綜合警備保障（2331） – ALSOK REPORT 2021(1)

ALSOK REPORT 2021Fiscal Year Ended March 31, 2021SOHGO SECURITY SERVICES CO., LTD.Securities Code: 2331ALSOK CharterManagement PhilosophyBased on two core principles exemplified by “arigato no kokoro” (a feeling of gratefulness and gratitude) and “bushi no seishin” (a samurai spirit), we devote ourselves to protecting the safety and security of our customers and of society as a whole.Management GuidelinesCode of Conduct1. Fundamental SpiritUnder any condition that we face, we work hard to live by a fundamental spirit that reflects our management philosophy—as exemplified by a feeling of gratefulness and gratitude and a samurai spirit based on toughness, fairness, and generosity—to be a highly principled company.2. PriorityOur top priority is to provide products and services of the first rank, while cultivating the highest levels of motivation in our employees and living up to shareholder expectations through attractive profit growth.3. Basic StrategyWhile security services remain at the heart of our business, as our basic strategy, we also seek to offer a diverse range of products and services in new fields to satisfy the needs of the everchanging times.4. Contributing to SocietyAllying ourselves with public bodies charged with protecting public safety and security, we commit ourselves to developing value-adding products and services, thereby always contributing to society.1. We will devote ourselves to serving our customers and society as a whole in a way that reflects a feeling of gratefulness and gratitude.2. We will embody a samurai spirit in everything we do based on toughness, fairness, and generosity, standing firm in the face of adversity and banding together to embrace success.3. We will value autonomy in our actions, empowered by “yachoseishin” (the spirit of a wild bird)—which represents independence, self-respect, perseverance, acuity, and tenacity—and take responsibility for delivering results.4. We will carry out our day-to-day activities based on the principles of sincerity, accuracy, strength, and speed.5. We will know no complacency, always marching forward purposefully while growing and refining our business to continue to provide value to customers and to society as a whole, thereby continuing to be relevant.6. We will pursue perpetual self-improvement and remain highly committed to compliance, thereby attracting and nurturing human resources of the caliber worthy of the industry leader.ALSOK’s Four Principles:Sincerity, Accuracy, Strength, and SpeedThe ideal security company, as envisioned by our founderSincerityThe Sun Symbolizes Sincerity• The lifeforce of a security company• Fulfilling the important mission of protecting clients’lives and propertyAccuracyThe Rod Symbolizes Accuracy• Professional security services must be accurate, and must never be muddledStrengthThe Eagle Symbolizes Strength• Strong-mindedCompany emblemSpeedThe Laurel Leaves Symbolize the Speed of an Olympic Champion• Security services must always be implemented rapidly—This is a core requirement of security01Message from the ChairmanValue That the ALSOK Group Needs to Provide to SocietyFirst of all, my thoughts are with all the victims of the This year, the Olympic and Paralympic Games Tokyo current COVID-19 pandemic and I would like to express 2020 were finally held. Holding true to ALSOK’s founding my sincere sympathies for those who have been infected philosophy, we were able to fulfill our responsibility as a representative of the Olympic and Paralympic Games Tokyo 2020 Security Consortium and make a wholehearted contribution toward ensuring that the Games were held in safety and security for all concerned. Going forward, we will be building on and refining the experience that we have gained through our involvement with the Olympics and Paralympics, and will continue to provide services based on this experience to all our clients.with the disease.ALSOK was founded in 1965, led by the experience of the founder who was a former police bureaucrat and was deeply involved in the operations of the 1964 Tokyo Olympic Games. Our corporate philosophy when the Company was first established emphasized “arigato no kokoro” (a feeling of gratefulness and gratitude) and “bushi no seishin” (a samurai spirit), and this philosophy is the fundamental spirit that underpins our operations, based on which we have done our utmost every day to ensure the safety of our customers and of society as a whole. To this day, the whole ALSOK Group has embraced this spirit as its unwavering origin that should be passed down across generations among all its employees and continues to pursue its ideals.In recent years, the threats facing society have been growing more diverse, as exemplified by, among others, crimes preying on children, senior citizens, etc., cybercrime and information leakage, intensifying natural disasters, and the global spread of infectious diseases and epidemics. As a company responsible for a critical component of social infrastructure supporting the safety of society, we devote ourselves to contributing to the resolution of these social issues through our business and to the sustainable creation of corporate value and further ensuring the safety of people who live in society.Chairman and Representative DirectorChief Executive Officer (CEO)Atsushi MuraiCONTE NTSOverview and Vision0102030709111517192325272931ALSOK Charter/ALSOK’s Four PrinciplesMessage from the ChairmanTalk with the PresidentALSOK’s History of Value CreationFinancial and Non-Financial HighlightsThe ALSOK Group’s Business OperationsList of ALSOK Products and ServicesALSOK’s Value-Creation ModelMedium-Term Management Plan (Grand Design 2025)Providing Products and Services That Help Resolve ALSOK’s StrengthsSocial IssuesALSOK’s R&DQuality Improvement InitiativesHuman Resource Development and Empowerment InitiativesNote: ALSOK was a Tokyo 2020 Official Partner (Security Services and Planning).Sustainability and ESGTo Realize a Sustainable SocietySustainability and CSR ManagementConsideration for the Global