Company has continued to expand its business by playing an importantrole as a part of Japan’s economic and social infrastructure and as a leader in the Japanese security
services industry. Amid rapidly changing conditions in the industry, we are ­contributing to the safety andsecurity of our customers and society by offering products and ­services that accurately respond toever-changing social needs.

FY2015FY1965¥150
million¥365,749
millionElectronic Security Services
Stationed Security Services
Transportation Security Services
General Property Management and Fire Protection Services
Long-Term Care Services / Other Services

Start-up of Electronic Security Services

Commencement of Transportation
Security Services
Founding of the Company, Launch of
Stationed Security Services
After its founding, the Company beganproviding stationed security services throughlarge-scale contracts with major companies,
financial institutions, and other organizations.

Jul. 1965 Launches stationed security services upon
Company’s founding

Targeting financial institutions, ALSOK later
commenced transportation security services
for marketable securities.

Feb. 1966 Begins providing transportation security services
Jan. 1971 Starts SOK ARIGATO UNDO (currently ALSOKARIGATO UNDO)The Next Stage
1

ALSOK REPORT 2015

After pushing forward with the developmentof electronic security systems aimed at
reducing labor requirements for security
services, the Company began offering its
SOK Guard System.

Sep. 1967 Launches SOK Guard System in electronic security
services (currently ALSOK Guard System)
Mar. 1970 Provides security services at Expo ’70, in Osaka
Feb. 1972 Provides security services at Winter Olympic Games,in Sapporo
Jan. 1975 Launches AMAND SYSTEM for automated managementof ATMs
Jun. 1979 Provides security services at 5th G7 Summit held in Tokyo
Mar. 1983 Receives first security business certification from Tokyo
Metropolitan Public Safety Commission

2015

50th Anniversaryof Foundation
Looking forward
to the next 50 years

Broadening of Business Scope

Overseas Expansion

Entry into General Property
Management and Fire Protection
Services
To respond to needs for the rationalizationand integration of building management,
ALSOK launched cleaning and facility management services in addition to fire protection services.
Apr. 1988 Launches TAKURUS home security system
Apr. 1993 Commences general property management services
Oct. 1997 Launches Cash Deposit Machine On-line System
Sep. 2002 Acquires quality management system accreditation
Oct. 2002 Lists stock on first section of Tokyo Stock ExchangeJul. 2003 Changes corporate brand name from
“SOK” to “ALSOK”
Oct. 2004 Acquires information security management systemaccreditation
Mar. 2005 Provides security services at Expo 2005, in
Aichi Prefecture
Apr. 2005 Expands ALSOK ANSHIN KYOSHITSU elementary
school crime prevention class program to all of JapanThe Company began overseas expansion bycatering to security demand from Japanesecompanies developing operations inSoutheast Asia.

To better respond to diversifying security
needs, ALSOK began broadening the scopeof its business to include peripheral fields
that are highly compatible with its security
services.
Nov. 2012 Enters into long-term care business		 Acquires shares in HOCHIKI CORPORATION(becomes equity-method affiliate)Nov. 2006 Launches REBORG-Q security robot system that
employs both robots and security guards forproviding stationed security services
Oct. 2007 Establishes ALSOK (Thailand) Co., Ltd., in Thailand
Nov. 2009 Establishes ALSOK (Vietnam) Co., Ltd., in Vietnam
Dec. 2010 Establishes ALSOK Trading Co., Ltd., in China
Feb. 2011 Converts Japan Facilio Co., Ltd., into subsidiary
Jun. 2011 Launches ALSOK-GV security system
Mar. 2012 Establishes ALSOK Malaysia Sdn. Bhd., in Malaysia
Aug. 2012 Establishes Seoul Representative Office of Sohgo
Security Services Co., Ltd., in South Korea
Oct. 2012 Establishes new HOME ALSOK brand of services
for individual users
		 Launches HOME ALSOK Premium

Feb. 2013 Establishes PT. ALSOK Indonesia, in Indonesia
Mar. 2013 Establishes ALSOK Consulting (Thailand) Co., Ltd.,in Thailand
		 Establishes ALSOK India Private Limited, in India
Jul. 2013 Acquires PrivacyMark® accreditation
Sep. 2013 Launches HOME ALSOK MIMAMORI SUPPORT
Nov. 2013 Cumulative number of participants in ALSOK ANSHINKYOSHITSU program exceeds one million
Mar. 2014 Acquires business continuity management systemaccreditation
Apr. 2014 Converts ALSOK Souei Co., Ltd., into subsidiary
Establishes Manila Representative Office of Sohgo
Security Services Co., Ltd., in the Philippines
		 Converts Nippon Building Maintenance Co., Ltd.,
into subsidiary
Sep. 2014 Converts ANTEI CARE Inc. into subsidiary
Oct. 2014		 Converts HCM Corporation into subsidiary
Oct. 2014		 Establishes Myanmar Office of ALSOK Consulting(Thailand) Co., Ltd., in Myanmar
Feb. 2015		 Converts ALSOK Care & Support Co., Ltd., into subsidiary

We will protect the safety and security of society in accordance withALSOK’s management philosophy.
ALSOK REPORT 2015

2

Business Reforms Targeting Long-Term Development
The security services industry is undergoing rapid change fueled by such trends as the advance of information and c­ ommunications
technology (ICT) as well as the aging population of Japan and the country’s declining birth rate. Amid these changes, the ALSOKGroup aims to support people’s safety, security, and comfortable living by protecting facilities, people, and properties.

MAMOLOOK(Mobile Security)

HOME ALSOKMIMAMORI SUPPORT

Mobile security terminal
equipped with communications
and safety confirmation functions

Monitoring of senior citizens 24hours a day, 365 days a year as
they go about their daily lives thatprovides emergency reportingand consultation services

Expansion of HOME ALSOK Brand of Products
and Services for Individual Users
ALSOK is going beyond traditional home security services, which only protect
people’s homes, to provide products and services that respond to various
needs of customers with the hope of enabling them to feel safe and secure no
matter where they are.
With this aim, we are rolling out numerous services for individuals and families. For example, we provide MAMOLOOK, a mobile security service to watch
over customers and, if needed, find them and dispatch guards to their location.
Another service is HOME ALSOK MIMAMORI SUPPORT, which offers monitoring of senior citizens as they go about their daily lives to watch over them 365
days a year. Meanwhile, the HOME ALSOK ALBO eye monitoring service uses
sensor-equipped web cameras to allow customers to personally confirm
images from their own homes and request security dispatch services as they
deem necessary. We also provide long-term care and related services.
Going forward, ALSOK will continue to maintain a lineup of product andservices that meet the various safety and security needs of individual users,
ranging from the protection of children’s safety to the provision of long-termcare for senior citizens.

HOME ALSOK ALBO eye

Long-Term Care andRelated Services

Monitoring service that enables
customers to check images andsound recordings on the go

Long-term care service brands
AMICA (HCM Corporation)
KATAKURI (ALSOK Care & Support Co., Ltd.)

Overseas Expansion Centered on
Southeast Asia
The ALSOK Group began aggressive overseas expansion in 2007 in the midst ofa rise in the number of Japanese companies developing operations abroad.
Currently, our network of subsidiaries and representative offices encompasses 10
regions centered on Southeast Asia. By utilizing
ALSOK-GV Internet-Basedthis network, we primarily provide security services
Image Monitoring Security
and security consulting to Japanese companies.
System
In the fiscal year ended March 31, 2015, we
continued to offer products and services basedon the security expertise we have accumulated
through operations in Japan and custom-­tailoredto the characteristics of specific countries. For
example, we launched the first electronic security
services operations to be directly managed by
the Company in Thailand. ALSOK will vigorously
Service allowing information on
develop its overseas operations into the futurewhen employees arrive at andleave work to be viewed andwith the aim of supporting customers conducting
facilities to be operated remotely
business outside Japan.
via the Internet

Seoul Representative Office

ALSOK India Private Limited

ALSOK REPORT 2015

Taiwan Shin Kong Security
Co., Ltd.*

Myanmar Office of ALSOK Consulting(Thailand) Co., Ltd.
ALSOK (Thailand)Co., Ltd.

ALSOK MALAYSIA SDN. BHD.

The Next Stage
3

ALSOK Trading Co., Ltd.

Manila Representative Office
ALSOK (Vietnam)Co., Ltd.

PT. ALSOK INDONESIA* The Company’s connection with Taiwan ShinKong Security Co., Ltd., is limited to investment.

Expansion of Business Scope into Fields HighlyCompatible with Security Services
In addition to strengthening its mainstay security services operations, ALSOK isexpanding the scope of its business to include building maintenance, long-termcare, and other fields that are highly compatible with security services.
Furthermore, in its facility management operations, the Company provides
facility security and other security services as well as a range of other services
on a one-stop basis. We thereby respond to customers’ various needs for the
maintenance, management, and operation of buildings, condominiums, andother facilities. At the same time, services for senior citizens have been identified
as an area of crucial importance, and we are therefore developing long-termcare operations. Through close coordination among ALSOK Group companies,
we aim to create new services that form a seamless link between security andlong-term care.

Facility
Management

Stationed
Security
Services
GeneralProperty
Management andFire Protection
Services

Electronic
Security
Services
Transportation
Security
Services

Long-Term
Care and
RelatedServices

Long-Term
Care and
RelatedServices

REBORG-X

ALSOKHyper Security Guard

Robots with personnel identification and automated patrol
functions

Security guards armed withwearable cameras, smartphones, and other IT equipment

Information Security
Services and ALSOK My
Number Solutions

ALSOK Aerial
Photography Services

Development of New Products and Services to
Respond to Diversifying Risks and Needs
ALSOK is committed to developing new products and services to protect customers from the diverse risks that arise from technological advances andchanges in the operating environment.
One major breakthrough has been the development of ALSOK Zone
Security Management, a new service that calls upon our security expertise and
ICT capabilities to provide safety and security to urban zones and at large-scale
events. This service combines various services utilizing state-of-the-art technologies, including ALSOK Hyper Security Guard, our new brand of security
guards armed with advanced IT equipment; REBORG-X automated patrolrobots; and countermeasures for security breaches by drones. The Company isalso bolstering its lineup of products and services that grant security and convenience across all areas of the private and public sectors. Such offerings
include our information security services, which protect against cyber-attacks,and ALSOK My Number Solutions, a solutions service created in light of theenactment of Japan’s Act on the Use of Numbers to Identify a Specific Individualin the Administrative Procedure, which will result in the introduction of the “My
Number” system. We also provide Underpass Monitoring Service designed tohelp prevent road flooding and ALSOK Aerial Photography Services, which­utilize aerial robots to take photographs of large-scale solar power installations.

Solutions service that respond to
new risks and needs

Services that utilize aerial robots
to inspect the panels of largescale solar power installations

The ALSOK Group will continue working to ensure people
can live safe, secure, and comfortable lives.
ALSOK REPORT 2015

4

Top Interview
Message Based on an Interview with the Chairman

By drawing on the experience andexpertise we have accumulated over theyears, we will cultivate human resources
suited to a company that is truly of thehighest caliber as we ­progress forward
over the next 50 years.

The
Next
Stage

Chairman and Representative Director
Chief Executive Officer (CEO)ALSOK’s 50th Anniversary
In 1965, Jun Murai founded the Company out of the desire to help thepolice and fire departments protect the safety of society, creating asecurity company of a style unique to Japan. In 2015, we celebrated
the 50th anniversary of ALSOK’s founding.
The industry now known as the security services industry in Japandates back to before World War II. Although the police were initially themain proponents of this industry, I believe the current industry features
an effective segregation of duties, with the police responsible foraddressing crimes that have been committed while security companies
are tasked with preventing crime. ALSOK was born during the period of
the so-called Japanese post-war economic miracle, a time when security services came to be essential for the greater society. The Company
played a key role in pioneering this burgeoning industry.
In the years that followed, the rise of globalization and the development of society led to changes in the policies of our customers as wellas in public opinion. Over the years, we continued to tailor our business

5

ALSOK REPORT 2015

and expertise to the changing times. Nevertheless, we also remainedtrue to our core management philosophy, which is exemplified by theconcepts of arigato no kokoro, an ever-present feeling of gratitude;
bushi no seishin, a strong and noble samurai spirit that emphasizes
teamwork and unity above all else; and yacho seishin, a “wild bird spirit”
that inspires us to persevere and survive under even the most difficult
conditions. Based on this core philosophy, we devoted ourselves to theprovision of security services of the first rank. Our ability to grow ALSOK
into the company it is today was not the result of any one fateful opportunity but was rather the product of our continued steadfast effort todevelop our business. The security services industry was almost completely unknown at its inception. However, it has now established asolid position as a social fixture, a fact that fills me with joy. Although wehave just now celebrated our 50th anniversary, we must remain awarethat society’s need for safety and security will always exist and, by virtueof that, ALSOK’s mission has only just begun. This conviction will spur
us forward into the future.

Strengths Forged over Half a Century

Vision for the Next 50 Years
ALSOK has defined the goal of achieving consolidated net sales of ¥1
trillion within the next 10 years. I realize that improving performance in thecurrent fiercely competitive environment will require that our employees
become more relatable as human beings while becoming even morecompetent at performing their duties. I firmly believe that it is by cultivating
human resources suited to a company that is truly of the highest caliber
and continuing to instill new employees with this same level of excellence
that ALSOK will fuel its development over the next 50 years.
Future political and economic trends are not easy to predict.
Nonetheless, I think it is important for ALSOK to expand its operations
into peripheral fields that are highly compatible with its mainstay ­security
services operations, leveraging its ability to provide service anywhere in
Japan—24 hours a day, 365 days a year—during this process. Our services are evolving to go further than simply protecting facilities, people,
and properties in order to support people in living safe, secure, andcomfortable lives. I hope that ALSOK will always be a company thatremains ever-responsive to changing operating conditions, moving
beyond the boundaries of traditional security services and acting as acompany essential to society. Demonstrating its position as such a
company, ALSOK recently received the first prize in Social Value andCapital Formation M&A Awards. This award, which is sponsored by theDevelopment Bank of Japan and presented to companies that haveconducted mergers or acquisitions with the potential to create significant social value and capital, was received in recognition of the acquisition of HCM Corporation, a company that offers long-term careservices. Through this acquisition, the Company aims to develop its
security services for senior citizens in order to provide security across allareas of their lives. I therefore feel that our receipt of this award is an

acknowledgment of our drive to provide higher levels of safety andsecurity to the community and thus represents the approval of our­business policies.
Furthermore, ALSOK views the upcoming 2020 Summer Olympic
and Paralympic Games in Tokyo as an opportunity to further its growth.
Acting as a Tokyo 2020 Official Partner in the category of “Security
Service and Planning,” we aim to take advantage of this opportunity tosolicit the high quality of Japanese security services and show hospitality to visitors from around the world. Looking 50 years down the line, we
hope to develop ALSOK into company that is deemed to be truly of thehighest caliber in both Japan and overseas.

Our Vision

ALSOK boasts impeccable service quality. Our devotion to our duties
has led to improvements in the quality of our services, which I believe is
our most prominent strength.
While establishing the aforementioned service quality, the ALSOKGroup has amassed a nationwide staff of more than 30,000 people andaccumulated a wealth of experience and expertise, which all represent
core strengths. Another strength is the convenience born out of ourability to dispatch guards to location in Japan—24 hours a day, 365
days a year—via electronic security services, stationed security services, and transportation security services that are available throughout
the country. In addition, we are faithfully working to provide services ofsuperior quality, and these efforts have won us the trust of customers,a fact that represents another of our strengths. For example, we strive
to develop human resources that live up to the expectations of society
and therefore offer employees training and education to foster good
corporate ethics and thorough compliance awareness as well as to help
them acquire specialized knowledge and skills. This commitment tohuman resource development is based on the realization that our business entails protecting the lives, well-being, and assets of customers,
meaning that the standards we must uphold to properly perform ourduties are incredibly rigorous. This situation requires us to cultivate
trustworthy employees.

Revision of the ALSOK Charter
The ALSOK Charter outlines the spirit of our founder and sets forth aroad map for the Company that also guides the activities of all employees. This charter was initially established when we celebrated the 35th
anniversary of the Company in 2000. Taking into account the changes
in our business scope, market size, and other factors that have occurredsince then, we chose to revise the charter in commemoration of theCompany’s 50th anniversary in order to ensure that it remains viable
into the future. At ALSOK, we speak of “principled companies” in thesame way one might refer to principled people, endeavoring always to
act as a highly principled company. The new ALSOK Charter was madeto ensure this ideal could be effectively communicated no matter how
our business scope may expand in response to changing social needs.
The ALSOK Charter, by its very nature, is a document that is meant
to be adhered to over the long term. For this reason, we refrained frommaking large revisions and instead focused on amending the charter toreflect the changes that have occurred between the Company’s 35th
anniversary and today, incorporating the opinions of younger employees along the way. The new ALSOK Charter encourages our employees
to become even-more principled individuals while we simultaneously
work to make ALSOK into an even-more principled company. It also
urges us to offer, to a wide range of customers, products and services
that contribute to the development of society in new areas in which we
can respond to contemporary needs. By positioning the ALSOK Charteras our shared motivation, we will push forward with the development ofour business over the next 50 and then 100 years.

ALSOK REPORT 2015

6

Top Interview
Message Based on an Interview with the President

We aim to build a high-profit­constitution by expanding existing
business through the improvement of­productivity and by maximizing thebenefits of intra-Group synergies.

The
Next
Stage

President and Representative Director
Chief Operating Officer (COO)

Fifth Consecutive Year of Higher Sales and Income
In the fiscal year ended March 31, 2015, certain sectors of the Japanese
economy were weak due to the impacts of the consumption tax hike on
consumer spending as well as the effects of natural disasters. However,a modest recovery trend was seen centered on the corporate sector asa result of improvements in corporate performance, the job market, andwage levels. Overseas, there was a trend toward gradual recovery centered on the United States, but the need to carefully monitor future
economic trends in Europe and especially in China and other emerging
nations remained nonetheless. Public safety issues in principal Middle
Eastern nations also warranted caution.
In regard to public safety in Japan, there seems to be no end to theoccurrence of stalking, special-case scams, and other crimes targeting
women, children, and senior citizens as well as issues involving confidential information, such as personal information leaks. At the sametime, there is a pressing need to prepare for natural disasters and monitor social infrastructure. For these reasons, the safety and security
needs of society are growing ever more diverse.

7

ALSOK REPORT 2015

In this operating environment, the ALSOK Group pushed forwardwith efforts to respond to the diversification of society’s safety andsecurity needs. To this end, we worked to strengthen our mainstay
security services operations while also focusing efforts on peripheral
fields that are highly compatible with security services, such as longterm care and building maintenance, and endeavoring to provide products and services related to these fields. At the same time, we pursued
cost reductions by consolidating functions in back-office and operating
divisions to streamline and rationalize operations. As a result of these
efforts, consolidated net sales rose 11.4% year on year, to ¥365,749
million; operating income was up 21.3%, to ¥22,971 million; ordinary
income increased 19.1%, to ¥24,700 million; and net income grew
23.5%, to ¥13,534 million. These results made for our fifth consecutive
year of higher sales and income, with net sales and ordinary income
reaching new record highs.

Evolution in Response to Diversifying Needs

As for GD2017’s financial goals, we have set forth the target ofachieving ROE of approximately 10.0%, and we aim to accomplish thistarget by improving the ordinary income margin. Specifically, we will
steadily advance market-specific strategies based on the basic policiesof the plan to generate cash flows by increasing profit and conduct
strategic investments to accelerate business development. We thereby
plan to improve ROE while maintaining a stable financial base. The
higher profits will be returned to employees as well as to shareholders
as we continue to issue stable dividends, targeting a consolidated dividend payout ratio of 30%.

Formulation of Grand Design 2017

CSR Activities

Targeting net sales in the area of ¥1 trillion, the ALSOK Group formulated its new three-year medium-term management plan, Grand Design
2017, or GD2017 for short. This plan is aimed at propelling theCompany to a new stage of development and sets out the following
consolidated financial goals for the fiscal year ending March 31, 2018:
net sales of approximately ¥500 billion; ordinary income of approximately ¥40 billion; an ordinary income margin of approximately 8.0%;
and return on equity, or ROE, of approximately 10.0%.
The plan was designed to serve as a compass for guiding us inproviding products and services that respond to customer needs aswell as to changes in the social environment, global economic trends,
and geopolitical risks. By advancing GD2017, we aim to make ALSOK
into a company that can continue to support people’s safety, security,and comfortable living by protecting facilities, people, and properties.
GD2017 primarily comprises four components: basic policies,
market-specific strategies, initiatives supporting market-specific strategies, and financial goals.
The basic policies of GD2017 are to raise consolidated net sales
and build a high-profit constitution. In order to build a high-profit constitution, we are expanding existing business by increasing the productivity of sales representatives, maximizing the benefits of intra-Groupsynergies, and working to provide new products and services that
better meet customer needs.

