Financial Information and References

ESG Initiatives

Financial Review

SASB Index

We have prepared a report under Sustainability Accounting Standards Board (SASB) guidance for theProfessional & Commercial Services sector, which most closely aligns with the business of SECOM. ThisOverview

report can be accessed from the IR section of our corporate website.

In the fiscal year ended March 31, 2021, SECOM CO., LTD. andits consolidated subsidiaries (collectively, “the Company”)
sought to provide high-quality services and products that
respond to the diverse needs of customers in its core security
services segment, as well as in its fire protection services,medical services, insurance services, geospatial information
services, BPO and ICT services, and real estate and otherservices segments.
Notwithstanding the negative impact of COVID-19 incertain areas of the security services, fire protection services
and medical services segments, consolidated net sales andoperating revenue in the period under review edged up 0.2%,
or ¥2.7 billion, to ¥1,135.3 billion, and operating income rose
4.8%, or ¥6.2 billion, to ¥135.8 billion. This was due to anincrease in the BPO and ICT services segment and to net
realized investment gains (including a gain on other-thantemporary impairment of investment securities) in theinsurance services segment, compared with net realized
investment losses in the previous fiscal year. Despite a loss
from discontinued operations, net of tax, net income attributable
to SECOM CO., LTD., advanced 3.2%, or ¥2.8 billion, to ¥89.9billion, underpinned by an increase in operating income, as well
as by a gain on other-than-temporary impairment of investment
securities, compared with a loss in the preceding period.

SECOM’s SASB Index
Professional & Commercial Services Sector Sustainability Indicators
Topic

Code

Workforce Diversity &Engagement

Description of approach to identifying and addressing data security risks

SV-PS-230a.2

Description of policies and practices relating to collection, usage, and retentionof customer information

SV-PS-230a.3(1) Number of data breaches, (2) Percentage involving customers’ confidential
business information or personally identifiable information, (3) Number ofcustomers affected

SV-PS-330a.1

Percentage of gender and racial/ethnic group representation for (1) executivemanagement and (2) all other employees

SV-PS-330a.2(1) Voluntary and (2) involuntary turnover rate for employees

SV-PS-330a.3

Employee engagement as a percentage

SV-PS-510a.1

Description of approach to ensuring professional integrity

SV-PS-510a.2

Total amount of monetary losses as a result of legal proceedings associatedwith professional integrity

Professional Integrity

Topic

Accounting Metric

SV-PS-230a.1

Data Security

Code

SV-PS-000.A
Activity metrics

SV-PS-000.B

Activity Metric

Data*

Number of employees by:(1) full-time and part-time(1) Full-time employees:

14,602(2) temporary(2) Temporary employees:

1,332(3) contract(3) Contract employees:

1,688

Employee hours worked, percentage
billable

Employee hours worked:

29,866,147

Percentage billable:

N/A*Data for “Activity metrics” is for SECOM CO., LTD., and is as of March 31, 2021, or for the fiscal year ended March 31, 2021. Because billing for electronic security
services, our principal business, is based on fixed monthly fees, “percentage billable” is not applicable.

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Operating Results

SECOM REPORT 2021

Net Sales and Operating Revenue
Consolidated net sales and operating revenue in the period
under review edged up 0.2%, or ¥2.7 billion, to ¥1,135.3 billion,
notwithstanding the negative impact of the pandemic oncertain areas of the fire protection services, security services
and medical services segments, and reflected an increase in
the BPO and ICT services segment, together with net realized
investment gains (including a gain on other-than-temporary
impairment of investment securities) in the insurance services
segment, compared with net realized investment losses in
the previous fiscal year. (For further information, please see
Segment Information below.)
Costs and Expenses
Total costs and expenses slipped 0.3%, or ¥3.5 billion, to ¥999.5billion. Cost of sales was down 0.6%, or ¥5.0 billion, to ¥790.3
billion, and was equivalent to 69.6% of net sales and operating
revenue, compared with 70.2% in the preceding period.
Contributing factors included net realized investment gains(including a gain on other-than-temporary impairment ofinvestment securities) in the insurance services segment,
as well as an increase in net sales and operating revenueand a decrease in the cost of sales ratio—attributable tothe presence of profitable projects—in the BPO and ICT
services segment.
Selling, general and administrative (SG&A) expenses, at¥201.7 billion, were down 0.7%, or ¥1.5 billion, and equivalent
to 17.8% of net sales and operating revenue, slightly better thanthe previous fiscal year’s 17.9%, reflecting cost-cutting efforts
and the voluntary suspension of business travel as a measure
to prevent the spread of COVID-19, among others. The Company
also reported an impairment loss on goodwill (in the security

services business) of ¥5.7 billion, up ¥4.9 billion. In contrast,
impairment loss on long-lived assets fell ¥857 million, to ¥95
million, and loss on sales and disposal of fixed assets, net,slipped ¥990 million, to ¥1.8 billion.
Operating Income
Operating income rose 4.8%, or ¥6.2 billion, to ¥135.8 billion,
as favorable results in the insurance services, BPO and ICT
services, and geospatial information services segments
outweighed declines in the security services, fire protection
services and medical services segments, while corporateexpenses and eliminations decreased. The operating margin
improved to 12.0%, from 11.4%. (For further information, pleasesee Segment Information below.)
Other Income and Expenses
Other income increased ¥2.3 billion, to ¥12.1 billion, while otherexpenses fell ¥3.6 billion, to ¥2.8 billion. Net other income thus
amounted to ¥9.3 billion, up ¥5.9 billion. This was primarily
attributable to a more encouraging investment environment,
as a consequence of which the Company reported a gain onother-than-temporary impairment of investment securities of¥4.6 billion, compared with a loss on other-than-temporary
impairment of investment securities of ¥3.7 billion in thepreceding period. The Company had also reported a ¥2.3 billion
gain on sales of securities, net, in the previous fiscal year, as
the result of the sale of a U.S. subsidiary in the geospatial
information services business.
Income Taxes
Income taxes amounted to ¥47.6 billion, up ¥6.8 billion, owing tohigher income from continuing operations before income taxes
and equity in net income of affiliated companies, as well as to anincrease in the income tax expense rate, reflecting the increasein impairment loss on goodwill. This was equivalent to 32.8% ofincome from continuing operations before income taxes andequity in net income of affiliated companies, compared with30.7% in the preceding period.
Equity in Net Income of Affiliated Companies
Equity in net income of affiliated companies edged down ¥76
million, to ¥6.6 billion.
Loss from Discontinued Operations, Net of Tax
In December 2020, all issued shares in consolidated subsidiary
Secom Home Life Co., Ltd., were transferred to a third party. Asa consequence, Secom Home Life and its subsidiary, previously
included in the real estate and other, and security services
segments, were excluded from the scope of consolidation andtheir operations classified as discontinued. Accordingly, theoperating results of these companies are reported in income(loss) from discontinued operations. Figures for prior periods
have been restated. As a consequence of this and otherfactors, loss from discontinued operations, net of tax, in theperiod under review was ¥2.6 billion, compared with income
from discontinued operations, net of tax, of ¥975 million in thepreceding period.

SECOM REPORT 2021

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