EnvironmentCommunity Contribution ActivitiesCorporate GovernanceDirectors, Audit & Supervisory Board Members, and Executive OfficersFinancial InformationFinancial SectionCorporate Information/Stock Information/Editorial Policy3335373941454954ALSOK CharterManagement PhilosophyBased on two core principles exemplified by “arigato no kokoro” (a feeling of gratefulness and gratitude) and “bushi no seishin” (a samurai spirit), we devote ourselves to protecting the safety and security of our customers and of society as a whole.Management GuidelinesCode of Conduct1. Fundamental SpiritUnder any condition that we face, we work hard to live by a fundamental spirit that reflects our management philosophy—as exemplified by a feeling of gratefulness and gratitude and a samurai spirit based on toughness, fairness, and generosity—to be a highly principled company.2. PriorityOur top priority is to provide products and services of the first rank, while cultivating the highest levels of motivation in our employees and living up to shareholder expectations through attractive profit growth.3. Basic StrategyWhile security services remain at the heart of our business, as our basic strategy, we also seek to offer a diverse range of products and services in new fields to satisfy the needs of the everchanging times.4. Contributing to SocietyAllying ourselves with public bodies charged with protecting public safety and security, we commit ourselves to developing value-adding products and services, thereby always contributing to society.1. We will devote ourselves to serving our customers and society as a whole in a way that reflects a feeling of gratefulness and gratitude.2. We will embody a samurai spirit in everything we do based on toughness, fairness, and generosity, standing firm in the face of adversity and banding together to embrace success.3. We will value autonomy in our actions, empowered by “yachoseishin” (the spirit of a wild bird)—which represents independence, self-respect, perseverance, acuity, and tenacity—and take responsibility for delivering results.and speed.4. We will carry out our day-to-day activities based on the principles of sincerity, accuracy, strength, 5. We will know no complacency, always marching forward purposefully while growing and refining our business to continue to provide value to customers and to society as a whole, thereby continuing to be relevant.6. We will pursue perpetual self-improvement and remain highly committed to compliance, thereby attracting and nurturing human resources of the caliber worthy of the industry leader.ALSOK’s Four Principles:Sincerity, Accuracy, Strength, and SpeedThe ideal security company, as envisioned by our founderSincerityThe Sun Symbolizes Sincerity• The lifeforce of a security company• Fulfilling the important mission of protecting clients’lives and propertyAccuracyThe Rod Symbolizes Accuracy• Professional security services must be accurate, and must never be muddledThe Eagle Symbolizes StrengthStrength• Strong-mindedCompany emblemSpeedThe Laurel Leaves Symbolize the Speed of an Olympic Champion• Security services must always be implemented rapidly—This is a core requirement of securityMessage from the ChairmanValue That the ALSOK Group Needs to Provide to SocietyThis year, the Olympic and Paralympic Games Tokyo 2020 were finally held. Holding true to ALSOK’s founding philosophy, we were able to fulfill our responsibility as a representative of the Olympic and Paralympic Games Tokyo 2020 Security Consortium and make a wholehearted contribution toward ensuring that the Games were held in safety and security for all concerned. Going forward, we will be building on and refining the experience that we have gained through our involvement with the Olympics and Paralympics, and will continue to provide services based on this experience to all our clients.First of all, my thoughts are with all the victims of the current COVID-19 pandemic and I would like to express my sincere sympathies for those who have been infected with the disease.ALSOK was founded in 1965, led by the experience of the founder who was a former police bureaucrat and was deeply involved in the operations of the 1964 Tokyo Olympic Games. Our corporate philosophy when the Company was first established emphasized “arigato no kokoro” (a feeling of gratefulness and gratitude) and “bushi no seishin” (a samurai spirit), and this philosophy is the fundamental spirit that underpins our operations, based on which we have done our utmost every day to ensure the safety of our customers and of society as a whole. To this day, the whole ALSOK Group has embraced this spirit as its unwavering origin that should be passed down across generations among all its employees and continues to pursue its ideals.In recent years, the threats facing society have been growing more diverse, as exemplified by, among others, crimes preying on children, senior citizens, etc., cybercrime and information leakage, intensifying natural disasters, and the global spread of infectious diseases and epidemics. As a company responsible for a critical component of social infrastructure supporting the safety of society, we devote ourselves to contributing to the resolution of these social issues through our business and to the sustainable creation of corporate value and further ensuring the safety of people who live in society.Chairman and Representative DirectorChief Executive Officer (CEO)Atsushi MuraiCON TE NTSOverview and Vision010203ALSOK Charter/ALSOK’s Four PrinciplesMessage from the ChairmanTalk with the PresidentALSOK’s History of Value CreationFinancial and Non-Financial HighlightsThe ALSOK Group’s Business OperationsList of ALSOK Products and ServicesALSOK’s Value-Creation ModelMedium-Term Management Plan (Grand Design 2025)Providing Products and Services That Help Resolve ALSOK’s StrengthsSocial IssuesALSOK’s R&DQuality Improvement InitiativesHuman Resource Development and Empowerment Initiatives0709111517192325272931Note: ALSOK was a Tokyo 2020 Official Partner (Security Services and Planning).Sustainability