AUDITED FINANCIAL STATEMENTS

Financial Data

2022

Contents
Consolidated Financial Statements .................................................. 02
Consolidated Balance Sheets......................................................... 02
Consolidated Statements of Income............................................ 04
Consolidated Statements of Comprehensive Income............. 04
Consolidated Statements of Changes in Equity........................ 05
Consolidated Statements of Cash Flows ................................... 06
Notes to Consolidated Financial Statements............................ 07
Independent Auditors’ Report.............................................................. 33
Year ended March 31, 2022

SECOM Financial Data 202201

Consolidated Financial Statements
Consolidated Balance Sheets
SECOM CO., LTD. and Subsidiaries
March 31, 2022 and 2021

ASSETS
Current assets:
Cash and cash equivalents (Notes 5 and 22)............................................................................
Time deposits (Note 13)..................................................................................................................
Cash deposits for armored car services (Note 6)...................................................................
Short-term investments (Notes 7 and 22)................................................................................
Notes and accounts receivable, trade........................................................................................
Due from subscribers......................................................................................................................
Inventories (Note 8)..........................................................................................................................
Short-term deferred charges (Note 2 (13))...............................................................................
Short-term receivables (Notes 9, 13, 20 and 21)....................................................................
Allowance for doubtful accounts (Note 9).................................................................................
Deferred insurance acquisition costs (Note 14)......................................................................
Other current assets........................................................................................................................
			Total current assets................................................................................................................

Investments and long-term receivables:
Investment securities (Notes 2 (7), 7, 13 and 22)....................................................................
Investments in affiliated companies (Note 10)........................................................................
Long-term receivables (Notes 9, 13, 20 and 21).....................................................................
Lease deposits...................................................................................................................................
Other investments............................................................................................................................
Allowance for doubtful accounts (Note 9).................................................................................

Property, plant and equipment (Notes 11, 13, 19 and 20):
Land......................................................................................................................................................
Buildings and improvements........................................................................................................
Security equipment and control stations..................................................................................
Machinery, equipment and automobiles...................................................................................
Construction in progress................................................................................................................
Accumulated depreciation

Other assets:
Operating lease right-of-use assets (Notes 2 (12) and 19)..................................................
Long-term deferred charges (Note 2 (13))................................................................................
Goodwill (Note 12).............................................................................................................................
Other intangible assets (Notes 12, 13, 19 and 20)..................................................................
Prepaid pension and severance costs (Note 15).....................................................................
Deferred income taxes (Note 17).................................................................................................
			Total assets...............................................................................................................................
See accompanying notes to consolidated financial statements.

02

SECOM Financial Data 2022

In millions of yen

Translation into thousandsof U.S. dollars (Note 3)

March 31

March 31

2022

2021

2022

¥  531,555
8,972
136,478
26,528
165,415
61,30038,171
7,973
26,192(2,077)3,554
22,597
1,026,658¥  502,201
9,587
138,890
21,220
153,41061,47931,784
7,887
27,666(1,708)2,640
24,375
979,431$ 4,357,008
73,541
1,118,672
217,443
1,355,861
502,459
312,877
65,352
214,689(17,025)
29,131
185,222
8,415,230

215,01271,66334,984
20,69911,380(4,201)
349,537

214,107
67,13039,602
19,731
11,105(4,002)
347,673

1,762,393
587,402286,754
169,664
93,279(34,434)
2,865,058

In millions of yen

Translation into thousandsof U.S. dollars (Note 3)

March 31

March 31

LIABILITIES AND EQUITYCurrent liabilities:
Bank loans (Notes 6 and 13)..........................................................................................................
Current portion of long-term debt (Notes 13, 19 and 21).....................................................
Notes and accounts payable, trade.............................................................................................
Other payables...................................................................................................................................
Deposits received (Note 6).............................................................................................................
Deferred revenue..............................................................................................................................
Accrued income taxes.....................................................................................................................
Accrued payroll..................................................................................................................................
Current operating lease liabilities (Notes 2 (12) and 19)......................................................
Other current liabilities...................................................................................................................
			Total current liabilities...........................................................................................................

2022

2021

2022

¥   31,814
15,121
46,03844,669124,001
38,25926,665
41,526
20,45030,622
419,165¥   33,852
15,45744,26543,679123,808
37,93823,56041,11920,44835,876420,002$   260,770
123,943
377,361
366,139
1,016,402
313,598
218,566
340,377
167,623251,001
3,435,780

Long-term liabilities:
Long-term debt (Notes 13, 19 and 21)........................................................................................
Guarantee deposits received.........................................................................................................
Accured pension and severance costs (Note 15)....................................................................
Long-term deferred revenue.........................................................................................................
Unearned premiums and other insurance liabilities (Note 14)...........................................
Investment deposits by policyholders (Notes 14 and 21).....................................................
Deferred income taxes (Note 17).................................................................................................
Noncurrent operating lease liabilities (Notes 2 (12) and 19)...............................................
Other long-term liabilities (Notes 21, 22 and 23)....................................................................
			Total long-term liabilities......................................................................................................
			Total liabilities..........................................................................................................................

51,84423,23830,244
16,545133,014
16,966
14,277
116,962
16,262
419,352
838,51753,492
23,34629,868
17,944133,118
19,82913,470120,052
15,542426,661
846,663

424,951
190,475
247,902135,615
1,090,279
139,066
117,025
958,705
133,295
3,437,313
6,873,093

66,41963,014
10,972
1,139,866

66,41074,607
10,884
1,070,419

544,418
516,508
89,934
9,343,164

2,424
3,325
2,929
8,678

2,566
(658)
(8,120)(6,212)

19,86927,25424,00871,131(79,437)
1,209,512
135,437
1,344,949¥2,183,466(73,785)
1,142,323
148,820
1,291,143¥2,137,806(651,123)
9,914,032
1,110,139
11,024,171$17,897,264

Commitments and contingent liabilities (Note 24)
121,890388,254
365,350
163,887
9,773
1,049,154(624,313)
424,841

137,412
13,174
109,653
58,67647,852
15,663
382,430¥2,183,466

120,613377,361355,945
160,139
10,166
1,024,224(595,115)
429,109140,500
13,905
109,946
58,37639,532
19,334
381,593¥2,137,806

999,098
3,182,410
2,994,672
1,343,336
80,1078,599,623(5,117,320)
3,482,303

1,126,328
107,984
898,795
480,951
392,230
128,385
3,134,673$17,897,264

Equity:SECOM CO., LTD. shareholders' equity (Note 18):
Common stock		 Authorized—900,000,000 shares, issued 233,298,049 shares in 2022
		 Authorized—900,000,000 shares, issued 233,295,926 shares in 2021.......................
Additional paid-in capital................................................................................................................
Legal reserve.....................................................................................................................................
Retained earnings.............................................................................................................................
Accumulated other comprehensive income (loss):		 Unrealized gains on securities (Note 7).................................................................................
		 Pension liability adjustments (Note 15).................................................................................
		 Foreign currency translation adjustments...........................................................................
Common stock in treasury, at cost:		 15,215,218 shares in 2022 and 15,034,565 shares in 2021...........................................
		 Total SECOM CO., LTD. shareholders' equity.........................................................................
Noncontrolling interests......................................................................................................................
			Total equity................................................................................................................................
			Total liabilities and equity....................................................................................................
See accompanying notes to consolidated financial statements.

SECOM Financial Data 202203

Consolidated Statements of Income

Consolidated Statements of Changes in Equity

SECOM CO., LTD. and Subsidiaries
Three years ended March 31, 2022

SECOM CO., LTD. and Subsidiaries
Three years ended March 31, 2022

2022

In millions of yen

Translation into thousandsof U.S. dollars (Note 3)

Years ended March 31

Year ended March 31

2021

2020

2022

Net sales and operating revenue (Notes 14, 18, 22 and 25)............................................................. ¥1,166,098 ¥1,135,339 ¥1,132,632
Costs and expenses:
Cost of sales (Note 8)................................................................................................................................
802,443790,288795,318
Selling, general and administrative expenses (Notes 2 (18), 2 (19), 2 (20) and 4)..................
204,190
201,723
203,223
Impairment loss on long-lived assets (Note 11)...............................................................................
113
95
952
Impairment loss on goodwill (Note 12)................................................................................................
268
5,660
758
Gain and loss on sales and disposal of fixed assets, net...............................................................
2,682
1,764
2,754
1,009,696
999,530
1,003,005
				Operating income.......................................................................................................................
156,402135,809
129,627
Other income:Interest and dividends..............................................................................................................................
1,784
1,880
1,961
Gain and loss on sales of securities, net (Notes 7 and 18)............................................................
334
—
2,297
Gain on other-than-temporary impairment of investment securities (Notes 18 and 22)....
—
4,594
—
Gain on private equity investments (Note 22)....................................................................................
3,072
—
—
Other (Notes 15, 16, 18 and 23)..............................................................................................................
4,480
5,647
5,545
9,670
12,121
9,803
Other expenses:
Interest..........................................................................................................................................................
1,165
1,168
1,120
Gain and loss on sales of securities, net (Notes 7 and 18)............................................................
—
121—
Loss on other-than-temporary impairment of investment securities (Notes 18 and 22)....
848
—
3,738
Loss on private equity investments (Note 22)...................................................................................
—
302
139
Other (Note 16)............................................................................................................................................
2,370
1,254
1,477
4,383
2,845
6,474
				Income from continuing operations before income taxes and equity				 in net income of affiliated companies..............................................................................
161,689
145,085
132,956
Income taxes (Note 17):
Current...........................................................................................................................................................
46,73843,74345,546
Deferred........................................................................................................................................................
2,426
3,855
(4,711)
49,16447,59840,835
				Income from continuing operations before equity				 in net income of affiliated companies..............................................................................
112,525
97,487
92,121Equity in net income of affiliated companies (Note 18).....................................................................
6,639
6,578
6,654
				Income from continuing operations....................................................................................
119,164
104,065
98,775
Income (loss) from discontinued operations, net of tax (Note 26).................................................
—(2,570)975
				Net income...................................................................................................................................
119,164
101,495
99,750Less: Net income attributable to noncontrolling interests..............................................................
(11,433)(11,582)(12,614)
				Net income attributable to SECOM CO., LTD. ................................................................... ¥  107,731 ¥   89,913 ¥   87,136

922,335
54,418976,753—
976,753(93,713)$  883,040

In yenTranslation into
U.S. dollars (Note 3)

Years ended March 31

Year ended March 312022

Per share data (Note 2 (22)):
Income from continuing operations attributable to SECOM CO., LTD. .......................................
Income (loss) from discontinued operations attributable to SECOM CO., LTD. .......................
Net income attributable to SECOM CO., LTD. .....................................................................................
Cash dividends per share (Note 18).........................................................................................................

¥492.83—
492.83¥175.00

Consolidated Statements of Comprehensive Income
SECOM CO., LTD. and Subsidiaries
Three years ended March 31, 2022
Comprehensive income:Net income...................................................................................................................................................
Other comprehensive income (loss), net of tax:
		 Unrealized gains on securities..........................................................................................................
		 Pension liability adjustments............................................................................................................
		 Foreign currency translation adjustments....................................................................................
Total comprehensive income................................................................................................................
Less: Comprehensive income attributable to noncontrolling interests......................................
		Comprehensive income attributable to SECOM CO., LTD. .....................................................

2021

2020

$9,558,180
6,577,402
1,673,689
926
2,197
21,984
8,276,198
1,281,982
14,623
2,738—
25,18036,722
79,263
9,549
—
6,951
—
19,42735,927
1,325,318
383,098
19,885402,983

Number ofsharesissuedBalance, March 31, 2019................................................................... 233,292,219
Comprehensive income:Net income.......................................................................................
—
Other comprehensive income (loss), net of tax (Note 18):
		 Unrealized gains on securities............................................
—
		 Pension liability adjustments...............................................
—
		 Foreign currency translation adjustments......................
—
Total comprehensive income.....................................................
Issuance of new stocks.......................................................................
1,779
Cash dividends paid to SECOM CO., LTD. shareholders.............
—Cash dividends paid to noncontrolling interests.........................
—
Transfer to legal reserve....................................................................
—
Equity transactions with noncontrolling interests and other(Note 18)................................................................................................
—
Gains on disposal of treasury stock................................................
—Net changes in treasury stock..........................................................
—
Balance, March 31, 2020................................................................... 233,293,998
Comprehensive income:Net income.......................................................................................
—
Other comprehensive income (loss), net of tax (Note 18):
		 Unrealized gains on securities............................................
—
		 Pension liability adjustments...............................................
—
		 Foreign currency translation adjustments......................
—
Total comprehensive income.....................................................
Issuance of new stocks.......................................................................
1,928
Cash dividends paid to SECOM CO., LTD. shareholders.............
—Cash dividends paid to noncontrolling interests.........................
—
Transfer to legal reserve....................................................................
—
Equity transactions with noncontrolling interests and other(Note 18)................................................................................................
—
Gains on disposal of treasury stock................................................
—Net changes in treasury stock..........................................................
—
Balance, March 31, 2021................................................................... 233,295,926
Comprehensive income:Net income.......................................................................................
—
Other comprehensive income (loss), net of tax (Note 18):
		 Unrealized gains on securities............................................
—
		 Pension liability adjustments...............................................
—
		 Foreign currency translation adjustments......................
—
Total comprehensive income.....................................................
Issuance of new stocks.......................................................................
2,123
Cash dividends paid to SECOM CO., LTD. shareholders.............
—Cash dividends paid to noncontrolling interests.........................
—
Transfer to legal reserve....................................................................
—
Equity transactions with noncontrolling interests and other(Note 18)................................................................................................
—
Gains on disposal of treasury stock................................................
—Net changes in treasury stock..........................................................
—
Balance, March 31, 2022................................................................... 233,298,049

Commonstock

Additional
paid-in
capitalLegalreserve

Retained­earnings¥66,393¥73,166¥10,783¥  967,679(¥    78)(¥73,759)¥1,044,184¥131,718¥1,175,902

—

—

—

87,136——

87,136

12,61499,750

—
—
—

—
—
—

—
—
—

—
—
—

(263)
(3,858)(2,862)

—
—
—

8
—
—
—

8
—
—
—

—
—
—
50

—
(37,104)
—
(50)

—
—
—
—

—
—
—
—

(263)
(3,858)(2,862)80,153
16(37,104)
—
—

—
(178)
(72)
12,364——(3,438)—(263)(4,036)(2,934)92,517
16(37,104)(3,438)————66,4011,506
0—74,680———10,833———
1,017,661———(7,061)—0(17)(73,776)

1,506
0
(17)
1,088,738(1,975)——
138,669

(469)
0
(17)
1,227,407———

89,913——89,913

11,582

101,495

—
—
—

—
—
—

—
—
—

—
—
—

519
3,942
(3,612)

—
—
—

9
—
—
—

9
—
—
—

—
—
—
51

—
(37,104)
—
(51)

—
—
—
—

—
—
—
—

519
3,942
(3,612)
90,762
18(37,104)
—
—

—
520
(363)
11,739——(2,523)
—

519
4,462
(3,975)102,501
18(37,104)(2,523)————
66,410(82)——
74,607———
10,884———
1,070,419———(6,212)——(9)(73,785)

(82)
—
(9)
1,142,323

935——
148,820853—(9)1,291,143———

107,731——

107,731

11,433

119,164

—
—
—

—
—
—

—
—
—

—
—
—

(142)
3,983
11,049

—
—
—

9
—
—
—

9
—
—
—

—
—
—
88

—
(38,196)
—
(88)

—
—
—
—

—
—
—
—

(142)
3,983
11,049122,621
18(38,196)
—
—

—
(7)
629
12,055——(2,965)
—

(142)
3,976
11,678
134,676
18(38,196)(2,965)—(11,602)—0———¥63,014 ¥10,972———¥1,139,866———¥ 8,678—
0(5,652)(¥79,437)(11,602)0(5,652)¥1,209,512

Commonstock intreasury,
at cost———¥66,419

$4.04
—
4.04
$1.43

In millions of yen

Translation into thousandsof U.S. dollars (Note 3)

Years ended March 31

Year ended March 31

2022

2021

2020

2022

¥119,164¥101,495¥99,750$  976,753

(142)
3,976
11,678
134,676(12,055)¥122,621

519
4,462(3,975)102,501(11,739)¥ 90,762(263)(4,037)(2,934)92,516(12,364)¥80,152(1,164)32,59095,721
1,103,900(98,811)$1,005,089

Commonstock intreasury,
at costTotal
SECOM CO., LTD.
shareholders’ Noncontrolling
equityinterests

Total(22,473)(34,075)—
0—(5,652)¥135,437 ¥1,344,949

Translation into thousands of U.S. dollars (Note 3)2022¥394.76
4.47
399.23¥170.00¥423.73(11.78)411.95¥170.00

In millions of yen
Accumulated
other com­prehensive
income (loss)

Commonstock

Balance, March 31, 2021.............................................................................................. $544,344
Comprehensive income:Net income..................................................................................................................
—
Other comprehensive income (loss), net of tax (Note 18):
		 Unrealized gains on securities.......................................................................
—
		 Pension liability adjustments..........................................................................
—
		 Foreign currency translation adjustments.................................................
—
Total comprehensive income................................................................................
Issuance of new stocks..................................................................................................
74
Cash dividends paid to SECOM CO., LTD. shareholders........................................
—Cash dividends paid to noncontrolling interests....................................................
—
Transfer to legal reserve...............................................................................................
—
Equity transactions with noncontrolling interests and other(Note 18)...........................................................................................................................
—
Gains on disposal of treasury stock...........................................................................
—Net changes in treasury stock.....................................................................................
—
Balance, March 31, 2022.............................................................................................. $544,418

Additional
paid-in
capitalLegalreserve

Retained­earnings

Accumulated
other com­prehensive
income (loss)

Total
SECOM CO., LTD.
shareholders’ Noncontrolling
equityinterests$611,533$89,213$8,773,926($50,918)($604,795)$9,363,303——

883,040——

883,040

93,713

976,753

—
—
—

—
—
—

—
—
—

(1,164)32,64790,566

—
—
—

74
—
—
—

—
—
—
721

—
(313,081)
—
(721)

—
—
—
—

—
—
—
—

(1,164)32,64790,566
1,005,089
148(313,081)
—
—

—
(57)
5,155
98,811——(24,303)—(1,164)32,59095,721
1,103,900
148(313,081)(24,303)—(95,099)—0———$516,508 $89,934———$9,343,164———$71,131—0(46,328)($651,123)(95,099)
0(46,328)$9,914,032

Total$1,219,836 $10,583,139(184,205)(279,304)—
0—(46,328)$1,110,139 $11,024,171

See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

04

SECOM Financial Data 2022

SECOM Financial Data 202205

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

SECOM CO., LTD. and Subsidiaries
Three years ended March 31, 2022

SECOM CO., LTD. and Subsidiaries
Three years ended March 31, 2022

2022

Cash flows from operating activities:
Net income..........................................................................................................................................................
Adjustments to reconcile net income to net cash provided by operating activities—
		 Depreciation and amortization, including amortization of deferred charges
		 (Notes 2 (11), 2 (13) and 12)....................................................................................................................
		 Accrual for pension and severance costs, less payments..............................................................
		 Deferred income taxes, including discontinued operations............................................................
		 Gain and loss on sales and disposal of fixed assets, net.................................................................
		 Impairment loss on long-lived assets (Note 11).................................................................................
		 Write-down on real estate inventories (Note 8)..................................................................................
		 Gain and loss on private equity investments (Note 22)....................................................................
		 Impairment loss on goodwill (Note 12).................................................................................................
		 Gain on sales of securities, net (Notes 7 and 14)...............................................................................
		 Loss on other-than-temporary impairment of investment securities (Notes 14 and 22)......
		 Equity in net income of affiliated companies.......................................................................................
		 Changes in assets and liabilities, net of effects from acquisitions and disposals:			 (Increase) decrease in cash deposits for armored car services..............................................
			 (Increase) decrease in receivables and due from subscribers, net of allowances.............
			 (Increase) decrease in inventories.....................................................................................................
			 Increase in deferred charges..............................................................................................................
			 Increase (decrease) in notes and accounts payable....................................................................
			 Increase (decrease) in deposits received........................................................................................
			 Increase (decrease) in deferred revenue.........................................................................................
			 Increase (decrease) in accrued income taxes................................................................................
			 Increase (decrease) in guarantee deposits received....................................................................
			 Increase (decrease) in unearned premiums and other insurance liabilities........................
			 Increase (decrease) in accrued consumption tax.........................................................................
			Other, net...................................................................................................................................................
				 Net cash provided by operating activities..................................................................................
Cash flows from investing activities:(Increase) decrease in time deposits..........................................................................................................
Proceeds from sales of property, plant and equipment........................................................................
Payments for purchases of property, plant and equipment.................................................................
Payments for purchases of intangible assets..........................................................................................
Proceeds from sales and redemptions of investment securities (Note 7).......................................
Payments for purchases of investment securities.................................................................................
(Increase) decrease in short-term investments......................................................................................
Proceeds from sale of subsidiaries, net of cash and cash equivalents disposed of.....................
Acquisitions, net of cash acquired (Note 4)...............................................................................................
(Increase) decrease in short-term receivables, net................................................................................
Payments for long-term receivables...........................................................................................................
Proceeds from long-term receivables........................................................................................................
Other, net..............................................................................................................................................................
				 Net cash used in investing activities............................................................................................
Cash flows from financing activities:
Proceeds from long-term debt.....................................................................................................................
Repayments of long-term debt.....................................................................................................................
Increase (decrease) in bank loans, net.......................................................................................................
Increase (decrease) in investment deposits by policyholders.............................................................
Dividends paid to SECOM CO., LTD. shareholders....................................................................................
Dividends paid to noncontrolling interests................................................................................................
Payments for acquisition of shares of consolidated subsidiaries from noncontrollinginterest holders...............................................................................................................................................
Increase in treasury stock, net......................................................................................................................
Other, net..............................................................................................................................................................
				 Net cash used in financing activities...........................................................................................
Effect of exchange rate changes on cash and cash equivalents...........................................................
Net increase in cash and cash equivalents..................................................................................................
Cash and cash equivalents at beginning of year........................................................................................
Cash and cash equivalents at end of year....................................................................................................
See accompanying notes to consolidated financial statements.