With regard to corporate social responsibility, or CSR, we believe that
ALSOK’s business of protecting the safety and security of society has
an inherently high level of social value. Aiming to go one step further, wehave identified CSR activities that will contribute to sustainable growth
for the Company, and we have organized these into four material CSR
themes based on which we are accelerating the implementation of our
CSR initiatives.
The first theme is “providing products and services that help resolve
social issues.” Based on this theme, we launched the HOME ALSOK
brand and are expanding the scope of our business, centered on security services, to include long-term care services. We thereby aim to
respond to the demand created by the aging of the population in
Japan, the country’s declining birthrate, and the diversification of­customer needs.
The second theme is “cultivating human resources and building a
comfortable workplace environment.” We realize that competitive humanresources are crucial to achieving sustainable growth, and we are thus
stepping up a plethora of initiatives for promoting a healthy work-lifebalance. At the same time, we are making progress favorably toward
our target of having 5% of administrative positions filled by women.
The third material CSR theme is “contributing to local communities
through active communication.” We have delegated the task of developing policies for reaching out to communities to the employees that
directly interact with these communities, and we are continually advancing community-rooted initiatives, such as the ALSOK ANSHINKYOSHITSU elementary school crime prevention class program.
The final theme is “providing trustworthy security services.” ALSOK
is expected to act in a highly ethical and disciplined manner, and it
therefore positions compliance, the protection of information assets,
and business continuity as management issues of extreme importance.
Furthermore, the ALSOK Group recognizes that environmental
preservation is a universal issue placed before all of humanity. The
Group therefore works to cut CO2 emissions, reduce resource use, andrecycle those resources that are used. We are also advancing afforestation activities to protect our precious forests and otherwise doing ourpart to preserve the environment.
We hope to ensure that customers always feel satisfied when theychoose ALSOK. To this end, we strive to act as a highly principled company with the aim of living up to stakeholder expectations, and we willcontinue conducting CSR activities into the future.

ALSOK REPORT 2015

Our Vision

The core concept behind the ALSOK Group’s business is to protect.
We protect people, including senior citizens, children, and women living
alone, as well as facilities, public infrastructure, ATMs, and countlessother articles. The more we consider the needs ALSOK must addressfrom these various perspectives, the more the range of fields that fallunder a broader definition of the word “security,” such as long-termcare and building maintenance, seems to expand. In the fiscal year
ending March 31, 2016, we must tackle the challenge of developing
operations in these fields into stably performing businesses.

8Long-Term Vision and Medium-Term Management Plan
Striving to be a company that supports people’s safety, security, and comfortable living by protecting facilities,
people, and properties

Formulation of Grand Design 2017, a three-year management plan guiding the implementation of growth strategies as
we target consolidated net sales of ¥1 trillion

Grand Design 2017
Consolidated
net sales	Economic trends in Europe, theUnited States, and emerging nations¥

	
Changes in geopolitical risks

1 trillion

	Low birthrate, aging population,and labor scarcity
	Potential of government fiscal­measures and regional development
and social security costs	Diversifying risks stemming from thedevelopment of technology

Transitioning to a new
development stage byimplementing growthstrategies	Threats of natural disasters

2020 Summer Olympic
and Paralympic
Games* in Tokyo	Post-disaster reconstruction
Rehearsal event for 2020
Summer Olympic andParalympic Games*in Tokyo

Rugby World Cup

50th
anniversary

Consumption tax increase

My NumbersystemSocial insurance
enrollment issues

Security plan for 2020
Summer Olympic andParalympic Games* in
Tokyo

2015

2020

GD2017

GD2020* The Company has been selected as a Tokyo 2020 Official Partner in the category of“Security Services and Planning” for the 2020 Summer Olympic and Paralympic Games.

9

ALSOK REPORT 2015

Grand Design 2017

Basic Policies of Grand Design 2017

Build high-profit constitution

1. Expansion of existing business by raising productivity ofsales representatives
2. Expansion of net sales by maximizing intra-Group synergies
3. Provision of new products and services that meet customer
needs

Grand Design 2017

Our Vision

Raise consolidated net sales

1. Improvement of per person labor productivity
2. Utilization of human resources
3. Groupwide cost reductions, including managerial side

Strategies of Grand Design 2017

To the next 50 years ~Developing through cooperation within the ALSOK Group~
Response to various risks and outsourcing needs of customers
Market-specificstrategies

Business
Corporations

Financial
Institutions

Public Sector	Integrated security services responding to diversifying risks and needs

Initiatives
supporting­market-specificstrategies

	Construction of facility managementbusiness structure	Development of new products
and services

Grand Design 2017

Individuals

Overseas	Expansion of business scope	Stable securement of humanresources and cultivation ofhuman resources having
competitive strength

Financial Goals
FY2015FY2018 Targets

Net Sales¥365.7 billion

Net Sales

Approx. ¥500 billion

Ordinary Income¥24.7 billion

Ordinary Income

Approx. ¥40 billion

Ordinary Income Margin

6.8%

Ordinary Income Margin

Approx. 8.0%

ROE

7.8%

ROE

Approx. 10.0%

ALSOK
ALSOK REPORTREPORT 201510

Financial and Non-Financial Highlights
As March 31, 2015

Net Sales¥

Ordinary Income / Ordinary Income Ratio

365.7
11.4

% YOY

Up

24.7
19.1

Ordinary income ¥billionUp

365,749 million yen

400,000

billion¥% YOY

Millions of yen

Millions of yen

Net Income

Up

24,700 million yen

26,00023,000%Millions of yen

9.0

15,0007.5

20,0006.0

17,0004.5

14,0003.0

11,000

1.5

billion% YOY

13,534 million yen

12,0006.8％

300,000

13.5
23.5

9,000
200,000

6,000
100,000

0

0

11

FY

12

13

14

15

12

Ordinary Income

¥
Up

Up

38.00 yen *

40.00

15

0.4

20.00

200,000

10.00

100,000

0

6.9

%

ROE

%

373,863 million yen

12.0

9.0

6.9％

12

13

14

15

As of March 31* Including a ¥3.00 per share special dividend commemorating
the Company’s 50th anniversary

13

14

15

Up

0.8

7.8

%

percentage point YOY%

Millions of yen

250,000

10.0

204,363 million yen

200,000

8.0

7.8 ％

150,000

6.0

100,000

4.0

50,000

2.0

6.0

3.0

0

11

12

Total Net Assets / ROE

percentage point YOY

400,000

300,000

11

FY

Millions of yen

30.00

FY

14

Ordinary Income Ratio

ROA

% YOY

Yen

13

Total Assets / ROA

38.00
26.6

0

0

11

FY

Dividends per Share

3,000

0

11

Total Assets

12

13

14

15

0
As of March 31

ROA

0

11

12

13

14

15

ROE

Total Net Assets

Millions of yen

2013

2014

2015

Net sales

315,564

328,209

365,749

Ordinary income

14,741

20,74524,700Net income

8,574

10,955

13,534

Capital expenditures

13,24919,617

13,627

Depreciation and amortization

12,213

9,198

11,331

Fiscal year

Fiscal year

2013

2014

2015

Net income

85.30

108.99134.65

Net assets

1,536.30

1,574.74

1,800.15

Dividends

25.00

30.00

38.00

Ordinary income margin

4.7

6.3

6.8

Fiscal year

Per share (yen)At the end of fiscal year

Ratios (%)

Total assets

296,665

342,495

373,863

Return on assets (ROA)

5.1

6.5

6.9

Total net assets

175,563

180,205

204,363

Return on equity (ROE)

5.7

7.0

7.8

11 ALSOK REPORT 2015

Number of Employees by Gender

Number of Employees

31,221
11.1

1,076
2.3

(Non-Consolidated)

14.9
0.5

Number of female employees

% YOY

Up

Average Number of Years of Continuous Service(Non-Consolidated)

Up

% YOY

Up

PeoplePeopleYears

40,00016,00020.0

31,221
30,00012,00020,0008,000

12,331% YOY

14.9 years

15.0

1,076

years

10.0

4,000

10,0005.0

00
As of March 31

11

12

13

14

15

0

As of March 31

11

12

Male Employees

Percentage of Employees Returning toWork after Childcare Leave(Non-Consolidated, Total for Male and Female Employees)

Up

96.6
4.2

As of March 31

11

12

13

14

15

Fuel Usage by Vehicles (Non-Consolidated)

9,029.6
6.2

t-CO2

% YOY
kl

50,00012,00039,212 t-CO2

kl

% YOY

Down

t-CO2

40,00080.0

15Female Employees

Down

96.6 %

100.0

14

39,212
5.2

percentage points YOY%

13

CO2 Emissions Volume (Non-Consolidated)%

About ALSOK

11,2559,029.6 kl

10,00017,265
t-CO2

8,000

5,295.6 kl

30,00060.0

6,000
20,000

40.0

4,000

21,947

10,000

20.0

t-CO2

0

0
As of March 31

11

12

13

14

15

FY

Vehicle Usage

Percentage of
Administrative Positions
Filled by Women(Non-Consolidated)(As of March 31, 2015)

3.2

%

0

0

11

12

13

14

15

Offices and Other Facilities

11

FY

Gasoline

Expenditures for Social
Contribution Activities

Number of ALSOK ANSHINKYOSHITSU Classes Held

(Non-Consolidated)(Fiscal year ended March 31, 2015)(Fiscal year ended March 31, 2015)

388.9

¥

million3,734.0 kl

2,000

12

13

14

15

Diesel Oil

Number of Individuals
CompletingFirst-Aid Training(As of March 31, 2015)

3,080

15,684

Total of

ALSOK REPORT 201512

Review of Operations
Security Services

Net Sales by Service Type (FY2015)

Net Sales (FY2015)

Electronic Security Services

¥

43.9%

160.4

billion88.4

billion52.3

billion58.3

billion

6.2

billion

ALSOK’s Electronic Security Services segment provides services in which
sensors are used to notify Guard Centers of disturbances so that security
guards can be dispatched to the scene. We offer a wide range of services
for both individual users and corporate customers.

Stationed Security Services

¥

24.2%

ALSOK’s Stationed Security Services segment stations security guards at
office buildings and various other customer facilities. These security guards
administer access control by monitoring or checking the identity of each
person who enters or exits designated customer facilities. In addition, theyalso conduct patrols to detect irregularities. Further, we conduct monitoring activities at disaster prevention centers and central management centers. We also offer security for events and other crucial security services.

Transportation Security Services

¥

14.3%

ALSOK’s Transportation Security Services segment includes its mainstay
Total ATM Management System for use by banks and convenience stores,
its Cash Deposit Machine On-line System, in which we manage the daily
sales revenues of business owners, and the Cash Transport System­service offered to financial institutions.

General Property Management and Fire Protection Services

¥

15.9%

ALSOK offers facility management services spanning from security to­facility installation on a one-stop basis through Japan Facilio Co., Ltd.;
Nippon Building Maintenance Co., Ltd.; ALSOK Souei Co., Ltd.; HOCHIKICORPORATION; and ALSOK Building Services Co., Ltd. (previously Sokei
Building Service Co., Ltd.).

Long-Term Care Services / Other Services

¥

1.7%

13 ALSOK REPORT 2015

ALSOK provides various long-term care services through HCM Corporation
and ALSOK Care & Support Co., Ltd. We also offer such services as
information security services, which protect against cyber-attacks and­information leakage, and ALSOK DENPO, a telegraph service.

Millions of yen
170,000¥160,409 million

160,000
150,000
140,000
130,000
120,000
FY

0

11

12

Millions of yen

13

14

15

¥88,429 million

90,00080,00075,000Future Initiatives

Contracts for corporate clients showed firm growth, up 32.7%
year on year. In addition, sales of access management systems and security camera systems increased following higher
demand for crime prevention measures in food product factories and other facilities. In services for individual users, we
witnessed a favorable increase in sales for HOME ALSOKAPARTMENT AND CONDOMINIUM PLAN, a service that equips
rental housing units with crime and disaster prevention andmonitoring precautions, as well as for HOME ALSOKMIMAMORI SUPPORT, an emergency report and consultation
service for senior citizens. The conversion of ALSOK Care &Support Co., Ltd., to a consolidated subsidiary also contributed to higher contract numbers.

We will continue actively developing new products andservices while pursuing alliances with housing developers
and strengthening sales proposals, such as security
camera system proposals for manufacturers, to respondto customer needs. Through the implementation of thisstrategy, we are targeting further net increases in electronic security services contracts. In the fiscal year ending
March 31, 2016, contracts for corporate clients are
expected to rise 5.4%, to 25,000 contracts, and contracts for individual users are forecast to grow 10.3%, to35,000 contracts.

Our stationed security services business is one of the largest in
the industry. In the fiscal year ended March 31, 2015, we
received stationed security contracts for large-scale facilities,
such as buildings that have undergone redevelopment inTokyo, as well as contracts for temporary security operations
from public institutions. The numerous contracts acquired
resulted in substantial net sales growth.

We will continue to provide high-quality stationed security
services as we work to expand orders from large-scale
facilities.
Going forward, demand for security is expected toincrease due to a rise in the number of road infrastructure
and building development projects in preparation for the2020 Summer Olympic and Paralympic Games* in Tokyo.
By catering to this demand, we aim to expand sales.

The number of contracts for our Total ATM Management
System showed a strong net increase of approximately 3,000,
with orders growing for ATMs installed at major banks andconvenience stores. Meanwhile, the number of cash deposit
machines operated under our Cash Deposit Machine On-line
System saw a net increase of approximately 1,850. We weresuccessful in responding to higher demand for the outsourcingof sales revenues management, capturing new contracts primarily from restaurants and automotive dealers.

We will target increased sales of our Total ATM Management
System by responding to growing outsourcing needs
among financial institutions.
For corporate clients, ALSOK has launched its new
Cash Deposit and Dispenser Machine On-line System,
which utilizes cash deposit and dispenser machines
boasting new features like change dispensing and moneychanging functions. This new system is currently available
to certain segments of the corporate sector, and we aim
to capture additional sales revenue management demandby using this system.

In the year under review, the benefits of the consolidation of
ALSOK Souei Co., Ltd., and Nippon Building MaintenanceCo., Ltd., into the Group appeared in the form of sales
increases. The consolidation of these two companies marked
the completion of our systems for providing facility management services. At the same time, sales of automated external
defibrillators (AEDs) were impressive, and the total number of
AEDs sold to date rose to nearly 100,000.

The Company will pursue higher sales through the provision of facility management services that offer one-stop
solutions for customers’ various needs for the maintenance, management, and operation of buildings, condominiums, and other facilities.

In the year under review, HCM Corporation and ALSOK Care &Support Co., Ltd., were consolidated into the Group, resulting
in a massive increase in net sales.

The ALSOK Group will fully leverage its management
resources to provide standard long-term care services
while developing new services that link security with longterm care.

70,000

About ALSOK

85,000Results in the Fiscal Year Ended March 31, 2015

65,000
FY

0

11

12

13

14

15

Millions of yen
60,000¥52,328 million

50,00040,00030,00020,000

FY

0

11

12

Millions of yen

13

14

15

¥58,309 million

60,00050,00040,00030,00020,000

FY

0

11

12

13

14

15

Millions of yen
7,000¥6,273 million

6,000
5,000
4,000
3,000

FY

0

11

12

13

14

15

* The Company has been selected as a Tokyo 2020 Official Partner in the category of “Security Services and Planning” for the 2020 Summer Olympic and Paralympic Games.

ALSOK REPORT 2015

14

New ALSOK Charter and Four Material CSR Themes
for Sustainable Growth
The ALSOK Charter, which comprises the Company’s management philosophy, management policies, and code of conduct, was established in2000 to commemorate the 35th anniversary of the Company’s founding and to compile the spirit of our founder into a single document. The charter
sets forth a road map for the Company that is also meant to guide the activities of all employees, and it forms the foundation for our corporate
essence. We aim to pass this charter and the spirit it embodies on to the employees of the future. However, it cannot be denied that circumstances
are very different from when the charter was formulated 15 years ago. In addition to the substantial shifts in social and economic trends, theCompany was listed on the stock exchange in 2002. Later, it began developing operations overseas while expanding the Group through mergers
and acquisitions. We therefore chose to implement a partial revision to the charter in recognition of ALSOK’s 50th anniversary in 2015, aiming to
make it more suited to the ALSOK Group of today, which has grown to include 74 companies and approximately 31,000 employees.

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 the safety and securityof our customers and of society as a whole.

Management Policies
1. Fundamental Spirit

2. Priority

Under any condition that we face, we work hard to live
by a fundamental spirit that reflects our m­ anagement
philosophy—as exemplified by a feeling of gratefulness and gratitude and a samurai spirit based on
toughness, fairness, and generosity–to be a highly
principled company.

3. Basic Strategy

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

4. Contributing to Society

While security services remain at the heart of ourbusiness, as our basic strategy, we also seek to offer
a diverse range of products and services in new fields
to satisfy the needs of the ever-changing times.

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 andsociety as a whole in a way that reflects a feeling ofgratefulness and gratitude.

2. We will embody a samurai spirit in everything we dobased on toughness, fairness, and generosity, standing
firm in the face of adversity and banding together toembrace success.

3. We will value autonomy in our actions, empowered by
4. We will carry out our day-to-day activities based on the“yacho seishin” (the spirit of a wild bird)—which represents
principles of sincerity, accuracy, strength, and speed.
independence, self-respect, perseverance, acuity, andtenacity—and take responsibility for delivering results.
5.		We will know no complacency, always marching
forward purposefully while growing and refining our­business to continue to provide value to customers andto society as a whole, thereby continuing to be relevant.

6. We will pursue perpetual self-improvement and remain
highly committed to compliance, thereby attracting andnurturing human resources of the caliber worthy of theindustry leader.

“Arigato no kokoro” (a feeling of gratefulness and gratitude): This refers to the way people in Japanese society agree to live their lives while being respectful toward the lives of others; it represents a
humble feeling of gratefulness and gratitude toward the people and everything else that enriches our daily lives.
“Bushi no seishin” (a samurai spirit): This embodies a strong and honorable yet kind mentality of a samurai from a bygone era characterized by discipline, purpose, and the will to succeed and grow.
“Yacho seishin” (the spirit of a wild bird): This refers to a drive to persevere and survive against all odds while always remaining aware of the possible threats surrounding oneself, just as a wild bird must
be constantly alert itself of the risk from predators and other dangers in its daily fight for survival.

15 ALSOK REPORT 2015

The ALSOK Group advances CSR activities in accordance with its management philosophy to respond to changing social needs and help resolve
the issues society faces. In the fiscal year ended March 31, 2014, we defined four material CSR themes with aim of fulfilling our social responsibilities and sharing our social value with shareholders and other stakeholders. These themes are: 1 providing products and services that help resolve
social issues; 2 cultivating human resources and building a comfortable workplace environment; 3 contributing to local communities throughactive communication; and 4 providing trustworthy security services. Our policies based on these material themes have been reshaped to reflect
the Company’s revised management philosophy, and we are stepping up initiatives in each of these areas.

2

Material CSR Theme

Providing Products and Services
that Help Resolve Social Issues

Cultivating Human Resources
and Building a Comfortable
Workplace Environment

ALSOK is providing a multifaceted lineup of products
and services that help resolve the issues faced bycustomers and society. This task is accomplished byleveraging its security services expertise based on an
accurate understanding of ever-changing social
trends, such as aging populations, declining birthrates, and tendency toward nuclear families.

The Company strives to help employees realize theirfull potential. To this end, it is enhancing training
systems, actively supporting career development,­
promoting diversity, and otherwise building a comfortable workplace environment and cultivating the humanresources that underpin its corporate activities.

Consumer3

Material CSR Theme

About ALSOK

1Material CSR Theme

Labor Practice4

Material CSR Theme

Community

Operating PracticeContributing to Local Communities
through Active Communication

Providing Trustworthy
Security Services

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

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

ALSOK REPORT 201516

Material Theme: Consumer

Providing Products and Services that Help Resolve Social Issues

ALSOK is providing a multifaceted lineup of products and ­services
that help resolve the issues faced by customers and society. Thistask is accomplished by leveraging its security ­services expertise
based on an accurate understanding of ­ever-changing social trends,
such as aging populations, declining birthrates, and the tendency
toward nuclear families.

Data on Social Issues

Data on the ALSOK Group’s Business

Number of Crimes Reported in
Accordance with the Penal Code

Number of Electronic Security
Services Contracts(January – December 2014) Source: National Police Agency(As of March 31, 2015)

Percentage of Population Aged 65 and Over

Increase in the Number of Long-TermCare Service Bases during the Fiscal
The Company has been working
Year Ended March 31, 2015
to develop its long-term care

1,212,163(As of March 31, 2015)
Source: Statistics Bureau, Ministry of Internal Affairs and Communications

26.3

%

803,601

118

services. The new acquisition of
two long-term care service
companies during the year underreview resulted in a large
increase in the number oflong-term care service bases.

Number of People Undergoing Emergency
Medical Transportation (January – December 2014)

Aggregate AED Sales

5,399,618

99,782

Number of Inbound Travelers to Japan

Number of ATMs Managed through the
Total ATM Management System

Source: Fire and Disaster Management Agency, Ministry of Internal Affairs
and Communications(January – December 2014)
Source: Japan National Tourism Organization

13,413,467
17 ALSOK REPORT 2015

(As of March 31, 2015)(As of March 31, 2015)

units

52,000Approx.