and ESGTo Realize a Sustainable SocietySustainability and CSR ManagementConsideration for the Global EnvironmentCommunity Contribution ActivitiesCorporate GovernanceDirectors, Audit & Supervisory Board Members, and Executive OfficersFinancial InformationFinancial SectionCorporate Information/Stock Information/Editorial Policy333537394145495402ALSOK REPORT 2021Overview and VisionTalk with the PresidentCROSS TALKPresident and Representative DirectorChief Operating Officer (COO)Professor, University of Niigata PrefectureYukiyasu AoyamaAtsushi NakajimaMaking ALSOK a Company That Will Continue to Be Needed in the FutureIn the fiscal year ending March 31, 2021, there was still no sign of the COVID-19 pandemic ending. With the impact of COVID-19 continuing to drag on, the world’s major economies have begun to adjust their existing COVID-19 containment measures, with the aim of getting economic activity back to normal. Given the easing of restrictions on movement and the shift toward measures intended to build a post-COVID*1 future, what kind of strategy does ALSOK need to follow? As we did last year, we have asked Professor Atsushi Nakajima of the University of Niigata Prefecture to share his views on this topic.Theme 1What kind of strategy will ALSOK need to follow in the “new normal” of coexisting with COVID-19?Professor Nakajima: The COVID-19 pandemic is showing no sign of coming to an end. However, with the emergence of new mutations such as the Delta variant, the world’s major economies have begun to adjust their existing COVID-19 containment measures. With the introduction of “vaccine passports” and measures to make COVID-19 vaccines mandatory for medical professionals, countries are easing the restrictions on movement while still maintaining broadly the same types of pandemic countermeasures as before. The change in course toward trying to balance measures to prevent infections with economic recovery is based on the assumption that, over the long term, COVID-19 is unlikely to be completely eliminated. As a result of this change, Europe and North America are continuing to see an upturn in economic activity. It was against this background that the Olympic and Paralympic Games Tokyo 2020 were held this year. While there were divergent opinions as to whether the games should have gone ahead, one can still take the view that Japan’s success in overcoming all the obstacles and holding the Olympic and Paralympic Games despite COVID-19 was a very impressive feat. The fact that the Games were being held during the middle of the bitter struggle against COVID-19 meant that they had to be held without spectators, and that rigorous PCR checks, etc., had to be applied to all participants; prior to the commencement of the Games there were also concerns that they would exacerbate the spread of COVID-19 within Japan. In the event, I feel that Japan did a very good job of avoiding increased COVID-19 infection risk, and I think that this was attributable in part to ALSOK’s hard work.Aoyama: From a security perspective, the question of how to hold such a big event safely and securely, while also eliminating infection risk, was a major challenge. Not everything went smoothly, but I think that, in the end, it went quite well, including the bubble isolation system*2. Arranging security for a large-scale event such as this requires a very large number of security guards, and so we participated in the formation of the Olympic and Paralympic Games Tokyo 2020 Security Consortium, with ALSOK acting as a co-representative. A total of 553 security firms from all over Japan joined the Consortium, mobilizing a total of approximately 470,000 people, and it was clear that the successful holding of the Games without any serious trouble was due to the shared sense of mission displayed by the security sector as a whole. Going forward, given the need to balance measures to prevent infections with economic recovery, we can assume that restrictions on movement will be eased. *1 Post-COVID: The period in which the transformation of values and modes of behavior resulting from the global COVID-19 pandemic take root in society.*2 Bubble isolation system: An infection prevention method whereby the movement and residence of athletes and other related parties is confined to a specified area, and contact with the outside world is avoided to the maximum possible extent.* ALSOK was a Tokyo 2020 Official Partner (Security Services and Planning).03The experience of organizing security for the Olympic and Paralympic test kits, we have been implementing a wide range of different types Games Tokyo 2020 under the COVID-19 crisis will represent an of support, including providing security services for quarantine important legacy for us, and I think it is extremely crucial to discuss facilities for people with mild COVID-19 symptoms, vaccination how this experience can be utilized for self-protection, both at the centers, etc.corporate level and at the level of individual citizens. Given that the security business and building maintenance Nakajima: The idea of working toward a “post-COVID” world business operate in the physical world, there are inevitably some appeared in Europe and North America earlier than it did in Japan. aspects of them that are difficult to digitalize. Nevertheless, we have While people are already being encouraged to avoid the Three C’s been rolling out the ALSOK Ventilation-Facilitating Solution, which (confined and enclosed spaces, crowded places, and close-contact links the ALSOK-G7 Electronic Security System with environmental settings) and to minimize face-to-face contact with others, in the era of sensors capable of measuring carbon dioxide concentration to notify “living with COVID-19,” I think that there will be a need for discussion users of ventilation status, as well as the ALSOK Congestion Status of further digital countermeasures, and for further progress based on Distribution Service, with which, using security camera images, this discussion.updates on crowding status of stores and facilities (i.e., whether