06

SECOM Financial Data 2022

In millions of yen

Translation into thousandsof U.S. dollars (Note 3)

Years ended March 31

Year ended March 31

2020

2022

¥119,164 ¥101,495 ¥ 99,750$  976,753

2021

78,507(2,659)
2,426
2,682
113
—
(3,072)
268
(709)
2,373
(6,639)78,716(2,110)
3,859
1,788
95
20
302
5,660
2,476
(11,441)(6,578)77,574
1,193(4,715)
2,770
952
66
139
758
(2,962)
8,540(6,654)

643,500(21,795)
19,88521,984926—(25,180)
2,197(5,811)
19,451(54,418)

2,412(10,450)(5,415)(8,015)
2,986
163(1,391)
4,022
(210)
(103)
(4,121)
12,961
185,293

2,016
14,319(787)(8,985)(4,077)1,061(1,807)(935)(1,197)
4,209
1,295
9,329
188,723

1,430(10,576)
9,256(11,754)
2,361(4,822)
1,874
5,146
(352)
4,600
4,529
5,295
184,398

19,770(85,656)(44,385)(65,697)
24,475
1,336(11,402)32,967(1,721)(844)(33,779)
106,239
1,518,795

738
3,602
(55,075)(10,778)
33,243(31,683)
—
(3)
—
57
(703)
1,975
(1,734)(60,361)(593)
766(50,122)(10,738)
47,859(55,991)
9,269
14,633(7,098)310(1,472)
1,947(1,719)(52,949)

1,564
1,178
(63,126)(11,722)
50,259(45,325)(1,357)
2,670
(725)
(147)
(1,416)
1,578(42)(66,611)

6,049
29,525(451,434)(88,344)
272,484(259,697)
—
(25)
—
467
(5,762)
16,189(14,214)(494,762)

5,349(16,953)(1,903)(2,863)(38,196)(2,965)

16,699(18,752)(4,500)(1,687)(37,104)(2,600)8,802(18,793)162(2,099)(37,104)(3,425)43,844(138,959)(15,598)(23,467)(313,081)(24,303)(28,573)
(241)
(659)
(11,241)
(9)
(16)
72
478
190
(97,273) (47,716) (52,942)
1,695
(525)
93
29,35487,53364,938502,201
414,668
349,730¥531,555 ¥502,201 ¥414,668(234,205)(92,139)588(797,320)
13,893
240,606
4,116,402$4,357,008

1. Nature of Operations
The parent company and its subsidiaries (collectively “the Company”)
are engaged in the businesses of security services, fire protection­services, medical services, insurance services, geospatial information
services, BPO and ICT services, and other services. With these services
combined, the Company is focusing on the establishment of a Social
System Industry, a network of integrated services and s­ ystems,­targeted at the needs of people and business.
The Company’s principal business activities are security services,
including on-line security systems for commercial and residential
prem­ises, static guard services, armored car services for cash collection and deposit and sales of security merchandise. The Company has
also been diversifying its services covering: fire protection services,
including automatic fire alarm systems and fire extinguishing systems;
medical services, including home and other medical services and theoperations of variable interest entities of which the Company is the primary beneficiary through managing hospitals and health care-related
institutions; non-life insurance services; geospatial information services using geospatial information systems (GIS) and surveying andmeasuring technology; BPO and ICT services, including data center
services, business continuity plan support, information security services and cloud-based services; as well as Business Process
Outsourcing (“BPO”) related services; other services, including lease ofreal estate, c­ onstruction and installation services and other services.

The Company provides investments, loans and guarantees to­ rganizations managing hospitals and health care-related institutions,oto a company holding real estate, and to a PFI (Private FinanceInitiative) organization which was established to build, maintain andoperate correctional facilities. Certain of these organizations are­considered VIEs under ASC 810.
Total assets and liabilities held by VIEs of which the Company is theprimary beneficiary were ¥90,505 million ($741,844 thousand) and¥92,880 million ($761,311 thousand), respectively, at March 31, 2022,
and ¥89,539 million and ¥98,588 million, respectively, at March 31,
2021. The creditors of VIEs do not have recourse to the Company’s general credit with the exception of debts guaranteed by the Company.
Total assets and liabilities held by VIEs of which the Company holds
significant variable interests but is not the primary beneficiary were¥27,670 million ($226,803 thousand) and ¥24,611 million ($201,730
thousand), respectively, at March 31, 2022, and ¥27,610 million and¥24,882 million, respectively, at March 31, 2021. The Company’s assets
in the consolidated balance sheets and the Company’s maximum exposure to losses related to VIEs at March 31, 2022 and 2021 were ¥9,186
million ($75,295 thousand) and ¥8,804 million, respectively.

2. Significant Accounting Policies
The parent company and its Japanese subsidiaries maintain theirrecords and prepare their statutory financial statements in accordancewith accounting principles generally accepted in Japan (“Japanese
GAAP”). Certain adjustments and reclassifications have been incorporated in the accompanying financial statements to conform with U.S.
generally accepted accounting principles (“U.S. GAAP”). These­adjustments were not recorded in the statutory books of account.
Significant accounting policies used in the preparation of the­accompanying consolidated financial statements are summarized
below:

Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: A llocate the transaction price to the performance obligationsin the contract
Step 5: R ecognize revenue when (or as) the entity satisfies a­performance obligation(1) Basis of Consolidation and Investments in Affiliated Companies
The consolidated financial statements include the accounts of theparent company and those of its majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminatedin consolidation.
Investments in companies in which the ability to exercise significant
influence exists (generally 20 to 50 percent owned companies), areaccounted for under the equity method. Consolidated income includes
the Company’s current equity in the net income of affiliated companies,
after elimination of intercompany profits.
(2) Consolidation of Variable Interest Entities
The consolidated financial statements also include variable interest
entities (“VIEs”) of which the Company is the primary beneficiary.
The Accounting Standards Codification (“ASC”) 810, “Consolidation,”
issued by the Financial Accounting Standards Board (“FASB”) requires
the reporting entity to consolidate a variable interest entity (“VIE”) as its
primary beneficiary when it is deemed to have a controlling financial
interest in a VIE, meeting both of the following characteristics:• The power to direct activities of a VIE that most significantly
impact the VIE’s economic performance.
• The obligation to absorb losses of the VIE that could potentially besignificant to the VIE or the right to receive benefits from the VIEthat could potentially be significant to the VIE.

(3) Revenue Recognition
The Company recognizes revenue based on the following five steps
in accordance with ASC 606, “Revenue from Contracts with Customers.”

The Company generates revenue principally through the sales ofmerchandise and services in the areas of security services, fire protection services, medical services, insurance services, geospatial information services, BPO and ICT services, and other services under separate
contractual arrangements.
Revenue from term service contracts, including security services, isrecognized over the contractual period or, in the case of specific services, when such services are rendered. Subscribers are generally
requested to prepay a portion of service charges, especially for security services, which are credited to deferred revenue and recognized inincome ratably over the covered service period. Revenue from theinstallation of security equipment used to provide on-line centralized
security services is deferred and recognized over the contractual
period of security services after completion of the installation. The
related installation costs are also deferred and amortized over the­contractual period (Note 2 (13)).
The Company enters into arrangements with multiple elements,
which may include any combination of security equipment, installationand security services. The Company allocates revenue to each element
based on its relative fair value if such element meets criteria for treatment as a separate unit of accounting as prescribed in ASC 606,
“Revenue from Contracts with Customers.” Otherwise, revenue isdeferred until the undelivered elements are fulfilled as a single unit ofaccounting.
Revenue from sales of merchandise and software is recognizedwhen the merchandise and software are received by the customer and,in the case of installations, when such installations are completed.
Revenue from construction contracts is recognized on the basis of
the progress of the performance obligation, which is mainly measured
by input methods based on costs incurred.

SECOM Financial Data 202207

Excluding the aforementioned policy, the policies as specificallydescribed hereinafter are applied for each of revenue items.
Property and casualty insurance premiums are earned ratably over
the terms of the related insurance contracts. Unearned premiums areearned ratably over the terms of the unexpired portion of premiums
written.
Revenue from sales of equipment under sales-type leases is recognized at the inception of the lease. Unearned income on sales-typeleases and direct-financing leases is recognized over the life of each
respective lease using the interest method. Leases not qualifying as
sales-type leases or direct-financing leases are accounted for as operating leases and the related revenue is recognized over the lease term.
Taxes collected from customers and remitted to governmental
authorities on revenue-producing transactions are accounted for on
a net basis and therefore are excluded from net sales and operating­revenue in the consolidated statements of income.
(4) Foreign Currency Translation
All asset and liability accounts of foreign subsidiaries and affiliates
are translated into Japanese yen at the rates of exchange in effect at
year-end and all income and expense accounts are translated at average rates of exchange during the year. The resulting translation adjustments are accumulated and reported as part of other comprehensive
income (loss).
Foreign currency receivables and payables of the Company aretranslated into yen at the rate in effect at the balance sheet date andthe resulting translation gains and losses are credited or charged toforeign currency income/expenses for the year.
(5) Cash Equivalents
For the purpose of the consolidated statements of cash flows, theCompany considers all highly liquid investments purchased with initial
maturities of three months or less to be cash equivalents.
(6) Investments in Debt and Equity Securities
The Company classifies investments in debt and equity securities
as “available-for-sale” or “held-to-maturity.” The Company has no
securities classified as “trading.” “Held-to-maturity” securities arethose securities in which the Company has the ability and intent tohold the security until maturity. All securities not included in “trading”
or “held-to-maturity” are classified as “available-for-sale” securities.
Marketable equity securities classified as “available-for-sale” aremeasured at fair value with unrealized gains and losses included inincome. Marketable debt securities classified as “available-for-sale”
are measured at fair value, and unrealized holding gains and losses
are reported as part of accumulated other comprehensive income(loss), net of tax. Debt securities classified as “held-to-maturity” arereported at amortized cost.
A decline in the fair value of any marketable debt securities classified as “available-for-sale” below cost that is deemed to be other-thantemporary results in a reduction in the carrying amount to fair value.
The impairment is charged to income and a new cost basis for the
securities is established. To determine whether an impairment is otherthan-temporary, the Company considers the length of time and extent
to which the market value of the security has been less than its original
cost, the financial condition, other specific factors affecting the market
value, deterioration of the credit condition of the issuers, and whether
or not the Company is able to retain the investment for a period of time
sufficient to allow for the anticipated recovery in market value.

08

SECOM Financial Data 2022

Realized gain or losses on the sale of marketable debt securities
classified as “available-for-sale” are based on the moving-average cost
method and are credited or charged to income.
Other investments in non-public companies, except for private equity
investments, are recorded at cost as fair value is not readily determinable. The Company periodically evaluates the values of other investments in non-public companies for possible impairment by taking into
consideration the financial and operating conditions of the issuer, thegeneral market conditions in the issuer’s industry and the period of
the decline in the estimated fair value and other relevant factors. If theimpairment is determined to be other-than-temporary, other investments in non-public companies are written down to their impaired
value through a charge to income.
(7) Private Equity Investments
The Company accounts for private equity investments in accordancewith ASC 946, “Financial Services—Investment Companies,” in whichinvestments are accounted for at fair value based on the Company’s
assessment of each underlying investment. The investments, by theirnature, have little or no price transparency.
Investments are initially carried at cost as an approximation of fairvalue. Adjustments to carrying value are made if there is evidenceof a change in fair value. Downward adjustments are also made, in
the absence of third-party transactions, if it is determined that the
expected realizable value of the investment has declined below thecarrying value.
The carrying value of private equity investments was ¥16,368 million($134,164 thousand) and ¥12,126 million at March 31, 2022 and 2021,
respectively.
Private equity investments are included in investment securities in
the consolidated balance sheets.
(8) Inventories
Inventories, consisting of security-related products, fire protectionrelated products, real estate and other related products, are statedat the lower of cost and net realizable value. Cost is determined,
in the case of real estate, based on the specific identification method
and, in the case of other inventories, primarily using the moving-­
average method.
(9) Allowance for Doubtful Accounts
The Company recognizes an allowance for doubtful accounts toensure trade, short-term and long-term receivables, and other receivables are not overstated due to uncollectibility. Allowance for doubtful
accounts is maintained for all customers based on a variety of factors,
including the length of time receivables are past due, macroeconomic
conditions, significant one-time events and historical experience.
An additional reserve for individual accounts is recorded when the
Company becomes aware of a customer’s inability to meet its financial
obligations, such as in the case of bankruptcy filings or deterioration in
the customer’s operating results or financial position. If circumstances
related to customers change, estimates of the recoverability of­receivables would be further adjusted.
(10) Deferred Insurance Acquisition Costs
Costs that vary with and are primarily related to acquiring new
insurance policies are deferred and amortized principally over thepremium-paying period of the related insurance policies applying apercentage relationship of cost incurred to premiums from contracts
issued to applicable unearned premiums throughout the period of
the contract.

(11) Property, Plant and Equipment and Depreciation
Property, plant and equipment, including significant l­easehold
improvements, are carried at cost and depreciated at rates based on
the estimated useful lives of the assets. Depreciation is computed
using the straight-line method for assets other than security equipment and control stations. Security equipment and control stations are
depreciated using the declining-balance method. Assets leased to­others under ­operating leases are depreciated using the straight-line
method over the estimated useful lives. Depreciation expense was¥58,033 million ($475,680 thousand), ¥57,067 mil­lion and ¥55,498 million for the years ended March 31, 2022, 2021 and 2020, respectively.
Maintenance, repairs and renewals are charged to income as incurred.
The estimated useful lives of depreciable assets are as f­ ollows:		 Buildings
33 to 50 years
		 Security equipment and control stations
5 to 8 years
		 Machinery, equipment and automobiles
2 to 20 years
The Company recognizes asset retirement obligations if the fairvalue of the obligations can be reasonably estimated. Asset retirement
obligations include those for which an entity has a legal obligation to
perform an asset retirement activity, however, the timing and/or
method of settling the obligation are conditional on a future event that
may or may not be within the c­ ontrol of the entity.
Performance of a contractual asset retirement obligation is required
for the building leased by a certain subsidiary when the lease matures
and the Company returns the leased building to its owner. However, theCompany plans not to relocate from the building and to continue to use
it until it will be demolished without restoration. As such, the executionof such obligation is not expected. The Company evaluated all the available evidence as of March 31, 2018 and performed efforts to establish
the best estimate. However, the scope and the amount of execution of
the obligation cannot be reasonably estimated. Therefore, an asset­retirement obligation for that building lease is not recognized.
(12) Leases as lessee
The Company recognizes a right of use asset and a lease liability at
the lease commencement date, for finance leases and operating leases.
Some of the contracts include options to extend or to terminate
the lease. The Company takes such options into consideration inorder to determine the lease term when it is reasonably certain that
it will ­exercise these options. The Company uses its incremental
borrowing rate based on the information available at commencement
to determine the present values of lease payments. The incremental
borrowing rate is the rate of interest that the Company would have to
pay to borrow.
(13) Short-Term Deferred Charges and Long-Term Deferred Charges
Short-term deferred charges and long-term deferred charges primarily consist of costs related to installation services of security equipment used to provide on-line security s­ ystems. The installation costs
are deferred and amortized using the straight-line method over thecontractual period of security ­services after completion of the installation. Amortiza­­tion expense was ¥9,466 million ($77,590 thousand),¥10,553 million and ¥11,080 m­ illion for the years ended March 31,
2022, 2021 and 2020, respectively.

(14) Impairment or Disposal of Long-Lived Assets
In accordance with ASC 360, “Property, Plant and Equipment,” theCompany reviews the carrying amount of its long-lived assets held andused, other than goodwill and intangible assets with indefinite lives,and assets to be disposed of, whenever events or changes in circumstances i­ndicate that the carrying amount may not be recoverable.
Long-lived assets to be held and used are reviewed for impairment bycomparing the carrying amount of the assets with their estimatedfuture undiscounted cash flows. If it is determined that an impairment
loss has occurred, the loss would be recognized during the period, andcalculated as the difference between the assets’ carrying amount andthe fair value. Long-lived assets that are to be disposed of other thanby sale are considered held and used until they are disposed of. Longlived assets that are to be disposed of by sale are reported at the lowerof their c­ arrying amount or fair value less cost to sell. Reductions in
the carrying amount are ­recognized in the period in which the longlived assets are classified as held for sale.
(15) Goodwill and Other Intangible Assets
Goodwill represents the excess of costs over the fair value of assetsof business acquired. Pursuant to ASC 350, “Intangibles—Goodwill
and Other,” goodwill and ­intangible assets acquired in a purchasebusiness combination and determined to have an indefinite useful life
are not amortized, but instead tested for impairment at least annually.
This accounting standard also requires that intangible assets withestimable u­ seful lives be amortized over their respective estimateduseful lives to their estimated residual v­ alues, and reviewed for impairment in accordance with ASC 360. The Company conducts its annual­impairment test each fiscal year.
(16) Unearned Premiums and Other Insurance Liabilities
Unearned premiums are related to unexpired periods of insurance
contracts and are earned on a pro-rata basis over the remaining contract period. Other insurance liabilities consist principally of liabilities
for unpaid claims and adjustment expenses, which are estimates of
payments to be made on reported claims and incurred but not reported
claims, which are computed based on past ­experience for unpaid
losses.
(17) Income Taxes
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and theirrespective tax bases, and operating loss carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected toapply to taxable income in the years in which those temporary differences and carryforwards are expected to be realized or settled. The
effect on deferred tax assets and liabilities of a change in tax rates isrecognized in income in the period that includes the enactment date.
Valuation allowances are recorded to reduce deferred tax assets when
it is more likely than not that a tax benefit will not be realized.
The Company recognizes in the consolidated financial statements
the impact of a tax position, if any, based on the technical merits of theposition, when that position is more likely than not to be sustained
upon examination. The benefit of the tax position is measured at thelargest amount of benefit that has greater than 50 percent likelihood of
being realized upon settlement with the a­ ppropriate tax authority.
The Company recognizes interest and penalties accrued related tounrecognized tax benefits in income taxes in the consolidated­statements of income.

SECOM Financial Data 202209

(18) Research and Development
Research and development costs are charged to income as incurred.
Research and development expenses included in selling, general andadministrative expenses for the years ended March 31, 2022, 2021 and2020 were ¥8,243 million ($67,566 thousand), ¥8,034 million and¥7,428 million, respectively.
(19) Advertising Costs
Advertising costs are charged to income as incurred, except for thecosts related to insurance policies. Advertising costs for acquiring new
insurance policies are deferred and amortized as part of insurance
acquisition costs. Advertising expenses included in selling, generaland administrative expenses for the years ended March 31, 2022, 2021
and 2020 were ¥5,416 million ($44,393 thousand), ¥4,462 million and¥5,740 million, respectively.
(20) Shipping and Handling Costs
Shipping and handling costs included in selling, general and administrative expenses for the years ended March 31, 2022, 2021 and 2020
were ¥1,337 million ($10,959 thousand), ¥1,317 million and ¥1,482­million, respectively.
(21) Derivative Financial Instruments
The Company accounts for derivative financial instruments in­accordance with ASC 815, “Derivatives and Hedging.”
The Company recognizes all derivative financial instruments inthe consolidated financial statements at fair value regardless of the
purpose or intent for holding them. Changes in the fair value of derivative financial instruments are either recognized periodically in income
or in equity as a component of accumulated other comprehensive
income (loss) depending on whether the derivative financial instruments qualify for hedge accounting, and if so, whether they qualify asa fair value hedge or a cash flow hedge. Changes in the fair values ofderivative financial instruments accounted for as a fair value hedge
are recorded in income along with the portion of the change in the fairvalue of the hedged item that relates to the hedged risk. Changes in
the fair value of derivative financial instruments accounted for as acash flow hedge, to the extent it is effective as a hedge, are recorded inaccumulated other comprehensive income (loss), net of tax. Changes
in the fair value of derivative financial instruments not qualifying as ahedge are reported in income.
The Company meets the documentation requirements necessaryfor effective hedges which include the risk management objective andstrategy for undertaking various hedge transactions. In addition, formal
assessment is made at inception of the hedge and periodically on an
on-going basis, as to whether the derivatives used in hedging activities
are highly effective in offsetting changes in fair values or cash flows ofhedged items. Hedge accounting is discontinued for ineffective hedges,
if any. Changes in fair value of discontinued hedges are recognized inincome.
(22) Per Share Data
Basic Earnings per Share (“EPS”) is computed based on the average
number of shares of common stock outstanding for the period. The
average number of shares of common stock outstanding for the years
ended March 31, 2022, 2021 and 2020 was 218,595 thousand shares,
218,261 thousand shares and 218,261 thousand shares, respectively.
There were no potentially dilutive shares outstanding during the years
ended March 31, 2022, 2021 or 2020.
Cash dividends per share shown in the accompanying consolidated
statements of income are computed based on dividends approved andpaid in each fiscal year.