There are approximately 190,000
ATMs in operation across Japan.
Many of the ATMs ALSOK iscontracted to manage can beused with foreign bank cards,
thereby contributing to increased
convenience for inbound travelers
to Japan.

CLOSE UP

ALSOK’s Dispatch System
Number of Incoming Calls to Guard
Centers from Customers across Japan

Approx.

4.48 million(Fiscal year ended March 31, 2015)

The ALSOK Group is protecting the lives and assets of approximately 460,000 corporate clientsand 340,000 individual users while managing about 52,000 ATMs across Japan. In these ways,
we are supporting an important part of the social infrastructure underpinning people’s everyday
lives as well as the development of the domestic economy.
As we pursue technological innovation in our security services, our roughly 31,000 employees are avidly working to maintain an up-to-date understanding of changes in social issues andcustomer needs in order to provide safety and security that go beyond the boundaries of traditional security services.

Protection for the Safety and Security of 110,000 Customers
across Three Regions
About ALSOKThe command center of the Tokyo Guard Center responds to approximately 1,200 alarms and
3,400 calls each day from the about 110,000 customers it serves in Tokyo and in Kanagawa andSaitama prefectures. The guard center’s team of roughly 100 employees takes shifts protecting
the safety and security of customers every hour of every day.
ALSOK employs a dispatch system, which, should an alarm be detected, automatically notifies security guards in the field via mobile terminals equipped with GPS functionality so that they
can be dispatched to the scene of the incident. Information on customers, including that on illnesses as well as medicine or hospitals being used regularly, is registered in this system. Security
guards are thus able to utilize this information to perform lifesaving activities that go beyond
security services. For example, in the case of an emergency, they can inform emergency contacts, call emergency services, or take other actions based on the instructions and support of theGuard Center.
We, as members of Guard Center team, also function as a lifeline for the security guards in thefield. By utilizing information from mobile terminals, we are able to constantly monitor the status of
security guards to help them avoid injuries or accidents. In this manner, we coordinate closely withfrontline security guards to ensure customers can live each day with safety and security.

Hironori Nakamura (left)
Commander, Team I, Tokyo Guard Center
ALSOK Tokyo GC Administration Office,
Security Operations Department (II)Trusting Relationships that Go Beyond Security Services

Masahiko Amano
Commander, Shinjuku Electronic Security Services Team,
Security Services Section (II)Security Services Department, ALSOK Josai Branch

The Shinjuku Electronic Security Services Team consists of 15 members, who provide roundthe-clock protection in the entertainment district and other sections of Shinjuku Ward in Tokyo.
Should an alarm be detected or a call be received from a customer, the security guards rushfrom their depots to the scene of the incident, swiftly moving through the narrow streets by
foot, bicycle, or motorcycle.
In the more dangerous, late-night hours, the Guard Center team takes over for on-site
security guards with regard to determining the risks associated with the disturbance site. The
team also provides support by calling for backup or immediately contacting emergency services as necessary. Furthermore, on-site security guards communicate with one another tocoordinate and ensure safe and appropriate responses to any situation that may arise.
Recently, I feel that we as security guards are expected to provide a range of services that
goes beyond the scope of traditional security services. For example, we are increasingly
receiving calls from senior citizens, and there have been times when I have found the customer
unconscious upon arriving at the scene. In these cases, I perform CPR (cardiopulmonary
resuscitation) or other first-aid procedures before handing the situation over to the paramedics. The number of customers that rely heavily on ALSOK, calling us for any disturbance, is on
the rise. This increase would not have occurred if not for the trust customers place in us, a factthat really drives home the importance of the role we play in society.

ALSOK REPORT 201518

Material Theme: Consumer

Providing Products and Services that Help Resolve Social Issues

Products and Services that Cater toDiversifying Lifestyles

Robust Lineup of New Products andServices for the Aging Society

ALSOK is guided by its mission of providing solutions to issues faced byeach of its customers. However, the ideal service is different for eachcustomer. For this reason, we are striving to develop the HOME ALSOK
brand for individual users into a lineup that can cater precisely to customers’ diversifying lifestyles.
ALSOK is combining its expertise in a variety of areas in order toprovide a diverse lineup of products and services in response to customer needs that can vary depending on region, age, health condition,or family structure. One example would be HOME ALSOK ALBO eye,a service that enables customers to confirm the status of their homewhen away and receive reports on any disturbances via email and othermeans. We also provide HOME ALSOK LADY’S SUPPORT, a service
for protecting women from stalking and other threats. Another offering is
MAMOLOOK, a multifunctional mobile security terminal. This terminal
allows for emergency reports to be made with the push of a button andenables the user’s position to be confirmed via GPS. Furthermore, internal sensors can detect and send automatic notifications when a user
falls or when an abnormality is detected in the life patterns of a user.
In addition, ALSOK offers HOME ALSOK RUSUTAKU SERVICE
to protect vacation houses, second houses, and other homes that are
not regularly occupied. Through this service, employees confirm thestatus of unoccupied houses, air them out, test plumbing functionality, and perform other services
designed to contribute to theresolution of issues associatedwith vacant homes in Japan.

The aging of Japanese society is expected to advance rapidly, and
ALSOK is developing a robust lineup of products and services toaddress the issues that will be faced by this aging society. HOMEALSOK MIMAMORI SUPPORT, for example, is a service that entails
installing control terminals in users’ homes. If the user simply pushes
the emergency call button located on this terminal, our security guards
will rush to the scene 24 hours a day, 365 days a year, and, uponassessing the situation, take the appropriate course of action. Family
members will be contacted and the security guards will call paramedics
or perform CPR if necessary. In addition, the control terminal has a
consultation button. Should users feel ill, they can press the consultation button to access ALSOK’s healthcare center at any time during the
day or night. Users are able to consult our trained staff about theirhealth condition, receive information about medical institutions or nursing care facilities, or ask other questions.
In long-term care service operations, HCM Corporation and
ALSOK Care & Support
Co., Ltd., were converted
to consolidated subsidiaries during the year underreview. We are currently
enhancing these operations, which are experiencing rapid demand growth.
(See “Initiatives at Group
Companies” below.)
HOME ALSOK MIMAMORI SUPPORT control terminal

ALSOK employee performing ­HOME ALSOK RUSUTAKU SERVICE

Initiatives at Group Companies

Expansion of Long-Term Care Service Operations to Serve the Aging Society

ALSOK has positioned strengthening and expanding its long-term care service operations as a top priority. Initiatives in thisrespect include the acquisitions of HCM and ALSOK Care & Support in 2014. HCM provides in-home and in-facility longterm care services primarily in Tokyo, Nagoya, and Osaka under the brand name AMICA, which is an amalgam of theJapanese words akaruku (cheerful), mijikana (close by), and kaigo (care). From HCM’s more than 70 in-home care service
bases, helpers are dispatched to visit customer homes and provide physical care services, including helping customers eat,bathe, or deal with excrements, or living support services, such as preparing meals and performing other household chores.
This company also operates fee-based, long-term care facilities, predominately in the Tokyo metropolitan area.
The operations of ALSOK Care & Support include its ANSHIN Care Center Business and its KATAKURI brand of carerelated services. In the ANSHIN Care Center Business, this company leverages the strength of its call center staffed by
employees with professional qualifications, such as physicians, nurses, or care managers, to provide emergency response,
health consultation, and other health support services. Under the KATAKURI brand, ALSOK Care & Support provides­in-home care services, operates day services and group homes, and rents welfare items, mainly in the Tokyo metropolitan
area. In these ways, this company is offering community-rooted, long-term care services that are both sincere and considerate. The incorporation of these two companies into the Group has established an important foundation for advancing its
strategies for the HOME ALSOK brand. By coordinating and merging the operations of these companies with our existing
businesses, we aim to provide higher levels of value and develop ALSOK into a trusted partner to society in the field of
long-term care services.

19 ALSOK REPORT 2015

AMICAVILLA INAGE (HCM)

ALSOK Care & Support employee
providing in-home care service

Products and Services for Preparing for
Natural Disasters and Addressing Aged
Infrastructure

Initiatives at Group Companies

Crime Prevention Products and Services
Accompanying technological advancement and changing global economic trends, crimes are becoming more diverse and intricate. Accordingly,
a wider range of countermeasures is now necessary for preventing crimes
targeting individuals, companies, and other entities. ALSOK remains evercommitted to contributing to society by providing products and services toaddress the risks of falling victim to diversifying crimes.
Drones have become increasingly common in recent years. In
response to this trend, ALSOK has been developing countermeasures
to minimize the damages should drones be used with malicious intent,
which represents a new class of threats ranging from voyeuristic photography and harassment to terrorism and other antisocial activity. For
example, we offer ALSOK Zone Security Management, an advanced
security service that fuses security guards with ICT. Employing a combination of sound, image, and other sensors chosen based on the characteristics of the zone to be protected, this service quickly detects whena drone infiltrates the zone, identifies it, determines the risk it presents, and then alerts the appropriate authorities. At the same time,
ALSOK Hyper Security Guards
equipped with IT equipment respondas appropriate based on risks presented by a drone to prevent damages from spreading and, therefore,
provide safety and security to bothvacant and crowded spaces.
We also offer a wide range ofother crime prevention services,
including ALSOK Information
Security Solutions, a compre- Sound sensor as part of drone
hensive security service utilizing countermeasures
security cards that can be used for employee IDs, access management­systems, computer security measures, and crime prevention.

About ALSOK

ALSOK offers its Underpass Monitoring Service to prevent floodingrelated accidents at underpasses, where it is common for rainwater toaccumulate. In recent years, there has been a rise in the number ofaccidents in which cars have become partially submerged in water
when entering underpasses that were flooded due to difficult-to-predict
flash rainstorms or other causes. Municipal governments are working toaddress this issue by monitoring underpasses through sensors andcameras, but it can be difficult for related government organizations toprovide a swift response at night or on public holidays, and initial
response efforts are often delayed as a result. ALSOK’s Underpass
Monitoring Service utilizes meteorological information to predict rainstorms. Should dangerous water levels be detected, ALSOK will quickly
assess the situation and make the necessary emergency reports. If
requested, road barriers can be lowered remotely to prevent floodingrelated accidents.
Another service of this nature is ALSOK’s Road Tunnel Emergency
Reporting and Monitoring Service. Accidents and fires inside tunnels
and incidents associated with aging social infrastructure, such as thoseinstalled during the period of the Japanese postwar economic miracle,
have the potential to develop into serious calamities. For this reason,
effective initial responses are of the utmost importance. However, it is notuncommon for responses to be delayed due to a lack of budget or labor.
Created through collaboration with municipal governments, our Road
Tunnel Emergency Reporting and Monitoring Service is the evolved formof a service that was previously available only in certain regions. This
service offers efficient management of tunnel safety and swift response intimes of emergency, thereby
reducing the need for government
employees to watch tunnels atnight or on public holidays andsubsequently lowering management costs while helping municipal governments maintain andmanage social infrastructure.
Furthermore, ALSOK provides
various other services in response
Road barrier deployed via our Underpass
to social needs related to the Monitoring Service

operation and management of buildings, facilities, and other properties,
including its Facilities Management Services, which offer comprehensive support for hygiene management, security, and countless othermanagement tasks.
(See “Initiatives at Group Companies” below.)Comprehensive Management and Operation Services for Various Fields

ALSOK BUILDING SERVICES CO., LTD. (previously Sokei Building Service Co., Ltd.), was the first subsidiary to be established by the Company and has been providing general property management services over the course of many years. This
company offers services ranging from everyday management support to security, renovation, and comprehensive facility
management services that help improve the value of customer buildings, facilities, and other properties. By providing total
support for the operation and management of customer properties, ALSOK BUILDING SERVICES enables customers tofocus on the core aspects of their business. When serving large-scale facilities, managers possessing a breadth of insightand experience are appointed to handle such tasks as outsourcing a wide range of duties from a comprehensive management perspective. These managers coordinate with customers and individuals responsible for different areas of operation
as well as perform various tasks and provide guidance and supervision to ensure smooth management and operation ofcustomer properties.

ALSOK BUILDING SERVICES employees
explaining progress of large-scale renovation project

ALSOK REPORT 201520

Material Theme: Labor Practice Cultivating Human Resources and Building a Comfortable Workplace Environment

The Company strives to help employees realize their fullpotential. To this end, it is enhancing training ­systems,
actively supporting career development, ­promoting­diversity, and otherwise building a ­comfortable workplaceenvironment and cultivating the human resources who
underpin its corporate activities.

Data on Initiatives for Promoting theUtilization of Human Resources

Data on ALSOK’s Human Resources

Number of Employees(Consolidated, as of March 31, 2015)

31,221

Security Services

25,784General Property
Management andFire Protection Services

1,670(Non-consolidated, fiscal year ended March 31, 2015)

Long-Term Care Services /Other Services
774
Corporate (shared)

2,993

Percentage of Administrative Positions Filled
by Women(Non-consolidated, as of March 31, 2015)

3.2

%

125

Employee Satisfaction Meetings
provide opportunities for frankexchanges of opinions between
executives and other employees.

Number of Employees Undergoing Trainingat Tokyo and Osaka Training Centers

The medium-term management
plan has set forth the goal of
having 5% of administrative
positions filled by women, andinitiatives are being advanced
to this end.

Number of Female ALSOK Group Employees(Fiscal year ended March 31, 2015)

5,422

Percentage of Employees Returning to Workafter Childcare Leave(Number of effective employees including part-time workers,
as of March 31, 2015)

6,733

Number of Employee Satisfaction
Meetings Held

(Non-consolidated total for male and female employees, as of March 31, 2015)

Security Services

3,778

General Property
Management andFire Protection Services

1,109

96.6

%

Long-Term Care Services /Other Services
1,846

Number of Female ALSOK Group
Employees with Children

Number of Good Service Thanks Cards
Distributed(Number of effective employees including part-time workers, as of March 31, 2015)(Non-consolidated, fiscal year ended March 31, 2015)

1,958
21 ALSOK REPORT 2015

46,278The Good Service Thanks
Card system was designed to
reward employees that haverealized the high level ofservices the Company targets.
This system contributes to thecreation of a workplace environment that always emphasizes employee satisfaction.

CLOSE UP

Training for Human Resources
Supporting ALSOK
Number of training programs
conducted at training centers

Approx.

70(Fiscal year ended March 31, 2015)

At ALSOK, we view employees as the most important resource underpinning our business activities. Reflecting this basic approach, we develop human resources who will help us realize ourmanagement philosophy, which calls on us to “devote our best efforts to protecting the safety
and security of our customers and of society as a whole.” In addition to legal education pursuant
to the Security Services Act, we conduct a wide variety of employee training programs to enhance
our security services and foster employees with appropriate business skills. For example, fromthe new employee level onward, we conduct training by division, including sales, electronic security services, stationed security services, transportation security services, and R&D. Also, we
conduct training for specific employee ranks and for managers.

Various Training Programs for Improving Service Quality
About ALSOKThe security services business entails protecting the lives and properties of customers, and it istherefore absolutely essential that we perform our duties in a disciplined manner to earn the trust ofcustomers. Accordingly, ALSOK positions human resource development among its top priorities
and is conducting various training programs, including training for new employees as well as rankbased training for veteran employees.
Over the past decade, we have sought to get back to basics, instituting training programs thatemphasize thinking patterns and actions based on ALSOK’s management philosophy. Upon entering the Company, new employees undergo training aimed at making them realize the gravity of theirposition as contributing members of society and endowing them with the sense of responsibility
required in the security services business. Watching these fledgling employees proceed onto more
specialized training as they mature and continue to develop is what motivates me in my work. Later,
veteran employees can take part in rank-based training, where they once again learn about corporate ethics, giving them an opportunity to practice introspection and become more complete humanbeings. The ALSOK Group also trains mid-career hires, some of whom are more than 60 years old.
I often hear such employees express that the way they viewed life changed after they had completed their training.
I will continue to devote my efforts to human resource development into the future, striving tohelp improve the quality of the services ALSOK provides.

Takumi Mizota
Assistant Manager, Tokyo Training Center,
Education & Training Department

Personal Growth through Rigorous Employee Training

Himeno Yonei
HOME ALSOK Group (II)ALSOK Shibuya Branch

When I was in university, I sat in on an explanation of ALSOK at a job fair. While I had originallybelieved that security services companies were largely male dominated, this preconception disappeared after hearing the explanation, and I became captivated with ALSOK’s extensive employee
training programs, which inspired me to join the Company.
I still remember the new employee training I participated in upon joining ALSOK, specifically
how we were rigorously trained on the fundamentals necessary for security guards and how I
learned the just-minded nature this position required.
After completing new employee training, I moved on to sales training. During this training, I was
designated as the head student, becoming the representative for the other trainees, a position thatsometimes weighed heavily on my shoulders. Looking back on the experience, however, I realizethat this position strengthened my sense of autonomy. Thanks to that and the strict yet passionate
guidance of the experienced employee instructors, I can confidently explain the appeal of ALSOK’s
extensive training programs in my own words, even during daily sales activities.
I plan to participate in even-more specialized training in the future, and I will take advantage ofthe expertise gained through such trainings to further my personal development and move forward
on my chosen career path at ALSOK.

ALSOK REPORT 201522

Material Theme: Labor Practice Cultivating Human Resources and Building a Comfortable Workplace Environment

Characteristics of ALSOK’s Human
Resource Development Systems
Basic Approach to Human Resource Development
At ALSOK, we view employees as the most important resource underpinning our business activities. Reflecting this basic approach, wedevelop human resources who will help us realize our management
philosophy, which calls on us to “devote our best efforts to protecting
the safety and security of our customers and of society as a whole.”
In all of our training programs, we further understanding of the fundamental spirit that we have adhered to since our foundation, which is
described in our management philosophy, management policies, andcode of conduct. At the same time, we have established a training
system to ensure that we put this spirit into practice in all aspects of ourbusiness operations.
Furthermore, training for new employees at Group companies isconducted by the Sohgo Security Alliance Education and Training
Union, which has an office in ALSOK’s Head Office.
Since a television program featured the training we conduct for new
employees, we have received numerous requests from schools andcompanies to conduct training on their behalf. Catering to this demand,
we have been training non-ALSOK employees at ALSOK JUKU (ALSOKWorkshops) since September 2011 to improve their basic skills as
members of society.

Employee Skill Improvement Program
The Company provides various opportunities for employees todevelop their skills outside of group training and on-the-job training. At the same time, we support individuals looking to pursue
further education on their own accord, and we have implemented
the Employee Skill Improvement Program to help facilitate theenhancement of employee skills.
Specific measures conducted through this program include
providing support for holding self-development classes, helping
develop an environment conducive to reading, coaching education
representatives at branches, and bolstering the amount of educational materials and digital content made available for employees.
We believe that reading is an important means for employees pursuing self-development. Based on this belief, we opened the ALSOKLIBRARY, a Company library that is divided between two locations: theninth floor of ALSOK’s Head Office Building and the Sokei Riverside
Building in Koto Ward in Tokyo. On March 31, 2015, the total numberof documents contained within this library exceeded 3,300. Employees
can request that documents be sent to them via the internal mailsystem through a checkout option available
through the Company
intranet, a measure thatprovides even employees stationed in offices inremote locations withaccess to this library.
ALSOK LIBRARY at ALSOK’s Head Office

23 ALSOK REPORT 2015

Self-Development Classes
ALSOK encourages employees to hold self-development classes tofacilitate their attempts to further improve their skills and develop higher
levels of knowledge. These efforts include classes conducted by executive officers and other employees that serve as in-house lecturers on
subjects like marketing, accounting, and other areas directly related tobusiness as well as a wide range of other courses, such as those on
foreign languages and modern history. In the year under review, 15classes on these and other subjects were held.

Career Development Programs
Human Resource Development through Personnel
Exchanges and the Internal Open Application System
ALSOK aims to utilize capable employees, from young employees tomanagers, in a wider range of situations in order to develop personnel
who can drive profit growth for the entire Group. We believe such efforts
will strengthen Group management. To facilitate this type of humanresource development, we actively conduct personnel exchanges
between Group companies as well as with other companies and central
government agencies (the Public-Private Personnel Exchange System).
In addition, ALSOK has instituted an internal open application system.
Through this system, we discover and develop human resources
capable of working in and forming the core of organizations in a wide
range of the Company’s business areas—from strategic businesses
related to new businesses, overseas businesses, and mergers andacquisitions through to sales and frontline operations. As of March 31,
2015, a total of 209 employees had taken advantage of this internal
open application system. Going forward, we will continue to support
the career development of employees to facilitate the growth of humanresources throughout the entire Group.

Qualification Acquisition
In conducting security services operations, specialized qualifications
are required for each area of business. For this reason, we strive toincrease the percentage of employees that have obtained publicly recognized qualifications. Under the ALSOK Standards, we have established targets for the acquisition of publicly recognized qualifications,and we are providing support to employees in acquiring such qualifications, including compensating them for related expenses, with the aimof meeting these targets.
Furthermore, with the goal of improving the capabilities of our technicians, we have introduced an e-learning program that is available to
ALSOK technicians throughout Japan. In addition, we encourage
employees to acquire qualifications relating to system installation, fire
prevention equipment, electrical work, and information technologies. Asof March 31, 2015, a total of 37,541 employees at SOHGO SECURITYSERVICES CO., LTD., had acquired publicly recognized qualifications.