an Aoyama: Now that variant strains of COVID-19 have been confirmed, area is becoming overcrowded) can be easily sent to a facility’s official our company has been exploring, since last year, what can be done website or to digital signage. And we have been promoting the to help revitalize economic activity while coexisting with COVID-19. development of our non-face-to-face sales operations using online During the COVID-19 pandemic, the most important thing we can do business discussions, etc., and the expansion of distance learning to ensure the safety and security of our customers is to prevent them of our employees and the provision of more efficient ways of from being affected by COVID-19, and to this end we have been construction work. Going forward, we will also be working to discussing what kind of assistance we can provide. Actually, besides customize the products and services that we provide.providing COVID-19-related products such as thermal imaging cameras, photocatalytic air purifier and sterilization devices, and PCR Theme 2What is the “creative destruction”*3 that will transform the security business to respond to the “post-COVID” era?Nakajima: Going forward, the shift toward the digital economy and Taking our security services as the core element, this is the time for us the green economy will become even more pronounced.to redefine and adjust the services that we implement, to provide While I get the impression that Japan has been rather slow off the customers with safety and security that go beyond the conventional mark in digitalizing its economy, in Europe and North America digital scope of security services, and aim to bring about a transformation of transformation (DX) is accelerating. For example, the European Union our business.(EU) is implementing GAIA-X,*4 a project to build a common, EU-wide Nakajima: The current pandemic is a natural disaster. While it hasn’t digital economy platform. This project will enable all data to be stored damaged machinery directly, it is a fact that, for us as people who in the same format; the idea is to create a platform that allows big data use machines, the pandemic has caused harm to how we think, how to be used with maximum effectiveness without being dependent we live, and the way in which our society operates. I think that, if we on private companies such as Google. It is no longer a case of can overcome this situation, then that, in and of itself, will lead to competing on individual digital technologies; the building of GAIA-X is creative destruction.a concept that will have a game-changing impact in the era of the When it comes to DX, it is not a matter of competing on individual digital economy.digital technologies or on adoption rates or installation rates; rather, it At the same time, as regards the development of the green is a case of dramatic change brought about by applying newly economy, the world’s leading economies (including Japan) need to generated technologies to needs that have emerged in a completely respond to global warming, which is proceeding faster than originally new area. I get the feeling that this is what is starting to happen now. expected, and the target year for becoming a net zero emissions ALSOK is providing services based on an architectural approach, and country, which was originally set for the second half of the 21st I hope this will rapidly generate major changes.century, has now been moved forward to 2050.Aoyama: There are many aspects of the security business that our Aoyama: In the future, with the trend toward digitalization and going green, new businesses, frameworks, and services will emerge, and the company has been involved in for the past 57 years which now range of areas where we can help to ensure customers’ safety and seem old-fashioned, and we need to transform these areas in a security will expand. As to how the processes of digitalization and revolutionary manner. The keywords for achieving this goal, as I see it, going green will proceed, ultimately, it is the provision of services are digital, safety and security, and going green. With the spread of by people that will help to ensure the safety and security of local teleworking (working from home) and remote working, cybersecurity communities. ALSOK will be supporting these developments in needs have grown, and there is considerable discussion regarding the a variety of different ways.growth of cashless payments and the adoption of digital currencies. The environment in which our company operates is being dramatically transformed. In response to this change, in our individual businesses—including security, facility management, and long-term care—we need to generate new demand from a customer-focused standpoint at the level of the individual customer, and need to offer services that provide safety and security from a new perspective. *3 Creative destruction: A concept advocated by the economist Joseph Schumpeter, whereby new, efficient equipment and methods drive out old, inefficient equipment and methods, replacing them and in doing so stimulating economic growth.* ALSOK was a Tokyo 2020 Official Partner (Security Services and Planning).