10

SECOM Financial Data 2022

(23) Use of Estimates
The preparation of the consolidated financial statements requires
management of the Company to make a number of estimates andassumptions relating to the reported amounts of assets and liabilities,
the disclosures of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts ofrevenues and expenses during the period. Actual results could differ
from those estimates. Significant items subject to such estimates andassumptions include the carrying amounts of inventories, deferredinsurance acquisition costs, investment securities, other investments,
property, plant and equipment, goodwill, other intangible assets,
unearned premiums and other insurance liabilities, valuation ofreceivables, valuation allowances for deferred income taxes, valuationof derivative instruments, assets and obligations related to employee
benefits, asset retirement obligations, income tax uncertainties, andother contingencies.
(24) Recent Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, “Measurement ofCredit Losses on Financial Instruments.” This accounting standard
replaces the current incurred loss methodology that delays recognition of the full amount of credit losses until the loss was probable ofoccurring with a methodology that reflects expected credit losses andrequires consideration of a broader range of reasonable and support­
able information to inform credit loss estimates. This accounting standard was originally planned to be effective for the fiscal years
beginning after December 15, 2020, however, in November 2019, the
FASB issued ASU No. 2019-10, “Effective Dates.” which defers theeffective date of ASU No. 2016-13 for public entities excluding
Securities and Exchange Commission (SEC) filers for two years.
Therefore, this accounting standard is effective for the fiscal years
beginning after December 15, 2022, including interim periods withinthat reporting period, and will be adopted by the Company in the fiscal
year beginning April 1, 2023. The Company is currently evaluating theeffect of adopting this accounting standard on its consolidated financial
statements.
In January 2017, the FASB issued ASU No. 2017-04, “Simplifying theTest for Goodwill Impairment.” This accounting standard eliminates
Step 2 from the goodwill impairment test. Instead, the amendments
require an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its car­rying amount and recognize an impairment charge for the amountby which the carrying amount exceeds the reporting unit’s fair value.
This accounting standard is effective for the fiscal years beginning
after December 15, 2020, including interim periods within that reporting period, and was adopted by the Company in the fiscal year beginning April 1, 2021. The adoption did not have a material impact on the
Company’s consolidated results of operations or financial position.
In August 2018, the FASB issued ASU No. 2018-12, “Targeted
Improvements to the Accounting for Long-Duration Contracts.” Thisaccounting standard changes the recognition, measurement, presentation and disclosure requirements for long duration contracts. Thisaccounting standard was originally planned to be effective for the­fiscal years beginning after December 15, 2020, however, in November
2019, the FASB issued ASU No. 2019-09, “Effective Dates.” which defers
the effective date of ASU No. 2018-12 for public entities excluding
Securities and Exchange Commission (SEC) filers for three years.
Therefore, this accounting standard is effective for the fiscal years
beginning after December 15, 2023, and interim periods within the­fiscal years beginning after December 15 2024, and will be adopted by
the Company in the fiscal year beginning April 1, 2024. The Company iscurrently evaluating the effect of adopting this accounting standard on
its consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, “Accounting forContract Assets and Contract Liabilities from Contracts with
Customers.” This accounting standard requires an entity to recognize
and measure contract assets and contract liabilities acquired in a­business combination. This accounting standard is effective for the­fiscal years beginning after December 15, 2022, including interim periods within that reporting period, and will be adopted by the Company inthe fiscal year beginning April 1, 2023. The Company is currently evaluating the effect of adopting this accounting standard on its consolidated
financial statements.
In November 2021, the FASB issued ASU No. 2021-10, “Disclosures
by Business Entities about Government Assistance”. This accounting
standard requires annual disclosures about transactions with a­government that are accounted for by applying a grant or contribution
accounting model by analogy to other accounting guidance. The annual
disclosure shall include; (1) information about the nature of the­transactions and the related accounting policy used to account for thetransactions, (2) the line items on the consolidated balance sheet andconsolidated income statement that are affected by the transactions,and the amounts applicable to each financial statement line item, and(3) significant terms and conditions of the transactions, including­commitments and contingencies. This accounting standard is effective
for the fiscal years beginning after December 15, 2021, includinginterim periods within that reporting period, and will be adopted by theCompany in the fiscal year beginning April 1, 2022. The Company iscurrently evaluating the effect of adopting this accounting standard on
its consolidated financial statements.
(25) Discontinued Operations
ASC 205-20, “Discontinued Operations,” requires the operating
results of any component of an entity with its own identifiable operations and cash flows which is disposed of or is classified as held for
sale, and with which the Company will not have significant continuing
involvement to be reported in discontinued operations. The results ofoperations related to certain businesses classified as discontinued
operations in the years ended March 31, 2021 and 2020 were­reclassified in the accompanying consolidated financial statements.
3. U.S. Dollar Amounts
U.S. dollar amounts have been included in these financial statements solely for the convenience of the reader. The translations of yen
into U.S. dollars have been made at the rate of ¥122=US$1, the approximate rate prevailing on the Tokyo Foreign Exchange Market on March
31, 2022. These translations should not be construed as representingthat the yen amounts actually constitute, or have been or could be­converted into U.S. dollars at that rate.

4. Acquisitions
Acquisition of ADT SERVICES (M) SDN. BHD. (Currently called SECOM
SMART (MALAYSIA) SDN. BHD.)
On September 1, 2020, the Company acquired 100% of commonshares outstanding of ADT SERVICES (M) SDN. BHD. for ¥5,113 million
in cash. The purpose of this acquisition is to increase corporate value
through further accelerating the expansion of security business­overseas.
The following table summarizes the estimated fair values of theassets acquired and liabilities assumed at the date of acquisition.
In millions of yen

Cash and cash equivalents...........................................................
Cash deposits for armored car services..................................
Other current assets......................................................................
Investments and long-term receivables..................................
Property, plant and equipment...................................................
Intangible assets, including goodwill........................................

¥  486
118
61
25
68
4,475

Total assets acquired.....................................................................

5,233

Current liabilities.............................................................................
Long-term liabilities.......................................................................

105
15

Total liabilities assumed...............................................................

120

Net assets acquired........................................................................

¥5,113

The goodwill of ¥4,475 million represents expected excess earnings
power based on the future business operations. It is not deductible fortax purposes and has been assigned to the Security services segment.
The Company recorded the acquisition costs of ¥15 million related tothis acquisition in selling, general and a­ dministrative expenses for theyear ended March 31, 2021.
Acquisition of ADT Integrated Security Solutions PTE. LTD. (Currently
called SECOM SMART (SINGAPORE) PTE. LTD.)On October 1, 2020, the Company acquired 100% of common shares
outstanding of ADT Integrated Security Solutions PTE. LTD. for ¥1,717
million in cash. The purpose of this acquisition is to increase corporate
value through further accelerating the expansion of security businessoverseas.
The following table summarizes the estimated fair values of theassets acquired and liabilities assumed at the date of acquisition.
In millions of yen

Cash and cash equivalents...........................................................
Cash deposits for armored car services..................................
Other current assets......................................................................
Property, plant and equipment...................................................
Intangible assets, including goodwill........................................

¥  148
52
16
19
1,577

Total assets acquired.....................................................................

1,812

Current liabilities.............................................................................

95

Total liabilities assumed...............................................................

95

Net assets acquired........................................................................

¥1,717

The goodwill of ¥1,567 million represents expected excess earnings
power based on the future business operations. It is not deductible fortax purposes and has been assigned to the Security services segment.
The Company recorded the acquisition costs of ¥11 million related tothis acquisition in selling, general and a­ dministrative expenses for theyear ended March 31, 2021.

SECOM Financial Data 2022

11

Acquisition of ADT Alarm Monitoring Hong Kong Limited
On February 5, 2021, the Company acquired 100% of commonshares outstanding of ADT Alarm Monitoring Hong Kong Limited for¥1,377 million in cash and accounts payable. The purpose of this­acquisition is to increase corporate value through f­ urther accelerating
the expansion of security business overseas.
The following table summarizes the estimated fair values of theassets acquired and liabilities assumed at the date of acquisition.

7. Short-Term Investments and Investment Securities
Short-term investments (current) and investment securities­(noncurrent) include debt and equity securities. The related aggregate
fair value, gross unrealized gains, gross unrealized losses and costs­pertaining to “available-for-sale” and “held-to-maturity” investments at
March 31, 2022 and 2021 are as ­follows:¥  17247
6
1,263

Total assets acquired.....................................................................

1,488

Current liabilities.............................................................................

111

Total liabilities assumed...............................................................

111

Net assets acquired........................................................................

¥1,377

The goodwill of ¥1,263 million represents expected excess earnings
power based on the future business operations. It is not deductible fortax purposes and has been assigned to the Security services segment.
The Company recorded the acquisition costs of ¥24 million related tothis acquisition in selling, general and a­ dministrative expenses for theyear ended March 31, 2021.
5. Cash and Cash Equivalents
Cash and cash equivalents at March 31, 2022 and 2021 comprise­­thefollowing:
In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2021

2022

¥518,113 ¥488,773
12,95013,068——492
360¥531,555 ¥502,201$4,246,827
106,148—
4,033$4,357,008

2022

Cash.......................................................
Time deposits.....................................
Call loans..............................................
Investment securities.......................

12

SECOM Financial Data 2022

March 31, 2022
Less than 12 months

March 31, 2022
Gross unrealized
Cost

Short-term investments:
Available-for-sale:		Debt securities...........
Held-to-maturity:
		Debt securities...........
Investment securities:
Available-for-sale:		Debt securities...........
Held-to-maturity:
		Debt securities...........

Gains

LossesFair value¥ 24,976¥1,307¥  0¥ 26,283

245¥ 25,2210¥1,3070¥  0245¥ 26,528¥103,875¥2,647¥592¥105,930

11,557¥115,432

1,163¥3,810236¥828

12,484¥118,414
In millions of yen
March 31, 2021

Gross unrealized
Cost

Gains

LossesFair value

Short-term investments:
Available-for-sale:		Debt securities...........
Held-to-maturity:
		Debt securities...........

¥ 20,825¥  395¥—¥ 21,220—¥ 20,825—¥  395—¥——¥ 21,220

Investment securities:
Available-for-sale:		Debt securities...........
Held-to-maturity:
		Debt securities...........

¥109,504¥3,208¥43¥112,669

11,833¥121,337

1,362¥4,570—¥43

13,195¥125,864

Investment securities include negotiable certificates of deposit andmoney management funds. These agreements mature within threemonths and their carrying values approximate f­ air value. The Company
has not experienced any losses through default of the financial institutions and does not a­ nticipate default of any ­outstanding agreements.
6. Cash Deposits for Armored Car Services
The Company operates cash collection and deposit services for­financial institutions relating to cash dispensers located outside of­financial institution facilities and also operates cash collection and­delivery ­services for entities other than financial institutions. Cashdeposit for armored car services balances are segregated from cash
and cash equivalents and are restricted as to use by the Company. The
Company funds most of the cash for such operations through bankoverdrafts and deposits. Bank loans and deposits received, which
relate to these operations, were ¥17,467 million ($143,172 thousand)and ¥118,972 million ($975,180 thousand), respectively, at March 31,
2022, and ¥19,516 million and ¥119,334 million, respectively, at March
31, 2021. As part of its fee arrangement, the Company is r­ eimbursed
for the interest cost of the related overdrafts.

In millions of yen

In millions of yen

In millions of yen

Cash and cash equivalents...........................................................
Cash deposits for armored car services..................................
Other current assets......................................................................
Intangible assets, including goodwill........................................

Gross unrealized losses on, and fair value of, “available-for-sale” and“held-to-maturity” securities, aggregated by invest­ment c­ ategory andthe length of time that individual securities have been in a continuous
unrealized loss position at March 31, 2022 are as follows:

Fair value

Gross unrealized
Cost

Short-term investments:
Available-for-sale:		Debt securities...........
Held-to-maturity:
		Debt securities...........
Investment securities:
Available-for-sale:		Debt securities...........
Held-to-maturity:
		Debt securities...........

Gains

LossesFair value$204,721$10,714 $    0$215,435

2,008$206,729

00$10,714 $    02,008$217,443

12 months or longer

In millions of yen

In thousands of
U.S. dollars

Grossunrealized
lossesYears ended
March 31

Year ended
March 31

Fair value

Available-for-sale:
Debt securities................

¥50,215

¥592

¥—

¥—

Held-to-maturity:
Debt securities................

¥   696

¥236

¥—

¥—

In thousands of U.S. dollars
March 31, 2022
Less than 12 months

12 months or longer

Fair valueGrossunrealized
lossesFair valueGrossunrealized
lossesAvailable-for-sale:
Debt securities................

$411,599$4,852$—$—

Held-to-maturity:
Debt securities................

$  5,705$1,934$—$—

Based on the Company’s ability and intent to hold the investments
for a reasonable period of time sufficient for a recovery of fair value,
the credit condition of the issuers and other relevant factors, theCompany does not consider these investments to be other-than-­temporarily impaired at March 31, 2022.
At March 31, 2022, debt securities principally consisted of short-term
investments in monetary trusts, Japanese government bonds, corporate
bonds, U.S. treasury securities and U.S. Government Agency Bonds.
The cost and fair value of “available-for-sale” and “held-tomaturity” debt securities by contractual maturity at March 31, 2022
are as follows:
In millions of yen
March 31, 2022
Available-for-saleIn thousands of U.S. dollars
March 31, 2022

Grossunrealized
lossesDue within 1 year.........
Due after 1 year
through 5 years..........
Due after 5 years
through 10 years.......
Due after 10 years.......

Cost

Fair value

Cost

Fair value¥ 26,283¥   245¥   245

64,61566,284——

12,11827,142¥128,851

12,45527,191¥132,213—
11,557¥11,802—12,484¥12,729

In thousands of U.S. dollars
March 31, 2022

$851,434
94,730$946,164$21,696 $4,852
9,532 1,934$31,228 $6,786$868,278
102,328$970,606

Cost

Fair value

Due within 1 year......... $  204,721 $  215,435
Due after 1 year
through 5 years..........
529,631543,311
Due after 5 years
through 10 years.......
99,328102,090
Due after 10 years.......
222,475
222,877$1,056,155 $1,083,713

Gross realized gains..............
Gross realized losses............

2022

2021

2020

2022

¥1,102309¥1,006
121¥1,354273$9,033
2,533

The Company maintains long-term investment securities, issued bya number of non-public companies, included as investment securities
in the consolidated balance sheets. The aggregate carrying amount of
the investments in non-public companies, at cost net of other-than-­temporary impairment, was ¥14,818 million ($121,459 thousand) and¥13,098 million at March 31, 2022 and 2021, respectively. The corresponding fair value at that date was not computed as such estimation
was not practicable and no significant events or changes that might
have affected the fair value of the investments were observed.
8. Inventories
Inventories at March 31, 2022 and 2021 comprise the f­ ollowing:
In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2022

2021

2022

Security-related products....................... ¥10,188 ¥ 9,513
Fire protection-related products.......... 13,416 11,786
Real estate...................................................
2,594
187
Other-related products............................ 11,973 10,298¥38,171 ¥31,784$ 83,508
109,968
21,262
98,139$312,877

The amount of write-down on real estate inventories included in costof sales for the years ended March 31, 2021 and 2020 were ¥20 millionand ¥66 million, respectively. There is no write-down on real estate
inventories included in cost of sales for the year ended March 31, 2022.

Held-to-maturity¥ 24,976

Available-for-sale

Proceeds from the sale of “available-for-sale” securities for theyears ended March 31, 2022, 2021 and 2020 were ¥19,515 million($159,959 thousand), ¥51,977 million and ¥35,559 million, respectively.
On those sales, the gross realized gains and gross realized losses,
using a moving-average cost basis, for the years ended March 31,
2022, 2021 and 2020 are as follows:

Held-to-maturity
Cost

Fair value$ 2,008 $  2,008——

9. Credit Quality of Financing Receivables and Allowancefor Doubtful Accounts
The Company has financing receivables and classifies them into four­categories: “lease receivables,” “loans receivable resulting from medical s­ ervices,” “other loans receivable” and “other.” Financing receivables classified as “lease receivables” are resulting from leasetransactions of s­ ecurity ­merchandise and security systems.
The Company continuously monitors overdue financing receivables
which, the Company considers, have a risk of uncollectability. For­financing receivables with specific customer collection issues, theCompany individually evaluates their collectability in order to determine the amount of allowance for doubtful accounts. For other financing receivables, the Company categorizes these receivables into groups
by their nature and characteristics. The Company collectively evaluates
the collectability of each group, using its historical experience of writeoffs and d­ etermines the amount of allowance for doubtful accounts.

——
94,730 102,328$96,738 $104,336

SECOM Financial Data 2022

13

Financing receivables and allowance for doubtful accounts at March
31, 2022 and 2021 are as follows:
In millions of yen
Year ended March 31, 2022
Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Allowance for
doubtful accounts:
Balance at
beginning of year.............
Provision (Reversal)....
Charge off.......................
Other................................
Balance at
end of year.........................
Individually
evaluated......................
Collectively
evaluated......................
Financing receivables:
Individually
evaluated......................
Collectively
evaluated......................

¥   303
(1)
(61)
—
241
133
¥   108¥2,601
330
—
—
2,931
2,931
¥   —

¥  523
(87)
—
1
437
437
¥    0Other¥  674
(2)
(0)
—
672
672
¥   —

Total

¥ 4,101
240
(61)
1
4,281
4,173
¥   108¥   216¥4,184¥  483¥  705¥ 5,588

45,207¥45,423418¥4,602862¥1,345132¥  837

46,619¥52,207

In millions of yen
Year ended March 31, 2021
Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Allowance for
doubtful accounts:
Balance at
beginning of year.............
Provision (Reversal)....
Charge off.......................
Other................................
Balance at
end of year.........................
Individually
evaluated......................
Collectively
evaluated......................
Financing receivables:
Individually
evaluated......................
Collectively
evaluated......................

Other

Total

In thousands of U.S. dollars
March 31, 2022

Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Allowance for
doubtful accounts:
Balance at
beginning of year............. $  2,483
Provision (Reversal)....
(8)
Charge off.......................
(500)
Other................................
—
Balance at
end of year.........................
1,975
Individually
evaluated......................
1,090
Collectively
evaluated...................... $    885Financing receivables:
Individually
evaluated...................... $  1,770
Collectively
evaluated...................... 370,550$372,320$21,320 $ 4,287
2,705
(713)
—
—
—
8
24,02524,025

3,582
3,582

Other

Total

$5,525 $ 33,615
(17)
1,967
(0)
(500)
—
8
5,508
5,508

Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

35,090Current................................... $370,549
Overdue.................................
1,771
Total:
Financing receivables..... $372,320
Financing receivables
on nonaccrual status....... $      —¥2,364237——¥  56628—(71)¥1,090
(270)
(69)
(77)

¥ 4,224
55
(30)
(148)

303

2,601

523

674

4,101

181

2,601

523

674

3,979

¥   122¥   —¥    0¥   —¥   122¥   279
49,525¥49,804¥5,021527¥5,548¥  597951¥1,548¥  720132¥  852$6,860 $427,926$     0 $ 3,959$    — $  3,959

In millions of yen

34,205$   — $    885

$34,295 $ 3,960$5,778 $ 45,803

3,426
7,065
$37,721 $11,025

1,082 382,123$6,860 $427,926

The Company considers receivables are past due and the financial
position of the debtor to be credit quality indicators and classifies­financing receivables into Overdue and Current. Financing receivables
determined to have no prospects for collecting contractual interest on
the basis of being past due and other factors are placed on n
­ onaccrual
status.
The aging analysis of the recorded financing receivables and financing receivables on nonaccrual status at March 31, 2022 and 2021 are
as follows:

Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Impaired receivables.........
Related allowance for
doubtful accounts.............

Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Current................................... ¥45,207
Overdue.................................
216
Total:
Financing receivables..... ¥45,423
Financing receivables
on nonaccrual status....... ¥    —

Other

Total

¥4,56933¥  908437¥  564273¥51,248959¥4,602¥1,345¥  837¥52,207¥    0¥  483¥   —¥   4832022

Current assets......................................... ¥159,391 ¥148,576
Noncurrent assets.................................. 210,205 199,105$1,306,484
1,722,991

Total assets.......................................... ¥369,596 ¥347,681$3,029,475$  728,426
392,566
1,908,483

Other

Total

¥483

¥705

¥5,588

133

2,931

437

672

4,173

Total liabilities and equity............... ¥369,596 ¥347,681$3,029,475

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

Other

Total

¥1,001547¥  574
278¥56,615
1,137¥5,548¥1,548¥  852¥57,752¥    1¥  597¥   —¥   598

Total

2020

2022

Net sales............................. ¥322,411 ¥289,647 ¥292,856$2,642,713

2021¥5,021¥597¥720¥6,617Gross profit......................... ¥ 83,546 ¥ 76,983 ¥ 78,425$  684,803

181

2,601

523

674

3,979

Net income
attributable toaffiliated companies...... ¥ 25,449 ¥ 23,931 ¥ 23,549$  208,598

Other

Total

$1,770$34,295$3,960$5,778$45,803

1,090

24,025

3,582

5,508

34,205The average amounts of impaired receivables for the year ended
March 31, 2022 are as follows:
In millions of yen
Loansreceivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Average amounts of
impaired receivables.......

¥5,515
33

2022
Other

¥279

Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

March 31, 2021
Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

March 312021

¥4,184

March 31, 2022

In millions of yen

March 31

¥216

In thousands of U.S. dollars

Impaired receivables.........
Related allowance for
doubtful accounts.............

In thousands of
U.S. dollars

2022

March 31, 2021

Impaired receivables.........
Related allowance for
doubtful accounts.............

