REVIEW OF OPERATIONS

Percentage of Revenue and Other Income*Security Services

Medical Services

68.3%

3.8%

Insurance Services

5.6%*Excluding intersegment transactions

CONTENTSSECURITY SERVICES ......................................................17
MEDICAL SERVICES .......................................................18
INSURANCE SERVICES ...................................................18
INFORMATION AND COMMUNICATION RELATEDAND OTHER SERVICES..................................................19
OVERSEAS OPERATIONS ...............................................20

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Information and Communication
Related and Other Services

21.7%

Commercial and Home Security Service
Subscribers by Category
At March 31, 2003

Service industries
Retailing/wholesaling
Financial services
Manufacturing
Government agencies
OthersHouseholds

CommercialSecurity Services

13.0%
10.1%
8.8%
8.5%
7.0%
19.7%
32.9%

and development and the manufacture of equipment toplanning, installation, 24-hour monitoring, emergency
response and maintenance.
For commercial customers, we continued toactively market SECOM AX and SECOM IX, on-line centralized systems that employ advanced image monitoring. Newly launched products included SECOM DX, acentralized security system featuring IC stick-type keys,
and ATM Building Security System, Japan’s first systemthat provides protection against ATM robberies involving
the destruction of ATM booths.
Our centralized home security systems link subscribers’ homes with our control centers to monitor for
intruders, fires, gas leaks and emergency calls. In theevent of a problem, control center staff dispatch emergency response personnel and, if necessary, contact thepolice, fire department or other appropriate authorities.
Contracts for these systems rose steadily during theperiod under review.
Large-scale proprietary systems combine on-site
patrols with security and equipment management

Electronic Security Services
In the fiscal year ended March 31, 2003, revenue in theelectronic security services category, which comprises
the provision of commercial and home security and largescale proprietary systems, rose 4.2%, to ¥258.4 billion,
and accounted for 49.6% of consolidated revenue andother income, compared with 50.2% in the previousperiod.
On-line centralized commercial security systems
form the core of this category. These services use
SECOM sensors, which are located on subscribers’premises and linked via telecommunications circuits toour control centers, to facilitate remote monitoring.
Control center staff are prepared to respond promptly toalarms by dispatching emergency response personnel
and, if necessary, alerting the police or fire department.
Our success in this field is underpinned by our commitment to quality, which we have realized by maintaining
control over every aspect of our services, from research

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REVIEW OF OPERATIONS

Medical Services

systems. One of our best-known offerings in this area is
SECOM TOTAX ZETA, a comprehensive system forindustrial facilities and commercial buildings.

Revenue and other income in the medical services segment totaled ¥20.0 billion, up 47.7% from the previousperiod, and amounted to 3.8% of consolidated revenue
and other income, up from 2.7% in the previous period.
This segment centers on home medical care-related
services, namely home nursing, personal care and pharmaceutical dispensing and home delivery services;
remote image diagnosis support; medical informationsystems; medical equipment sales; management ofsenior citizens’ residences; and leasing of real estate for
medical institutions. These services are administered bysubsidiary Secom Medical System, established tointegrate our medical, health and personal care services.
Our home nursing services have earned a solid reputation among patients and medical professionals alike.
We have steadily expanded our network of visiting nurse
stations and currently operate more than 30 of these facilities, allowing us to provide services to an increasing number of patients. Hospinet, which is marketed to medical
institutions, transmits MRI and CT images via integrated
services digital network (ISDN) to the Hospinet Center forexamination by our highly experienced diagnostic experts,
who then provide consultation to the patient’s primary
physician. SECOM Ubiquitous EMR supports a teamapproach to home medical care—in which physicians,
nurses, pharmacists and medical care providers work
together to ensure effective treatment—by facilitating
access to medical reports by authorized personnel overthe Internet.
The medical services segment also encompasses
subsidiary Mac Corporation. Mac’s operations center on
the sale of medical equipment and instruments.

Other Security Services
This category comprises static guard services, which
depend on the judgment and practical abilities of extensively trained, professional security guards, and armoredcar services, which require highly skilled drivers and special vehicles to safely transport cash and valuables. In theperiod under review, this category generated revenue of¥53.2 billion, an increase of 4.0%, and accounted for
10.2% of consolidated revenue and other income,compared with 10.4% in the previous period.
Merchandise and Other
We offer a variety of security-related products, including
CCTV monitoring, access-control, fire detection and extinguishing, and external and internal monitoring systems;
and services, such as COCO-SECOM mobile security services. Revenue in this category rose 2.3%, to ¥44.1 billion, and represented 8.5% of consolidated revenue andother income, compared with 8.7% in the previous period.
In the period under review, we responded to theincreasingly diverse security needs of customers with anumber of new merchandise offerings. These included
D-CCTV, a fully digital surveillance camera system thatenables images to be monitored and recorded withoutdeterioration. In the area of access-control systems, we
commenced sales of an updated version of SESAMO
IDs, our fingerprint identification-based system, withimproved precision and processing efficiency. We also
augmented our lineup of PYTHAGORAS proprietary
security vaults with models offering greater protection
against theft.
We also expanded our COCO-SECOM menu of services, which provide security for people and property on
the move. New products include COCO-SECOM
G-Manager, which provides track-and-locate services forgroups of individuals or objects; COCO-SECOM with
Emergency Call; and a COCO-SECOM service developed
especially for construction equipment.