Creation of a Comfortable
Workplace Environment
Complete Lineup of Support
Systems for Female Employees

Consultations through the ALSOK Support Line may be conducted
face-to-face; via the Internet; over the telephone, with immediate telephone
access available; through email; or other means, making this support line a
consultation venue that is easy to use for employees and their families.
Kurumin mark signifying­c ompanies with supportive
child-raising systems

Mental Health Care
Helping employees maintain sound mental health is vital to security
services operations. To promote good mental health, the Company has
developed its Mental Health Maintenance Plan in accordance with theguidelines of the Ministry of Health, Labour and Welfare. Also, we
respond to employee concerns flexibly through a help desk—the
ALSOK Support Line—and we have prepared a manual to help managers deal with employees suffering from poor mental health. In 2012, we
expanded the scope of availability of the ALSOK Support Line to Group
companies. We are constantly working to further enhance this system.

Communication with Employees
Forums for Exchanges with Employees
ALSOK periodically provides
opportunities for employees
and senior managers to
exchange opinions. Also, wehold discussion forums withthe president, which serve as
prime opportunities for facilitating communication by allowing
employees to communicate Discussion forum with President Aoyama
directly with the president.
Moreover, to provide further opportunities for frank exchanges of
opinions between executives and other employees, we held 125
Employee Satisfaction Meetings during the year under review.

About ALSOK

ALSOK has developed a complete lineup
of support systems for its female employees to ensure that these employees can work with peace of mind andrealize their full potential. Leave can be taken during pregnancy andafter childbirth, and we have reemployment systems for employees
who have resigned for childbirth or parenting reasons.
Due to these efforts, the Company has been certified by the Tokyo
Labour Bureau of the Ministry of Health, Labour and Welfare as a company having supportive child-raising systems. These strong support
systems have helped empower female employees in a wide range offields, including management as well as sales and technical divisions
and even actual security services.

Employee Surveys—Gathering Employee Feedback
ALSOK has been annually conducting employee surveys since 1999.
These surveys investigate matters that include the penetration of CSR
activities and employee awareness of them. In addition, we use thefindings of these surveys when formulating new measures, and survey
results are relayed to employees through an internal newsletter.

Major Systems for Creating a Comfortable Workplace Environment
SystemDetails

Prenatal checkup leave

Special paid leave provided on an application basis based on the stage of pregnancy
Leave provided over a defined period for employees living with and caring for children under the age of threeChildcare leave(legal requirements only mandate leave for employees with children under the age of one)

System of shortened working hours for employees raising children that have yet to complete the third grade of elementary school

Shortened working hours for childcare(legal requirements only mandate shortened working hours provided to employees with children under the age of three)

Long-term care leave

Up to 365 days of leave per applicable family member provided to employees looking after family members requiringlong-term care (legal requirements only mandate leave of 93 days per family member)

Support for returning to work after extended work leave
for personal injuries and illness

Program for providing leave to employees requiring long-term absence from work due to personal injuries or illnesses that
includes trial return and other support for returning to work

ALSOK Support Line

Consultation venue based on the established Mental Health Maintenance Plan for employees and their families that provides
various consultation methods

Internal open application system

Trial promotion system for placing employees in overseas, planning, development, new business, or supervisory positions

Rehiring for retirees, including for positions at
Group companies

Rehiring system for employees reaching mandatory retirement age with an option for employees to be transferred to Group
companies after early retirement

Disaster relief volunteer support

System for authorizing employee participation in volunteer activities after natural disasters

Initiatives at Group Companies

In-House Daycare Center Catering to Diverse Needs of Working Women

In July 2015, Kita-Kanto Sohgo Security Services Co., Ltd., opened a daycare center known as Kita-Kanto Sohgo
Security Services Daycare Center MAMOROOM on the first floor of its head office building. This directly operated daycare center was created with the aim of responding to the diverse needs of working women arising from the increase in
the number of employee households in which both parents work. At MAMOROOM, parents may enroll their children inmonthly daycare services or have their children watched on a one-off basis. Children may also be left with the center
after normal working hours. Available to anyone, not just employees, this small facility offers the children it looks after apersonal and warm atmosphere.
Moreover, MAMOROOM has a cooperative agreement with the adjacent clinic, providing an extra degree of safety andsecurity to this daycare center. Should a child fall ill or suffer an injury, an examination at this clinic is only a door away.

MAMOROOM daycare center operated
by Kita-Kanto Sohgo Security Services

ALSOK REPORT 201524

Material Theme: Community

Contributing to Local Communities through Active Communication

To give form to the arigato no kokoro part of ALSOK’s
fundamental spirit, the Company acts as a good
­corporate citizen, diligently working to contribute to theresolution of the various issues faced by the­communities it serves.

Data on ALSOK’s Social Contribution Activities

Expenditures forSocial Contribution Activities

Aggregate Number of ALSOK ANSHINKYOSHITSU Participants(Non-consolidated, fiscal year ended March 31, 2015)(As of March 31, 2015)

¥

388.8

millionAggregate Number of Individuals
Completing First-Aid Training(Consolidated, as of March 31, 2015)

1,134,837
Aggregate Number of Individuals Certified
under ANSHIN KYOSHITSU Master
Certification System (Consolidated, as of March 31, 2015)

15,6841,310

Aggregate Number Welfare Vehicles
Donated through ALSOK ARIGATO UNDO

Percentage of Teachers Giving Positive
Evaluations to the ALSOK ANSHINKYOSHITSU Program (As of March 31, 2015)(As of March 31, 2015)

92

97.5

For more information on the ANSHINKYOSHITSU Master Certification System,
please refer to page 26.

%

Aggregate Number of Times ALSOK-Supported
Athletes Have Participated in the Olympics*

Number of Employees Holding Black Belts
in Martial Arts

(As of March 31, 2015)(Consolidated, as of March 31, 2015)24

Aggregate Number of Medals Won(As of March 31, 2015)
Gold medals
5
Silver medal
4
Bronze medals
0* The Company has been selected as a Tokyo 2020 Official Partner in the category of“Security Services and Planning” for the 2020 Summer Olympic and Paralympic Games.

25 ALSOK REPORT 2015

3,537

CLOSE UP

Aggregate Number of
ALSOK ANSHIN KYOSHITSU
Classes Held

36,938(Consolidated, as of March 31, 2015)

As one of its social contribution activities aimed at resolving the issues faced by local communities, the ALSOK Group dispatches employees to elementary schools throughout Japan to conduct the ALSOK ANSHIN KYOSHITSU program, which teaches children crime prevention andfirst-aid skills. We have been conducting this program for more than a decade. This program has
since grown to massive proportions, and, as of March 31, 2015, we have held a total of 36,938
classes for more than 1.1 million students at 8,405 elementary schools. This social contribution
activity, advanced by ALSOK’s security professionals, has garnered a strong reputation among
teachers and guardians alike.

Participation in Education to Protect the Safety andSecurity of Communities
About ALSOKWhen we first began the ALSOK ANSHIN KYOSHITSU program, we lacked the necessary expertise for conducting classes, a fact that was a source of hardship and anxiety for our employee
instructors. Nevertheless, we continued to advance this initiative, driven steadily forward by thesense of purpose we felt in protecting children. These efforts paid off in the end as, today, thisprogram has successfully won the support of countless communities. In 2014, we saw new
employees enter ALSOK Group companies who had participated in ALSOK ANSHIN KYOSHITSU
classes when they were in elementary school. I was filled with joy by this event, which was a testament to the program’s long history spanning more than 10 years.
To support this program, the ALSOK Group has established a unique certification system
known as the ANSHIN KYOSHITSU Master Certification System. As employee instructors gain
experience teaching, they are able to acquire higher levels of certification by undergoing internal
trainings and tests, beginning with Master I and then moving on to Master II and III. This system
therefore helps improve the quality of our classes while providing additional motivation for employee
participants. With the goal of protecting the smiles of as many children as possible, we will continue to advance this invaluable education activity on a Groupwide basis, aiming to make ALSOK
employees into readily apparent contributors to the safety and security of local communities.

Takuro Seto
PR Section (I), PR Department

Badges for each certification level of
ANSHIN KYOSHITSU Master Certification
SystemRealization of a Society in which Children Can Grow Safely
and Securely

Takashi Asano
Security Operation and Management Section,
Security Operations Dept. (I)I love children, and I have always had an interest in becoming a teacher. For this reason, after sitting
in on an ALSOK ANSHIN KYOSHITSU class, I quickly decided to become an instructor myself.
I have acquired Master III certification under the ANSHIN KYOSHITSU Master Certification
System, which is designed to help improve the quality of our classes. This level of certification isawarded to those individuals capable of serving as leaders in these activities. As such, I often findmyself responsible for coordinating our efforts with schools and communities while also passing myskills onto less-experienced employee instructors.
It is not easy conducting ALSOK ANSHIN KYOSHITSU classes, as the thought processes ofindividual children differ as do their responses to our classes. Still, when children tell me that theywant to become an ALSOK ANSHIN KYOSHITSU instructor in the future, I feel all is worthwhile.
There is also a lot to be learned from children, and I am frequently inspired to consider further whatis necessary for ensuring the safety and security of local communities.
By providing ALSOK’s insight and expertise, I hope to contribute to the realization of a society
in which children can grow safely and securely.

ALSOK REPORT 201526

Material Theme: Community

Contributing to Local Communities through Active Communication

Donations and Charitable Activities Basedon ALSOK’s Management Philosophy

Crime Prevention, Disaster Prevention, and
Educational Activities for Local Communities

ALSOK ARIGATO UNDOThe ALSOK ARIGATO UNDO movement was launched in 1967 as anembodiment of the spirit of gratefulness and gratitude known as arigato
no kokoro, which was originally defined by ALSOK’s founder Jun Murai
based on the belief that people in society agree to live and let others
live. The goal of this movement is to reflect our arigato no kokoro for the
benefits we receive constantly from the nation and society by contributing to society in Japan and overseas.
The movement is funded by donations from employees and executives at the Company and Group companies who concur with its objectives. Through monetary and non-monetary donations, including those
directed at disaster relief, this movement supports social welfare, disaster relief, and a wide range of other activities.

Major Donations and Recipients through ALSOKARIGATO UNDO in the Fiscal Year Ended March 31, 2015
Donations
Recipient•	Yuukikai (Social Welfare Corporation, Niigata Prefecture)•	Yuukari (Social Welfare Corporation, Kagoshima Prefecture)•	Senjukai (Social Welfare Corporation, Chiba Prefecture)•	Works Mirai Kochi (Specified Non-Profit Organization,
Kochi Prefecture)•	Yuuyuusha (Specified Non-Profit Organization, Shizuoka Prefecture)•	Matsuyama City Welfare Association (Social Welfare Corporation,
Ehime Prefecture)

Non-monetary Donations
Items•	3 welfare vehicles equipped with wheelchair lifts donated to welfare
facilities, such as service centers for senior citizens and people withdisabilities (Tokushima Prefecture, Wakayama Prefecture, Chiba
Prefecture)•	10,000 paper binoculars assembled at a support facility for people
with disabilities donated to spectators at the National Sports Festivalof Japan, in Nagasaki Prefecture

Monetary Donations for Disasters
Disaster•	Landslides (Hiroshima City)•	Rainstorms during July–August rainy season (Itami City, Fukuchiyama City)•	Typhoon No. 11, Typhoon No. 12 (Kochi Prefecture, Tokushima
Prefecture)

Ceremony commemorating donation of
binoculars to National Sports Festival ofJapan, in Nagasaki Prefecture

27 ALSOK REPORT 2015

Initiatives to Make Towns Safe and Secure

Handover of welfare vehicle to Bansou S&S
Start, Tokushima

The ALSOK Group makes a concerted effort to conduct crime prevention activities in local communities. Specifically, we carry out volunteer
crime prevention patrols using vehicles equipped with blue revolving
lights in the areas surrounding branch sites every month. In addition,
when on standby, employees conduct crime prevention patrols along
the routes used by elementary school students when commuting toand from school. Through these efforts, employees are forming aclose link with local communities. They work to raise crime prevention
awareness and encourage community members to help fight crime.
With the aging of society, crime is becoming a problem for all ofsociety, as seen in bank transfer scams and other crimes targeting
senior citizens. Realizing this fact, we began offering in 2013 ALSOKHOTTO LIFE KOZA, a class for senior citizens to teach them how to
avoid crimes targeting their age group. ALSOK instructors are­d ispatched to community aid centers and other facilities wherec ommunity members gather­
to conduct classes that allow
senior citizens to learn about
crime through fun activities likecard games and quizzes. For
people that have concerns about
their health or the health of theirpartner, we provide First-Aid
Experience Classes, which teach Senior citizens participating in ALSOK HOTTOCPR and AED usage and edu- LIFE KOZA together with children(ALSOK Minami Tama Branch)cate participants with regard to
the type of symptoms that warrant an immediate call to paramedics. Furthermore, to spreadfirst-aid awareness and knowledge among local residents, we
provide guidance and advice on
the use of AEDs at local eventsand disaster response training.
AED training (ALSOK Miyagi Branch)

Safety and Security
Provided through Wildlife Trapping and Monitoring
Systems
ALSOK is active in the prevention and control of damage from wildlife.
In recent years, the issue of deer, boars, monkeys, and other wildlife
causing damage to crops or disrupting ecosystems has become
increasingly serious and widespread. By installing sensors and cameras
to conduct monitoring duties, the Company helps reduce the laborburden placed on municipal government organizations and hunting
associations while ensuring quick detection of cases in which traps
capture animals that are not harmful or cause injury to humans. In thismanner, we are working to protect the safety and security of farmers aswell as preserve the pristine nature of undeveloped woodlands.

Promotion of Sports

Support for Education and Volunteer Activities

Support for the Cultivation of Athletes

Jun Murai Memorial Foundation

ALSOK supports sports, such as judo, with the goal of heightening
team spirit among employees and thereby contributing to the development of the Company’s business.
The Company currently has a total of 10 sports clubs, including
its prestigious judo and wrestling clubs, which have produced
numerous Olympic athletes* and world champions.
ALSOK is also actively supporting the healthy development ofchildren from local communities through sports. In the fiscal year
ended March 31, 2015, we held a judo workshop in the city of
Shizuoka in Shizuoka Prefecture staffed by employees that weremembers of the Company’s judo club. In addition, members of the
track and field club at Gunma Sohgo Guard System Co., Ltd., provided shot put, discus, and hammer throw instruction for children in
the surrounding community. ALSOK also held various kendo andjudo workshops throughout Japan.

Since 2000, the Jun Murai Memorial Foundation has been providing scholarships of ¥30,000 per month to university students andgraduate students finding it difficult to study for financial reasons.
In the year under review, the foundation provided scholarships to49 students, which totaled ¥17.6 million.

Exhibit at the Manabi no Fes 2014 Family
Education Event
About ALSOK

ALSOK collaborates with Mainichi Media Café, an organization that
conducts CSR activities sponsored by The Mainichi Newspapers
Co., Ltd. As one facet of this collaboration, we held an exhibit at the
Manabi no Fes 2014 family education event. At this event, we conducted crime prevention quizzes that provided elementary school
students and their parents with a fun opportunity to learn about thepotential risks present on the way to and from school.

Disaster Relief Volunteer Support System
In June 2012, the Company introduced its disaster relief volunteer
support system to help support the volunteer activities of employees. This system enables employees to acquire up to five special
leave days each fiscal year to participate in Company-approved
disaster relief volunteer activities.

Employees from Gunma Sohgo Guard Systemproviding instruction

TOPICS

Communal Activities in Earthquake-Stricken Regions Led by Star ALSOK Athletes

On November 12 and 13, 2014, star athletes from ALSOK sports clubs visited Miyagi Prefecture, which was heavily
impacted by the Great East Japan Earthquake, to lead various communal activities based on the theme of empowering the quake-stricken Tohoku region.
On November 12, wrestlers Kaori Icho, Sohsuke Takatani, and Takehiro Kanakubo visited Onagawa Junior HighSchool, in Onagawa Town, where they conducted a talk show, forging a bond with students by responding to theirvarious questions.
On November 13, judo wrestlers Riki Nakaya, Yusuke Kumashiro, Megumi Tachimoto, and Haruka Tachimoto took
part in lily bulb planting at Arahama Elementary School, in Sendai City, a school scheduled for closure due to the impactsof the Great East Japan Earthquake. This communal agricultural activity was conducted together with fifth gradersfrom this school. These athletes also helped make mochi (pounded rice) from rice harvested in the Arahama area.

ALSOK athletes conducting talk show for students
at Onagawa Junior High School

Furthermore, wrestlers Saori Yoshida and Kaori Icho visited the Miyagi Prefectural Office in Sendai City andthe Sendai City Office along with President Aoyama. Vice Governor of Miyagi Prefecture Shuichi Miura thanked
Yoshida and Icho for their visit, stating that the visit was surely a great source of hope for the disheartened childrenthat had suffered losses due to the earthquake in this heavily impacted region.
Yoshida also visited a temporary housing complex in Arahama, where the impacts of the earthquake wereparticularly severe. There, she held a communal gathering for the complex’s roughly 1,000 residents.

ALSOK athletes planting lily bulbs at Arahama
Elementary School* The Company has been selected as a Tokyo 2020 Official Partner in the category of “Security Services and Planning” for the 2020 Summer Olympic and Paralympic Games.

ALSOK REPORT 201528

Material Theme: Operating Practice Providing Trustworthy Security Services

Groupwide Compliance Initiatives
The ALSOK Group’s services are founded on the solid trust of society. Stringent compliance with relevant laws isabsolutely essential, and we must also practice strong corporate ethics. The Company therefore places compliance among its highest management priorities, and the Group is united in advancing compliance initiatives.

Stringent Compliance

ALSOK Hotline

Focus on Compliance

Expansion of Scope to Group Companies

The Company is heavily focused on compliance and conducts its security services operations while observing the Security Services Act. The
Company has established the Compliance Committee, which is headedby the executive officer in charge of compliance. The committee strives
to install an unwavering awareness of compliance in all executive officers and employees based on the compliance rules formulated in 2002,
and it periodically verifies the status of compliance in business andother activities.

The ALSOK Hotline was set up in April 2004 to facilitate reporting andconsultation regarding harassment and other inappropriate corporate
behavior. If employees encounter legal issues, improper conduct, or
unethical behavior, they are able to report such instances using thisvenue without fear of detrimental treatment.
Characteristics of the ALSOK Hotline include the protection of thereporter, the prevention of detrimental treatment, and the ability toreport anonymously. These rules form
the foundation of this internal reporting
system. We view compliance as animportant issue needing to be addressedon a Groupwide basis, and the scope of
this hotline is being expanded to include
Group companies for this reason. As of
March 31, 2015, the ALSOK Hotline wasavailable to employees of the Company
Ethics education booklets
and 48 Group companies.

Compliance Initiatives Implemented on aGroupwide Basis
The ALSOK Group implements Groupwide compliance initiatives thatare principally based on established common themes.
In accordance with the theme for each respective year, interdivision
coordination is pursued to cultivate and entrench a compliance-based
mind-set.
In the fiscal year ended March 31, 2015, we worked to cultivateand entrench awareness with regard to six themes, each of which waspromoted over a two-month period. The themes were compliance with
the Act on Special Measures Preventing and Correcting Actions That
Interfere with Shifting Consumption Tax with the Aim to Ensure theSmooth and Appropriate Pass-on of Consumption Tax; strict compliance with traffic laws; stringent labor management to prevent excessive
work hours and unpaid overtime; complete avoidance of insider trading; thorough prevention of information leaks through appropriate useof IT systems; and proper submission of legally mandated forms andthorough compliance with the Security Services Act. After each twomonth period, reports on activities conducted and their outcomes werecompiled by Group companies as well as by the Company.

Initiatives at Group Companies

distributed to employees

Promotion material for ALSOK Hotline using eye-catching illustrations

Antisocial Forces Response Training

The ALSOK Group is a proud provider of security services, dealing in safety by protecting the lives, wellbeing, andassets of customers, and it is fully aware of the responsibility that this entails. We are therefore committed to conducting appropriate business activities. At the same time, we are working to rid society of antisocial forces, such as crime
syndicates and people and organizations that seek economic gain through scams and other sinister methods. ALSOK
is thereby working to contribute to improved public safety while fulfilling its social responsibilities.
In the year under review, Niigata Sohgo Security Services Co., Ltd., held a training session aimed at preventing any
connections with antisocial forces that was conducted by the managing director of the Niigata Center for the Eliminationof Boryokudan. Primarily targeted at department heads, this training offered information on crime syndicates and other
antisocial forces as well as on recent policies in this regard. Members of the Niigata Center for the Elimination of
Boryokudan guided role-playing exercises illustrating the procedure for nullifying contracts if the counterparty is foundto be a crime syndicate as well as other exercises designed to help employees better respond to antisocial forces.