In millions of yen

Current liabilities.................................... ¥ 88,868 ¥ 86,471
Long-term liabilities.............................. 47,893
44,640Equity......................................................... 232,835 216,570

Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

March 31, 2022

Financing receivables
on nonaccrual status....... ¥    —SECOM Financial Data 2022

$37,721 $11,025

March 31, 2022$    — $     0¥ 6,617
51,135¥57,752

Total$4,623 $420,066
2,237
7,860

Impaired receivables and the related allowance for doubtful
accounts at March 31, 2022 and 2021 are as follows:

In millions of yen¥   204
60
39
—

Other

$37,451 $ 7,443
270
3,582

10. Investments in Affiliated Companies
The Company has investments in affiliated companies that are
accounted for under the equity method. Investments principally consistof Taiwan Secom Co., Ltd., a 28.7 percent owned affiliate, which is listedon the Taiwan Stock Exchange; S1 Corporation, a 28.8 percent owned
affiliate, which is listed on the Korea Exchange; and Toyo Tech Co., Ltd.,a 27.4 percent owned affiliate, which is listed on the Second Section(as of March 31, 2022. Transition to the Standard Market from April 4,2022.) of the Tokyo Stock Exchange.
Combined financial information for the affiliated c­ ompanies
accounted for under the equity method is as f­ ollows:

In millions of yen

Current................................... ¥49,525
Overdue.................................
279
Total:
Financing receivables..... ¥49,804

14

In thousands of U.S. dollars
Year ended March 31, 2022

¥247

¥4,603

¥540

Other

Total

¥713

¥6,103

Dividends received from affiliated companies for the years ended
March 31, 2022, 2021 and 2020 were ¥5,088 million ($41,705­thousand), ¥4,398 million and ¥4,112 million, respectively.
Three listed affiliated companies accounted for under the equity
method with an aggregated carrying amount of ¥61,718 million($505,885 thousand) and ¥57,645 million at March 31, 2022 and 2021,
respectively, had a quoted market value of ¥132,508 million($1,086,131 thousand) and ¥126,842 ­million at March 31, 2022 and
2021, respectively.
The amounts of goodwill included in the carrying amount of investments in affiliated companies were ¥4,613 million ($37,811 thousand)and ¥4,560 million at March 31, 2022 and 2021, respectively.

In thousands of U.S. dollars
Loans
receivable
resulting from
Other
Lease
medicalloans
receivables
services receivable

Average amounts of
impaired receivables.......

$2,025$37,731$4,426

Other

Total

$5,844$50,026

SECOM Financial Data 202215

A summary of transactions and balances with the affiliated­companies accounted for under the equity method is presented below:
In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2022

2021

2020

2022

Sales.....................................

¥1,080¥1,326¥1,291$ 8,852

Purchases...........................

¥9,299¥9,818¥9,531$76,221

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2022

2021

2022

Notes and accounts
receivable, trade................................

¥  783¥  523$ 6,418

Loans receivable..................................

¥   10¥  118$    82

Notes and accounts payable............

¥3,458¥3,302$28,344

Guarantees for bank loans...............

¥   —

¥   —

$    —The Company’s equity in undistributed income of affiliates at
March 31, 2022 and 2021 included in retained earnings was ¥45,314­million ($371,426 thousand) and ¥43,731 million, respectively.
11. Long-Lived Assets
The Company has assessed the potential impairment of its longlived assets. As a result of a significant decrease in revenue forecasts,
the Company recognized impairment losses for the years ended March
31, 2022, 2021 and 2020. The fair value was determined based on the­estimated p­ resent value of future cash flows or appraisal value.
Impairment losses on long-lived assets by ­business segment for theyears ended March 31, 2022, 2021 and 2020 are as follows:
In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2022

2021

2020

2022

Security services.......................
Fire protection services...........
Medical services........................
Insurance services....................
Geospatial information
services......................................
BPO and ICT services................
Other services............................
Corporate items.........................

¥ —
25
—
—

¥—
—
—
—

¥201
48
—
—

$ —
205
—
—

4
84
—
—

21
73
1
—

259
437
7
—

33
688
—
—

Total.....................................

¥113

¥95

¥952

$926

12. Goodwill and Other Intangible Assets
The components of acquired intangible assets, excluding goodwill, atMarch 31, 2022 and 2021 are as ­follows:
In millions of yen
March 31, 2022
Gross
carrying Accumulated
amount amortization

Amortized intangible assets:
Software..............................................
Other.....................................................

Unamortized intangible assets.........

Net
carrying
amount¥ 73,909
44,662¥118,571(¥45,984)(18,844)(¥64,828)¥27,925
25,818¥53,743¥  4,933¥     —

¥ 4,933

In millions of yen
March 31, 2021
Gross
carrying Accumulated
amount amortization

Amortized intangible assets:
Software..............................................
Other.....................................................

Unamortized intangible assets.........

Net
carrying
amount¥ 72,048
41,171¥113,219(¥43,440)(16,439)(¥59,879)¥28,608
24,732¥53,340¥  5,036¥     —

¥ 5,036

In thousands of U.S. dollars
March 31, 2022
Gross
carrying Accumulated
amount amortization

Amortized intangible assets:
Software..............................................
Other.....................................................

Unamortized intangible assets.........

Net
carrying
amount$605,811 ($376,918) $228,893
366,082 (154,459) 211,623$971,893 ($531,377) $440,516$ 40,435$      —

2023......................................................................
2024......................................................................
2025......................................................................
2026......................................................................
2027......................................................................

In millions of yen
Security
services

Goodwill................... ¥65,521
Accumulated
impairment
losses..................... (3,637)
March 31, 2020..... 61,884
Goodwill acquired
during the year....
7,307
Disposal...................
(519)
Impairment
losses..................... (5,660)
Translation
adjustment...........
(230)
Goodwill................... 71,673
Accumulated
impairment
losses..................... (8,891)
March 31, 2021..... 62,782
Goodwill acquired
during the year....
52
Disposal...................
—
Impairment
losses.....................
(63)
Translation
adjustment...........
(77)
Goodwill................... 71,648
Accumulated
impairment
losses..................... (8,954)
March 31, 2022..... ¥62,694

Fire
protection
services

Medicalservices

Geospatial
information
services¥1,999 ¥9,399— (5,361)
1,999 4,038

Otherservices

Total¥4,439¥35,114 ¥2,536¥119,008

(775)
3,664

(175)
34,939

(135)
2,401

(10,083)
108,925

In millions of yen

In thousands of
U.S. dollars¥12,164
10,496
9,372
6,720
4,621

$99,705
86,03376,82055,08237,877

BPO and ICT
services

123
—

—
—

—
—

—
—

—
—

7,430
(519)

—

—

—

—

—

(5,660)

—
2,122

—
9,399

—
3,855

—
35,114

—
2,401

(230)
124,564— (5,361)
2,122 4,038

(191)
3,664

(175)
34,939—2,401(14,618)
109,946

—
—

—
—

—
—

—
—

—
—

52
—

—

(205)

—

—

—

(268)

—
—
2,122 9,399

—
3,855

—
35,114

—
2,401

(77)
124,539— (5,566)¥2,122 ¥3,833

(191)
(175)
—
¥3,664 ¥34,939 ¥2,401(14,886)¥109,653

The data of the years ended March 31, 2021 and 2020 are presented
based on the classification method after the segment change.

$ 40,435

Aggregate amortization expense for the years ended March 31,
2022, 2021 and 2020 was ¥11,008 million ($90,230 thousand), ¥11,096
million and ¥10,996 million, respectively. Amortized intangible assets
are amortized using the straight-line method over their estimated­useful lives. The weighted average amortization period for i­nternal use
software is ­approximately five years.
The estimated aggregate amortization expense for i­ntangible assets
for the next five years is as follows:
Years ending March 31

The changes in the carrying amount of goodwill by business­segment for the years ended March 31, 2022 and 2021 are as follows:

In thousands of U.S. dollars
Security
services

Fire
protection
services

Medicalservices

Geospatial
information
services

BPO and ICT
services

Other
services

Total

Goodwill$587,484 $17,393 $77,041 $31,599 $287,819 $19,680 $1,021,016
Accumulated
impairment
losses..................... (72,877)— (43,943) (1,566)(1,434)— (119,820)
March 31, 2021..... 514,607 17,393 33,098 30,033 286,385 19,680
901,196
Goodwill acquired
during the year....
426
—
—
—
—
—
426
Disposal...................
—
—
—
—
—
—
—
Impairment
losses.....................
(517)— (1,680)———(2,197)
Translation
adjustment...........
(630)
—
—
—
—
—
(630)
Goodwill................... 587,280 17,393 77,041 31,599 287,819 19,680 1,020,812
Accumulated
impairment
losses..................... (73,394)— (45,623) (1,566)(1,434)— (122,017)
March 31, 2022..... $513,886 $17,393 $31,418 $30,033 $286,385 $19,680 $  898,795

13. Bank Loans and Long-Term Debt
Bank loans of ¥31,814 million ($260,770 thousand) and ¥33,852­million at March 31, 2022 and 2021, respectively, are generally comprised of 30 to 365 day notes. The weighted average interest rate was
0.67 percent and 0.73 percent at March 31, 2022 and 2021, respectively. Substantially all of these loans are borrowed from banks. The
Company has entered into basic agreements with these banks whichstate that, with respect to all present or future loans with such banks,
collateral (including sums on deposit with such banks) or guarantors
shall be provided immediately upon request. Further, any collateral furnished pursuant to such agreements or otherwise will be applicable toall indebted­ness to such banks. The Company has not been requested
to submit such ­additional security.
At March 31, 2022, Nohmi Bosai Ltd. and Arai & Co., Ltd., subsidiariesof the parent company, had an unused committed line of credit fromshort-term arrangements of ¥4,128 million ($33,836 thousand). Theline of credit expires in March 2026. Under the agreement, Nohmi Bosai
Ltd. is required to pay commitment fees, at an annual rate of 0.15
­percent, on the unused portion of the line of credit. The line of credit
expires in April 2041. Under the agreement, Arai & Co., Ltd. is required
to pay commitment fees, at an annual rate of 0.55 percent andJapanese yen one month Tokyo Interbank Offered Rate (tibor), on theunused portion of the line of credit.
At March 31, 2022, the Company had overdraft agreements with
32 banks and its unused lines of credit amounted to ¥70,810 million($580,413 thousand). The Company incurs no fee on the unused portionof these overdraft agreements. The overdraft agreements expire in the
period from April 2022 to March 2023. The Company has the a­ bility andintent to extend these overdraft agreements under s­ imilar terms andconditions.
Long-term debt at March 31, 2022 and 2021 comprises the f­ ollowing:
In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2021

2022

2022

Loans, principally from banks due
2022–2041 with interest rates
ranging from 0.13% to 5.00%:
Secured.................................................... ¥15,604 ¥15,899
Unsecured............................................... 19,409 21,821
0.26% unsecured bonds due 2021.......
—
10
0.25% unsecured bonds due 2021.......
—
10
0.31% unsecured bonds due 2023.......
12
19
0.40% unsecured bonds due 2024.......
913
0.29% unsecured bonds due 2022.......
—
10
Unsecured bonds due 2021–2040
with floating interest rates basedon 6-month Japanese yen TIBOR.......
3,779
4,166
Obligations under finance leases,
due 2022–2043 (Note 19)...................... 28,152 27,001
Less: Portion due within one year........

$127,902
159,090——98
74—
30,977
230,753

66,965 68,949(15,121) (15,457)

548,894(123,943)¥51,844 ¥53,492$424,951

Impairment losses on goodwill recognized in the above table aremainly due to decreases in the estimated fair value of reporting units
in each segment mainly caused by decreases in projected cash flows.
The fair value is deter­mined based on the estimated present value of
future cash flows.

16

SECOM Financial Data 2022

SECOM Financial Data 2022

17

Assets pledged as collateral for bank loans and long-term debt at
March 31, 2022 and 2021 are as follows:
In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2021

2022

Time deposits.................................................. ¥ 1,619 ¥ 1,356
Short-term and long-term receivables.... 6,372
6,425
Investment securities.................................... 1,590
1,580
Property, plant and equipment................... 46,429 42,762
Other intangible assets................................. ¥   818 ¥   818

$ 13,270
52,23013,033
380,566$  6,705

2022

The aggregate annual maturities on long-term debt at March 31,
2022 are as follows:
Years ending March 31

2023....................................................................
2024....................................................................
2025....................................................................
2026....................................................................
2027....................................................................
Thereafter.........................................................

In millions of yen

In thousands of
U.S. dollars¥15,121
10,758
8,372
5,604
3,691
23,419¥66,965$123,943
88,18068,62345,93430,254
191,960$548,894

14. Insurance-Related Operations
Secom General Insurance Co., Ltd. (“Secom Insurance”), a subsidiaryof the parent company, maintains accounting records as noted in
Note 2 in accordance with Japanese GAAP, which vary in certain
respects from U.S. GAAP. Those differences are principally, (a) that
insurance acqui­sition costs are charged to expense when incurredunder Japanese GAAP whereas under U.S. GAAP, those costs aredeferred and amortized generally over the premium-­paying periodof the insurance policies, (b) that liabilities related to incurred but
not reported claims are computed based on related regulations inJapan whereas under U.S. GAAP, those liabilities are computed basedon past experience for u­ nreported losses, and (c) that unearned­premiums are calculated based on the documents authorized by theSupervisory Authorities in Japan whereas under U.S. GAAP, unearned
premiums are reflected based on the lapse and s­ urrender over thecontract period.
In addition, under certain property and casualty insurance contracts
with a refund clause and long-term insurance policies that p­ rovide
refunds at maturity, such as fire, the policyholder receives a refund
if premiums have been fully paid unless a s­ ubstantial settlement (asdefined in the p­ olicy) has occurred. The Company has provided forsuch refundable amounts by classifying a portion of the net pre­miums­written, together with interest thereon, as investment deposits by­policyholders. Contract and policy terms are p­ rincipally five years.
For purposes of preparing the consolidated financial s­ tate­ments,
appropriate adjustments have been made to reflect such items in­accordance with U.S. GAAP.
The net equity of Secom Insurance at March 31, 2022 and 2021 were¥80,205 million ($657,418 thousand) and ¥74,111 million, respectively.

18

SECOM Financial Data 2022

Net sales and operating revenue of Secom Insurance include net
realized investment gains and losses, including gains and losses onsales of securities, losses on other-than-temporary impairment ofinvestment securities and impairment losses on long-lived assets.
Net realized investment gains and losses, including losses on otherthan-temporary impairments, for the years ended March 31, 2022,
2021 and 2020 were losses of ¥1,150 million ($9,426 thousand), andgains of ¥7,654 million, and losses of ¥4,136 million, respectively. Gains
and losses on other-than-­temporary impairments of investment securities for the years ended March 31, 2022, 2021 and 2020 were lossesof ¥1,525 million ($12,500 ­thousand), and gains of ¥6,848 ­million andlosses of ¥4,802 million, respectively.
15. Pension and Severance Costs
Employees of the parent company and its domestic s­ ubsidiaries
whose services are terminated are, under most c­ ircumstances, ­eligible
for lump-sum benefits and/or e­ ligible for pension benefits.
The parent company and certain domestic subsidiaries have adopted
a cash balance pension plan and a defined contribution pension plan.
Benefits under the cash balance pension plan are c­ alculated as a­certain percentage of employees’ annual income over their period ofservice, plus interest calculated as the 3-year average yield for 10-year
government bonds. The defined contribution pension plan was established in April 2003, by transferring a portion equivalent to 20 percentof the cash balance pension plan, including portions funded in priorperiods. A s­ pecified percentage of employees’ annual income is­contributed to the defined ­contribution pension plan.
In April 2005, the parent company and certain domestic subsidiaries
transferred an additional portion of the cash balance pension plan tothe defined contribution pension plan. Accord­ingly, the ratio of theaccumulated amount in the cash balance pension plan and the amountof contributions to the defined contribution pension plan changed to
70 percent and 30 percent, including portions funded in prior periods.
Net periodic pension and severance costs for the years ended
March 31, 2022, 2021 and 2020 are as follows.
The service cost component of net periodic pension cost and severance cost for the Company’s cash balance pension plan is included incost of sales and selling, general and administrative expenses in the
consolidated statements of income. The components other than the­service cost component are included in other income in the­consolidated s­tatements of income.

2022

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2021

2020

Net periodic pension andseverance costs:
Service cost................................. ¥7,983 ¥8,149 ¥8,016
Interest cost................................
450
440
314
Expected return onplan assets................................ (3,540) (3,403) (3,312)
Amortization of priorservice benefit..........................
30
25
(1)
Recognized actuarial loss.......
419
429
185
Transfer to the defined
contribution pension plan.....
——
444
		 Net periodic pension
		 and severance costs.......... ¥5,342 ¥5,640 ¥5,646

The changes in benefit obligation, plan assets and funded s­ tatus are
as follows:(29,016)
246
3,434

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2021

2022

2022

Change in benefit obligation:
Benefit obligation
at beginning of year........................ ¥123,797 ¥118,915
Service cost.........................................
7,983
8,149
Interest cost........................................
450
440
Actuarial (gain) loss..........................
(175)
3,144
Benefits paid.......................................
(7,056)(6,092)
Decrease due to disposal ofinterest in subsidiaries..................
—(776)
Other......................................................
—
17
Benefit obligation
at end of year.................................... 124,999 123,797
Change in plan assets:
Fair value of plan assets
at beginning of year........................ 133,461 119,312
Actual return on plan assets..........
8,301
12,475
Employer contribution......................
5,948
6,106
Benefits paid.......................................
(5,103)(4,432)
Fair value of plan assets
at end of year.................................... 142,607 133,461
Funded status
at the end of year................................. ¥ 17,608 ¥  9,664$1,014,730
65,433
3,689(1,434)(57,836)——
1,024,582

1,093,943
68,041
48,754(41,828)$  144,328

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2021

2022

2022

Prepaid pension andseverance costs....................................
Accrued pension andseverance costs....................................
			Net amount recognized..........

¥47,852¥39,532$392,230(30,244) (29,868)¥17,608 ¥ 9,664(247,902)$144,328

Other changes in plan assets and benefit obligations r­ ecognized inother comprehensive income (loss) for the year ended March 31, 2022
are summarized as follows:

Current year actuarial gain............................
Amortization of actuarial loss.......................
Amortization of prior service benefit..........

Actuarial (gain) loss...............................
Prior service benefit..............................
			Net amount recognized..........

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2022

2021

2022

(¥2,038)
193(¥1,845)¥3,318223¥3,541($16,705)
1,582($15,123)

The accumulated benefit obligation for the pension plan was¥124,717 million ($1,022,270 thousand) and ¥123,909 million atMarch 31, 2022 and 2021, respectively.
The projected benefit obligation, accumulated benefit o­ bligationand fair value of plan assets for the pension plans with projected­benefit obligation and ­accumulated benefit obligation in excess of plan
assets were ¥54,248 million ($444,656 ­thousand), ¥53,966 million($442,344 thousand) and ¥25,225 million ($206,762 thousand),­respectively, at March 31, 2022, and ¥52,976 million, ¥53,088 millionand ¥24,200 million, ­respectively, at March 31, 2021.
The Company uses March 31 as the measurement date for the­domestic pension plan.
Weighted-average assumptions used to determine the benefit­obligation at March 31, 2022 and 2021 are as follows:

1,168,910

Amounts recognized in the consolidated balance sheets at
March 31, 2022 and 2021 consist of:2022$65,433
3,689

In millions of yen

Amounts recognized in accumulated other comprehensive income(loss) at March 31, 2022 and 2021 consist of:

In millions of yen

In thousands of
U.S. dollars(¥4,937)(419)(30)(¥5,386)($40,467)(3,434)(246)($44,147)

March 31

Discount rate..................................................................................
Rate of compensation increase................................................
Interest crediting rate for cash balance plans.....................

2022

2021

0.5%
2.5%
0.1%

0.4%
2.5%
0.1%

Weighted-average assumptions used to determine net p­ ension andseverance costs for the years ended March 31, 2022, 2021 and 2020are as follows:
Years ended March 31

Discount rate..................................................................
Expected return on plan assets...............................
Rate of compensation increase................................
Interest crediting rate for cash balance plans.....

2022

2021

2020

0.4%
3.0%
2.5%
0.1%

0.4%
3.0%
2.5%
0.1%

0.3%
3.0%
2.2%
5.5%

The Company determines the expected long-term rate of return basedon the expected long-term return of the various asset categories in which
it invests. The Company considers the current expectations for future
returns and the actual ­historical returns of each plan asset category.
The Company’s investment policy is designed to ensure that sufficient plan assets are available to provide future ­payments of pension
benefits to the eligible plan participants. Plan assets set target allocations for the individual asset categories and are invested primarily inequity and debt securities, and other assets such as real estate withthe objective to minimize risk and achieve the expected rate of return.
The investment results are ­periodically reviewed and asset allocationis adjusted to target allocations as necessary.

—$43,786

SECOM Financial Data 2022

19

The following table represents the fair value of the Company’s­ ension plan assets at March 31, 2022 and 2021. The three levels ofpinputs used to measure fair value are more fully described in Note 22.
In millions of yen
March 31, 2022
Level 1

Cash and cash
equivalents........................... ¥11,907
Equity securities
Japanesecompanies.......................
5,142
Foreigncompanies.......................
7
Debt securities
Government
bonds.................................
—
Non-government
bonds.................................
—
Pooled funds..........................
3,778
Call loans.................................
—
Insurance contracts.............
—
Other.........................................
—¥20,834

Level 2

Level 3Total¥     —

¥     —

¥ 11,907

—

—

5,142

—

—

7

—

—

—

—
62,0893,312
15,748(152)—
40,340——436—
106,207
3,312
15,748284¥80,997¥40,776¥142,607* The pension investment trust fund included in the plan’s pooled funds is classified
as Level 2, and invests approximately 60% in equity securities, 30% in debt
­securities and 10% in other investments. The unquoted beneficial certificate of
security investment trust included in the plan’s pooled funds is c­ lassified as Level 3.
In millions of yen
March 31, 2021

Cash and cash
equivalents...........................
Equity securities
Japanesecompanies.......................
Foreigncompanies.......................
Debt securities
Government
bonds.................................
Non-government
bonds.................................
Pooled funds..........................
Call loans.................................
Insurance contracts.............
Other.........................................