*4 GAIA-X: An infrastructure concept announced by the German and French governments to support the flow of data while safeguarding security and data sovereignty.Overview and VisionTalk with the PresidentCROSS TALKPresident and Representative DirectorChief Operating Officer (COO)Professor, University of Niigata PrefectureYukiyasu AoyamaAtsushi NakajimaMaking ALSOK a Company That Will Continue to Be Needed in the FutureIn the fiscal year ending March 31, 2021, there was still no sign of the COVID-19 pandemic ending. With the impact of COVID-19 continuing to drag on, the world’s major economies have begun to adjust their existing COVID-19 containment measures, with the aim of getting economic activity back to normal. Given the easing of restrictions on movement and the shift toward measures intended to build a post-COVID*1 future, what kind of strategy does ALSOK need to follow? As we did last year, we have asked Professor Atsushi Nakajima of the University of Niigata Prefecture to share his views on this topic.Theme 1What kind of strategy will ALSOK need to follow in the “new normal” of coexisting with COVID-19?Professor Nakajima: The COVID-19 pandemic is showing no sign of checks, etc., had to be applied to all participants; prior to the coming to an end. However, with the emergence of new mutations commencement of the Games there were also concerns that they such as the Delta variant, the world’s major economies have begun to would exacerbate the spread of COVID-19 within Japan. In the event, I adjust their existing COVID-19 containment measures. With the feel that Japan did a very good job of avoiding increased COVID-19 introduction of “vaccine passports” and measures to make COVID-19 infection risk, and I think that this was attributable in part to ALSOK’s vaccines mandatory for medical professionals, countries are easing hard work.the restrictions on movement while still maintaining broadly the same Aoyama: From a security perspective, the question of how to hold types of pandemic countermeasures as before. The change in course such a big event safely and securely, while also eliminating infection toward trying to balance measures to prevent infections with risk, was a major challenge. Not everything went smoothly, but I think economic recovery is based on the assumption that, over the long that, in the end, it went quite well, including the bubble isolation term, COVID-19 is unlikely to be completely eliminated. As a result of system*2. Arranging security for a large-scale event such as this this change, Europe and North America are continuing to see an requires a very large number of security guards, and so we upturn in economic activity.participated in the formation of the Olympic and Paralympic Games It was against this background that the Olympic and Paralympic Tokyo 2020 Security Consortium, with ALSOK acting as a Games Tokyo 2020 were held this year. While there were divergent co-representative. A total of 553 security firms from all over Japan opinions as to whether the games should have gone ahead, one can joined the Consortium, mobilizing a total of approximately 470,000 still take the view that Japan’s success in overcoming all the obstacles people, and it was clear that the successful holding of the Games and holding the Olympic and Paralympic Games despite COVID-19 without any serious trouble was due to the shared sense of mission was a very impressive feat. The fact that the Games were being held displayed by the security sector as a whole. Going forward, given the during the middle of the bitter struggle against COVID-19 meant that need to balance measures to prevent infections with economic they had to be held without spectators, and that rigorous PCR recovery, we can assume that restrictions on movement will be eased. The experience of organizing security for the Olympic and Paralympic Games Tokyo 2020 under the COVID-19 crisis will represent an important legacy for us, and I think it is extremely crucial to discuss how this experience can be utilized for self-protection, both at the corporate level and at the level of individual citizens.Nakajima: The idea of working toward a “post-COVID” world appeared in Europe and North America earlier than it did in Japan. While people are already being encouraged to avoid the Three C’s (confined and enclosed spaces, crowded places, and close-contact settings) and to minimize face-to-face contact with others, in the era of “living with COVID-19,” I think that there will be a need for discussion of further digital countermeasures, and for further progress based on this discussion.Aoyama: Now that variant strains of COVID-19 have been confirmed, our company has been exploring, since last year, what can be done to help revitalize economic activity while coexisting with COVID-19. During the COVID-19 pandemic, the most important thing we can do to ensure the safety and security of our customers is to prevent them from being affected by COVID-19, and to this end we have been discussing what kind of assistance we can provide. Actually, besides providing COVID-19-related products such as thermal imaging cameras, photocatalytic air purifier and sterilization devices, and PCR test kits, we have been implementing a wide range of different types of support, including providing security services for quarantine facilities for people with mild COVID-19 symptoms, vaccination centers, etc. Given that the security business and building maintenance business operate in the physical world, there are inevitably some aspects of them that are difficult to digitalize. Nevertheless, we have been rolling out the ALSOK Ventilation-Facilitating Solution, which links the ALSOK-G7 Electronic Security System with environmental sensors capable of measuring carbon dioxide concentration to notify users of ventilation status, as well as the ALSOK Congestion Status Distribution Service, with which, using security camera images, updates on crowding status of stores and facilities (i.e., whether an area is becoming overcrowded) can be easily sent to a facility’s official website or to digital signage. And we have been promoting the development of our non-face-to-face sales operations using online business discussions, etc., and the expansion of distance learning of our employees and the provision of more efficient ways of construction work. Going forward, we will also be working to customize the products and services that we provide.Theme 2What is the “creative destruction”*3 that will transform the security business to respond to the “post-COVID” era?Nakajima: Going forward, the shift toward the digital economy and the green economy will become even more pronounced. While I get the impression that Japan has been rather slow off the mark in digitalizing its economy, in Europe and North America digital transformation (DX) is accelerating. For example, the European Union (EU) is implementing GAIA-X,*4 a project to build a common, EU-wide digital economy