29 ALSOK REPORT 2015

Antisocial forces response training conducted at Niigata Sohgo Security Services

Business Continuity Initiatives as a Company Protecting the Safety
and Security of Society
In preparation for extraordinary circumstances, such as large-scale natural disasters and accidents, the Company
has established a business continuity plan (BCP). Based on this BCP, we acquired certification under ISO 22301,
the international standard for business continuity management systems (BCMSs), and are strengthening business
continuity management initiatives. In addition, ALSOK offers BCP SOLUTION SERVICES grounded in the expertise
acquired while developing its own BCP.

Business Continuity—A Crucial Concern for
Security Companies

TOPICSALSOK supports an important part of social infrastructure that
underpins the safety and security of society, and the Company isthus charged with the crucial social responsibility of ensuring thecontinuity of its business. Natural disasters cannot be prevented.
For this reason, it is absolutely essential that we implement countermeasures to minimize the impacts of such disasters and be
prepared to appropriately resume any disrupted operations inorder to halt the spread of damages by averting secondary disasters. Moreover, risk management based on BCPs and business
continuity management principles has become a common practice, and all organizations are now expected to establish practicalrecovery plans and be capable in swiftly resuming disrupted
operations. To ensure these capabilities, regular drills are required.
The Company conducts comprehensive disaster response drills
as well as drills on assembling employees via travel by foot oncea year. It also practices safety conformation through drills for all
employees that simulate various disasters, thereby guaranteeing
readiness for various emergency situations. Furthermore, we realize that the expertise accumulated by implementing the Company’s
BCP measures can be applied to any organization or company,
and we are therefore providing this expertise in the form of BCP
SOLUTION SERVICES.

Drill for assembling employees via travel
by foot

About ALSOK

ALSOK’s main business is to protect the safety and security of people,
meaning that the Company supports an important part of social infrastructure. For this reason, it is absolutely essential that we prepare for unpredictable disasters and accidents and ensure that we can continue business
operations even under extreme circumstances. In fact, we believe thiscrucial concern also represents one of our responsibilities toward society.
At our Head Office as well as at regional headquarters and otheroffices, we continue to conduct practical trainings that has been finetuned to simulate a wide range of disturbances. In addition, specificresponse procedures have been developed for such disturbances, which
include large-scale earthquakes and other natural disasters, damages tofacilities, and an outbreak of a new strain of influenza. We have also analyzed the daily road traffic congestion patterns experienced when performing transportation security services as well as fuel consumption
trends in order to facilitate the development of concrete business continuity measures. Furthermore, we use motorcycles and bicycles on a daily
basis when responding to ATM malfunctions as another measure toensure business continuity in the event of a disaster.
ALSOK recognizes that there is no defined end point for BCPs andthat there is always room for improvement.
Partially influenced by the unprecedented
Great East Japan Earthquake of 2011, we
realized the need to further improve our
BCP. Accordingly, we acquired certification
under ISO 22301 in March 2014, making theCompany the first security services provider inJapan to receive this certification. Going forward, ALSOK will continue instituting
measures to ensure it can always fulfill its
social responsibilities, even under extreme
circumstances.
Proof of ISO 22301certification

BCP Drills in Preparation for Emergencies

Comprehensive disaster response drill

BCP Support Provided as Initial Response Experts

BCPs are becoming increasingly more important in ensuring that companies can minimize the impacts of abnormal
occurrences, accidents, natural disasters, and other emergency situations on their business, continue operating, andquickly resume any disrupted operations. To aid companies in establishing BCPs for responding to such emergencies, ALSOK provides BCP SOLUTION SERVICES to offer comprehensive support ranging from assistance in formulating plans and manuals to guidance for conducting drills and the provision of disaster prevention supplies. By
drawing on the wealth of experience and expertise we possess as initial response experts, we help customers
develop disaster response manuals that are optimally based on the perspective of work sites. We also provide support for conducting disaster response drills, select the disaster response items customers should stockpile, and offer
aid for instituting various other risk management measures.

Disaster response planning utilizing a map

ALSOK REPORT 201530

Material Theme: Operating Practice Providing Trustworthy Security Services

Protection and Management of Information Assets
The ALSOK Group realizes that properly protecting and managing information assets is an important task for
management. For this reason, we have established the Basic Information Security Policy and are constructing
systems to ensure that appropriate precautions are always taken for information leaks and other information risks.

Measures for Protecting and Managing
Information Assets
Basic Policies for Information Security
The ALSOK Group receives information from customers whenconcluding security contracts. Therefore, appropriate protection
and management of information assets is essential to conducting
security operations.
With this in mind, we established the Basic Information Security
Policy in 2004. Forming the basis for Companywide information
security efforts, this policy is applied to all employees, including
executive officers, and all the information assets that we hold.
In addition, ALSOK has established the Personal Information
Security Policy as well as developed internal personal information
security regulations and management systems. Also, related training and educational programs are conducted. These measures areapplied to the Company and all Group companies. In these ways,
we ensure that personal information is properly protected.

IT System Security Measures
The ALSOK Group carefully monitors all computer servers that are connected to the Internet to determine whether or not they are vulnerable
to threats. We are thereby constructing systems that allow security
measures to be implemented immediately should the security precautions in place for a server be deemed insufficient.
In April 2012, with the aim of developing an understanding of therisks of computer viruses and educating employees, we began conducting internal drills to prepare for cyber-attacks utilizing targetedemails.* In addition, we have installed into all computers software thathelps prevent information leakage due to the loss of removable memory
media by setting limitations on saving files onto such media.
Furthermore, we periodically check employees’ private computers thatare used at home to confirm that the employees do not have any

TOPICSfi­ le-sharing software installed or business data saved to their hard disk.
This measure enables us to ensure the safety of non-work-use computers as well.
* A type of cyber-attack involving emails sent to specific companies or individuals with the aim of attacking
their systems or leaking confidential information

Strengthening of Systems for the Protection andManagement of Information Assets
Aiming to bolster the protection and management of information
assets, the ALSOK Group is promoting the acquisition of certification
under ISO 27001, which is the international standard for information
security management systems. As of March 31, 2015, the Company
and 15 Group companies had acquired this accreditation.
In addition, the Company has established an internal computer
security incident response team (CSIRT) as a precaution for the riskof cyber-attacks and other serious information security breaches.

Reinforcement of Personal Information
Management Systems
As a security company responsible for protecting people’s lives andassets, ALSOK realizes that the trust of customers forms the basis for
its operations. Striving to achieve even higher levels of personal information management, the Company acquired PrivacyMark® accreditation in July 2013.
The Company believes that promoting stringent personal information security management will in turn help improve the quality of services provided to customers.

The PrivacyMark System® was established by JIPDEC (Japan
Information Processing Development Center) to acknowledge
private enterprises that take appropriate measures to protect
personal information. Compliant enterprises are granted theright to display “PrivacyMark” in the course of their businessactivities.

Initiatives to Protect Information Assets—Targeted Email Response Drills

The damages brought about by targeted emails have come to be a major social issue in recent years. These intricately designed emails
present false information to lure unsuspecting readers into opening attachment files or clicking on misleading links. Should the recipient
fall for such deception, the computers or servers of the targeted organization will become infected with computer viruses, enabling thesender of the email to access and steal information on the technologies, customers, or know-how of the organization.
As these emails are only sent to specific targets, it is difficult for the viruses they carry to be detected by standard antivirus software.
To combat this threat, ALSOK conducts response drills several times a year in which simulated targeted emails are sent to employees
working at its Head Office and at all other Company offices. These drills encompass the procedure of immediately reporting to theinformation management representative should a targeted email be mistakenly opened, a measure meant to prevent damages fromsecondary incidents. We are thereby working to raise understanding and awareness among all employees with regard to such procedures as they carry out their daily duties.

31 ALSOK REPORT 2015

CSR Management

To the Company, CSR entails remaining ever mindful of the expectations of customers and society at large andexercising its management philosophy based on the principles of arigato no kokoro, an ever-present feeling ofgratefulness and gratitude, and bushi no seishin, a strong and noble samurai spirit that emphasizes teamwork andunity above all else.

ALSOK’s Fundamental Spirit and CSR Policy

Strengthening of the CSR Promotion
Framework

Protection of the Safety and Security of Society

Structure of CSR Ideals
Clear Identification of Activities Based on Our
Management Philosophy
Based on the Company’s management philosophy, ALSOK has established its management policies and code of conduct as well as a framework of internal rules and regulations. 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 ALSOKGroup should engage with its stakeholders. The code of conduct
defines how all members of the Company, including employees andexecutive officers, should act in carrying out their daily business activities. The Company has also established various regulations and internal
rules related to specific issues. Based on these guidelines, we are incorporating CSR activities into all areas of our business operations.
(For more information, please refer to page 15.)

Management Philosophy

CSR Activities Centered on the CSR OfficeIn April 2011, the Company established the CSR Office. This office is
responsible for all areas of the Group’s CSR activities and undertakes
such tasks as managing the implementation of CSR activities and communicating CSR-related information to stakeholders.
For the fiscal year ended March 31, 2015, the Company published
ALSOK Report 2015, the first edition of a new series of yearly reportsthat compile both financial and non-financial information to provide amore-integrated and easier-to-understand view of the link between the
ALSOK Group’s business activities and CSR activities. Meanwhile, we
provided more-robust disclosure of CSR-related information throughour website to better practice corporate accountability. Going forward,
we will continue to advance CSR activities in accordance with ISO
26000 as we plan and construct our website and future ALSOK reports
and undertake other endeavors to further promote CSR.

About ALSOK

Since its founding in July 1965, the Company has continued to develop
its security services business in accordance with its fundamental spirit,
which is defined by the two principles set out in its management philosophy: arigato no kokoro and bushi no seishin.
These two principles of our fundamental spirit embody our strong
sense of commitment toward protecting the safety and security of society. We believe that CSR entails faithfully exercising this fundamental
spirit and contributing to the resolution of the issues faced by customers and society through our business activities.

Initiatives to Inculcate CSR
Internal CSR Lectures
The CSR Office leads efforts to inculcate CSR throughout the Company.
These initiatives include distributing our in-house quarterly magazine,
ALSOK CSR Newsletter, and our CSR Activities Guide.
We also conduct a yearly lecture utilizing our CSR report that isincorporated into training for newly promoted managers. In the fiscal
year ended March 31, 2015, approximately 500 people attended thislecture. As a result, our annual questionnaires continue to show yearon-year improvement in the understanding of CSR among employees. Targeting all employees, including those of Group companies,
our dedicated department, the CSR Office, will continue leading CSR
education efforts.

Management
Policies
Code of Conduct
Training for newly promoted managers utilizing CSR Report 2014

Internal Regulations and Rules

ALSOK REPORT 201532

Consideration for the Global Environment

Global environmental concerns are common issues for all of humanity. For this reason, the Company is working to
reduce the environmental impact of its operations and has set concrete goals to this effect.

Energy Use and Environmental
Impact Reduction

Reduction of Security Vehicle Energy Use
Introduction of Fuel-Efficient and Eco-Friendly Vehicles

Concerted Group Effort to Reduce Energy Use
An April 2010 revision to the Act on the Rational Use of Energy
classifies the Company as a special company that uses energy
exceeding a specified volume, which is calculated by converting
the use of electricity, gas, kerosene, and other energy sources intokiloliters of crude oil. Consequently, we are required to reduceenergy usage by 1% or more per year versus the level of the fiscal
year ended March 31, 2010.
Mindful that we have many offices, facilities, and vehicles forbusiness use throughout Japan, we established the Medium- to
Long-Term Environmental Management Plan in the fiscal year
ended March 31, 2010. Based on this plan, the Company is making
a concerted effort to reduce electricity usage and vehicle fuel consumption volumes.
In addition, we analyze the usage patterns of every bank ATM
we manage throughout Japan in order to determine the optimalroutes for checking these ATMs. Through this process, we are able
to replenish and collect cash more efficiently without impeding customer convenience, which remains our top priority. These efforts
consequently allow us to limit the number of unnecessary ATM
checks, effectively reducing fuel consumption and CO2 emissions
associated with the travel involved in these checks.
In the fiscal year ended March 31, 2015, we worked to cultivate
a mind-set focused on electricity conservation among employees
while converting vehicle standby positions in the Electronic Security
Services segment to facility standby positions and actively introducing fuel-efficient vehicles and motorcycles into our fleet. At thesame time, with the aim of reducing vehicle traveling distance, wedeveloped more-efficient routes for use by sales staff on sales visits
and lowered the number of technicians placed on night duty.
As a result, we achieved a massive 7.9% reduction in electricity
usage in comparison with the fiscal year ended March 31, 2010,
the year in which we established reduction goals. This decrease
was accomplished despite the increase in the number of offices
and the record-breaking summer heat.
In addition, vehicle fuel consumption volumes showed a substantial reduction, decreasing 6.2% year on year, to 9,029.6 kiloliters.
While vehicle traveling distance rose due to the expanded range ofbusiness activities in the Transportation Security Services segment,
the impacts of this longer traveling distance were outweighed by thebenefits of introducing into our fleet hybrid-electric vehicles, motorcycles, and pedal electric cycles. Going forward, we will continue
working toward converting our entire fleet to eco-friendly vehicles in
the pursuit of further reductions in fuel consumption.
33 ALSOK REPORT 2015

Vehicles are a major part of the ALSOK Group’s operations.
However, we are actively introducing hybrid-electric vehicles, electric vehicles, motorcycles, pedal electric cycles, and other fuel-efficient vehicles with the aim of converting our entire fleet toeco-friendly vehicles. In addition, we are pursuing further fuel savings by promoting idling stops and eco-friendly driving techniques.
As of March 31, 2015, nearly all of the vehicles in ALSOK’s fleet
qualified as low-emissions vehicles based on the certification standards established by the Ministry of Land, Infrastructure, Transport
and Tourism. Specifically, the fleet comprised 373 hybrid-electricvehicles, and we have also introduced into this fleet 643 motorcycles, 5 electric motorcycles, 191 pedal electric cycles, and 429
bicycles with the aim of cutting fuel consumption while securing asufficient level of mobility. In addition, we have begun introducing
liquid petroleum gas powered vehicles and motorcycles* at certain
branches in order to further reduce our environmental footprint.
* 
Liquid petroleum gas poweredengines emit 12% to 15% less CO2
than gasoline engines and approximately 6% less CO 2 than diesel
engines with the same emission classand fuel-supply method. Accordingly,
liquid petroleum gas is seen as
the cleanest of all fossil fuels.

Hybrid-electric vehicle belonging to ALSOKTokushima branch

3R Initiatives
ALSOK is advancing Companywide initiatives based on the “3Rs,” orreduce, reuse, and recycle. We cooperate with garbage separation andink cartridge collection programs, and we also reuse and recycle various types of equipment. Articles to be disposed of at branches in theTokyo metropolitan area are accumulated at our repair center in ShinYokohama, which categorizes items, repairs and ships those to bereused, and properly disposes of or recycles the remaining items. In theyear under review, the average ratio of waste recycled at all branches
was approximately 34%. In addition, the rechargeable nickel-cadmium
batteries used in our various power supply equipment are recycled tomake further contributions to the preservation of the environment. The
range of batteries to be recycled was recently expanded, and we recycled approximately 17,000 batteries in the year under review as a result.

  Social Contribution Initiative Commemorating ALSOK’s 50th Anniversary—

PICK UP

Afforestation Activities in the Region Impacted by the Great East Japan Earthquake

About ALSOKIn April 2015, ALSOK planted approximately 2,000 modified disease-resistant Japanese black pine (Pinus thunbergii)­saplings in Sammu City, Chiba Prefecture. These afforestation activities were conducted as part of our social contribution
initiatives commemorating ALSOK’s 50th anniversary. President Aoyama and 102 employees took part in this event, which
was attended by Sammu City’s Mayor Senshu Shiina.

Environmental Preservation and Contribution to the
Safety and Security of Impacted Regions
Following the Great East Japan Earthquake, the Hasunuma area of
Sammu City was heavily impacted by the ensuing tsunami, whichalmost completely destroyed a stretch of approximately eight kilometers along the coastline. Hasunuma was the southernmost area to be
impacted by the tsunami that resulted from the earthquake, and it issometimes viewed as an invisible victim. As part of our social contribution initiatives commemorating ALSOK’s 50th anniversary, we conducted afforestation activities along the Hasunuma coastline with theaim of helping preserve the environment and reviving a forest that had
previously played a part in limiting disaster damages.
In this undertaking, we received guidance on tree-planting techniques from Laboratory of Earth Conscious Life, a specified non-profit
organization that conducts afforestation activities centered on Nagano
Prefecture and Chiba Prefecture. Over the course of the project, morethan 100 employees took part in planting approximately 2,000 modified
disease-resistant Japanese black pine (Pinus thunbergii) saplings, thespecies of which was selected by Chiba Prefecture. In July 2015, we
weeded the area, a task that is essential in ensuring the healthy growthof the saplings, which were deemed to be properly taking root.
In addition to helping preserve the environment, this initiative will contribute to the safety and security of the Hasunuma area, which was heavily impacted by the Great East Japan Earthquake, by reviving a forest thatwill play a part in limiting disaster damages. As such, these afforestation
activities can truly be said to be social contribution activities characteristicof ALSOK. We intend to continue such activities in the future.

Timeline of Afforestation Activities
February 2015

Placed stakes to signify planting locations to prepare for
actual planting

April 2015

Conducted tree planting (social contribution initiative
commemorating ALSOK’s 50th anniversary)

July 2015

Weeded area around planted saplings

Incredibly Meaningful
Activities Advanced by
Utilizing the Strengths ofCompanies and NPOs
Hidenobu Takegaki
Mobile Forces Member and Representative Director
Laboratory of Earth Conscious Life
Specified Non-Profit Organization

Laboratory of Earth Conscious Life hopes to create a society inwhich people are not only aware of the importance of trees andforests but also feel closely connected to them. In this society, allpeople will be able to interact closely with those living in mountainvillages, ensuring that everyone lives in harmony with one another.
We have chosen to undertake afforestation activities in SammuCity in light of the heavy tsunami-related damages suffered by Chiba
Prefecture as well as the particularly heavy blow dealt to the disasterprevention forest in this city. With each coming year, we are expanding the range of our forest revival activities while soliciting contributions
from municipal governments, companies, and individuals.
Forests are important sources of water and air that are indispensable to all of our lives. Companies and NPOs have very different places in society. I therefore feel that activities for preserving
and reviving forests advanced by utilizing the differing strengths
of companies and NPOs are incredibly meaningful.
The trees planted with ALSOK will take more than 50 years
to reach their full size. I hope I am able to see these trees when
ALSOK celebrates its 100th anniversary, as they will have no
doubt grown large and come to be effective in their disaster prevention role.

ALSOK REPORT 201534

Security Services Industry and the ALSOK GroupOperating Environment for the Security Services Industry

People stating thatpublic safety isimproving

The number of reported crimes in Japan has been declining for 12 straight years and had dropped to 1.21
million in 2014, less than half the peak figure of 2.85 million in 2002. One factor behind this decline is, ofcourse, government crime prevention initiatives. However, another contributing factor is undoubtedly the factthat security services companies have become commonly recognized as providers of services that protect
the safety and security of society, which has led to a more-than-twofold increase in the number of house andother buildings introducing electronic security services, from 1.16 million in 2002 to 3.06 million in 2014.
Regardless, many people still feel that public safety is deteriorating, a sentiment that is accentuated by therise in ever-more menacing crimes by minors, special-case scams targeting senior citizens, and cybercrimes.

15.8%

Worsening
Perception of
Public Safety

People statingthat public safety
is deteriorating

81.1%

Source: Special Public Perception Survey
on Public Safety, Cabinet Office (2012)

Numbers of Reported Cases of Crimes and Buildings Introducing Electronic Security Services
Cases / Buildings

Arrest rate (%)

3,500,000

50

3,066,725 buildings

2,800,000

40

30.6%

2,100,000

30
2,000,000

1,212,163 cases

20

1,400,000

370,568 cases 10

700,000

0

0

98

99

Reported Cases of Crimes

00
Arrests

01

02

03

04

05

Buildings Introducing Electronic Security Services

06
Arrest Rate

Number of Special-Case Scams Targeting Senior Citizens

07

08

09

10

11

12

13

14

Sources: Overview of the Security Industry in 2014 and Crimes in Japan 2014, National Police Agency

Cybercrimes

Cases

Billions of yen

Arrests

Consultations

16,00080

10,000150,000

13,392 cases
12,000¥56.5 billion

60

118,100 cases
7,905 cases

5,000

120,000

6,000

90,0004,000

60,0002,000

30,000

40

8,000

4,000

20

0

0

10

11

Reported Cases of Special-Case Scams

12

13

Damages of Special-Case Scams

0

0

14

10
Arrests for Cybercrimes

11

12

13

14

Consultations Related to Cybercrimes

Source: Reported Cases of Special-Case Scams and Arrest Rates in 2014, National Police Agency

Source: Threats in Cyberspace in 2014, National Police Agency

Number of Crimes Targeting Children

Number of Reported Cases of Stalking

Cases

Cases

40,00025,00022,823 cases

20,00030,00024,707 cases

15,00020,00010,00010,000

5,000

0

0

10

11

12

13

Source: The White Paper on Police 2014, National Police Agency

35 ALSOK REPORT 2015

14

10

11

12

13

14

Source: Responses to Cases of Stalking and Domestic Violence in 2014, National Police Agency

Trends in the Security Services Industry
Total annual sales in the Japanese security services industry exceeded ¥3.3 trillion.1 In the fiscal year ended
March 31, 2015. Presently, there are approximately 9,240 1 security services companies in Japan; however,including ALSOK, there are currently only two companies with annual sales of more than ¥300.0 billion. The
third-largest company has sales of approximately ¥41.7 billion, and there is a wide gap between this company
and ALSOK in terms of profitability. Moreover, the majority of security services companies primarily offer laborintensive stationed security services, including traffic control 2. Only a small percentage of these companies arecapable of offering electronic and transportation security services, which require a large amount of capital investment. Contrary to the upward trend in the number of buildings introducing electronic security services, a trend
driven by the worsening perception of public safety, the number of companies capable of providing these services is on the decline. Looking forward, we anticipate that the reorganization of small and medium-sized companies in the industry will continue to progress.