Level 1

Level 2

Level 3Total

¥ 4,464¥     —

¥     —¥  4,464

Level 1In thousands of U.S. dollars

In millions of yen

March 31, 2022

Year ended March 31, 2021

Level 2

Level 3

Total

Cash and cash
equivalents........................... $ 97,598 $      — $      — $   97,598
Equity securities
Japanesecompanies....................... 42,148——
42,148Foreigncompanies.......................
57
—
—
57
Debt securities
Government
bonds.................................
————
Non-government
bonds.................................
————
Pooled funds.......................... 30,967 508,926 330,656
870,549
Call loans.................................
—
27,148—27,148Insurance contracts.............
— 129,082—
129,082
Other.........................................
—(1,246)
3,574
2,328

The following table represents the changes in Level 3 investments
for the years ended March 31, 2022 and 2021.
Level 3 investments, mainly in unquoted certificates of beneficial
interests in securities investment trust included in the plan’s pooled
funds, are at the ­discretion of the administrator of the fund. Their fair­values are estimated based on unobservable inputs provided by theadministrator of the fund.
In millions of yen

4,484

Equitysecurities

7

—

—

7

Japanesecompanies

Pooled
funds

Other

Total

¥424

¥31,202¥493¥32,119

—
4,993
—
—
—

—
69,4882,158
15,256(313)—
31,202——
493—
105,683
2,158
15,256
180¥14,706¥86,636¥32,119¥133,461* The plan’s government bonds are all foreign bonds.
* The pension investment trust fund included in the plan’s pooled funds is classified
as Level 2, and invests approximately 50% in equity securities, 40% in debt
­securities and 10% in other investments. The unquoted beneficial certificate of
security investment trust included in the plan’s pooled funds is c­ lassified as Level 3.

Total

¥424

¥32,058¥708¥33,190

—

933

26

959

—

2,221

(25)

2,196

—
—
¥424

(917)
(3,093)¥31,2022022

Balance at beginning of year........
Actual return on plan assets:
Relating to assets soldduring the year...........................
Relating to assets heldat end of year..............................
Purchases, sales andsettlements, net..............................
Transfer to (from) Level 3, net......
Balance at end of year....................

In thousands of U.S. dollars

Balance at beginning of year........
Actual return on plan assets:
Relating to assets soldduring the year...........................
Relating to assets heldat end of year..............................
Purchases, sales andsettlements, net..............................
Transfer to (from) Level 3, net......
Balance at end of year....................

931

(20)

892

—

3,778

29

3,807

(405)
4,429
—
—
¥ — ¥40,340

(66)
3,958
—
—
¥436 ¥40,776

Pooled
funds

Other

Total

$3,475 $255,754 $4,041 $263,270
(156)

7,631

(164)

7,311

—

30,967238

31,205(3,319) 36,304(541) 32,444————$    — $330,656 $3,574 $334,230

The Company expects to contribute ¥5,766 million ($47,262t­ housand) to its domestic defined benefit plans in the year e­ nding
March 31, 2023.
The following benefit payments, which reflect future s­ ervice, as­appropriate, are expected to be paid.
Years ending March 31

(19)

(216)
(1,133)—(3,093)¥493 ¥32,119

Year ended March 31, 2022

Japanesecompanies

424

1,229

Other

* The pension investment trust fund included in the plan’s pooled funds is classified
as Level 2, and invests approximately 60% in equity securities, 30% in debt
­securities and 10% in other investments. The unquoted beneficial certificate of
security investment trust included in the plan’s pooled funds is c­ lassified as Level 3.

——

Pooledfunds

Equitysecurities

4,060

47

Balance at beginning of year........
Actual return on plan assets:
Relating to assets soldduring the year...........................
Relating to assets heldat end of year..............................
Purchases, sales andsettlements, net..............................
Transfer to (from) Level 3, net......
Balance at end of year....................

Japanesecompanies$170,770 $663,910 $334,230 $1,168,910

Year ended March 31, 2022

1,182

Equitysecurities

2023....................................................................
2024....................................................................
2025....................................................................
2026....................................................................
2027....................................................................
2028–2032........................................................

In millions of yen

In thousands of
U.S. dollars¥ 6,405
6,646
6,518
6,422
6,369
37,139$ 52,500
54,47553,42652,63952,205
304,418

The parent company and certain subsidiaries have defined contribution pension plans. The contributions to the defined contribution pen­sion plans for the years ended March 31, 2022, 2021 and 2020 were¥2,225 million ($18,238 thousand), ¥2,276 million and ¥2,127 million,
respectively.
16. Exchange Gains and Losses
Other expenses for the years ended March 31, 2022, 2021 and 2020
includes net exchange losses of ¥100 million ($820 t­ housand), ¥243
million and ¥484 million, respectively.

20

SECOM Financial Data 2022

17. Income Taxes
Total income taxes for the years ended March 31, 2022, 2021 and2020 are allocated as follows:
In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2021

2020

Consolidated income taxes
from continuing
operations.................................. ¥49,164 ¥47,598 ¥40,835
Consolidated income taxes
from discontinued
operations..................................
—
(561)
104
Shareholders’ equity—
accumulated othercomprehensive
income (loss):
Unrealized gains
on securities.........................
(55)
214
(102)
Pension liability
adjustments.........................
1,664
1,977 (1,856)
Foreign currencytranslation
adjustments.........................
(5)——¥50,768 ¥49,228 ¥38,981

2022$402,983—(451)
13,639(41)$416,130

The parent company and its domestic subsidiaries are subject to anumber of income taxes. The statutory income tax rate in Japan wasapproximately 30.5 percent for the years ended March 31, 2022, 2021
and 2020.
Reconciliations of the differences between income taxes c­ omputed
at statutory tax rates and consolidated income taxes from continuing­operations are as follows:2022

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2021

2020

Income taxes computed
at statutory tax rate................ ¥49,315 ¥44,251 ¥40,550
Increase (decrease)resulting from:
Reversal of valuation
allowance.............................. (1,244) (1,052) (1,172)
Per capita tax.........................
1,045
1,079
911
Provision of valuation
allowance..............................
320
1,705
273
Net effect of changes incorporate tax rates.............
(24)
52
10
Other, net.................................
(248) 1,563
263
Consolidated income
taxes from continuing
operations........................ ¥49,164 ¥47,598 ¥40,835

2022$404,221(10,196)
8,566
2,623
(197)
(2,034)$402,983

SECOM Financial Data 2022

21

The significant components of deferred tax assets and ­liabilities at
March 31, 2022 and 2021 are as follows:
In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2021

2022

2022

Deferred tax assets:
Operating lease liabilities.................. ¥ 39,096 ¥ 43,427
Accrued pension andseverance costs.................................
8,733
8,535
Property, plant and equipment........
6,667
6,701
Accrued bonus......................................
6,453
6,542
Adjustment of book value atthe date of acquisition
		 Land and buildings.........................
5,391
5,433
		Other assets.....................................
400
388
Vacation accrual...................................
5,675
5,496
Loss carryforwards.............................
3,307
4,253
Deferred revenue.................................
3,221
4,868
Unrealized intra-entity profit
on asset transfer...............................
2,548
3,002
Investment securities.........................
2,256
3,094
Allowance for doubtful accounts....
1,816
1,714
Intangible assets..................................
1,291
1,355
Other........................................................ 16,416
14,393
		 Gross deferred tax assets............ 103,270 109,201
		Less: Valuation allowance............ (16,384) (17,357)
		 Total deferred tax assets.............. 86,886
91,844
Deferred tax liabilities:
Operating leaseright-of-use assets........................... (39,096) (43,427)
Prepaid pension andseverance costs................................. (14,523) (11,836)
Adjustment of book value atthe date of acquisition
		Intangible assets.............................
(6,664)(7,373)
		 Land and buildings.........................
(3,371)(3,562)
		Other assets.....................................
(717)
(762)
Unrealized gains on securities........
(8,189)(8,766)
Investments in affiliatedcompanies...........................................
(7,224)(6,582)
Deferred installation costs................
(2,329)(378)
Other........................................................
(3,387)(3,294)
		 Gross deferred tax liabilities....... (85,500) (85,980)
		 Net deferred tax assets
		 (liabilities)........................................ ¥  1,386 ¥  5,864$320,459
71,58254,64852,89344,1893,279
46,51627,107
26,402
20,885
18,492
14,885
10,582
134,557
846,476(134,295)
712,181(320,459)(119,041)(54,623)(27,631)(5,877)(67,123)(59,213)(19,090)(27,764)(700,821)

SECOM Financial Data 2022

Deferred income taxes(Other assets).....................................
Deferred income taxes(Long-term liabilities)......................
		 Net deferred tax assets
		 (liabilities)...................................

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2022

2021

2022

¥15,663¥19,334$128,385(14,277)(13,470)(117,025)¥ 1,386¥ 5,864$ 11,360

The Company has not recognized deferred tax liabilities for a ­portion of undistributed earnings of foreign subsidiaries of ¥38,084
million ($312,164 thousand) totaling ¥724 million ($5,934 thousand)at March 31, 2022 as they are not expected to be remitted in the­foreseeable future.
At March 31, 2022, the operating loss carryforwards of domestic­subsidiaries amounted to ¥6,022 million ($49,361 thousand) andare available for offsetting against future taxable earnings of such­subsidiaries for up to ten years, as follows:
Expires in the years ending March 31

2023....................................................................
2024....................................................................
2025....................................................................
2026....................................................................
2027....................................................................
2028....................................................................
2029....................................................................
2030....................................................................
2031....................................................................
2032....................................................................

In millions of yen

In thousands of
U.S. dollars¥  219
178
1,149
1,650
567
—
186
179
1,155
739

$ 1,795
1,459
9,418
13,525
4,648
—
1,525
1,467
9,467
6,057

¥6,022$49,361$ 11,360

The valuation allowance principally relates to deferred tax assets ofsubsidiaries with operating loss carryforwards, for tax purposes, thatare not expected to be realized. The net change in the total valuation
allowance for the years ended March 31, 2022, 2021 and 2020 was adecrease of ¥973 million ($7,975 ­thousand), and a decrease of¥2,746 million and a decrease of ¥546 million, respectively.
In assessing the realizability of deferred tax assets, the Company’s
management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those
temporary differences become deductible. The Company’s management considered the sched­uled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in m
­ aking this22

assessment. Based upon the level of historical taxable income andprojec­tions for future t­ axable income over the periods in which thedeferred tax assets are deductible, the Company’s management
believes it is more likely than not that the Company will realize the­benefits of these deductible ­differences, net of the ­existing valuation
allowance at March 31, 2022 and 2021.
Net deferred tax assets (liabilities) at March 31, 2022 and 2021 arereflected in the accompanying consolidated balance sheets under the­following captions:

The operating loss carryforwards of overseas subsidiaries at
March 31, 2022 amounted to ¥6,091 million ($49,926 thousand), apart of which will begin to expire in the year ending March 31, 2023.
The total amount of unrecognized tax benefits for the years ended
March 31, 2022, 2021 and 2020 was insignificant. Also, there were no­significant movements in the gross amounts of unrealized tax benefits
and the amounts of interest and penalties recognized due to the­unrecognized tax benefits during the years ended March 31, 2022,
2021 and 2020.
Although the Company believes its estimates of unrecognized tax
benefits are reasonable, uncertainties regarding the final determination of income tax audit settlements and any related litigation could
affect the total amount of unrecognized tax benefits in future periods.
Based on the information available as of March 31, 2022, the Company
does not expect significant changes to the unrecognized tax b­ enefits
within the next 12 months.

The Company files tax returns in Japan and various foreign jurisdictions. In Japan, the Company is no longer subject to regular income tax
examinations by the tax authorities for years before 2012. In otherforeign tax jurisdictions, major subsidiaries are no longer subject toincome tax examinations by tax authorities for years before 2021, withsome exceptions.
18. Shareholders’ Equity(1) Additional Paid-In Capital
The change in additional paid-in capital includes the effect ofchanges in the Company’s ownership interest in its consolidated
subsidiaries.
The net income attributable to SECOM CO., LTD. and transfers from(to) noncontrolling interests for the years ended March 31, 2022, 2021
and 2020 are as follows:2022

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2021

2020

Net income attributable
to SECOM CO., LTD....................¥107,731 ¥89,913 ¥87,136
Transfers from (to)noncontrolling interests:
		 Decrease in additional
		 paid-in capital related		 to the acquisition of
		 Secom Joshinetsu
		 Co., Ltd.’s ownership		 interests............................ (11,603)——
		Other, net.............................
1(82) 1,506
Net transfers from (to)noncontrolling interests.... (11,602)(82) 1,506
Change from net income
attributable to SECOM CO.,LTD. and transfers from (to)noncontrolling interests.........¥ 96,129 ¥89,831 ¥88,642

2022$883,040(95,107)8(95,099)(3) Common Stock in Treasury
The Company may repurchase its common stock from the market
pursuant to the Japanese Companies Act. There are certain restrictions
on payment of dividends in connection with the treasury stock­repurchased.
(4) Other Comprehensive Income (Loss)
Components of other compre­hensive income (loss) for the years
ended March 31, 2022, 2021 and 2020 are as follows:
In millions of yen
Tax(expense)or benefit

Net-of-tax
amount¥   10(¥    12)

45

(130)

(1,504)

3,571

(160)

405

—

11,6155

63(¥1,604)¥15,512¥1,193(¥  338)¥  855

(460)

124

(336)

5,973

(1,832)

4,141

466

(145)

321

(4,053)—(4,053)78—

78¥3,197(¥2,191)¥1,006Pre-tax
amount

For the year ended March 31, 2022:
Unrealized gains on securities—
		 Unrealized gains or losses
		 arising during the period.............. (¥    22)		Less: Reclassification		adjustment for gains
		or losses realized in		
net income.............................
(175)
Pension liability adjustments—
		 Unrealized gains or losses
		 arising during the period..............
5,075
		Less: Reclassification		adjustment for gains
		or losses realized		in net income........................
565
Foreign currencytranslation adjustments—
		 Unrealized gains or losses
		 arising during the period..............
11,615
		Less: Reclassification		adjustment for gains
		or losses realized		in net income........................
58
			Other comprehensive
			 income (loss)............................... ¥17,116$787,941(2) Retained Earnings
The Japanese Companies Act provides that an amount equal to 10
percent of surplus distributed by the parent company and its Japanesesubsidiaries be appropriated as a legal reserve until the aggregate
amount of additional paid-in capital and legal reserve equals 25 ­percent of the c­ ommon stock account.
The amount available for dividends under the Japanese Companies
Act i­s based on the amount recorded in the ­parent company’s non­consolidated statutory financial statements in accordance withJapanese GAAP. Such amount was ¥676,587 million ($5,545,795
thousand) at March 31, 2022.
Subsequent to March 31, 2022, the parent company’s Board of
Directors declared a year-end cash dividend of ¥90 ($0.74) per share,
totaling ¥19,627 million ($160,877 thousand), to shareholders of record
on March 31, 2022. The dividend declared was approved at the generalshareholders’ meeting held on June 28, 2022. Dividends are recordedin the year they are declared.
The Company has made it a basic policy to distribute dividends
twice a year, the interim dividend whose record date is September 30
each year and commenced from the year ended March 31, 2015,
and the year-end dividend whose record date is March 31 each year.
The interim dividend is determined by the Board of Directors andthe ­year-end dividend is determined by the General Meetingof Shareholders.
Cash dividends per share are computed based on dividends paid forthe year.

For the year ended March 31, 2021:
Unrealized gains on securities—
		 Unrealized gains or losses
		 arising during the period..............
		Less: Reclassification		adjustment for gains
		or losses realized in		
net income.............................
Pension liability adjustments—
		 Unrealized gains or losses
		 arising during the period..............
		Less: Reclassification		adjustment for gains
		or losses realized		in net income........................
Foreign currencytranslation adjustments—
		 Unrealized gains or losses
		 arising during the period..............
		Less: Reclassification		adjustment for gains
		or losses realized		in net income........................
			Other comprehensive
			 income (loss)...............................

SECOM Financial Data 2022

23

In millions of yen
Pre-tax
amount

For the year ended March 31, 2020:
Unrealized gains on securities—
		 Unrealized gains or losses
		 arising during the period..............
		Less: Reclassification		adjustment for gains
		or losses realized in		
net income.............................
Pension liability adjustments—
		 Unrealized gains or losses
		 arising during the period..............
		Less: Reclassification		adjustment for gains
		or losses realized		in net income........................
Foreign currencytranslation adjustments—
		 Unrealized gains or losses
		 arising during the period..............
			Other comprehensive
			 income (loss)...............................

¥  139Tax(expense)or benefit(¥   34)

Net-of-tax
amountReclassification adjustments for gains or losses realized in net income(pre-tax amount) included in the consolidated statements of income forthe years ended March 31, 2022, 2021 and 2020 are as follows:(6,124)

231

136
1,914

(58)

(368)
(4,210)173(2,934)—(2,934)(¥9,192)¥1,958(¥7,234)

In thousands of U.S. dollars
Pre-tax
amountTax(expense)or benefit

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31¥  1052022(504)

In millions of yen

Net-of-tax
amount

For the year ended March 31, 2022:
Unrealized gains on securities—
		 Unrealized gains or losses
		 arising during the period.............. ($    180) $    82 ($     98)		Less: Reclassification		adjustment for gains
		or losses realized in		
net income.............................
(1,435)369(1,066)
Pension liability adjustments—
		 Unrealized gains or losses
		 arising during the period..............
41,598 (12,328)
29,270		 Less: Reclassification		adjustment for gains
		or losses realized		in net income........................
4,631(1,311)3,320
Foreign currencytranslation adjustments—
		 Unrealized gains or losses
		 arising during the period..............
95,205—
95,205
		Less: Reclassification		adjustment for gains
		or losses realized		in net income........................
475
41
516
			Other comprehensive
			 income (loss)............................... $140,294 ($13,147) $127,147

Unrealized gains on
securities—
Net sales andoperating revenue................
Gain and loss on sales of
securities, net........................
Loss on other-thantemporary impairment ofinvestment securities..........
Pension liability
adjustments—
Net periodic pension
and severance costs(Note 15)..................................
Equity in net income ofaffiliated companies............
Foreign currencytranslation adjustments—
Gain and loss on sales of
securities, net........................

2021(¥308)(133)
266(¥392)
67
(135)

2020

(¥422)
82
(164)

2022

($2,525)(1,090)
2,180

449

454

184

3,680

116

12

47

951

58

78

—

Buildings and improvements..............
Machinery, equipment
and automobiles...................................
Other intangible assets.........................
Accumulated depreciation
and amortization..................................

Years ending March 31

SECOM Financial Data 2022

In thousands of
U.S. dollars¥ 7,727
6,170
4,877
3,179
1,624
13,84537,422(9,270)$ 63,336
50,57439,97526,057
13,311
113,484
306,737(75,984)

28,152(7,116)

230,753(58,327)¥21,036$172,426

2023........................................................................
2024........................................................................
2025........................................................................
2026........................................................................
2027........................................................................
Thereafter.............................................................
Total minimum lease payments.....................
Less: Amount representing interest.............
Present value of net minimum
lease payments (Note 13)..............................
Less: Current portion.........................................
Long-term finance leaseobligations.....................................................

Operating lease expenses for the years ended March 31, 2022 and2021 were ¥22,199 million ($181,959 thousand) and ¥22,927 million,
respectively.
Supplemental cash flow information is as follows:
In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2022

2021

2022

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2021

2022

¥12,289¥11,013$100,730

36,0791,554

35,945
36295,730
12,738(24,896) (23,063)¥25,026 ¥23,931(204,066)$205,132

Depreciation and amortization expenses for assets under financeleases for the years ended March 31, 2022, 2021 and 2020 were
¥7,817 million ($64,074 thousand), ¥7,542 million and ¥7,530 m­ illion,­respectively.

Cash paid for amounts included in
the measurement of operatinglease liabilities......................................
Right of use assets obtained in
exchange for operatinglease liabilities......................................

¥25,319¥21,845$207,533

22,231

18,876

182,221

The following is a schedule by year of the future minimum lease
payments under operating leases at March 31, 2022:
Years ending March 31

2023........................................................................
2024........................................................................
2025........................................................................
2026........................................................................
2027........................................................................
Thereafter.............................................................
Total minimum lease payments.....................
Less: Amount representing interest.............
Present value of net minimum
lease payments.................................................

In millions of yen

In thousands of
U.S. dollars¥ 20,489
14,446
10,655
9,448
7,691
83,240145,969(8,557)$  167,943
118,41087,33677,44363,041
682,295
1,196,468(70,140)¥137,412$1,126,328

The following is remaining lease term and discount rate under­operating leases at March 31, 2022 and 2021:
Weighted-average remaining lease term...
Weighted-average discount rate...................