platform. This project will enable all data to be stored in the same format; the idea is to create a platform that allows big data to be used with maximum effectiveness without being dependent on private companies such as Google. It is no longer a case of competing on individual digital technologies; the building of GAIA-X is a concept that will have a game-changing impact in the era of the digital economy. At the same time, as regards the development of the green economy, the world’s leading economies (including Japan) need to respond to global warming, which is proceeding faster than originally expected, and the target year for becoming a net zero emissions country, which was originally set for the second half of the 21st century, has now been moved forward to 2050.Aoyama: There are many aspects of the security business that our company has been involved in for the past 57 years which now seem old-fashioned, and we need to transform these areas in a revolutionary manner. The keywords for achieving this goal, as I see it, are digital, safety and security, and going green. With the spread of teleworking (working from home) and remote working, cybersecurity needs have grown, and there is considerable discussion regarding the growth of cashless payments and the adoption of digital currencies. The environment in which our company operates is being dramatically transformed. In response to this change, in our individual businesses—including security, facility management, and long-term care—we need to generate new demand from a customer-focused standpoint at the level of the individual customer, and need to offer services that provide safety and security from a new perspective. Taking our security services as the core element, this is the time for us to redefine and adjust the services that we implement, to provide customers with safety and security that go beyond the conventional scope of security services, and aim to bring about a transformation of our business.Nakajima: The current pandemic is a natural disaster. While it hasn’t damaged machinery directly, it is a fact that, for us as people who use machines, the pandemic has caused harm to how we think, how we live, and the way in which our society operates. I think that, if we can overcome this situation, then that, in and of itself, will lead to creative destruction. When it comes to DX, it is not a matter of competing on individual digital technologies or on adoption rates or installation rates; rather, it is a case of dramatic change brought about by applying newly generated technologies to needs that have emerged in a completely new area. I get the feeling that this is what is starting to happen now. ALSOK is providing services based on an architectural approach, and I hope this will rapidly generate major changes.Aoyama: In the future, with the trend toward digitalization and going green, new businesses, frameworks, and services will emerge, and the range of areas where we can help to ensure customers’ safety and security will expand. As to how the processes of digitalization and going green will proceed, ultimately, it is the provision of services by people that will help to ensure the safety and security of local communities. ALSOK will be supporting these developments in a variety of different ways.*1 Post-COVID: The period in which the transformation of values and modes of behavior resulting from the global COVID-19 pandemic take root in society.*3 Creative destruction: A concept advocated by the economist Joseph Schumpeter, whereby new, efficient equipment and methods drive out old, inefficient equipment and methods, *2 Bubble isolation system: An infection prevention method whereby the movement and residence of athletes and other related parties is confined to a specified area, and contact with replacing them and in doing so stimulating economic growth.the outside world is avoided to the maximum possible extent.* ALSOK was a Tokyo 2020 Official Partner (Security Services and Planning).*4 GAIA-X: An infrastructure concept announced by the German and French governments to support the flow of data while safeguarding security and data sovereignty.* ALSOK was a Tokyo 2020 Official Partner (Security Services and Planning).04ALSOK REPORT 2021Overview and VisionTalk with the PresidentTheme 3Responding to society’s diverse needs for safety and securityNakajima: I feel that, besides the “post-COVID” era, we also need to think about how we can move forward steadily based on the “new normal” in the situation of “living with COVID.” How do you feel about this?Aoyama: The Grand Design 2025 (GD2025) Medium-Term Management Plan (FY2022–FY2026) which was formulated this fiscal year outlines ALSOK’s vision for the next five years, a period which will either be “post-COVID” or “living with COVID.” In this plan, in regard to the changes in the environment that surrounds ALSOK, including our customers and society as a whole, we recognize three main categories of problems: global issues, such as infectious diseases, global warming, energy problems, etc.; issues in Japan, such as the declining birthrate and aging population, and growing disparities in wealth and income; and issues relating to the development of advanced technology, such as the growth of artificial intelligence (AI) and the Internet of Things (IoT), 5G and 6G communications technology, etc. The plan takes account of Japan’s goal of contributing toward the realization of the Sustainable Development Goals (SDGs) and realizing a reduction in greenhouse gas emissions of at least 46% by 2030 (compared to fiscal 2014), and of becoming a carbon-neutral nation by 2050. While promoting the innovation of the security business model, ALSOK is aiming to become a resilient integrated safety and security solutions provider. I believe that we need to strengthen the internal and external infrastructure that we have cultivated in our security, facility management and care businesses, and create new solutions that integrate diverse service functions. While we have already been involved in areas such as