ALSOK 9%No. 2

Share of the
Security Services
MarketSource: Overview of the Security Industry in 2014,
National Police Agency

3%

1. Source: Overview of the Security Industry in 2014, National Police Agency
2. Some countries do not consider traffic control to be part of security services.

Characteristics of the Japanese Security Services Industry

Ratio of Households
Introducing Home
Security in Japan

Operating Foundation

In the United States, when a security alarm signal is transmitted, police generally receive the information
directly from the security company’s monitoring center and rush to the scene. Japan’s system, however, ismore centered on the security company as, after a disturbance is detected, it is the security company’s
security guards that rush to the scene. Working in conjunction with the company’s guard centers, thesesecurity guards address the situation, contacting the police, fire, and other designated bodies as deemednecessary. For this reason, security companies hold the keys to their clients’ premises. As such, Japan’ssystem is significantly different from that of the United States.

Sources: Overview of the Security Industry in
2014, National Police Agency;
Statistics of Japan 2012, Statistics Bureau,
Ministry of Internal Affairs and Communications

Numbers of Security Services Companies Providing and Buildings Introducing Electronic Security Services
Companies

Buildings

1,000

3,066,725 facilities

3,500,000

2,800,000

800

662 companies
600

2,100,000

400

1,400,000

200

70,000

0

0

98

99

00

01

02

Security Services Companies Providing Electronic Security Services

03

04

05

06

07

Buildings Introducing Electronic Security Services

08

09

10

11

12

13

14

Source: Overview of the Security Industry in 2014, National Police Agency

ALSOK Group Business Model
With its electronic security services, which account for more than 40% of total net sales, and its stationed
security services and transportation security services, the ALSOK Group provides a comprehensive lineup
of products and services that contribute to safety and security. Moreover, we possess a nationwide networkof sales offices and operating bases, and we have established unshakable trust among banks and otherfinancial institutions, which account for approximately 25% of total net sales. Currently, we are entrustedwith the management of approximately 52,000 ATMs located throughout Japan, making us the industry
leader in this respect.
Furthermore, the Electronic Security Services segment operates a stock business model in which clients from the previous fiscal year generally continue their contracts, thus allowing the segment to grow on
an ongoing basis. Presently, 463,053 corporate client facilities, up 5.2% year on year, and 340,548 residential households, up 43.3% year on year, are connected to ALSOK’s Guard Centers through telecommunications lines, proving the stable growth potential of this business.

1.7%
15.9%
43.9%
Net Sales by
Business Segment(FY2015)

14.3%

24.2%

Electronic Security Services
Transportation Security Services
Long-Term Care Services / Other Services
Stationed Security Services
General Property Management andFire Protection Services

ALSOK REPORT 201536

Corporate Governance

Basic Corporate Governance Policy
and System
The ALSOK Group advocates “contribution to society and public welfare” as one of its management policies, and the Group focuses its
efforts on protecting the safety and security of customers and society.
Meanwhile, to continue to be a corporate group that is trusted by all
stakeholders, we strive to reinforce Groupwide corporate governancewith measures that separate managerial execution and oversight functions, allow swifter decision making, encourage strong corporate ethics,
and provide transparency in business management.

Corporate Governance System
The Company employs the Audit & Supervisory Board Member system,
effectively creating a double-check function through which operational
execution is overseen by the Board of Directors, while the Audit &Supervisory Board conducts audits. ALSOK strives to clarify the divisionof roles in management and business execution as well as expedite
management decision making. To those ends, it introduced the executive officer system in June 2002, an in-house company system in April
2010, and appointed a chief executive officer (CEO) and a chief operating officer (COO) on April 1, 2011.
Corporate governance system

Company with Audit & Supervisory Board

Chairman of the Board of Directors

Chairman and Representative Director

Number of directors

8 (of whom 2 are outside directors)

Number of Audit & Supervisory
Board Members

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

Ratio of outside directors and Audit &42%­Supervisory Board Members to total directors
and Audit & Supervisory Board Members
Number of independent directors/
Audit & Supervisory Board Members

5

Number of meetings of the Board of ­Directors
and attendance by outside directors and ­Audit& Supervisory Board Members in the year
under review

17 times
Outside directors: 1 attended 94% of meetings,
1 attended 100% of meetings
Outside Audit & Supervisory Board Members:
2 attended 100% of meetings, 1 attended 94%
of meetings

Number of meetings of the Audit & Supervisory Board and attendance by outside Audit& Supervisory Board Members in the year
under review

17 times
2 attended 100% of meetings,
1 attended 94% of meetings

Reasons for Appointment and Duties of Outside Directors
and Outside Audit & Supervisory Board Members
The Company employs two outside directors and three outside Audit &Supervisory Board Members; applications have been submitted to theTokyo Stock Exchange identifying each of these individuals as independent directors and independent auditors, respectively. It is anticipatedthat each outside director and each outside Audit & Supervisory Board
Member will offer valuable input based on the experience and expertise
acquired during their professional career. Further, these independent
officers are free of circumstances that would cause them to hold conflicting interests with the general shareholders of the Company. In total,
these factors are expected to enable the outside directors and Audit &Supervisory Board Members to effectively monitor management from an
independent standpoint, and they were appointed based on this belief.
Outside directors and outside Audit & Supervisory Board Members
attend meetings of the Board of Directors, at which they offer their opinions on the matters at hand. They receive briefings on the issues to be
37 ALSOK REPORT 2015

discussed at meetings of the Board of Directors prior to the meeting,allowing them to more effectively monitor management. The participation of the outside directors in these meetings 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 coordinate with
the Inspection Department and the independent auditing corporation
employed by the Company in regard to audits by Audit & Supervisory
Board Members, internal audits, and accounting audits. To facilitate thiscoordination, the outside Audit & Supervisory Board Members periodically exchange information with these bodies. They also evaluate thelegality of the measures implemented by Internal Control Operations. To
this end, they perform both operational and accounting audits of theorganization and review all relevant documents.
In view of the above, the Company believes that the outside Audit &Supervisory Board Members are able to conduct effective and comprehensive audits and that the governance controls for management arefunctioning properly.

Compensation for Directors andAudit & Supervisory Board Members
Amount of Compensation
The number of members and total compensation for each classificationin the fiscal year ended March 31, 2015, are as follows.
Members

Total compensation(Millions of yen)

Directors (excluding outside directors)

6

180

Audit & Supervisory Board Members(excluding outside Audit & Supervisory
Board Members)

1

23Classification

Outside directors and Audit & Supervisory
Board Members

5

53

Total

12

257

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 havebeen set at General Shareholders’ Meeting. The compensation of directors
includes a fixed amount, calculated according to their positions andwhether they are an outside director or not, as well as a performance-linked
amount, calculated based on an evaluation of the operational execution
performance of individual directors in the previous fiscal year conducted inaccordance with predetermined standards. Decisions regarding the compensation of directors are made by the Board of Directors. The compensation of Audit & Supervisory Board Members is paid as a fixed amountdecided in accordance with standards set by the Audit & Supervisory Board.

Internal Control System
Based on the Companies Act and the Financial Instruments andExchange Act, the Company has established systems to ensure
directors perform duties in compliance with all relevant laws andregulations and the articles of incorporation. In addition, the Company
has in place systems for guaranteeing that proper operating practices
are observed by other listed companies and the corporate groups­consisting of these companies and their subsidiaries.
The management of the ALSOK Group carried out an evaluation of theGroup’s internal control system as of March 31, 2015, based on the Financial
Instruments and Exchange Act. This evaluation found that the internal control system is effective, which has been noted in the report on the internal
control system. The independent auditing corporation, Grant Thornton
Taiyo LLC, has also expressed the opinion that the result of the evaluationby the management noted in the internal control report is accurate.

Compliance

Risk Management
The Company places particular importance on risk management, which iscentral 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 executive officer incharge of risk management as its chairperson. In addition, individual risk

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

Operating Foundation

The Company has established the Compliance Committee, which isheaded by the executive officer in charge of compliance. The committee
strives to inculcate an unwavering awareness of compliance in all executive officers and employees based on the compliance rules formulated in
2002, and it periodically verifies the status of compliance in businessand other activities. Furthermore, the Company conducts activities topromote compliance on a Groupwide basis. Moreover, along with the
Education & Training Department, the Compliance Committee is implementing corporate ethics training and taking other steps to cultivate andthoroughly 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
employees to report any issues that they may witness.
(For more information, please refer to page 29.)

management assessment bodies have been set up at the Head Officeand each individual business office to undertake exhaustive, Companywide
risk management activities. Furthermore, the Company has developedorganizational structures to ensure that it can respond quickly should aserious emergency occur. Through such structures, the Company is able
to relay urgent orders throughout the organization, set up a response
headquarters, or take other emergency response measures.
In September 2004, the Company established the Information
Asset Management Committee, chaired by the executive officer incharge of information asset management. The purpose of the committee is to respond as swiftly as possible to changes in the information
asset management environment, such as the full implementation of the
Personal Information Protection Law, which was enacted in April 2005.
The committee undertakes such activities as the development of astructure for the management of personal, business, and other important information in the Company’s possession as well as the promotionof employee education on this topic.

The Company’s IR Website http://www.alsok.co.jp/en/ir/

General Shareholders’ Meeting

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

Board of Directors’ Meetings (Monthly)
2 Outside Directors
6 Internal Directors
Total: 8
Discussions about Operational
Policies on Business Affairs
Management Committee(Twice monthly)

Committees
Risk Management Committee
Compliance Committee
Information Asset Management
Committee

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

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

Inspection Department

Head Office,Internal Company Divisional Management
Operating Committee of the Company(Twice monthly)
Executive Officers
5 Directors and Executive Officers
12 Executive Officers
Total: 17

Advisory Contracts with
Attorneys in Specialized Fields
Legal Consultation
Legal OfficeInternal Control Operations
As of June 25, 2015

ALSOK REPORT 201538

Directors, Corporate Auditors, and Executive Officers

As of June 25, 2015

Directors
Atsushi Murai

Yukiyasu Aoyama

Chairman and Representative Director
Chief Executive Officer (CEO)President and Representative Director
Senior Executive President
Chief Operating Officer (COO)
President of ALSOK Company
Chief Officer of Business Promotion DivisionSep. 1995:	Director-General, Chubu Regional Police Bureau (Resigned in Jun. 1996)
Jun. 1996:	Deputy Governor, Deposit Insurance Corporation of Japan(Resigned in Sep. 1997)
Sep. 1997:	Joined the Company as a consultant
Jun. 1998:	Senior Executive Vice President andRepresentative 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 andRepresentative Director, Chief Officer ofBusiness Promotion Division (Current)
Apr. 2011:	Chief Operating Officer (Current)
Apr. 2012:	President and Representative Director(Current)
Senior Executive President (Current)

Yuichi Miyazawa

Kiyomi Hara

Director
Senior Executive Officer
Strategic Business
Management Company
Regional Management

Director
Senior Executive Officer
Deputy Chief Officer of Business Promotion Division
Chief Officer of Corporate Customer Sales Promotion
Sales Promotion

Apr. 1978:	Joined the Company
Apr. 2004:	General Manager of Human Resources Department
Apr. 2007:	Executive Officer, Deputy Chief Officer of West
Headquarters
Jun. 2010:	Senior Executive Officer
Jun. 2011:	Director and Senior Executive Officer (Current)
Apr. 2014:	In charge of Strategic Business, Management
Company, and Regional Management (Current)Apr.

2014:	Representative Director, Japan Facilio Co., Ltd.
(Current)Mar. 1970:	Joined the Company
Apr. 2003:	General Manager of Yokohama Branch
Jun. 2007:	Executive Officer responsible for stationed security
services reorganization
Jun. 2010:	Executive Officer
Deputy Chief Officer of Business Promotion
Division (Current)
Jun. 2011:	Director and Senior Executive Officer (Current)
Apr. 2012:	In charge of Sales Promotion (Current)
and Corporate Customer Sales Promotion
Apr. 2014:	Chief Officer of Corporate Customer Sales
Promotion (Current)May

2014:	Representative Director,
Nippon Building Maintenance Co., Ltd. (Current)

Major Concurrent Positions

Feb.

2015:	President and Representative Director (Outside
Director), ALSOK Care & Support Co., Ltd.
(Current)

Major Concurrent Positions

Jun.

2011:	Representative Director, Sokei Leasing Co., Ltd.
(Currently ALSOK LEASING CO., LTD.)

Apr.

2014:	Representative Director,
ALSOK Souei Co., Ltd. (Current)

Corporate Auditors
Makoto Uenoyama

Masaki Tatsuguchi

Takeshi Oiwa

Ikuhiro Watanabe

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

Audit & Supervisory Board Member

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

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

Jun. 2007:	Director, Matsushita ElectricIndustrial 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 Apr.
2015)
Jun. 2013:	Joined the Company as Audit &Supervisory Board Member(Current)

Apr. 1978:	Joined the Company
Aug. 2005:	General Manager of Shiga
BranchJan. 2010:	General Manager of Finance &Accounting Department
Oct. 2012:	General Manager of General
Affairs Department
Jun. 2014:	Chief Officer of Regional
Division (VIII)
Jun. 2015:	Audit & Supervisory Board
Member (Current)

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.
Jun. 2010:	Director and Senior Managing
Executive Officer, Sompo Japan
Insurance Inc.
Jan. 2011:	Deputy President and Director,
Sompo Japan Insurance Inc.
(Resigned in Mar. 2011)
Apr. 2011:	Audit & Supervisory Board
Member, Nippon Export andInvestment Insurance (Current)
Jun. 2011:	Joined the Company as Audit &Supervisory Board Member(Current)

Jun. 2007:	General Manager of Custodial
Department, The Norinchukin
Bank (Resigned in May 2009)
Jun. 2009:	Manager of Internal Audit
Division, Starzen Co., Ltd.
Apr. 2013:	Executive Officer and Manager
of Legal Department, Starzen
Co., Ltd. (Resigned in Sep.
2014)
Oct. 2014:	Corporate Advisor, Norinchukin
Research Institute Co., Ltd.
Jun. 2015:	Joined the Company as Audit &Supervisory Board Member(Current)

39 ALSOK REPORT 2015

Yoshiro Kuribayashi

Hirohisa Hokari

Director
Senior Executive Officer
Human Resources
Corporate Ethics
Deputy Chief Officer of Business Promotion Division (HOME ALSOK)

Director
Senior Executive Officer
General Affairs / Corporate Planning
Deputy Chief Officer of Business Promotion Division
Chief Officer of Financial Institutions Services / Compliance
Risk Management / Information Assets Management / Investor Relations

Apr. 1974:	Joined the Company
Apr. 2007:	General Manager of Human Resources Department
Apr. 2009:	Executive Officer responsible for human resources
Jun. 2011:	Senior Executive Officer
Oct. 2013:	Deputy Chief Officer of Business Promotion
Division (HOME ALSOK) (Current)
Assumed responsibility for Human Resources
and Corporate Ethics (Current)
Jun. 2014:	Director and Senior Executive
Officer (Current)

Apr. 2010:	Director-General of Operations Department at Bank of Japan(Resigned in Jun. 2011)
Jun. 2011:	Joined the Company as Executive Officer responsible for business planning andfinancial institution marketing and sales promotion and General Manager ofBusiness Planning Department
Feb. 2012:	Senior Executive Officer and Deputy Chief Officer ofBusiness Promotion Division (Current)
Assumed responsibility for 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, andInformation Asset Management (Current)
Jun. 2014:	Director and Senior Executive Officer(Current)

Yutaka Takehana

Director (Outside Director)

Director (Outside Director)

Apr. 2000:	Managing Director, Nippon Steel Corporation(Currently NIPPON STEEL & SUMITOMO METAL CORPORATION)
Apr. 2003:	Executive Vice President, Nippon Steel Corporation (Resigned in Jun. 2005)
Jun. 2005:	President and Representative Director, Nippon Steel Trading Co., Ltd.
(Currently NIPPON STEEL & SUMIKIN BUSSAN CORPORATION) (Resigned inJun. 2009)
Jun. 2009:	Director and Senior Advisor,
Nippon Steel Trading Co., Ltd.
(Resigned as Director in Jun. 2010 and
as Senior Advisor in Jun. 2011)
Jun. 2012:	Joined the Company as Outside Director(Current)

Sep. 2001:	Director, Hiroshima Prefectural Police Headquarters
Jun. 2003:	Vice Governor of Tokyo (Resigned in Jul. 2005)
Aug. 2005:	Director of Public Safety Department, National Police Agency(Resigned in Jan. 2007)
Mar. 2007:	Consultant, Matsushita Electric Industrial Co. Ltd.
(Currently Panasonic Corporation)
Oct. 2007:	Member of Tokyo Metropolitan Board of Education(Current)
Apr. 2008:	Executive Officer,
Matsushita Electric Industrial Co. Ltd.
(Currently Panasonic Corporation)
Apr. 2009:	Managing Executive Officer,
Panasonic Corporation(Resigned in Mar. 2013)
Jun. 2013:	President & CEO,Tokyo Big Sight Inc. (Current)
Jun. 2015:	Joined the Company as
Outside Director (Current)

Operating Foundation

Seiki Miyamoto

Major Concurrent PositionJun.

2013: President & CEO, Tokyo Big Sight Inc. (Current)

Executive Officers
Hiraku Otani

Tsuyoshi Murai

Eiji Kuwabara

Masato Yagi

Senior Executive Officer
Financial & Accounting
International Affairs
Procurement
Internal Control
Chief Officer of International Affairs

Senior Executive Officer
Deputy Chief Officer of Business Promotion
Division
Business Planning & Management
Regional Financial Institution Services

Executive Officer
Marketing & Products Planning Dept.
General Manager of Marketing & Products
Planning Dept.

Executive Officer
Chief Officer of Regional Division (I)Yukio Yonago

Executive Officer
Chief Officer of Regional Division (II)Executive Officer
Second in Charge of Strategic BusinessPresident of ALSOK Souei Co., Ltd.

Shigeyoshi Kuroki

Masahiro Kawaguchi
Senior Executive Officer
Chief Officer of R&D Planning Dept.

Ikuji Kayaki
Senior Executive Officer
Chief Officer of Security Operations
Structural Reform(Transportation Security Services)

Shigeki Nomura
Senior Executive Officer
Deputy Chief Officer of Business Promotion
Division (Central Japan)
Chief Officer of Regional Division (III)

Masashi Terao
Senior Executive Officer
Deputy Chief Officer of Business Promotion
Division (Kansai)

Toshiro Yoshioka

Shinichi Honjo

Executive Officer
Chief Officer of Regional Division (V)Executive Officer
Long-term Care
President of HCM Corporation

ALSOK REPORT 201540

Management Indexes

2005

2006

2007

2008

Net sales

257,789

267,545276,560

284,996

Cost of sales

192,405

199,144

203,080

212,287

Gross profit

65,383

68,40073,47972,709Selling, general and administrative expenses

54,421

56,15457,507

58,913Operating income

10,962

12,246

15,972

13,795

Ordinary income

11,592

13,102

16,917

14,642

Net income

4,951

5,550

7,558

7,653

Gross profit margin (%)

25.4

25.6

26.6

25.5

Operating income margin (%)

4.3

4.6

5.8

4.8

Ordinary income margin (%)

4.5

4.9

6.1

5.1

Fiscal year ended March 31

Profit and loss (Millions of yen)

Profitability

Return on assets (ROA) (%)

4.2

4.6

6.0

5.0

Return on equity (ROE) (%)

4.1

4.4

5.7

5.6

EV/EBITDA (times)1

6.3

7.4

6.9

5.0

43.6

45.7

47.2

46.2

Stability
Equity capital ratio (%)
Equity capital ratio on market-value basis (%)

55.0

67.5

77.2

47.4

72,05665,54461,042

74,485

15.5

12.3

14.9

15.2

Total asset turnover ratio (times)

0.9

0.9

1.0

1.0

Shareholders’ equity turnover ratio (times)

2.1

2.1

2.1

2.1

Tangible fixed assets turnover ratio (times)

4.6

4.6

4.8

5.0

Net assets per share (yen)1,222.93

1,274.27

1,322.82

1,356.35

Net income per share (yen)

47.54

52.91

74.71

75.07

Price-book value ratio (times)

1.3

1.5

1.6

1.0

Price earnings ratio (times)

32.5

35.7

28.9

18.5

Interest-bearing liabilities (millions of yen)Interest coverage ratio (times)2
Efficiency

Per share information

Dividends per share (yen)

17

17

20

20

Consolidated dividend payout ratio (%)

35.8

32.1

26.8

26.6

Closing stock price

1,543

1,887

2,160

1,390

24,18524,70325,30226,014

10.9

11.3

11.6

11.8

—

—

—

—

—

—

—

—

Other information
Number of employees (consolidated) Average number of years of continuous service(non-consolidated) Percentage of employees returning to work after­childcare leave (non-consolidated, total for male andfemale employees)
CO2 emissions volume (non-consolidated, t-CO2)
1.