24

In millions of yen

475

19. Leases as lessee
The Company leases certain office space, employee residen­tial­facilities, equipment for armored car services and transportationequipment. Some leased buildings, and equipment for armored car
services and transportation equipment are held under finance leases.
Other leases are classified as o
­ perating leases.
A summary of leased assets under finance leases at March 31, 2022
and 2021 is as follows:2022

The following is a schedule by year of future minimum lease­ ayments under finance leases and the present value of the netp­minimum lease payments at March 31, 2022:

March 31, 2022

March 31, 2021

183 months
0.67%

190 months
0.64%

20. Leases as lessor
The Company’s leasing operations consist principally of leasing of
security merchandise, security systems and real estate for offices andmedical institutions. Most of the security merchandise and security
systems on lease are classified as sales-type leases or direct-financing­­
leases. Other leases are ­classified as ­operating leases.
A summary of lease receivables under sales-type and direct-­financing leases at March 31, 2022 and 2021 is as follows:
In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2021

2022

Total minimum lease payments
to be received........................................... ¥53,572 ¥58,861
Estimated executory cost........................
(4,360) (4,837)
Unearned income......................................
(3,789) (4,220)
Lease receivables, net.............................. 45,423 49,804
Less: Current portion................................ (15,772) (16,532)
Long-term lease receivables, net.... ¥29,651 ¥33,272$439,115(35,738)(31,057)
372,320(129,279)$243,041

2022

The following is a schedule by year of future minimum lease­ ayments to be received under sales-type leases and direct-­financing
pleases at March 31, 2022:
Years ending March 31

In millions of yen

In thousands of
U.S. dollars¥17,803
13,815
9,950
6,831
3,345
1,828

$145,926
113,238
81,55755,992
27,41814,984¥53,572$439,1152023........................................................................
2024........................................................................
2025........................................................................
2026........................................................................
2027........................................................................
Thereafter.............................................................
Total future minimum lease
payments to be received...........................

A summary of investment in property under operating leases andproperty held for lease at March 31, 2022 and 2021 is as follows:
In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2022

2021

2022

Land............................................................... ¥43,232 ¥39,574
Buildings and improvements................. 34,660 34,714
Other intangible assets............................
662
662
Accumulated depreciation
and amortization..................................... (14,805) (14,186)¥63,749 ¥60,764$354,361
284,098
5,426(121,352)$522,533

The future minimum rentals under noncancelable operating leases
at March 31, 2022 are as follows:
Years ending March 31

2023........................................................................
2024........................................................................
2025........................................................................
2026........................................................................
2027........................................................................
Thereafter.............................................................
Total future minimum rentals....................

In millions of yen

In thousands of
U.S. dollars¥2,824
406
242
173
162
2,100
¥5,907$23,148
3,328
1,984
1,418
1,328
17,212$48,418

SECOM Financial Data 2022

25

21. Fair Value of Financial Instruments
The following methods and assumptions were used to e
­ stimate thefair value of financial instruments in cases for which it is p
­ racticable.
The three levels of inputs used to measure fair value are more fully
described in Note 22.
(1) Cash and Cash Equivalents; Time Deposits; Cash Deposits for armoredcar services; Notes and Accounts Receivable, Trade; Due from Subscribers; Short-Term Receivables; Bank Loans; Notes and Accounts P­ ayable,
Trade; Other Payables; Deposits Received; Accrued Income Taxes; andAccrued ­Payroll
The carrying amounts approximate fair value because of the­short-term maturities of such instruments.
(2) Short-Term Investments; Investment Securities
The fair values of short-term investments and investment s­ ecurities
are principally based on quoted market prices.
(3) Long-Term Receivables Including Current PortionLong-term receivables, including the current portion, are classified
as Level 2 and fair value is estimated based on the present value of
future cash flows through estimated maturity, discounted using
estimated market discount rates.
(4) Long-Term Debt Including Current PortionLong-term debt, including the current ­portion, is classified as Level
2 and fair value is estimated based on the present value of future cash
flows of each instrument discounted using the C­ ompany’s current­incremental ­borrowing rates for similar liabilities.
(5) Investment Deposits by Policyholders
The fair values of investment deposits by policyholders are c­ lassified
as Level 3 and estimated based on the present value of future cash
flows, ­discounted using the interest rates currently being offered for­similar contracts.
(6) Derivatives
The fair values of derivatives are estimated using current market­pricing models by obtaining quotes from ­financial institutions.

The carrying amounts and estimated fair values of finan­cial instruments, excluding, debt and equity securities, which are d­ isclosed in
Notes 2 (7) and 7, at March 31, 2022 and 2021 are as follows:
In millions of yen
March 31
2022
Carrying
amountNon-derivatives:
Assets—		Long-term receivables
		 including current		 portion (Less allowance		 for doubtful accounts)....
Liabilities—
		Long-term debt
		 including current		 portion.................................
		Investment deposits
		 by policyholders...............
Derivatives:
Liabilities—
		 Interest rate swaps
		 (Other long-term
		 liabilities)............................

Estimated
fair value

2021
Carrying
amountEstimated
fair value¥47,732¥48,273¥53,387¥53,71466,96566,961

68,94968,947

16,966

17,484

19,82920,58200

1

1In thousands of U.S. dollars
March 31, 2022
Carrying
amountNon-derivatives:
Assets—		 Long-term receivables including current		 portion (Less allowance for doubtful
		 accounts)....................................................................
Liabilities—
		 Long-term debt including current		 portion.........................................................................
		Investment deposits
		 by policyholders.......................................................
Derivatives:
Liabilities—
		 Interest rate swaps (Other long-term
		 liabilities)....................................................................

22. Fair Value Measurements
ASC 820, “Fair Value Measurements and Disclosures,” defines fairvalue as the price that would be received to sell an asset or paid totransfer a liability (an exit price) in the principal or most advantageous
market for the asset or l­iability in an orderly transaction between market participants at the measurement date. This accounting standard
establishes a three-level fair value hierarchy that prioritizes the inputs
used to measure fair value as follows:
Level 1— Inputs are quoted prices in active markets for ­identicalassets or liabilities.
Level 2— Inputs are quoted prices for similar assets or liabilities in
active markets, quoted prices for identical or similar
assets or liabilities in markets that are not active, inputs
other than quoted prices that are observable, and inputs
that are derived principally from or corroborated byobservable market data by correlation or other means.
Level 3— Inputs are derived from valuation techniques in which
one or more significant inputs or value drivers are­unobservable, which reflect the reporting entity’s own
assumptions about the assumptions that market­participants would use in establishing a price.
The following table represents the Company’s assets and liabilities
that are measured at fair value on a recurring basis at March 31, 2022
and 2021. Transfers between levels are recognized at the end of the­respective reporting periods.
In millions of yen

Estimated
fair value$391,246 $395,680
548,894548,861

139,066

143,31100Limitation:
Fair value estimates are made at a specific point in time based on
relevant market information and information about financial
instruments. These estimates are s­ ubjective in nature and involve
uncertainties and matters of significant j­udgment and therefore cannot
be determined with precision. Changes in assumptions could
significantly affect the estimates.

March 31, 2022

Assets:Cash equivalents.......
Short-term
investments andinvestment
securities..................
Total assets.....................
Liabilities:
Derivatives(Other long-term
liabilities)...................
Total liabilities.................

SECOM Financial Data 2022

Level 2

Level 3Total¥    492¥     —

¥     —

¥    492

104,545¥105,037

93,619¥93,619

16,368¥16,368

214,532¥215,024¥      —
¥      —

¥     0¥     0¥     —
¥     —

¥      0¥      0In millions of yen

March 31, 2022
Level 1

Assets:Cash equivalents......
Short-term
investments andinvestment
securities.................
Total assets....................
Liabilities:
Derivatives(Other long-term
liabilities)..................
Total liabilities................

Level 2

Level 3

Total$  4,033 $      — $      —$    4,033

856,925 767,369 134,164$860,958 $767,369 $134,164

1,758,458$1,762,491$      — $      0 $      —$      — $      0 $      —$        0$        0Cash Equivalents
All highly liquid investments with initial maturities of three months orless are considered to be cash equivalents, and principally valued
using quoted prices for identical assets in markets that are not active.
Short-Term Investments and Investment Securities
Equity securities and debt securities classified as Level 1 assets arevalued using unadjusted quoted market prices in active markets with
sufficient volume and frequency of transactions.
Level 2 assets comprise principally debt securities, which are valued
using quoted prices for similar assets in active markets, or quoted
prices for identical or similar assets in markets that are not active.
Non-marketable securities classified as Level 3 assets are valued
based on unobservable inputs as the market for the assets was not
active at the measurement date. The fair value is determined by using
a valuation technique, such as the discounted cash flow model, which
best reflects the nature, characteristics and risks of each asset. Thesesignificant unobservable inputs contain discount rates, exit timing andan EBITDA multiple. An increase (decrease) in the discount rates, thelater (earlier) exit and a decrease (increase) in the EBITDA multiple
would result in a decrease (increase) in the fair value of nonmarketable securities.
The Company’s Level 3 investment securities that are measured
at fair value on a recurring basis at March 31, 2022 and 2021,
amounting to ¥16,368 million ($134,164 thousand) and ¥12,126 million,
respectively, are primarily private equity investments. The valuation
technique and significant unobservable inputs are as follows:

March 31, 2021

Assets:Cash equivalents.......
Short-term
investments andinvestment
securities..................
Total assets.....................
Liabilities:
Derivatives(Other long-term
liabilities)...................
Total liabilities.................

26

Level 1In thousands of U.S. dollars

Level 1

Level 2

Level 3Total¥    360¥     —

¥     —

¥    360

147,490¥147,850

50,408¥50,408

12,126¥12,126

210,024¥210,384¥      —
¥      —

¥     1¥     1¥     —
¥     —

¥      1¥      1March 31, 2022
Valuation techniqueSignificant unobservable inputs

Range

Discounted cash flows

Discount rate
Exit timing
EBITDA multiple

15%–30%2022–2025
0x–9.9x

Valuation techniqueSignificant unobservable inputs

Range

Discounted cash flows

Discount rate
Exit timing
EBITDA multiple

4.75%–25%
2021–2025(23.2)x–16.4x

March 31, 2021

Derivative Financial Investments
Derivative financial instruments comprise forward exchange c­ ontracts,
interest rate swaps and others. These derivative instruments are v­ alued
using observable market data and classified as Level 2 liabilities.

SECOM Financial Data 2022

27

The following table represents the changes in Level 3 assets­ easured on a recurring basis for the years ended March 31, 2022m
and 2021.

Balance at beginning of year..............
Total gains or losses(realized and unrealized):		 Included in earnings....................
		 Included in other		 comprehensive income............
Purchases............................................
Sales......................................................
Redemptions.......................................
Cancellation of contract...................
Foreign currency translation
adjustments......................................
Balance at end of year..........................

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2022

2021

2022

¥12,126¥10,366$ 99,393

2,998

(396)

24,574

—
138
(240)
—
—

—
2,853
(26)
—
—

—
1,131
(1,967)——

1,346¥16,368(671)¥12,126

11,033$134,164

Changes in unrealized gains
or losses relating to instruments
still held at end of year:
		 Included in earnings.................... ¥ 2,758 (¥   256)

$ 22,607

Total gains or losses (realized or unrealized) related to short-term
investments and investment securities are primarily included in
net sales and operating revenue or gain/loss on private equity
investments, in the consolidated statements of income.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
For the year ended March 31, 2022, non-marketable equity securities
with a carrying amount of ¥14,820 million ($121,475 thousand) were
written down to their fair value of ¥14,818 million ($121,459 thousand),resulting in an other-than-­temporary impairment charge of ¥2 million($16 thousand), which was included in earnings. For the year ended
March 31, 2021, non-marketable equity ­securities with a carrying
amount of ¥13,307 million were written down to their fair value of¥13,099 million, resulting in an other-than-temporary impairment
charge of ¥208 million, which was included in earnings. All impaired
non-marketable equity securities were classified as Level 3 assets as
the Company uses unobservable inputs such as future cash flows tovalue these investments.
Long-lived assets (Note 11) and goodwill (Note 12) are also­measured at fair value on a nonrecurring basis. All impaired long-lived
assets and goodwill were classified as Level 3 assets as the Company
uses u­ nobservable inputs to value these assets. These Level 3 assets
are not significant.
23. Derivative Financial Instruments(1) Risk Management Policy
The Company utilizes derivative financial instruments in the normal
course of business to reduce exposure to fluctuations in interest rates.
The Company assesses interest rate risk by con­tinually monitoringchanges in the exposure and by evaluating hedging opportunities. The
Company does not hold or issue derivative financial instruments for
trading purposes. The Company is also exposed to credit-related losses
in the event of non-­perfomance by counterparties to derivative financial instru­ments, but it is not expected that any counterparties will failto meet their obligations, because most of the counterparties areinternationally recognized financial institutions and contracts arediversified amongst a ­number of major financial institutions.

28

SECOM Financial Data 2022

(2) Risk Management
The Company has exposure to the market risk of changes in interest
rates which relates ­primarily to its debt obligations. The Company
principally enters into interest rate swap agreements to manage
fluctuations in cash flows resulting from changes in interest rates.
Interest rate swaps are used to change floating rates on debt obligations to fixed rates by entering into receive-floating, pay-fixed interest
rate swaps under which the Company receives floating interest rate
­proceeds and makes fixed interest rate payments, thereby e­ ffectively
creating fixed-rate debt.
(3) Cash Flow Hedges
The Company ­designates interest rate swap agreements as cash
flow hedges for variability of cash flows originating from floating rateborrowings. The e­ ffective portion of changes in fair values of derivative
instruments designated as cash flow hedges of these debt obligations
are reported in other comprehensive income (loss). These amounts arereclassified into current income in the same period that hedged items
affect current income. The ineffective portion of changes in fair values
are reported in income immediately.
(4) Derivative Instruments Not Designated as Hedges
The Company enters into interest rate swap agreements to reduce
exposure to fluctuations in interest rates relating primarily to debt
obligations and other agreements. Changes in fair value of thesederivative financial instruments, which are not d­ esignated as hedges,
are reported in current income.
Fair values of derivative instruments reflected in the c­ onsolidatedbalance sheets as of March 31, 2022 and 2021 are as follows:
Derivatives not designated as hedging instruments

Location

Liabilities:
Interest rate swaps

Other long-term
liabilities

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2022

2021

2022

¥0

¥1

$0

24. Commitments and Contingent Liabilities
The Company has commitments outstanding at March 31, 2022 forthe ­purchase of property, plant and equipment of a
­ pproximately ¥2,505
million ($20,533 thousand).
The Company provides guarantees to third parties mainly withrespect to bank loans extended to its affiliated companies and otherentities. Such guarantees are provided to enhance the credit standingof the affiliated companies and other entities. For each guarantee provided, the Company would have to per­form under the guarantee if
the affiliated companies and other entities default on a payment
within the guaranteed period of one to five years. The maximum
amount of undiscounted pay­ments the Company would have to makein the event of default amounts to ¥405 million ($3,320 thousand) at
March 31, 2022. The carrying amounts of the liabilities recognized as
the Company’s obligations under these ­guarantees at March 31, 2022
and 2021 were deemed insignificant.
It is not anticipated that damages, if any, resulting from legal actions
will have a material impact on the Company’s consolidated financial
statements.
25. Revenue(1) Disaggregation of revenue
Revenue from contracts with customers and other sources for theyears ended March 31, 2022, 2021 and 2020 are as follows:

2022

LocationInterest rate swaps

Other income

Year ended
March 31

2020

2022

2021

Revenue recognized fromcontracts with customers.... ¥1,091,537 ¥1,061,271 ¥1,062,804
Revenue recognized fromother sources..........................
74,561
74,06869,828
Total.............................................. ¥1,166,098 ¥1,135,339 ¥1,132,632$8,947,024
611,156$9,558,180

The disaggregation of revenue by operating segments is describedin Note 28.
Revenue recognized from other sources primarily comprises
revenue recognized from lease contracts and insurance contracts.

Derivatives not designated as hedging instruments

Years ended
March 31

Years ended
March 31

Due within 1 year..........................
Due after 1 year............................

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2022

2021

2022

¥146,856
196,256¥157,986
220,557$1,203,738
1,608,656¥343,112¥378,543$2,812,394

26. Discontinued Operations
The Company accounted for the sale of certain businesses in­accordance with ASC 205-20, “Discontinued Operations.”
The Company sold certain businesses included in the other services
segment, during the year ended March 31, 2021. The Company
reported the operating results related to these operations as­discontinued operations. Prior period figures have been restated.
Discontinued operations for the years ended March 31, 2021 and2020 are as follows:
In millions of yen
Years ended
March 31

Net sales and operating revenue............................
Income (loss) from discontinued operations
before income taxes.............................................
Loss on sales of discontinued operations........
Income taxes.............................................................
Income (loss) from discontinued operations,net of taxes..............................................................
Attributable to noncontorolling interests.........
Attributable to SECOM CO., LTD. .........................

In thousands of
U.S. dollars
Year ended
March 31

2022

2021

2020

2022

¥1

¥4

¥11

$8

Receivables*1..................................
Contract assets*2...........................
Contract liabilities*3......................

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2022

2021

2022

¥178,114
23,43556,190¥183,826
31,06358,033$1,459,951
192,090
460,574

2021

2020

¥12,892¥28,07531(3,162)
561

1,079
—
(104)

(2,570)—(2,570)975—
975

Income (loss) from discontinued operations, net of tax, by businesssegment for the years ended March 31, 2021 and 2020 is as f­ ollows:
In millions of yen(2) Contract balances
Contract balances arising from contracts with customers at March
31, 2022 and 2021 are as follows:

Effects of derivative instruments on the consolidated statements
of income for the years ended March 31, 2022, 2021 and 2020 are
as follows:

In millions of yen

In millions of yen

In thousands of
U.S. dollars(3) Transaction price allocated to the remaining performance obligations
The aggregate amounts of transaction price allocated to unsatisfied
performance obligations related to contracts that have original
expected durations in excess of one year at March 31, 2022 and 2021
are as follows:

Years ended
March 31

Security services.........................................................
Other services..........................................................
Income (loss) from discontinued operations,net of taxes..............................................................

2021

2020

(¥  666)(1,904)¥180
795(2,570)975*1 Receivables are included in notes and accounts receivable, trade, due from subscribers and short-term receivables in the accompanying consolidated balance
sheets. These amounts are before ­deducting allowance for doubtful accounts.
*2 Contract assets are included in notes and accounts receivable, trade in theaccompanying consolidated balance sheets. These amounts are before­deducting allowance for doubtful accounts.
*3 Contract liabilities are included in deferred revenue, other current liabilities and­long-term deferred revenue in the accompanying consolidated balance sheets.

The balance of contract liabilities due within one year, amounting to¥39,194 million as of March 31, 2021, is recognized as revenue for the
fiscal year ended March 31, 2022.

SECOM Financial Data 20222927. Supplemental Cash Flow Information
Supplemental cash flow information is as follows:2022

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2020

2022

2021

Cash paid during theyear for:
Interest.................................... ¥ 1,170 ¥ 1,117 ¥ 1,044
Income taxes.......................... 42,883 43,904 40,584
Non-cash investing andfinancing activities:
Additions to obligations
under finance leases.........
8,406
7,311
7,568
Significant acquisitions(Note 4)—
		Assets acquired.................
—
8,533
—
		Liabilities assumed..........
—
(326)
—
		Considerations for		 equity..................................
—
8,207
—
		 Cash and cash		 equivalents on hand.......
—
(806)
—
		Total considerations......... ¥     — ¥ 7,401 ¥     —

$  9,590
351,500

68,902————$      —

28. Segment Information
The Company discloses financial and descriptive i­nformation
about the Company’s reportable operating segments. The o­ perating
segments reported below are the segments of the Company for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regu­larly by ­management in­deciding how to allocate resources and assess performance.
The Company has seven reportable business segments: security
services, fire protection services, medical services, insurance services,
geospatial information services, BPO and ICT services, and otherservices.

30

SECOM Financial Data 2022

In December 2020, the Company transferred all of the issued sharesof Secom Home Life Co., Ltd., which had been a consolidated subsidiary, and excluded it from the scope of consolidation. As a result, the­segment name was changed from “real estate and other services”
to “other services” from the fiscal year ended March 31, 2022. There is
no change in the segment classification as a result of this change
regarding the ­segment name noted above. Effective from the fiscal
year ended March 31, 2022, the Company has reviewed the segmentclassifications from the perspective of similarity and relevance of­business activities in order to provide more appropriate information,and has reclassified some businesses ­previously included in the­security services segment to the BPO and ICT services segment andthe other services segment. Accordingly, segment information of allprior p­ eriods has been restated to conform to the presentation used
for the fiscal year ended March 31, 2022.
The security services segment provides various types of secu­rity
services by utilizing the Company’s unique security systems and manufacturing and selling security merchandise. The fire protection services segment provides various types of fire protection equipment,such as automatic fire alarm and fire extinguishing and other fire protection systems for office buildings, plants, tunnels, ships, residences
and cultural monuments. The medical ser­vices segment provides
intravenous solutions to patients at home, home-based n­ ursing careservices, medical data trans­mission services by utilizing theCompany’s network and leas­ing of real estate for medical institutions.
In addition, the VIE, of which the Company is the primary beneficiary
manage hospitals and health ­care-related institutions. The insurance
services s­ egment includes the non-life insurance-related underwriting
business in the Japanese market. The geospatial information services
segment includes surveying and measuring services and GIS services.
The BPO and ICT services s­ egment includes various BPO related services, data center services, ­business continuity plan support, information security services and cloud ­services. The other services segment
includes leasing of real estate, ­construction and installation services
and other services.
Corporate expenses consist principally of general and administrative
expenses of the planning, personnel and admin­istrative departments ofthe parent company and administrative departments of the foreign­holding company.
Intersegment sales are priced on a basis intended to a
­ pproximate
amounts charged to unaffiliated customers.
Identifiable assets are those assets used exclusively in the operations of each segment or which are allocated when used jointly.
Corporate assets, which are held by the parent company and the foreign holding company for general and administra­tive facilities, ­consist
principally of cash and cash equivalents, short­-term investments,
investment securities, land, buildings and improvements, machinery,equipment and automobiles.