Insurance Services
The insurance services segment recorded revenue andother income of ¥29.1 billion, an increase of 1.3%, andaccounted for 5.6% of consolidated revenue and otherincome, compared with 5.8% in the preceding year.

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In the period under review, subsidiary Secom General
Insurance continued to draw on synergies with other
SECOM Group companies to offer an extensive range ofattractive products. These include policies that capitalize on
our capabilities as a security services provider. Particularly
notable offerings are Security Discount Fire Policy, a policy
for subscribers to on-line security services, and SECOMAnshin My Home, a comprehensive fire insurance policy primarily for home security system subscribers. Bothof these policies offer reduced premiums, recognizing
the security system as a risk-lowering factor. We alsooffer New SECOM Anshin My Car, an automobile insurance policy that provides round-the-clock on-site emergency services, and MEDCOM, an unrestricted cancer
treatment policy that combines insurance services withmedical expertise and gives patients access to cuttingedge treatments not covered by Japan’s national healthinsurance scheme.

Service and SECOM Intrusion Detection Service, bothof which feature round-the-clock monitoring and reporting to ensure a high level of security and stability. Inaddition to cyber security services, Secom Trust.net
offers network services and the Secure Data Center,
which combines physical and cyber security to provide
comprehensive services.
Capitalizing on Group expertise in physical andcyber security, in the period under review we introduced
SECOM Data Safe, Japan’s first commercial data repository. We also began providing cyber security services
to the Miyazaki prefectural government to ensure thesecurity of Miyazaki’s e-government program.
GIS Services
Pasco, a leading purveyor of GIS and aerial mapping services in Japan, continued to cultivate new technologies andservices in response to the needs of its customers, thereby
cultivating new markets for its GIS and mapping services.
In the area of GIS services, Pasco offers PasCAL—acomprehensive GIS service integrating various types ofdata with digital maps—to government ministries andagencies in line with the Japanese government’s“e-Japan Priority Policy Program.” The company also offers
Wagamachi Guide, an interactive site for local governmentsthat enables residents to access various information using
a map interface. For private-sector customers, Pasco continued to reinforce its Management-Navigation series ofinnovative GIS solutions, which includes ManagementNavigation Light, an area marketing support service, andManagement-Navigation CRM, a customer relationshipmanagement support system.
Pasco’s mapping services include surveying, which
capitalizes on its aerial photography capabilities andremote sensing technologies, and three-dimensionallaser measurement, used in urban planning and public
facility management.

Information and Communication
Related and Other Services
Revenue and other income in this segment rose 9.4%, to¥113.0 billion, equivalent to 21.7% of consolidated revenue
and other income, up from 20.9% in the previous period.
Information Services
Subsidiary Secom Information System Co., Ltd., offers abroad range of services to external customers, including
the planning, development, operation and maintenanceof corporate networks. The company also plans, builds
and operates the SECOM Group’s information networks
and intranet.
Secom Trust.net Co., Ltd., specializes in cybersecurity, providing digital authentication, network security monitoring and other related services. The company’s digital authentication services include issuing
digital authentication certificates and setting up and operating systems for organizations wishing to establish theirown digital certificate authority. Network security monitoring services focus on SECOM Virus Monitoring

Education Services
Secom Lines, a pioneer in the field of computer-aided
learning in Japan, continued to focus on the development
and provision of local area network (LAN)-based learning

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REVIEW OF OPERATIONS

Overseas Operations

systems, Internet-based educational software and on-line
educational software utilities.

In response to the increasingly diverse and sophisticatedsecurity needs of customers worldwide, we are expanding
our operations in overseas markets. One distinguishing
characteristic of our approach overseas is that we takeknow-how and security systems developed in our homemarket and blend them with local customs and conditions to create value-added, customized solutions. This
has enabled the SECOM Group to gain local acceptanceand create a security service network that transcends
differences in customs and cultures.
At present, we have operations in 10 countries andterritories. In the belief that the desire for security is universal, we launched our first overseas operation in
Taiwan in 1978. This was followed in succession by operations in the Republic of Korea and the United States in1981. Since then, we have set up operations in Europe,in the United Kingdom; in Oceania, in Australia; and elsewhere in Asia, in Thailand, Malaysia, Singapore,Indonesia and the PRC.

Real Estate Sales
In line with its goal of providing safe and comfortable
homes, subsidiary Secom Home Life develops and markets condominiums that incorporate other value-added
SECOM Group services, including security services,
home medical care, home personal care, information
services and insurance coverage.
Real Estate Leasing
SECOM provides real estate leasing services through its
subsidiary Arai & Co., Ltd., which joined the SECOM
Group in the previous period. Arai continues to maximize
its extensive experience and expertise in property management and draw on the capabilities of other Group
companies to generate new synergies and expand its
operations.

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