2.

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 in securities)
EBITDA (Earnings before interest, tax, depreciation and amortization) = Operating income + Depreciation and amortization
Due to changes in the method of calculation, interest coverage ratios for the fiscal year ended March 31, 2006, and earlier are calculated differently from those in subsequent fiscal years.

41 ALSOK REPORT 2015

2009

2010

2011

2012

2013

2014

2015

285,004

278,579

279,272

304,723

315,564

328,209

365,749

215,711210,097

209,364

232,812242,410

248,900

276,116

69,292

68,482

69,90871,91073,15379,30889,632

59,34959,211

59,555

61,10061,36360,37566,660

9,943

9,270

10,352

10,81011,79018,932

22,971

10,63010,81911,765

12,55814,741

20,74524,700

4,224

4,563

4,706

3,903

8,574

10,955

13,534

24.3

24.6

25.0

23.6

23.2

24.2

24.5

3.5

3.3

3.7

3.5

3.7

5.8

6.3

3.7

3.9

4.2

4.1

4.7

6.3

6.8

3.6

3.8

4.2

4.4

5.1

6.5

6.9

3.1

3.3

3.3

2.7

5.7

7.0

7.8

3.0

2.3

1.4

1.4

3.0

5.3

10.1

47.7

50.9

50.3

51.3

52.1

46.2

48.4

39.4

32.0

34.8

46.5

63.5

66,24751,31849,311

39,27037,45571,66673,698

20.7

24.0

20.1

34.1

36.9

36.4

28.5

1.0

1.0

1.0

1.1

1.1

1.0

1.0

2.1

2.0

2.0

2.1

2.1

2.1

2.2

5.0

4.9

4.9

5.2

5.4

5.2

5.4

1,364.33

1,397.90

1,421.67

1,446.93

1,536.30

1,574.74

1,800.15

41.90

45.39

46.82

38.83

85.30

108.99134.65

0.6

0.8

0.6

0.7

0.9

1.4

2.3

20.2

23.9

19.3

25.3

16.1

19.9

30.4

20

20

20

20

25

30

38

47.7

44.1

42.7

51.5

29.3

27.5

28.2

845

1,083

905

982

1,373

2,164

4,095

26,96027,322

27,79027,86828,05428,091

31,221

11.9

12.3

12.7

13.3

13.8

14.4

14.9

—

92.2

90.2

93.3

97.6

92.4

96.6

—

40,871

39,96838,022

38,587

41,377

39,212

ALSOK REPORT 2015

Financial Section

29.5

110.1

42

Breakdown of Sales / Number of Contracts

Net Sales by Service Type
Billions of yen

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

160.4

Security Services
Electronic Security Services

140.2

143.2

143.9

142.5

138.9

138.4

142.9

147.1

151.8

Stationed Security Services

67.5

70.9

72.7

72.8

70.6

71.3

71.3

73.8

77.2

88.4

Transportation Security Services

42.8

44.5

46.6

47.4

46.8

47.6

49.8

50.8

51.0

52.3

General Property Management andFire Protection Services1

—

—

—

—

—

17.0

36.6

40.6

44.8

58.3

Long-Term Care Services / Other Services

16.8

17.8

21.6

22.2

22.1

4.7

4.0

3.0

3.2

6.2

Total

267.5

276.5

284.9

285.0

278.5

279.2

304.7

315.5

328.2

365.7

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 thissegment 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“Long-Term Care Services / Other Services.”
Billions of yen
400

365.7 billion yen

300

200

100

0

06

FY

Electronic Security Services

07

08

Stationed Security Services

09

Transportation Security Services

10

11

12

General Property Management and Fire Protection Services

13

14

15

Long-Term Care Services / Other Services

Net Sales by Client Type
Billions of yen

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Business corporations2

144.9

156.7

162.7

164.8

163.1

160.9

178.4

186.5

196.7

224.9

Financial institutions2

84.2

86.0

90.0

90.4

85.7

88.3

90.7

89.8

90.5

91.3

Government offices /Japan Post2

29.8

24.2

22.4

19.6

19.5

19.3

20.5

22.0

22.8

26.4

Individuals

8.4

9.4

9.8

10.0

10.1

10.6

14.9

17.1

18.0

22.9

267.5

276.5

284.9

285.0

278.5

279.2

304.7

315.5

328.2

365.7

3

Total

2.	In conjunction with the conversion of Japan Post to a privately operated company in October 2007, sales to Japan Post Co., Ltd., have been transferred from “Government offices / Japan
Post” to “Business corporations” and sales to Japan Post Bank Co., Ltd., and Japan Post Insurance Co., Ltd., have been transferred to “Financial institutions.” Sales to subsidiaries of financial
institutions were previously included under “Business corporations” but have since been transferred to “Financial institutions.”
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.
Billions of yen
400

365.7 billion yen

300

200

100

0

06

FY

Business corporations

43 ALSOK REPORT 2015

Financial institutions

07

08

Government offices /Japan Post

09
Individuals

10

11

12

13

14

15

Number of Contracts
Contracts

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Security Services
432,852

462,913487,228

507,954524,708

541,654580,263

630,977

677,672

803,601  Corporate Clients

Electronic Security Services

343,292

359,344

372,196

381,759

388,853

396,580

406,261

422,676

440,028

463,053  Individual Users

89,560103,569

115,032

126,195

135,855

145,074

174,002

208,301

237,644

340,5485

Stationed Security Services

2,726

2,843

2,922

2,854

2,785

2,866

2,934

3,020

3,227

3,597

Transportation Security Services

29,51932,98033,39733,96035,96339,06548,284

51,69855,42059,134General Property Management andFire Protection Services4

—

—

—

—

—

44,212

47,91354,90363,00473,898Long-Term Care Services / Other Services

54,50557,42556,09943,17142,909

8,307

8,957

11,98913,72522,477

Total

519,602556,161

579,646587,939

606,365

636,104

688,351

752,587

813,048962,707

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 thissegment 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 “LongTerm Care Services / Other Services.”
5.	If contracts for individual households in housing complexes are included, this figure would be approximately 830,000.

Number of Contracts for Corporate ClientsContracts

463,053 contracts

500,000

400,000

300,000

200,000

100,000

0

06

FY

07

08

09

10

11

12

13

14

15

Financial Section

Number of Contracts for Individual Users
Contracts
400,000

340,548 contracts
300,000

200,000

100,000

0
FY

06

07

08

09

10

11

12

13

14

15

ALSOK REPORT 201544

Management’s Discussion and Analysis

Analysis of Business Performance

Sales by Business Segment

Operating Environment

Security Services

Consolidated Financial Results for the Fiscal Year Ended March 31,
2015 (April 1, 2014 – March 31, 2015) In the year under review, inJapan, certain sectors of the economy were weak due to theimpacts of the consumption tax hike on consumer spending as wellas the effects of natural disasters. However, a modest recovery
trend was seen centered on the corporate sector as a result of
improvements in corporate performance, the job market, and personal income. Overseas, the overall trend was that of recovery, butthere remains a need to carefully monitor the impacts of politicalconditions in the United States and deteriorating public safety inprincipal Middle Eastern countries.
In regard to public safety in Japan, there seems to be no end tothe occurrence of crimes targeting women and children, scams
aimed at senior citizens, and issues involving confidential information. At the same time, there is a pressing need to prepare for natural disasters. For these reasons, the safety and security needs ofsociety are growing more diverse.

Operating Results
In this environment, the ALSOK Group continued working tostrengthen its mainstay security services operations while also
expanding businesses in peripheral fields that are highly compatible
with security services, such as nursing care and building maintenance. At the same time, we pursued cost reductions by consolidating functions in back-office and operating divisions.
Due to the above factors, net sales rose 11.4% year on year, to¥365,749 million; operating income was up 21.3%, to ¥22,971­million; ordinary income was up 19.1%, to ¥24,700 million; and net
income increased 23.5%, to ¥13,534 million.

Net Sales

Electronic Security Services
In services for corporate clients, the Company worked to promotesales of ALSOK-GV (read as “ALSOK G-five”), a service that combines Internet-based security services utilizing image monitoringwith ALSOK Information Service, which allows for information
regarding when employees arrive at or leave the premises to beviewed online while also providing Internet-based remote control
functionality for equipment. Furthermore, in May 2014, we added
ALSOK-FM SUPPORT to our lineup. This product featuresenhanced facility management functions for medium- to large-scale
facilities and thereby enables facility value to be boosted for only asmall cost. Sales of ALSOK-FM SUPPORT were aggressively promoted throughout the year.
In services for individual users, we witnessed an increase inorders for the HOME ALSOK APARTMENT AND CONDOMINIUM
PLAN, a service for housing complexes, as well as for HOMEALSOK MIMAMORI SUPPORT, an emergency report and consultation service for senior citizens. HOME ALSOK ALBO eye, which waslaunched in September 2014, performed favorably as well. At thesame time, we continued to reinforce alliances with housing developers and real estate companies while also strengthening ties withfinancial institutions and insurance companies to promote sales of
HOME ALSOK PREMIUM, a service for standard households.
As a result, net sales in the Electronic Security Services segment rose 5.6% year on year, to ¥160,409 million, due in part to thesales increases stemming from the consolidation of ALSOK Souei
Co., Ltd., and ALSOK Care & Support Co., Ltd.

Ordinary Income / Ordinary Income Ratio

365,749

Millions of yen

million yen

24,700
million yen

Millions of yen%
8

360,000

24,000300,000

20,0006

240,000

16,0004

180,000

12,000

2

6.8 %

0
FY

11

12

13

14

15

0
FY

11

Ordinary Income

45 ALSOK REPORT 2015

12
Ordinary Income Ratio

13

14

15

0

Stationed Security Services
In the year under review, we made smooth progress in acquiring
new orders, and there was an increase in orders for temporary,large-scale stationed security operations. Accordingly, net sales in
the Stationed Security Services segment increased 14.4% year on
year, to ¥88,429 million.
Transportation Security Services
In the year under review, we saw favorable performance for the
Cash Deposit Machine On-line System, which utilizes theCompany’s Internet-based information management functions aswell as its transportation security network to provide comprehensive support for managing the sales revenues and change of distributors and retailers. In addition, contracts increased for the Total
ATM Management System, a total operation and management
support system for ATMs installed in financial institutions and convenience stores. Due to these factors, net sales in the Transportation
Security Services segment increased 2.5% year on year, to ¥52,328
million.

Long-Term Care Services Services / Other Services
The Company views services for senior citizens as representing animportant business field and has therefore been developing operations in the area since 2013. In the year under review, HCM
Corporation and ALSOK Care & Support Co., Ltd., were consolidated into the Group. As a result, net sales in the Long-Term Care
Services / Other Services segment amounted to ¥6,273 million,
representing a massive increase from the performance of the former
Other Services segment in the fiscal year ended March 31, 2014.
Going forward, the Group will fully leverage its management
resources to develop its conventional nursing care service operations while also creating new hybrid services by fusing security
services and nursing care.

Analysis of Individual Items

Number of Electronic Security Services Contracts

Number of Contracts for Individual Users

 eneral Property Management andGFire Protection Services

Contracts

Contracts

1,000,000

360,000

Financial Section

In the year under review, the benefits of the consolidation of ALSOK
Souei Co., Ltd., and Nippon Building Maintenance Co., Ltd.,
appeared in the form of sales increases. At the same time, we
strengthened our system for providing a one-stop response tocustomer needs related to the maintenance, management, andoperation of buildings, condominiums, and other facilities. As aresult, net sales in the General Property Management and Fire
Protection Services segment increased 30.1% year on year, to¥58,309 million.

In the year under review, net sales increased ¥37,540 million year
on year, to ¥365,749 million.
Cost of sales was ¥276,116 million, primarily due to a ¥4,119
million increase in cost of sales from procurement of products andinstallation of equipment and a ¥13,264 million increase in labor costs.
Selling, general and administrative expenses were ¥66,660 million, due to a ¥4,050 million increase in salaries and allowances.
Ordinary income rose ¥3,955 million, or 19.1%, to ¥24,700
million.
Extraordinary income was down due to a ¥110 million decreasein compensation income and a ¥106 million decrease in gain on
sales of investment securities.
Extraordinary loss declined as a result of the absence of ¥66
million decrease in loss on retirement of noncurrent assets.
Net income increased ¥2,579 million, or 23.5%, to ¥13,534
million.

340,548contracts

803,601
contracts

750,000

270,000

500,000

180,000

250,000

90,000

0
FY

07

08

09

10

11

12

13

14

15

0
FY

07

08

09

10

11

12

13

14

15

ALSOK REPORT 201546

Financial Position

Forecast for the Fiscal Year Ending March 31, 2016

AssetsIn the fiscal year ending March 31, 2016, there will be some concern with regard to the opaque nature of conditions overseas, but
Japan will continue to see improvements in corporate ­performance,
the job market, and personal income, and these ­improvements
are anticipated to create a pronounced virtuous cycle in thedomestic economy.
In the security services industry, traditional security needs willremain present. At the same time, we expect to see expanding
business opportunities resulting from the accelerated developmentof social infrastructure as part of national resilience improvement
plans, post-Great East Japan Earthquake reconstruction efforts,
and preparations for large-scale events. However, intensified competition is forecast to create a harsh operating environment for the
security services industry during the fiscal year ending March 31,
2016. Success under these difficult conditions will require that we
promote the further differentiation of our products and services.
ALSOK has always been a company that protects the bodies,
lives, and assets of its customers, and it has continued to build
upon its security services, track record since its establishment. In
addition to growing its security services operations, the entire
Group will actively develop businesses in peripheral fields going
forward as it creates products and services that live up to customer
expectations and improves its business performance.
In the fiscal year ending March 31, 2016, the ALSOK Group
forecasts net sales of ¥405,000 million, up 10.7% year on year;
operating income of ¥29,400 million, up 28.0%; ordinary income of¥31,000 million, up 25.5%; and net income attributable to ownersof the parent of ¥17,000 million, up 25.6%. These results will beachieved through the implementation of initiatives such as thosedescribed above.

Total assets at the end of the year under review increased ¥31,368
million, or 9.2%, from the previous fiscal year-end, to ¥373,863­million. Total current assets increased ¥10,986 million, or 5.5%, to¥210,445 million, and total noncurrent assets increased ¥20,381
million, or 14.2%, to ¥163,418 million.
The ¥10,986 million increase in current assets was primarily due
to a ¥7,964 million increase in notes and accounts receivable–trade,a ¥2,951 million increase in cash and deposits, and a ¥1,121 million
in lease receivables and investment assets, which offset a ¥1,819
million decrease in cash for Transportation Security Services.
The ¥20,381 million increase in noncurrent assets was mainly
attributable to a ¥10,402 million increase in goodwill, a ¥9,463­million increase in net defined benefit asset, and a ¥4,162 million
increase in investment securities.

Liabilities
Total liabilities at the end of the year under review increased ¥7,209
million, or 4.4%, from the previous fiscal year-end, to ¥169,500­million. Total current liabilities increased ¥16,142 million, or 14.1%,
to ¥130,464 million, and total noncurrent liabilities decreased¥8,932 million, or 18.6%, to ¥39,035 million.
The ¥16,142 million increase in current liabilities was a result offactors such as a ¥6,864 million increase in accrued consumption
taxes, a ¥3,065 million increase in short-term loans payable, and a¥2,876 million increase in notes and accounts payable–trade.
The ¥8,932 million decrease in noncurrent liabilities was due toa ¥8,069 million decrease in net defined benefit liability and a¥2,068 million decrease in long-term loans payable.

Total Assets / ROA

Total Net Assets / ROE

Millions of yen

204,363%

Millions of yen

8.0

200,000

320,000

6.0

150,000

6.0

240,000

4.0

100,000

4.0

160,000

2.0

50,0002.0

373,863

400,000

million yen

million yen

7.8 %

%
8.0

6.9 %

0
FY

Total Assets

11

12
ROA

47 ALSOK REPORT 2015

13

14

15

0

0
FY

11

Total Net Assets

12
ROE

13

14

15

0

Net Assets
Total net assets at March 31, 2015, were up ¥24,158 million, or
13.4%, from the previous fiscal year-end, to ¥204,363 million.

Cash and Cash Equivalents
The balance of cash and cash equivalents (hereafter referred to as“cash”) at March 31, 2015, was ¥35,791 million, down from¥40,541 million at March 31, 2014. This decrease was because net
cash provided by operating activities was ¥19,666 million, net cashused in investing activities was ¥24,295 million, and net cash provided by financing activities was ¥6,596 million.
Cash flows from operating activities
As a result of our operating activities in the year under review, net
cash provided by operating activities decreased 6.6% year on year,to ¥19,666 million. Principal items increasing cash included¥24,653 million in income before income taxes, an increase of
17.9% year on year; ¥11,331 million in depreciation and amortization, an increase of 23.2%; and ¥2,676 million in increase in notes
and accounts payable–trade, an increase of 48.6%. Conversely,
major items decreasing cash included ¥11,624 million in increase in
assets and liabilities for Transportation Security Services, comparedwith ¥2,329 million in decrease in assets and liabilities forTransportation Security Services in the previous fiscal year; ¥8,573
million in income taxes paid, a year-on-year increase of 8.5%; and¥5,391 million in increase in notes and accounts receivable–trade,a year-on-year increase of 13.6%.
Increase (decrease) in assets and liabilities for Transportation
Security Services includes the increases and decreases in funds
procured for transportation security services that are included in cash
for Transportation Security Services and short-term loans payable.

Cash flows from financing activities
Net cash provided by financing activities was ¥6,596 million, compared with net cash used in financing activities of ¥9,142 million in
the previous fiscal year. Principal items increasing cash included¥15,802 million in net increase in short-term loans payable, compared with ¥439 million in net decrease in short-term loans payable in the previous fiscal year. Conversely, major items decreasing
cash included ¥3,518 million in cash dividends paid, an increase of
32.1%; ¥3,447 million in repayment of long-term loans payable, anincrease of 1.8%; and ¥2,700 million in repayments of lease obligations, a decrease of 3.3%.

Risk Information
In relation to the ALSOK Group’s business and accounting circumstances, the following items could potentially have significant effects
on the judgment of investors. Future-related information mentioned
below was deemed appropriate by the Group as of June 25, 2015,
the date on which the 50th Securities Report was filed.

Financial Section

Cash flows from investing activities
Net cash used in investing activities in the year under review was¥24,295 million, a 45.5% year-on-year increase. The primary factors were ¥12,153 million in purchase of property, plant and equipment, down 20.2% from the previous fiscal year, and ¥11,435
million in purchase of shares of subsidiaries resulting in change inscope of consolidation.

Dividend Policies
The ALSOK Group considers the return of earnings to shareholders
to be a top management priority, and its basic policy is to distributeprofits to shareholders based on its operating results while fortifying
internal reserves. The Group uses internal reserves for investments
in R&D required for future growth and development, qualitative
upgrades to information systems, and capital investment for new
businesses as it works to improve corporate value.
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,while the interim dividend is decided by the Board of Directors.
As the Company celebrated the 50th anniversary of its founding on July 16, 2015, we have decided to issue a special dividendof ¥3.0 per share to commemorate this momentous occasion andshow our appreciation for the support of shareholders. Combinedwith the standard dividend of ¥17.5 per share, this will make for a
total year-end dividend of ¥20.5 per share.
Accordingly, for the fiscal year ended March 31, 2015, in consideration of results in the year under review, results forecasts for thecurrent fiscal year, and capital investment plans, the Company paid
an annual dividend of ¥38.0 per share, including an interim dividendof ¥17.5 per share, for a consolidated payout ratio of 23.9%.