open innovation, using collaboration with the university sector and alliances with other enterprises, we need to be working with people at other companies with which we are on good terms to undertake an evolution in terms of what products and services we can provide to each market, strengthen our ability to respond to the risks experienced by different customers, and expand into new business areas with security at the core. In this way, by continuing to provide concrete solutions for the specific situations that customers are exposed to on a daily basis, we will continue to be an enterprise that is needed by the next generation and that creates value. I also feel that it is very important to build a working environment in which employees can fulfill their potential. We have already started by holding discussions regarding diverse work styles, and I want us to continue with thorough implementation of emphasizing that people are the most important thing for us, and with undertaking talent cultivation in a variety of different forms.Nakajima: I know you have said that “People are at the heart of the security business,” Mr. Aoyama, and I think it is fair to say that people are the single most important asset. Whether it is dealing with the pandemic or responding to creative destruction, ultimately, it is people who get things done. Over the past 20 years, the ordinary income of Japanese companies as a whole has risen by 150%, whereas average wages per person have fallen by 10%. I think one can reasonably say that it is impossible to boost corporate value without increasing investment in human talent cultivation. In a country like Japan with limited natural resources, I believe that, in order to activate the country’s latent potential, enhancing the capabilities of its human talent is the ultimate engine for economic growth.Aoyama: That’s very true. And that is why I want us to pay even more attention to human talent diversification and capability development than we do at present. In combination with efforts to enhance the motivation of our employees working as operatives in the security (including electronic security, stationed security, and transport security), facility management and long-term care businesses, in order to enhance productivity in these services, we will be striving to implement effective talent cultivation, in terms of recruitment, education and training, and we will roll out these efforts on a global basis. I also want us to strengthen our sustainability initiatives. As I see it, the content of the SDGs represents the concrete embodiment of how to promote our corporate mission in line with the Company’s management philosophy of emphasizing “arigato no kokoro” and “bushi no seishin.” Particularly with regard to environmental issues, we are aware that these are issues that affect the whole of humanity, and we are contributing toward the realization of carbon neutrality and of the resource-circulating economy from three perspectives: reducing greenhouse gas emissions, the resource-circulating economy and society, and biodiversity.Nakajima: I think that a security industry that uses security to provide integrated services for ensuring safety and security will be a “21st century growth industry” in the post-COVID era. You need to think about what you need to achieve next and move forward steadily, one step at a time, and if you do this properly, I am sure it will lead to growth. I find it very reassuring to know that ALSOK is taking the lead by following this path.Aoyama: The COVID-19 pandemic has led to a dramatic CROSS TALKtransformation in the environment in which our company operates. provider” by strengthening our foundations, ensuring that all These changing circumstances have been accompanied by the employees are working as one, and moving forward steadily. Thank growth of diverse safety and security needs, and it is vital that we you very much for the valuable opinions that you have shared with respond to these needs by putting ourselves in the customer’s place, us today!looking ahead, and emphasizing speed. We will be aiming to realize our vision of being a “resilient, integrated safety and security solutions Postscript to the DialogueOvercoming the COVID-19 PandemicIt is now nearly two years since the COVID-19 pandemic developed ALSOK was founded in 1965. Social and economic conditions, into a full-scale pandemic. ALSOK is committed to providing both within and outside Japan, were much different at that time from customers with resilient, integrated safety and security solutions, and this the current situation in the 21st century. In Japan, the declining mission has remained unchanged during COVID-19; every day, we have birthrate and the aging of the population have accelerated, and the continued to do our utmost in locations both within and outside Japan.nation’s population structure is undergoing dramatic change. Other Having been postponed for a year, and despite the rapid increase major transformations include labor shortages, the depopulation of in the number of people infected with COVID-19 due to the emergence rural areas and increasing concentration of the population in the major of the Delta variant, the Olympic and Paralympic Games Tokyo 2020 cities, and resource and environmental constraints. It has become were held successfully in 2021, thanks to the hard work of all the apparent that Japan’s overall economic strength has weakened, and authorities concerned. On the security side, the 553 member the competitiveness of individual enterprises is significantly changed. companies of the Olympic and Paralympic Games Tokyo 2020 We are also in the middle of a major transformation in technology, Security Consortium worked together as one with a common strategy, including the widespread adoption of AI and the transition to 5G and which I found deeply gratifying. Although the Games were held 6G communications technology. Regarding the international situation, without spectators, nevertheless, they could not have been held the end of the Cold War was followed by the