Information by business and geographic segments for the years
ended and as of March 31, 2022, 2021 and 2020 is as follows:(1) Business Segment Information
In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2020

2022

¥  563,623 ¥  555,060 ¥  561,067
3,093
3,064
3,370
566,716
558,124
564,437$4,619,861
25,352
4,645,213

2022

Net sales andoperating revenue:
Security services—
		Customers.............................
		Intersegment........................
Fire protection services—
		Customers.............................
		Intersegment........................
Medical services—
		Customers.............................
		Intersegment........................
Insurance services—
		Customers.............................
		Intersegment........................
Geospatial information
services—
		Customers.............................
		Intersegment........................
BPO and ICT services—
		Customers.............................
		Intersegment........................
Other services—
		Customers.............................
		Intersegment........................
Total.............................................
Eliminations..............................
Total net sales andoperating revenue.................

2021

148,804
3,302
152,106

140,599
3,275
143,874

151,861
4,050
155,911

1,219,705
27,066
1,246,771

195,826
236
196,062

182,573
206
182,779

187,101
220
187,321

1,605,131
1,934
1,607,065

51,7693,151
54,92058,291
3,084
61,37543,515
3,413
46,928424,336
25,828450,164

56,371
194
56,56553,908204
54,11253,535201
53,736

462,057
1,590
463,647

115,544
9,212
124,756

112,144
9,709
121,853

99,833
13,321
113,154

947,082
75,5081,022,590

34,161
1,235
35,396
1,186,521(20,423)

32,764
1,187
33,951
1,156,068(20,729)35,7201,363
37,083
1,158,570(25,938)

280,008
10,123
290,1319,725,581(167,401)¥1,166,098 ¥1,135,339 ¥1,132,632$9,558,180

Operating income (loss):
Security services.....................
Fire protection
services....................................
Medical services......................
Insurance services..................
Geospatial information
services....................................
BPO and ICT services..............
Other services..........................
Total.............................................
Corporate expenses
and eliminations....................
Operating income....................
Other income............................
Other expenses........................
Income fromcontinuing operations
before income taxes.............

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2022

2021

2020

2022

¥113,380¥101,096¥106,850$  929,344

14,516
13,636
8,547

13,091
3,938
9,309

17,817
6,232(4,319)118,984
111,770
70,057

3,874
14,562
6,120
174,635

4,443
14,495
6,046
152,418

3,030
11,474
6,282
147,366

31,754
119,361
50,164
1,431,434(18,233)¥156,402
9,670(4,383)(16,609)¥135,809
12,121(2,845)(17,739)¥129,627
9,803(6,474)(149,452)$1,281,982
79,263(35,927)¥161,689¥145,085¥132,956$1,325,318

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2021

2022

¥  916,912 ¥  905,667$ 7,515,672

2022

Assets:Security services.........................................
Fire protection
services........................................................
Medical services..........................................
Insurance services......................................
Geospatial information
services........................................................
BPO and ICT services..................................
Other services..............................................
Total.................................................................
Corporate items...........................................
Investments inaffiliated companies.................................
Total assets...................................................

190,544
203,299
247,258

180,083
202,191
242,071

1,561,836
1,666,385
2,026,705

77,954
241,694
121,195
1,998,856
112,948

72,703
246,586
118,314
1,967,615
103,059

638,967
1,981,098
993,402
16,384,065
925,803

71,662
67,132¥2,183,466 ¥2,137,806

587,396$17,897,264

SECOM Financial Data 202231

Independent Auditors’ Report2022

Depreciation andamortization:
Security services.....................
Fire protection
services....................................
Medical services......................
Insurance services..................
Geospatial information
services....................................
BPO and ICT services..............
Other services..........................
Total.............................................
Corporate items.......................
Total depreciation
and amortization...................
Capital expenditure:
Security services.....................
Fire protection
services....................................
Medical services......................
Insurance services..................
Geospatial information
services....................................
BPO and ICT services..............
Other services..........................
Total.............................................
Corporate items.......................
Total capital
expenditures...........................

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2020

2022

2021

¥51,573¥51,645¥50,045$422,729

2,836
8,055
2,509

2,662
8,496
2,556

2,537
8,321
2,290

23,24666,025
20,566

1,751
9,751
1,158
77,633
874

1,665
9,816
1,008
77,848868

1,700
10,822
1,002
76,717857

14,352
79,926
9,492
636,336
7,164¥78,507¥78,716¥77,574$643,500¥44,059¥44,276¥44,672$361,139

5,176
4,018
2,770

5,249
4,057
1,936

2,569
8,778
4,440

42,42632,93422,705

2,608
7,871
4,182
70,684
584

2,052
6,928
3,677
68,175486

2,987
13,034
2,239
78,7191,116

21,37764,51634,279579,376
4,787¥71,268¥68,661¥79,835$584,163

The capital expenditures in the above table represent the a­ dditions
to property, plant and equipment and intangible assets of eachsegment.
The Company has no single customer that accounts for more than
10 percent of total revenues.
The following table is a breakdown of security services revenue toexternal customers by service category. The security services businessis managed as a single operating segment by the C­ ompany’s­management.

Electronic security
services........................................
Other security services:
Static guard
services..................................
Armored car
services..................................
Merchandise andother..............................................
Total security
services..................................

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2022

2021

2020

2022

¥348,749¥344,882¥344,992$2,858,598

75,45969,37070,054

618,516

62,467

62,841

63,602512,025

76,94877,967

82,419630,722¥563,623¥555,060¥561,067$4,619,861(2) Geographic Segment Information
Net sales and operating revenue attributed to countries based on
the geographical location of customers for the years ended March 31,
2022, 2021 and 2020 and long-lived assets as of March 31, 2022 and2021 were as ­follows:2022

Net sales andoperating revenue:
Japan.........................................
Other..........................................
		Total.....................................

In millions of yen

In thousands of
U.S. dollars

Years ended
March 31

Year ended
March 31

2021

2020

¥1,117,929 ¥1,091,216 ¥1,083,446
48,16944,12349,186¥1,166,098 ¥1,135,339 ¥1,132,632

Long-lived assets:
Japan......................................................................
Other.......................................................................
		Total..................................................................

The Board of Directors and Shareholders
SECOM CO., LTD.

OpinionWe have audited the consolidated financial statements of SECOM CO., LTD. and its subsidiaries (the Company), which comprise theconsolidated balance sheets as of March 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income,2022
changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended March 31, 2022, and the related notes to theconsolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the$9,163,352※ロゴの周りのガイドラインは、ロゴに必要なクリアスペースです。
Company as of March 31, 2022 and 2021, and the results of their operations and their cash flows for each of the years in the three-year period
394,828
ended March 31, 2022, in accordance with U.S. generally accepted accounting principles.
クリアスペースの中に、他のオブジェクトやテキストが入らないよう、ご留意ください。
$9,558,180
Basis for Opinion

In millions of yen

In thousands of
U.S. dollars

March 31

March 31

2022

2021

2022

¥755,252
15,125¥770,377¥771,547
13,711¥785,258$6,190,590
123,975$6,314,565

There are no individually material countries other than Japan withrespect to net sales and operating revenue and long-lived assets.
29. Subsequent Events(Business Combination by Share Acquisition)
SECOM entered into the share purchase agreement on May 12, 2022
to acquire 55.1%, or 7,612,000 shares of the common shares o­ utstandingof SENON LIMITED and acquired the shares on July 1, 2022.
(1) Purpose of Acquisition		 SENON provides a wide range of security services nationwide
as a total security company. Its business includes security guard
services, electronic security services, airport security services,and vehicle fleet operation services. SECOM believes that
SENON’s strengths as a total security company combined withSECOM’s technological advantages and expertise will enable us
to provide more customers with higher quality and optimized
security services.
(2)	Acquisition Cost of Company Subject to Business Combination andBreakdown Thereof
Consideration for AcquisitionCash
26,999 million yen
Acquisition Cost
26,999 million yen(3)	Amount of Goodwill Incurred, Reasons for the Goodwill Incurred andthe Method and the Period of Amortization
		 Not determined at this point of time.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, inaccordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.
Emphasis of Matter
We draw attention to Note 29 to the consolidated financial statements, which describes the Company entered into the share purchase­agreement on May 12, 2022 and acquired 55.1% shares of the common shares outstanding of SENON LIMITED on July 1, 2022.
Our opinion is not modified in respect of this matter.

Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with U.S.
generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparationand fair p­ resentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in
the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the­consolidated financial statements are available to be issued.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material­misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level ofassurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect amaterial misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements
are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a­reasonable user based on the consolidated financial statements.
In performing an audit in accordance with GAAS, we:•	Exercise professional judgment and maintain professional skepticism throughout the audit.
•	Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design
and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding theamounts and disclosures in the consolidated financial statements.
•	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, nosuch opinion is expressed.
•	Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made bymanagement, as well as evaluate the overall presentation of the consolidated financial statements.
•	Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about theCompany’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of theaudit, significant audit findings, and certain internal control related matters that we identified during the audit.
Convenience Translations
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2022 are presented
solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has
been made on the basis described in Note 3 to the consolidated financial statements.

Tokyo, Japan
September 7, 2022

32

SECOM Financial Data 2022

SECOM Financial Data 2022

33

Summary of Selected Financial Data

OTHER FINANCIAL DATASECOM CO., LTD. and Subsidiaries
Years ended/as of March 31
In millions of yen
2022

2021

2020

2019

2018

2017

Composition of consolidated net sales andoperating revenue by segment
Net sales and operating revenue.......................................................... ¥1,166,098 ¥1,135,339 ¥1,132,632 ¥1,087,355 ¥1,058,568 ¥1,004,094
Security services:.................................................................................
563,623
555,060
561,067
548,271547,015
529,144				 As a percentage of net sales and operating revenue......
48.3%
48.9%
49.5%
50.4%
51.7%
52.7%
		 Electronic security services..........................................................
348,749
344,882
344,992
342,299
339,445
337,283				 As a percentage of net sales and operating revenue......
29.9
30.4
30.5
31.5
32.0
33.6
		 Other security services—			Static guard services.................................................................
75,45969,37070,054
66,28959,05456,438				 As a percentage of net sales and operating revenue......
6.5
6.1
6.2
6.1
5.6
5.6
			Armored car services................................................................
62,467
62,841
63,60262,41761,08957,873				 As a percentage of net sales and operating revenue......
5.4
5.5
5.6
5.7
5.8
5.8
					Subtotal.................................................................................
137,926
132,211
133,656
128,706
120,143
114,311
		 Merchandise and other..................................................................
76,94877,967
82,41977,26687,42777,550				 As a percentage of net sales and operating revenue......
6.6
6.9
7.2
7.1
8.3
7.7
Fire protection services......................................................................
148,804
140,599
151,861
140,139
136,559
126,232				 As a percentage of net sales and operating revenue......
12.8
12.4
13.4
12.9
12.9
12.6
Medical services....................................................................................
195,826
182,573
187,101
181,705
175,318
168,819				 As a percentage of net sales and operating revenue......
16.8
16.1
16.5
16.7
16.6
16.8
Insurance services...............................................................................
51,76958,291
43,515
41,63744,683
43,780				 As a percentage of net sales and operating revenue......
4.4
5.1
3.8
3.8
4.2
4.4
Geospatial information services......................................................
56,371
53,90853,53551,51050,906
51,609				 As a percentage of net sales and operating revenue......
4.8
4.7
4.7
4.7
4.8
5.1
BPO and ICT services...........................................................................
115,544
112,144
99,83390,22571,47551,255				 As a percentage of net sales and operating revenue......
9.9
9.9
8.8
8.2
6.7
5.1
Other services........................................................................................
34,161
32,76435,72033,86832,61233,255				 As a percentage of net sales and operating revenue......
3.0
2.9
3.3
3.3
3.1
3.3
Net income attributable to SECOM CO., LTD., cash dividends
and SECOM CO., LTD. shareholders’ equity
Net income attributable to SECOM CO., LTD. .................................... ¥  107,731
Cash dividends paid(2)...............................................................................
38,196
SECOM CO., LTD. shareholders’ equity................................................ 1,209,512
Consolidated financial ratios
Percentage of working capital accounted for by:
Debt—
		Bank loans..........................................................................................
		 Current portion of long-term debt..............................................
		Straight bonds...................................................................................
		 Other long-term debt......................................................................
			Total debt.......................................................................................
SECOM CO., LTD. shareholders’ equity............................................
			Total capitalization......................................................................
Return on total assets (percentage)(a)..................................................
Return on equity (percentage)(b).............................................................
Percentage of net sales and operating revenue absorbed by(c):Depreciation and amortization.........................................................
Rental expense under operating leases........................................
Ratio of accumulated depreciation to depreciable
assets (percentage)................................................................................
Net property turnover (times)(c).............................................................
Before-tax interest coverage (times)(c) (d)..............................................

¥   89,913
37,104
1,142,323¥   87,136
37,104
1,088,738¥   89,686
34,922
1,044,184¥   96,623
32,7381,000,277¥ 91,387
30,557929,242

2.4
1.2
0.3
3.7
7.6
92.4
100.0

2.7
1.2
0.3
4.0
8.3
91.7
100.0

3.3
1.5
0.3
3.4
8.5
91.5
100.0

3.4
1.6
0.4
3.6
8.9
91.1
100.0

3.5
1.7
0.5
4.1
9.8
90.2
100.0

4.0
1.9
0.7
4.5
11.1
88.9
100.0

4.9
8.9

4.2
7.9

4.2
8.0

4.8
8.6

5.3
9.7

5.2
9.8

6.7
2.5

6.9
2.6

5.7
2.4

6.8
2.5

7.3
2.3

7.6
2.5

68.0
2.75
139.8

66.6
2.65
125.2

65.3
2.73
117.5

65.4
2.67
109.6

64.6
2.63
123.0

63.2
2.49
107.1

Note: Installation revenue is included in the corresponding electronic security services.

Contents
Summary of Selected Financial Data................................................ 35
Common Stock Data............................................................................... 37

34

SECOM Financial Data 2022

SECOM Financial Data 2022

35

Common Stock Data
SECOM CO., LTD.
As of March 31

2022

2021

2020

2019

2018

2017

Number of shares outstanding
Issued.........................................................................................
Owned by SECOM CO., LTD. .................................................

233,298,049
15,215,218

233,295,926
15,034,565

233,293,998
15,033,588

233,292,219
15,031,867

233,290,441
15,030,573

233,288,717
15,028,470

Balance......................................................................................

218,082,831

218,261,361

218,260,410

218,260,352

218,259,868

218,260,247¥  492.83
175.00¥  411.95
170.00¥  399.23
170.00¥  410.91
160.00¥  442.70
150.00¥  418.71
140.005,546.11
677.24
1.60
17.99
13.09
8,868

5,233.74
602.60
1.78
22.61
15.45
9,313

4,988.25
533.88
1.80
22.48
16.81
8,974

4,784.12
590.91
1.98
23.08
16.05
9,482

4,582.96
649.44
1.73
17.89
12.20
7,920

4,257.50
631.91
1.87
19.03
12.61
7,969

Per share information
Net income attributable to SECOM CO., LTD.
per share (in yen) (1) ..............................................................
Cash dividends paid per share (in yen) (2) ........................
SECOM CO., LTD. shareholders’ equity
per share (in yen) (3) ..............................................................
Cash flow per share (in yen) (1) (e) .........................................
Price/Book value ratio..........................................................
Price/Earnings ratio..............................................................
Price/Cash flow ratio.............................................................
Stock price at year-end (in yen).........................................

Notes: (a) Net income attributable to SECOM CO., LTD. / Total assets(b) Net income attributable to SECOM CO., LTD. / SECOM CO., LTD.
shareholders’ equity(c) Including discontinued operations(d) (Income before income taxes and equity in net income of affiliatedcompanies + Interest expense) / Interest expense(e) (Net income attributable to SECOM CO., LTD. + Depreciation andamortization – Dividends approved) / Average number of shares
outstanding during each period

36

SECOM Financial Data 2022

(1) Per share amounts are based on the average number of shares
outstanding during each period.
(2) Subsequent to March 31, 2021, cash dividends of ¥19,627 million(¥90 per share) were approved at the general shareholders’ meetingon June 28, 2022 (see Note 18 of the notes to consolidated financial
statements).
(3) Per share amounts are based on the number of shares outstanding at
the end of each period, less treasury stock.

SHAREHOLDER INFORMATION
Number of shareholders....................................................
Common shares held by:
Financial institutions.......................................................
Securities firms................................................................
Other domestic corporations........................................
Foreign investors.............................................................
Individuals and others....................................................
Treasury stock..................................................................
Total.................................................................................

2022

2021

2020

2019

2018

2017

23,401

21,73923,29724,02326,80925,20039.13%
3.05
2.78
40.96
7.56
6.52
100.00%39.44%
2.81
2.45
41.55
7.31
6.44
100.00%38.65%
1.95
2.50
42.76
7.70
6.44
100.00%37.14%
3.30
2.46
42.74
7.92
6.44
100.00%35.94%
1.63
2.53
44.85
8.61
6.44
100.00%35.05%
3.89
2.51
43.42
8.69
6.44
100.00%

PRICE INFORMATION (TOKYO STOCK EXCHANGE)
2020
2021

2022

April–June.................................................................................................
July–September......................................................................................
October–December................................................................................
January–March.......................................................................................
April–June.................................................................................................
July–September......................................................................................
October–December................................................................................
January–March.......................................................................................

Price per share (in yen)
High
Low

¥ 9,700
10,33010,625
10,265
9,555
8,704
8,318
9,100

¥8,240
9,061
8,735
9,073
8,201
8,027
7,536
7,610

Nikkei Stock Average (in yen)
High
Low

¥23,178.10
23,559.30
27,568.15
30,467.75
30,089.25
30,670.10
29,794.37
29,332.16¥17,818.72
21,710.00
22,977.13
27,055.94
27,448.01
27,013.25
27,528.87
24,717.53

SECOM Financial Data 2022

37

CONSOLIDATED FINANCIAL DATA(BASED ON JAPANESE GAAP) [REFERENCE]
COMMON STOCK ISSUES

Date

Additional
shares issued(In thousands)

Sharesoutstanding
after issue(In thousands)

Share capital
after issue(In thousandsof yen)Allotment ratio
to shareholders

June 15, 1974
Dec. 21, 1974
May 21, 1975
May 21, 1975
Dec. 1, 1975
May 31, 1976
June 1, 1976
Dec. 1, 1976
Nov. 30, 1977
Dec. 1, 1977
Dec. 1, 1978
June 1, 1981
Dec. 1, 1981
Jan. 20, 1983
Nov. 30, 1983
Nov. 30, 1984
Nov. 30, 1985
Jan. 20, 1986
Nov. 30, 1986
Nov. 30, 1987
Jan. 20, 1988
Nov. 30, 1988
Nov. 30, 1989
Jan. 19, 1990
Mar. 31, 1990
Mar. 31, 1991
Mar. 31, 1992
Mar. 31, 1993
Mar. 31, 1994
Mar. 31, 1995
Mar. 31, 1996
Mar. 31, 1997
Mar. 31, 1998
Mar. 31, 1999
Nov. 19, 1999
Mar. 31, 2000
Mar. 31, 2001
Mar. 31, 2002
Mar. 31, 2003
Mar. 31, 2005
July 27, 2017
July 26, 2018
July 26, 2019
July 22, 2020
July 21, 2021
July 27, 2022

1,968
2,760
1,196
1,244
4,320
1,880
2,060
6,798
2,042
6,300
7,560
3,000
4,836
5,320
194
1,418
186
6,031
2,878
1,609
3,541
439
1,808
22,986
1,446
2,949
2,035
267
6,986
477
613
1,825
29
159
116,410
273
25
175
6
8
1
2
2
2
2
2

9,200
11,96013,156
14,40018,72020,60022,66029,45831,50037,80045,36048,36053,19658,51658,71060,12860,314
66,34569,22370,832
74,37374,812
76,62099,606
101,052
104,001
106,036
106,303113,289
113,766
114,379
116,204
116,233
116,392
232,802
233,075
233,100
233,275
233,281
233,289
233,290
233,292
233,294
233,296
233,298
233,300¥   460,000
598,000
657,800
720,000
936,000
1,030,000
1,133,000
1,472,900
1,575,000
1,890,000
2,268,000
2,418,000
2,659,800
3,000,000
3,280,942
5,329,282
5,602,945
5,602,945
11,269,932
15,021,200
15,021,200
16,063,099
21,573,139
21,573,139
25,070,104
32,244,732
37,338,751
37,991,568
56,756,263
58,214,178
59,865,105
65,253,137
65,327,060
65,709,927
65,709,927
66,096,852
66,126,854
66,360,338
66,368,827
66,377,829
66,385,263
66,392,692
66,401,083
66,410,237
66,419,390
66,427,074—
3 for 10
1 for 10—
3 for 10—
1 for 10
3 for 10—
2 for 10
2 for 10—
1 for 10
1 for 10———
1 for 10——
0.5 for 10——
3 for 10
—
—
—
—
—
—
—
—
—
—
10 for 10*
—
—
—
—
—
—
—
—
—
—
—

Remarks

Issue at market price (¥900)
Stock split
Stock split
Issue at market price (¥1,134)
Stock split
Issue at market price (¥2,570)
Stock split
Stock split
Issue at market price (¥1,700)
Stock split
Stock split
Issue at market price (¥2,230)
Stock split
Stock split
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Stock split
Conversion of convertible bonds
Conversion of convertible bonds
Stock split
Conversion of convertible bonds
Conversion of convertible bonds
Stock split
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Stock split
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Conversion of convertible bonds
Issue of new shares as restricted stock compensation
Issue of new shares as restricted stock compensation
Issue of new shares as restricted stock compensation
Issue of new shares as restricted stock compensation
Issue of new shares as restricted stock compensation
Issue of new shares as restricted stock compensation

Note: The above is a record of SECOM’s common stock issues since the common stock was listed on the Tokyo Stock Exchange in June 1974.
*One share was split into two.