1. Sales Depending on a Specific Business Sector
Sales from the financial institutions sector accounted for over 20%of the Group’s total sales in the year ended March 31, 2015.
Consequently, trends in the economic environment surrounding
financial institutions, including the possible cancellations of existing
security service contracts due to the elimination or consolidation of
branch locations, could have a considerable effect on the Group’s
operating performance. Therefore, the Group will continue toaggressively advance sales promotions in other business sectors inorder to find new clients as well as maintain and develop firm relationship with existing clients in the financial institutions sector.
2. Electronic Security Services BusinessOf the Group’s total sales, 43.9% are dependent on the Electronic
Security Services business. The effective operation of the Electronic
Security Services business requires continuous capital investment
for structuring and maintaining operational infrastructures such as
the preparation of Guard Centers and depots, vehicles for Electronic
Security Services and communication systems, as well as personnel expenses for Guard Center staff and security staff. Should the
ALSOK REPORT 201548

Group fail to enter into a certain volume of Electronic Security
Services contracts due to any of a wide range of factors associatedwith the Group’s Electronic Security Services business, the Group’s
operating performance could be affected. Therefore, we have tried
to diversify our business so that we can minimize business risks.
3. Cash for Transportation Security Services
The Group uses its own funds or funds financed through overdrafts
as cash to be used in the CD machines installed by the subsidiaries
of financial institutions in their business partners’ stores and offices
or cash used to deposit advances for Cash Deposit Machine
On-line System contracts. For this reason, should there be anincrease in interest rates associated with cash procured for these
purposes, the Group’s operational performance could be adversely
affected. Consequently, the Group must renegotiate the pricing
conditions defined in contracts between the Group and its clients.
Further, the Company has subscribed to cash securities transport
insurance to cover any damage or loss that may occur during thetransportation or storage of such cash.
4. Dependency on a Specific Equipment Supplier
The Group mostly depends on companies such as NEC Corporation
for development and provision of the center equipment installed in
the Guard Centers. Should any difficulty arise in the provision ofsuch center equipment due to natural disasters or other reasons,the normal operation of the Guard Centers could be affected. As forprovision involving the center equipment as well as main equipmentused for offering Electronic Security Services, the Group enters intoa master agreement for commodity purchases to provide for anticipated quantities of items. Furthermore, the Group holds certain
levels of spare items for maintenance to allow for emergencies.
5. Adaptation to Changes in the Technological Environment
The development of security-related equipment and the adoption ofstate-of-the-art IT technologies are indispensable to the Group’s
adequate provision of security services, since it must deal with“increasingly complicated and heinous crimes,” “expansion in crime
fields, such as the increase of cyberattacks, etc.,” “obsolescence ofexisting facilities due to the sophistication of information communication infrastructures,” and “advance in a wide range of operations
applying IT technology.” Should our adaption to technological progress fall behind the changes in the technological environment, theGroup’s operating performance could be negatively affected.
Therefore, the ALSOK Group continues to make efforts in the development of security-related equipment and advanced IT technologies principally in the R&D Department of the Group. At the sametime, we work to avoid risk by staying abreast of the latest technology trends in communications, devices, and other technologies.

49 ALSOK REPORT 2015

6. Management of Client Information
In order to conclude a security service contract with clients, theGroup obtains a significant amount of information about themincluding their names, addresses, and phone numbers of relatedparties as well as various information about the clients’ premises
where security services are to be provided, and utilizes that essential information for the execution of security services and businessactivities. If any problem, whether inevitable or not, should arise, theGroup may suffer from an unfavorable reputation and legal claim fordamages. We, therefore, have managed client information properly
through employee education and careful observation of subcontractors. These measures enable us to avoid leaking, losing, anddeleting personal information. As a further precaution, the ALSOKGroup has “Leakage of Personal Information Insurance,” which
covers all Group companies.
7. Ensuring Human Resources
In recent years, Japanese society has been rapidly super aging due
to a combination of extended average life expectancy and a plungein the birthrate. Although it can be anticipated that these trends willlead to a rise in the need for ALSOK’s security services, it could
become more difficult to recruit younger workers in this laborintensive industry. We established a recruitment association in our
aim to strengthen our cooperative structure in recruitment forGroup companies. Furthermore, we established a new company
that re-employs experienced retired workers for the purpose of
securing a high-quality labor force. In addition, formulation a plan
for a more efficient operational structure is in progress through theintroduction of security services and security robots that utilize ICT.
8. Legal Restrictions
In order to provide clients with various security and other services,
the Group is subject to a variety of legal restrictions, including the
major ones stated in the table below. Should any of these legal
restrictions be amended or abolished, or any new legal provisions
established, the Group’s operating performance could be affected.
9. Measures in Relation to Natural and Other Disasters
In the event an unprecedented natural disaster were to occur,
normal signal transmission/reception to and from clients would
become unavailable, causing serious difficulties such as the suspension of our security services. In such cases, the resulting claims
for damages and the decline in public trust of the Group could
affect the operating performance and future business developmentof the Group. In addition, the Group may be compelled to pay substantial expenses to recover damaged Guard Centers and otherfacilities. The Group has made backups for the Guard Centersthrough the Support Center to prepare for damage caused by anatural disaster as a business continuity plan (BCP) of its security
system. Moreover, the Group has established system servers,
which receive a security alarm signal throughout Japan, in two

Network Centers and has made a backup system according topriority. Preparing for a major wide-area natural disaster, the Groupwill reduce risk by taking measures for each stage.
10. Risk of Massive Disasters
Should a major earthquake occur, or there be wind or flood
damage, and should long-term power failure occur following sucha disaster, the Group’s networks or other operational infrastructure
could stop functioning, which may disrupt its ability to provide
security and other services. Moreover, such disasters could
damage the Group’s assets, such as security equipment located onclients’ premises, forcing the Group to repair or replace thoseassets. The Group’s operating performance or financial position
could be adversely affected. Therefore, the Group has developed anumber of precautionary measures based on its wealth ofMajor Operation

Electronic Security Services
Stationed Security Services
Transportation Security Services
Electronic Security Services
General Property Management andFire Protection Services

Electronic Security Services

security-related experience and expertise. It has formulated disaster response rules in accordance with disaster response regulations, established a business continuity plan and other responsemanuals, stockpiled necessary disaster prevention items, anddeveloped a flexible nationwide response network. It also conducts
periodic disaster prevention training and education and other precautionary measures. As an approach to prevent the suspension
ATMs if at all possible in the event of a natural disaster, we obtained
ISO 22301 certification in March 20, 2014. This represents thenation’s first acquisition of this certification for Transportation
Security Services that fill ALSOK-managed ATMs with cash as well
as security services that target ATM troubleshooting operations.
Hereafter, the Group will enhance the structure and contribute to
the preservation of the social infrastructure.

Relevant Laws

Competent Authorities, Etc.

Security Business Law / Road Traffic Law

National Public Safety Commission

Act against Delay in Payment of Subcontract Proceeds, Etc. to­Subcontractors

Japan Fair Trade Commission,
Small and Medium Enterprise Agency

Telecommunications Business Law / Radio Law

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

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 Affairs Agency

Truck Transport Business Law / Freight Forwarding Business Law /Road Trucking Vehicle Law

Ministry of Land, Infrastructure, Transport and Tourism

Transportation Security Services

Warehousing Business Law

Ministry of Land, Infrastructure, Transport and Tourism

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 Buildings

Ministry of Health, Labour and Welfare

Waste Disposal Act

Ministry of the Environment

Building Lots and Buildings Transaction Business Law / Architect Act /Act on Advancement of Proper Condominium Management

Ministry of Land, Infrastructure, Transport and Tourism

Electricity Business Act / Law Concerning the Securing of Safety and the
Optimization of Transaction of Liquefied Petroleum Gas

Ministry of Economy, Trade and Industry

Correspondence Delivery Act

Ministry of Internal Affairs and Communications

Worker Dispatching Act / Employment Security Act

Ministry of Health, Labour and Welfare

Long-Term Care Insurance Act

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

Insurance Business Law / Financial Instruments and Exchange Act /Act on Prevention of Transfer of Criminal Proceeds

Financial Services Agency

Law About the Adequacy of Duties of the Detective Business

National Public Safety Commission

Personal Information Protection Law

Consumer Affairs Agency / Ministry of Economy,
Trade and Industry / National Public Safety Commission

Act on Special Measures to Prevent and Correct Shift for Consumption Tax

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

Act Against Unjustifiable Premiums and Misleading Representations

Consumer Affairs Agency

Stationed Security Services

General Property Management andFire Protection Services

Other Services

ALSOK REPORT 2015

Financial Section

Consumer Contract Act
Transportation Security Services andOther Services

50

Consolidated Balance Sheets

Millions of yen

2014

2015

   Cash and deposits

43,161

46,113   Cash for Transportation Security Services

98,57996,760   Notes and accounts receivable–trade

36,05544,020   Lease receivables and investment assets

1,986

3,108

As of March 31, 2015 and 2014

AssetsCurrent assets   Short-term investment securities   Raw materials and supplies   Costs on uncompleted construction contracts

415

861

4,380

4,759

343

393

  Advances paid

6,370

6,301

   Deferred tax assets

1,842

1,868

  Other

6,534

6,502

   Allowance for doubtful accounts

(211)

(243)

199,458

210,445   Buildings and structures

42,16542,599    Accumulated depreciation(22,982)(23,758)    Buildings and structures, net

19,183

18,840    Machinery, equipment and vehicles

119,885

124,784    Accumulated depreciation   Total current assets
Noncurrent assets   Property, plant and equipment(104,169)(106,286)     Machinery, equipment and vehicles, net

15,716

18,498   Land22,933

23,219   Lease assets

11,092

11,063    Accumulated depreciation(5,529)(6,126)    Lease assets, net

5,562

4,937

   Construction in progress

1,410

2,712

   Other

12,882

13,310    Accumulated depreciation(9,462)(9,814)    Other, net

3,419

3,495

    Total property, plant and equipment

68,22571,704  Intangible assets   Software

3,681

4,192

   Goodwill

769

11,172   Other

1,699

1,489

   Total intangible assets

6,151

16,853

34,466

38,629   Investments and other assets   Investment securities   Long-term loans receivable

456

395

    Lease and guarantee deposits

7,798

8,039

   Insurance funds

2,004

2,053

50

9,514

    Net defined benefit asset   Deferred tax assets

12,6385,587   Other

12,097

11,192    Allowance for doubtful accounts

(853)

(552)

    Total investments and other assets

68,65974,859   Total noncurrent assets

143,036

163,418

Total assets

342,495

373,863

51 ALSOK REPORT 2015

Millions of yen

2014

2015

   Notes and accounts payable–trade

21,06923,946   Short-term loans payable

56,47259,538   Current portion of long-term loans payable

3,165

3,459

As of March 31, 2015 and 2014

Liabilities
Current liabilities   Current portion of bonds

1064  Accounts payable–other

13,672

15,680  Lease obligations

2,506

2,775

   Income taxes payable

4,203

4,232

   Accrued consumption taxes

1,680

8,544

   Provision for bonuses

1,072

1,460

238

186

   Provision for directors’ bonuses   Deferred tax liabilities

00  Other

10,230

10,576   Total current liabilities

114,322

130,46420

115   Long-term loans payable

3,983

1,915

  Lease obligations

5,510

5,832

   Deferred tax liabilities

33

615

   Deferred tax liabilities for land revaluation

366

332

   Net defined benefit liability

33,55425,484   Provision for directors’ retirement benefits

Noncurrent liabilities  Bonds payable

1,696

1,725

   Asset retirement obligations

67

68  Negative goodwill

60

—

2,674

2,946

  Other   Total noncurrent liabilities
Total liabilities

39,035
169,500

18,675

18,675

Financial Section

47,968162,290

Net Assets
Shareholders’ equity  Capital stock  Capital surplus

32,117

32,117  Retained earnings

114,961

130,753  Treasury stock   Total shareholders’ equity(1,988)(1,989)163,766

179,557

Accumulated other comprehensive income   Valuation difference on available-for-sale securities

5,969

8,235

   Revaluation reserve for land

(5,343)(5,293)   Foreign currency translation adjustment

46

173

   Remeasurements of defined benefit plans(6,148)(1,725)   Total valuation and translation adjustments(5,475)

1,389

Minority interests

21,914

23,415

Total net assets

180,205

204,363

342,495

373,863

Total liabilities and net assets

ALSOK REPORT 201552

Consolidated Statements of Income andConsolidated Statements of Comprehensive Income
Consolidated Statements of Income
Fiscal years ended March 31, 2015 and 2014

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
Equity in earnings of affiliates
Amortization of negative goodwill
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
Compensation income
Gain on reversal of asset retirement obligations
Total extraordinary income
Extraordinary loss
Loss on valuation of investment securities
Loss on retirement of noncurrent assets
Impairment loss
Loss on extinguishment of tie-in shares
Total extraordinary loss
Income before income taxes
Income taxes–current
Income taxes–deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income

Millions of yen

2014

2015

328,209248,900
79,30860,37518,932

365,749
276,116
89,632
66,66022,971

250
512
123
243
114
517
80
336
945
3,124

249
548
159
247
89
641
60
268
952
3,217

578
7
151
258
314
1,311
20,745

689
0
228
290
279
1,488
24,700

108
124
25
258

2
13
—
16

23
66
2
—
92
20,911
8,372
481
8,853
12,057
1,102
10,955

49
—
0
13
63
24,653
8,653
1,127
9,780
14,872
1,337
13,534

Consolidated Statements of Comprehensive Income

Millions of yen

Fiscal years ended March 31, 2015 and 2014

2014

2015

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates accounted for using equity method
Total other comprehensive income
Comprehensive income(Contents)
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests

12,057

14,872

1,761
—
7
—
81
1,850
13,908

2,413
33
29
4,416
335
7,228
22,10012,736
1,171

20,4001,700

53 ALSOK REPORT 2015

Consolidated Statements of Changes in Net Assets

Millions of yen
Shareholders’ equity

Balance as of March 31, 2013
Cumulative effects of changes in accounting policies
Balance at the beginning of current period reflectingchanges in accounting policies
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Change of scope of consolidation
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2014

Capital stock

Capital surplus

Retainedearnings

Treasury stock

Total shareholders’equity18,675

32,117

106,731(1,987)

155,536

18,675

32,117

106,731(1,987)

155,536(2,664)
10,955(0)(60)—
18,675—
32,117

8,230
114,961(2,664)
10,955
(0)
(60)

(0)
(1,988)

8,229
163,766

Minority interests

Total net assets

Accumulated other comprehensive income

Balance as of March 31, 2013
Cumulative effects of changes in accounting policies
Balance at the beginning of current period
reflecting changes in accounting policies
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Change of scope of consolidation
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2014

Valuationdifference on
available-for-salesecurities

Revaluation
reserve for land

Foreign currencytranslation
adjustment

4,245(5,343)(10)      —

(1,109)21,135

175,563

4,245(5,343)(10)—(1,109)21,135

175,563

778
778
21,914(2,664)
10,955(0)(60)(3,587)
4,641
180,205

1,724
1,724
5,969

0
0
(5,343)56
56
46

Remeasurements Total valuation andof defined benefit
translationplans, net of tax
adjustments(6,148)(6,148)(6,148)(4,366)(4,366)(5,475)

Millions of yen
Shareholders’ equity
Retainedearnings

Total shareholders’equityCapital surplus

Balance as of March 31, 2014

18,675

32,117

114,961
5,776(1,988)Cumulative effects of changes in accounting policies
Balance at the beginning of current period reflectingchanges in accounting policies
Changes of items during the period

163,766
5,776

18,675

32,117

120,738(1,988)

169,542(0)(3,518)13,534(0)(0)(1,989)10,015
179,557

Minority interests

Total net assets

Treasury stock(3,518)13,534

Dividends from surplus
Net income
Purchase of treasury stock

Financial Section

Capital stock

Change of scope of consolidation
Net changes of items other than shareholders’ equity—
18,675

Total changes of items during the period
Balance as of March 31, 2015—
32,117

10,015
130,753

Accumulated other comprehensive income

Balance as of March 31, 2014
Cumulative effects of changes in accounting policies
Balance at the beginning of current period reflectingchanges in accounting policies
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Change of scope of consolidation
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2015

Valuationdifference on
available-for-salesecurities

Revaluation
reserve for land

Foreign currencytranslation
adjustment

5,969(5,343)46(6,148)(5,475)

21,914
190

180,205
5,966

5,969

(5,343)46(6,148)(5,475)

22,104

186,171

Remeasurements Total valuation andof defined benefit
translationplans, net of tax
adjustments(3,518)13,534
(0)
2,266
2,266
8,235

49
49
(5,293)

126
126
173

4,423
4,423
(1,725)

6,865
6,865
1,389

1,311
1,311
23,415

8,176
18,192
204,363

ALSOK REPORT 201554

Consolidated Statements of Cash Flows

Millions of yen

Fiscal years ended March 31, 2015 and 2014

Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Amortization of negative 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
Equity in (earnings) losses of affiliates
Loss (gain) on sales of noncurrent assets
Loss (gain) on retirement of noncurrent assets
Loss (gain) on reversal of asset retirement obligations
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 refund
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 investment securities
Proceeds from sales of investment securities
Purchase of investments in subsidiaries
Purchase of shares of subsidiaries resulting in change in scope of consolidation
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 to minority shareholders
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 in cash and cash equivalents from newly consolidated subsidiary
Increase in cash and cash equivalents resulting from merger with unconsolidated subsidiaries
Cash and cash equivalents at end of period
55 ALSOK REPORT 2015

2014

2015

20,911
9,198
2
370
(80)
11
(310)
24
36
(762)
578
(517)
1
218
(25)
(222)
23
(180)
(4,744)956
1,801(1,279)2,329
257
28,597900(574)(7,900)32
21,056

24,653
11,331
0
768
(60)
(281)
213
(246)
(54)
(797)
689
(641)
1
228
—
(161)
49
(105)
(5,391)(348)
2,676(1,970)(11,624)
8,953
27,884953(698)(8,573)100
19,66663(15,224)
10
(878)
1,627
(30)
—
3
(74)
158
(2,356)(16,701)(498)(12,153)
2
(919)
1,357
(498)
(11,435)
(12)
(102)
133
(168)
(24,295)(439)
459(3,388)(10)(0)(2,793)(2,664)(304)(9,142)
2(4,785)40,541
36—
35,79115,802920(3,447)(57)(0)(2,700)(3,518)
(401)
6,596
40
2,007
35,791—
177
37,976

Corporate Information / Stock Information

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) 31,221(Non-consolidated) 12,331
Head office / 10 Headquarters /65 Branches / 40 Offices / 289 Sales offices

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

As of March 31, 2015

300,000,000
102,040,042(including. 1,506,619 shares of treasury stock)
10,746First Section of Tokyo Stock Exchange
2331
100

Financial Institutions
35.8%
Domestic Corporations24.2%
Individuals and Other
21.7%
Foreign Investors
16.1%
Treasury Stock
1.5%
Securities Companies and Other 0.7%

Major Shareholders (Top 10)
Name

Number ofshares held
(1,000 shares)

Percentage ofshares held
(%)

7,388
5,504
5,341
5,283

7.34
5.47
5.31
5.25

4,261

4.23

4,150
3,441
3,420

4.12
3.42
3.40

3,080

3.06

2,985

2.96

SOHGO CORPORATION
Employees Shareholding Association
Japan Trustee Services Bank, Ltd. (Trust Account)
Saitama Machinery Co., Ltd.
Trust & Custody Services Bank, Ltd. as trustee forMizuho Bank Ltd.
Retirement Benefit Trust1 Northern
Trust Co. (AVFC)
Kamakura Corporation
Sompo Japan Nipponkoa Insurance Inc.
Tokio Marine & Nichido Fire Insurance Co., Ltd.
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Atsushi Murai* Treasury stock (1,506,619 shares) has been excluded.

Stock Chart
Yen

Yen

5,000

20,000
Nikkei Stock Average

4,000

15,0003,000

Our Closing Price (Left axis)

10,000

2,000
5,000

1,000
0

0

18,000Financial Section

Thousand Shares
Trading Volume

12,0006,000

02006/3

2007/3

2008/3

2009/3

2010/3

2011/3

About ALSOK Report 2015
Beginning with the fiscal year ended March 31, 2015, the Company has
begun publishing integrated reports that compile its previously separate
annual reports and CSR reports. These integrated reports will be positioned as comprehensive communication tools meant to provide stakeholders with easy-to-understand explanations of the ALSOK Group’sbusiness performance and other financial information, business activities,
and strategies as well as the Group’s various initiatives for pursuing sustainable improvements in corporate value. We hope these reports will prove
to be viable tools for promoting understanding with regard to the ALSOKGroup for shareholders, other investors, and a wide range of other readers.

2012/3

2013/3

2014/3

2015/3

Information for Shareholders and Other Investors
ALSOK’s corporate website includes detailed information on the Company’s management policies,­financial position, business performance, andstock as well as an assortment of IR materials.
IR website: http://www.alsok.co.jp/en/ir/

CSR and Social Contribution Activities
Detailed information on the CSR and social contribution­activities that ALSOK is advancing as part of its
business activities based on ISO 26000 can befound on its corporate website (some sections
available in Japanese only).
CSR website: http://www.alsok.co.jp/en/csr/
ALSOK REPORT 201556

Eight consecutive years of inclusion in principal SRI index
Since 2007, ALSOK has been selected for inclusion in the FTSE4Good Global

SOHGO SECURITY SERVICES CO., LTD.

1-6-6 Motoakasaka, Minato-ku,
Tokyo 107-8511, Japan
http://www.alsok.co.jp/en/
IR OfficeCSR Office

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

Index, a socially responsible investment (SRI) index. We believe this continued
inclusion reflects recognition of ALSOK’s active engagement in CSR activities.

• PrivacyMark® and PrivacyMark System® are ­registeredtrademarks of JIPDEC (Japan Information Processing
Development Center)• REBORG and TAKURUS are registered trademarks of
SOHGO SECURITY SERVICES CO., LTD.