Contents
Condensed Consolidated Balance Sheets(Based on Japanese GAAP)................................................................ 40
Condensed Consolidated Statements of Income(Based on Japanese GAAP)................................................................ 42
Consolidated Statements of Comprehensive Income(Based on Japanese GAAP)................................................................ 42

38

SECOM Financial Data 2022

SECOM Financial Data 2022

39

Condensed Consolidated Balance Sheets (Based on Japanese GAAP)SECOM CO., LTD. and Subsidiaries
As of March 31
In millions of yen

ASSETS

2022

2021

2020

2019

2018

2017

Current assets:
Cash on hand and in banks................................................................. ¥   522,363 ¥  499,247 ¥  414,199 ¥  350,319 ¥  317,267 ¥ 302,364
Cash deposits for armored car services.........................................
136,477
138,889
140,905
142,335
135,808
130,619
Notes and accounts receivable, trade..............................................
—
132,886
141,609
133,659
129,984
119,801
Notes and accounts receivable–trade and contract assets......
149,878—————
Due from subscribers...........................................................................
39,46839,98040,74541,61635,27233,090
Short-term investments......................................................................
27,02021,57932,442
25,382
17,36029,387
Lease receivables and investments in leased assets.................
37,51841,511
42,76841,82645,544
43,974Merchandise and products..................................................................
14,724
14,28913,862
14,146
12,321
11,915
Real estate inventories.........................................................................
2,593
186
4,930
5,864
4,766
5,223
Work in process......................................................................................
5,629
4,880
5,237
5,872
5,057
4,913
Costs on uncompleted construction contracts.............................
—
7,524
10,78010,971
10,441
8,979
Work in process for real estate inventories...................................
——
21,80630,74339,68822,283
Raw materials and supplies...............................................................
13,93011,003
10,927
10,398
8,849
8,385
Deferred income taxes.........................................................................
—
—
—
—
—
14,003
Short-term loans receivable...............................................................
2,563
3,053
4,525
4,398
5,196
4,942
Other..........................................................................................................
36,06428,714
31,40031,00026,352
23,684
Allowance for doubtful accounts.......................................................
(2,031)(1,715)(1,677)(1,775)(1,818)(1,766)				 Total current assets................................................................
986,202
942,033
914,465
846,759
792,094
761,804

Fixed assets:
Tangible assets:
		 Buildings and improvements, net................................................
		 Security equipment and control stations, net..........................
		 Land......................................................................................................
		 Other, net.............................................................................................
				 Total tangible assets...............................................................

151,80973,911122,050
42,695
390,467

152,770
74,704
120,876
43,424
391,775

153,30774,309117,720
40,970386,308

148,693
71,715
116,876
41,115
378,401

148,62270,872
114,287
39,907
373,689

150,254
69,569116,825
39,886
376,536

Intangible assets....................................................................................

115,228

120,277

124,767

128,215

131,028

112,131

Investments and others:
		 Investment securities......................................................................
276,230
272,123
252,299
269,575
280,659
280,974
		 Long-term loans receivable...........................................................
29,49433,30134,35135,28435,28438,403
		 Net defined benefit asset................................................................
47,85239,532
31,78938,48841,40935,282
		 Deferred income taxes....................................................................
27,40725,08531,554
27,46921,6589,592
		 Other.....................................................................................................
47,06853,58852,232
53,952
52,33251,436
		 Allowance for doubtful accounts..................................................
(12,195)(13,538)(12,647)(13,042)(13,033)(15,990)				 Total investments and others..............................................
415,858
410,093
389,580
411,728
418,311399,698				 Total fixed assets.....................................................................
921,553
922,145
900,656
918,346
923,029
888,367
Deferred assets..........................................................................................
—
—
—
—
—
4
				Total assets............................................................................... ¥1,907,755 ¥1,864,179 ¥1,815,121 ¥1,765,105 ¥1,715,123 ¥1,650,176

40

SECOM Financial Data 2022

In millions of yen

LIABILITIES

2022

2021

2020

2019

2018

Current liabilities:
Notes and accounts payable, trade.................................................. ¥   44,271
Bank loans...............................................................................................
32,159Current portion of straight bonds.....................................................
409
Lease obligations...................................................................................
4,843
Payables—other.....................................................................................
43,257
Accrued income taxes..........................................................................
25,043
Accrued consumption taxes...............................................................
8,966
Accrued expenses.................................................................................
8,436
Deposits received for armored car services.................................
118,971
Deferred revenue...................................................................................
38,228
Accrued bonuses...................................................................................
17,960
Provision for losses on construction contracts............................
2,159
Other..........................................................................................................
17,041
				Total current liabilities...........................................................
361,750¥   42,858
33,806439
4,730
42,21523,44012,652
7,828
119,334
30,192
18,2981,820
23,488361,106¥   47,409
38,3642,916
4,702
42,927
24,74011,666
7,294
118,30231,224
18,213
2,391
24,129374,284¥   45,826
39,126
2,009
4,875
42,64522,7677,209
7,329
121,086
30,43817,255
2,913
25,975369,458¥   43,929
41,558795
4,932
40,10225,896
7,959
7,084
113,830
30,30916,2092,436
22,499357,5443,489
11,65015,077
23,6696,859

3,899
10,444
12,85430,694
7,314

4,143
8,674
11,86532,632
7,866

4,702
10,063
11,96032,9558,735

5,322
12,721
11,902
33,181
14,217

7,003
14,123
11,77733,907
21,943842
21,896
16,545793
22,098—794
23,710—

1,046
22,953—

1,421
21,849—1,306
22,428—

185,698
4,240
289,969
651,719

181,0144,134
273,248634,355

174,602
4,052
268,343642,627

172,866
4,406
269,691
639,150

172,345
3,403
276,366
633,910

166,155
4,342
282,989
636,922Long-term liabilities:
Straight bonds........................................................................................
Long-term loans....................................................................................
Lease obligations...................................................................................
Guarantee deposits received..............................................................
Deferred income taxes.........................................................................
Accrued retirement benefits for directors andaudit and supervisory board members........................................
Net defined benefit liability.................................................................
Long-term deferred revenue..............................................................
Investment deposits by policyholders, unearned
premiums and other insurance liabilities....................................
Other..........................................................................................................
				Total long-term liabilities......................................................
				Total liabilities...........................................................................

2017

¥

44,63544,9691,460
4,752
37,46927,557
5,765
5,315
107,878
30,552
15,447
2,532
25,596353,933

NET ASSETS
Shareholders’ equity:
Common stock........................................................................................ ¥   66,419 ¥   66,410 ¥   66,401 ¥   66,392 ¥   66,385 ¥ 66,377
Capital surplus........................................................................................
70,33581,80181,87480,36080,32880,297Retained earnings................................................................................. 1,043,766
998,405
960,828
908,852
851,764
797,493
Common stock in treasury, at cost...................................................
(79,436)(73,785)(73,775)(73,759)(73,748)(73,731)
				Total shareholders’ equity.................................................... 1,101,084
1,072,832
1,035,328
981,846924,729
870,437
Accumulated other comprehensive income:Unrealized gains on securities..........................................................
Deferred losses on hedges.................................................................
Foreign currency translation adjustments....................................
Remeasurements of defined benefit plans, net of taxes...........
				 Total accumulated other comprehensive income.........

20,220(6)(5,627)
6,865
21,451

22,122(11)(17,011)
4,247
9,346

12,095(15)(13,388)
1,096
(212)

18,157(21)(10,683)
6,421
13,87323,759(24)(5,774)
9,933
27,89425,125(30)(7,954)
4,423
21,563

Noncontrolling interests.........................................................................

133,499

147,645

137,378

130,234

128,589

121,253

				Total net assets........................................................................ 1,256,036
				Total liabilities and net assets........................................... ¥1,907,755

1,229,824¥1,864,179

1,172,494¥1,815,121

1,125,954¥1,765,105

1,081,213¥1,715,123

1,013,253¥1,650,176

SECOM Financial Data 2022

41

NONCONSOLIDATED FINANCIAL DATA

Condensed Consolidated Statements of Income (Based on Japanese GAAP)(BASED ON JAPANESE GAAP) [REFERENCE]SECOM CO., LTD. and Subsidiaries
Years ended March 31
In millions of yen
2022

2021

2020

2019

Revenue¥1,049,859¥1,035,898¥1,060,070¥1,013,823
		 Percentage change from prior year......................................
1.3%(2.3)%
4.6%
4.5%

2018

2017

¥970,624
4.6%¥928,098
5.3%

Costs of revenue................................................................................
		 As a percentage of revenue....................................................

712,18767.8

705,32668.1

722,54668.2

692,21168.3

652,67367.2

621,41267.0

Gross profit..........................................................................................
		 As a percentage of revenue....................................................

337,67232.2

330,57131.9

337,52331.8

321,61131.7

317,95032.8

306,686
33.0

Selling, general and administrative expenses..........................
		 As a percentage of revenue....................................................

194,173
18.5

193,64518.7

194,66418.4

191,39718.9

182,50218.8

175,636
18.9

Operating profit..................................................................................
		 As a percentage of revenue....................................................

143,499
13.7

136,925
13.2

142,85813.5

130,21312.8

135,44814.0

131,050
14.1

Non-operating income.....................................................................
Non-operating expenses.................................................................

14,977
5,290

11,554
9,489

13,778
5,281

19,646
4,970

13,152
4,281

22,371
6,388

Ordinary profit....................................................................................
		 As a percentage of revenue....................................................

153,186
14.6

138,990
13.4

151,356
14.3

144,889
14.3

144,31814.9

147,033
15.8

Extraordinary profit...........................................................................
Extraordinary losses.........................................................................

1,033
2,206

352
10,499

3,471
6,971

1,909
2,838

2,471
2,545

516
5,697

Income before income taxes..........................................................
		 As a percentage of revenue....................................................

152,01314.5

128,843
12.4

147,855
13.9

143,960
14.2

144,24514.9

141,852
15.3

Income taxes—current.....................................................................
Income taxes—deferred..................................................................

45,045
1,223

43,023(68)

45,488128

47,001(7,808)54,811(9,314)43,3262,369

Net income..........................................................................................

105,744

85,888102,238

104,766

98,74896,156

Net income attributable to noncontrolling interests...............

11,470

11,207

13,15812,757

11,755

11,986

Net income attributable to owners of the parent....................
		 As a percentage of revenue....................................................
		 Percentage change from prior year......................................

94,2739.0
26.2

74,681
7.2(16.2)

89,080
8.4(3.2)

92,0099.1
5.8

86,9939.0
3.4

84,170
9.1
9.3

Consolidated Statements of Comprehensive Income (Based on Japanese GAAP)SECOM CO., LTD. and Subsidiaries
Years ended March 31

42

In millions of yen
2022

2021

2020

2019

2018

2017

Net income..........................................................................................
Other comprehensive income (losses):
Unrealized gains (losses) on securities.................................
Deferred gains (losses) on hedges..........................................
Foreign currency translation adjustments...........................
Remeasurements of defined benefit plans...........................
Share of other comprehensive income (losses) ofaffiliated companies accounted for underthe equity method......................................................................

¥105,744¥85,888¥102,238¥104,766¥ 98,748¥ 96,156(1,835)
—
9,484
2,491

10,451—(4,485)
3,715(6,288)—(1,236)(5,695)(5,740)(0)(2,616)(3,056)(1,649)0(1,003)
5,595

5,324
—
(3,539)
4,698

2,539

525

(1,468)(3,439)3,876(1,327)

		 Total other comprehensive income (losses)....................

12,67910,206(14,688)(14,853)

6,819

5,155

Comprehensive income...................................................................

118,423

96,09587,55089,913

105,568

101,312Comprehensive income attributable to:
Owners of the parent company................................................
Noncontrolling interests.............................................................

106,378
12,04484,24011,85474,994
12,55577,988
11,924

93,323
12,24488,78912,522

SECOM Financial Data 2022

Contents
Condensed Nonconsolidated Balance Sheets(Based on Japanese GAAP)................................................................ 44
Condensed Nonconsolidated Statements of Income(Based on Japanese GAAP)................................................................ 46

SECOM Financial Data 2022

43

Condensed Nonconsolidated Balance Sheets (Based on Japanese GAAP)SECOM CO., LTD.
As of March 31
In millions of yen

ASSETS

2021

2020

2019

2018

2017

Current assets:
Cash on hand and in banks.........................................................
Cash deposits for armored car services.................................
Notes receivable.............................................................................
Due from subscribers...................................................................
Accounts receivable, trade..........................................................
Accounts receivable–trade and contract assets..................
Receivables—other........................................................................
Short-term investments..............................................................
Merchandise....................................................................................
Supplies............................................................................................
Prepaid expenses..........................................................................
Deferred income taxes.................................................................
Short-term loans receivable......................................................
Other..................................................................................................
Allowance for doubtful accounts..............................................
				Total current assets........................................................

¥227,828
33,777363
17,890
—
9,777
4,375
—
7,328
2,507
8,674
—
14,4207,887(41)334,790¥224,817
37,273360
18,046
10,802
—
4,249
—
7,300
2,356
2,483
—
22,1238,568(70)
338,310¥164,370
36,730586
18,241
12,280
—
4,353
1,499
7,144
2,111
2,432
—
42,4739,208(89)
301,340¥120,815
39,504723
17,931
11,516
—
4,714
—
7,047
1,686
2,599
—
35,2504,530(101)
246,218¥ 85,009
38,347523
17,286
10,995
—
4,387
—
5,628
1,767
2,556
—
28,0171,712(105)
196,128¥ 87,387
37,869621
16,48010,650
—
3,088
—
5,312
1,722
2,323
3,710
27,5391,804(117)
198,394

Fixed assets:
Tangible assets:
		 Buildings and improvements, net........................................
		Automobiles, net........................................................................
		 Security equipment and control stations, net..................
		 Machinery and equipment, net.............................................
		 Tools, furniture and fixtures, net..........................................
		Land..............................................................................................
		 Construction in progress........................................................
		Other, net.....................................................................................
				Total tangible assets.......................................................

16,534588
68,972
90
4,071
22,2303,542
1,521
117,553

16,283557
71,042
105
3,812
22,2494,457
1,623
120,132

17,427492
71,533
114
4,193
22,281
3,433
1,725
121,203

16,263
501
69,049143
3,566
21,952
4,721
1,827
118,025

16,160611
67,746
162
2,861
22,077
4,812
72
114,504

16,282709
65,997
179
3,173
21,9782,195
69
110,585

Intangible assets:
		Software......................................................................................
		Other.............................................................................................
				Total intangible assets...................................................
Investments and others:
		Investment securities..............................................................
		 Investment securities in subsidiaries and		 affiliated companies..............................................................
		 Investments in subsidiaries and		 affiliated companies..............................................................
		 Long-term loans receivable...................................................
		Lease deposits...........................................................................
		 Long-term prepaid expenses................................................
		 Prepaid pension and severance costs................................
		 Deferred income taxes............................................................
		Insurance funds.........................................................................
		Other.............................................................................................
		 Allowance for doubtful accounts..........................................
				Total investments and others......................................
				Total fixed assets.............................................................
				Total assets.......................................................................

44

2022

SECOM Financial Data 2022

7,137
3,655
10,792

7,826
3,516
11,343

8,181
1,602
9,783

8,560
920
9,480

5,903
741
6,644

6,125
400
6,526

23,04722,215

17,74921,982

24,58323,083393,659356,243

353,592

353,375

350,551

323,9932,179
51,307
7,565
11,721
29,605
5,548
4,370
2,234
(874)
530,365
658,710¥993,501

2,179
57,331
7,650
20,10425,825
4,408
4,268
2,307
(827)
501,706
633,182¥971,493

2,179
81,174
7,564
20,876
22,614
5,306
4,227
2,408
(2,826)514,866
645,853¥947,194

2,149
113,221
7,578
20,461
21,410
5,442
4,109
2,458
(4,442)547,748675,254¥921,472

2,098
138,277
7,650
20,622
20,763
—
4,046
2,613
(4,440)566,767
687,917¥884,045

2,098
134,796
7,559
20,847
21,643
—
4,294
2,560
(5,532)535,344
652,456¥850,851

In millions of yen

LIABILITIES

2022

2021

2020

2019

2018

2017

Current liabilities:
Accounts payable...........................................................................
Bank loans.......................................................................................
Lease obligations...........................................................................
Payables—other.............................................................................
Payables—construction...............................................................
Accrued income taxes..................................................................
Accrued consumption taxes.......................................................
Accrued expenses.........................................................................
Deposits received for armored car services.........................
Deferred revenue...........................................................................
Accrued bonuses...........................................................................
Other..................................................................................................
				Total current liabilities...................................................

¥  3,676
17,467275
16,445
3,530
11,1893,489
779
16,31322,9636,432
3,932
106,496¥  4,505
19,516263
17,297
4,348
10,594
5,131
675
17,78819,8086,718
4,603
111,252¥  4,125
22,565271
17,381
4,127
11,8485,106739
14,192
20,147
6,849
4,902
112,258¥  3,820
21,211309
19,7695,437
11,2103,221
747
18,34819,9496,488
2,590
113,104¥  4,108
21,940229
16,708
3,897
13,162
3,817
691
16,446
20,3006,300
2,623
110,226¥  3,604
22,703215
14,476
4,018
14,3452,883
697
15,187
20,6296,278
4,014
109,053

Long-term liabilities:
Lease obligations...........................................................................
Guarantee deposits received......................................................
Deferred income taxes.................................................................
Long-term deferred revenue......................................................
Accrued pension and severance costs....................................
Other..................................................................................................
				Total long-term liabilities..............................................
				Total liabilities.................................................................

3,691
15,975
—
6,059
1,037
291
27,054
133,551

3,807
16,167
—
—
1,389
313
21,678132,931

3,867
16,347
—
—
1,517
326
22,058134,316

3,971
16,462
—
—
1,788
343
22,566135,670

2,358
16,640
3,575
—
2,164
91
24,830135,057

2,477
16,804
6,642
—
2,506
103
28,533
137,587¥ 66,419¥ 66,410¥ 66,401¥ 66,392¥ 66,385¥ 66,377

83,095
3,432
86,52883,086
0
83,087

83,077
083,07883,0690
83,06983,061
0
83,062

83,0540
83,054

9,028

9,028

9,028

9,028

9,028

9,028

800
2,212
768,348780,388(79,436)
853,900

800
2,212
744,495
756,535(73,785)
832,248800
2,212
721,639
733,679(73,775)
809,383

800
2,212
692,935
704,976(73,759)
780,679800
2,212
653,840
665,881(73,748)
741,579

800
2,212
618,887
630,927(73,731)706,629

6,049

6,313

3,494

5,122

7,408

6,634

6,049
859,950¥993,501

6,313
838,562¥971,493

3,494
812,878¥947,1945,122
785,801¥921,472

7,408
748,988¥884,045

6,634
713,263¥850,851

NET ASSETS
Shareholders’ equity:
Common stock................................................................................
Capital surplus:
		 Additional paid-in capital........................................................
		 Other capital surplus...............................................................
				Total capital surplus.......................................................
Retained earnings:
		Legal reserve..............................................................................
		 Other retained earnings:
			 Reserve for system developments.................................
			General reserve....................................................................
			 Accumulated earnings carried forward........................
				Total retained earnings..................................................
Common stock in treasury, at cost...........................................
				Total shareholders’ equity...........................................
Valuation, translation adjustments and others:
Unrealized gains on securities..................................................
				Total valuation, translation adjustments				 and others.......................................................................
				Total net assets...............................................................
				Total liabilities and net assets...................................

SECOM Financial Data 2022

45

Condensed Nonconsolidated Statements of Income (Based on Japanese GAAP)SECOM CO., LTD.
Years ended March 31
In millions of yen
2022

46

2021

2020

2019

2018

2017

Revenue..............................................................................................
		Percentage change from prior year....................................

¥395,181
0.2%¥394,389¥398,929(1.1)%
1.2%¥394,181
1.6%¥387,881
1.4%¥382,476
1.7%

Costs....................................................................................................
		As a percentage of revenue..................................................

234,703
59.4

235,165
59.6

236,39759.3

234,04659.4

229,33259.1

227,204
59.4

Gross profit........................................................................................
		As a percentage of revenue..................................................

160,47840.6

159,22440.4

162,53140.7

160,13440.6

158,54940.9

155,271
40.6

Selling, general and administrative expenses........................
		As a percentage of revenue..................................................

81,775
20.7

83,68221.2

85,654
21.5

83,30121.1

80,38020.7

78,988
20.7

Operating profit................................................................................
		As a percentage of revenue..................................................

78,70319.9

75,541
19.2

76,87719.3

76,833
19.5

78,16820.2

76,28319.9

Non-operating income...................................................................
Non-operating expenses...............................................................

18,872
2,480

16,174
2,414

16,9503,289

15,006
2,866

14,9782,064

13,3893,130

Ordinary profit..................................................................................
		As a percentage of revenue..................................................

95,09424.1

89,301
22.6

90,53822.7

88,972
22.6

91,083
23.5

86,54322.6

Extraordinary profit.........................................................................
Extraordinary losses.......................................................................

548
1,621

226
8,992

1,651
2,092

87
203

1,896
324

651
100

Income before income taxes........................................................
		As a percentage of revenue..................................................

94,021
23.8

80,53420.4

90,09722.6

88,85522.5

92,65523.9

87,094
22.8

Income taxes.....................................................................................
		Effective tax rate......................................................................

24,135
25.7

20,57425.5

24,28927.0

14,838
16.7

24,962
26.9

23,83327.4

Net income........................................................................................
		As a percentage of revenue..................................................
		Percentage change from prior year....................................

69,885
17.7
16.6

59,96015.2(8.9)

65,80816.5(11.1)

74,01618.8
9.3

67,69217.5
7.0

63,260
16.5
8.2

SECOM Financial Data 2022