emergence of a successfully without the hard work and dedication of a wide range of multipolar global economy characterized by regional economic related parties (in ALSOK’s case, handling security and facility integration, which in turn was followed by an upsurge in regionalism management). Based on the results achieved with the Olympic and and the revival of Islamic fundamentalism, and then by the proliferation Paralympic Games, I asked Professor Nakajima to follow on from last of terrorism, the rise of China and friction between the U.S. and China. year’s dialogue with a further discussion, so that we could reconfirm The COVID-19 pandemic emerged against the backdrop of these the validity of the strategy that ALSOK is following.dramatic changes in the international situation. It is precisely because As Professor Nakajima pointed out, Europe and North America we are living through a period of this kind that Schumpeter’s “creative have already taken the lead in terms of preparing for the “post-COVID” destruction” is happening, without people necessarily being aware of era. Regarding the acceleration of DX, or in other words the it, in the era of “living with COVID” and “post-COVID.” I hope that we at digitalization of the economy, we are starting to see some concrete ALSOK can play at least a small role as pioneers in this process and measures in Japan, including the promotion of remote working during as a platformer of the SDGs. As Professor Nakajima noted, the the COVID-19 pandemic, and the establishment of the Digital Agency ALSOK Group attaches great importance to people, and has been within the Japanese government in September 2021. Japan is also proactively investing in human capital cultivation. I hope that, by finally starting to get serious about the greening of the economy, and working steadily to provide safety and security solutions not only in with the formulation of a new energy policy to meet the goals of Japan but also in other Asian countries, we can further enhance the making Japan carbon neutral by 2050 and reducing carbon dioxide way ALSOK is viewed.emissions by at least 46% by 2030 (compared to fiscal 2014) that were announced at the COP26 international conference in 2021, for every sector in Japan, there is no time to waste.Yukiyasu AoyamaPresident and Representative Director, ALSOKYukiyasu AoyamaProfileMarchApril19751975198019921993199419952000200220032005200620082008200920102012Graduated from the University of Tokyo, Faculty of LawJointed the Ministry of FinanceDistrict Director of the Itako Tax OfficeVisiting Researcher at the University of OxfordDirector, Minister’s Secretariat and Research and Planning Division, Minister’s SecretariatDeputy Commissioner (Large Enterprise Examination and Criminal Investigation), Tokyo Regional Taxation BureauChief of the Wakayama Prefectural PoliceDirector of the Planning and Coordination Division, Planning and Coordination Bureau, Environment AgencyDirector-General, Yokohama CustomsCounselor and Deputy Director-General of the Customs and Tariff Bureau of the Minister’s Secretariat Visiting Professor at the University of TokyoDirector-General, Customs and Tariff BureauRetired from the postJoined the Company as Senior Executive OfficerExecutive Vice President and Representative DirectorSenior Executive Vice President and Representative DirectorPresident and Representative Director (Current)JulyJulyJulyAugustJuneJulyJulyDecemberJulyJulyAugustJuneAprilAprilAtsushi NakajimaProfileMarchAprilAugustAprilMay19751975198719921995Graduated from the University of Tokyo, Faculty of LawJoined the Industrial Bank of Japan, Ltd. (IBJ)Senior Manager, Research Department, Head Office, IBJSenior Manager, International Finance Department, Head Office, IBJSenior Deputy General Manager, Industry Research Department, June1997Deputy General Manager, General Manager, IBJ Paris BranchOctober1999President, Banque IBJ (France) S.A.June2000Chief Economist & General Manager, Research Department, Head Office, IBJHead Office, IBJApril2002–Executive Officer & Chief Economist, Mizuho Research Institute Ltd.; Chief March 2003Economist & General Manager, Research Division, Mizuho Corporate BankMarch2003–Executive Officer, Chief Economist & General Manager, Research Division, March 2004Mizuho Corporate Bank; Executive Officer & Chief Economist, Mizuho Research Institute Ltd.April2004–Senior Managing Executive Officer & Chief Economist, March 2011Mizuho Research Institute Ltd.AprilApril20112020Chairman, Research Institute of Economy, Trade and Industry (RIETI), IAAProfessor, University of Niigata Prefecture (Current); Consulting Fellow, RIETI, IAA (Current)June2020Chairman, Maison franco-japonaise (Current)* ALSOK was a Tokyo 2020 Official Partner (Security Services and Planning).05Overview and VisionTalk with the PresidentTheme 3Responding to society’s diverse needs for safety and securityNakajima: I feel that, besides the “post-COVID” era, we also need to are the most important thing for us, and with undertaking talent think about how we can move forward steadily based on the “new cultivation in a variety of different forms.normal” in the situation of “living with COVID.” How do you feel about this?Aoyama: The Grand Design 2025 (GD2025) Medium-Term Nakajima: I know you have said that “People are at the heart of the security business,” Mr. Aoyama, and I think it is fair to say that people are the single most important asset. Whether it is dealing with the Management Plan (FY2022–FY2026) which was formulated this fiscal pandemic or responding to creative destruction, ultimately, it is people year outlines ALSOK’s vision for the next five years, a period which will who get things done. Over the past 20 years, the ordinary income of either be “post-COVID” or “living with COVID.” In this plan, in regard Japanese companies as a whole has risen by 150%, whereas average to the changes in the environment that surrounds ALSOK, including wages per person have fallen by 10%. I think one can reasonably say our customers and society as a whole, we recognize three main that it is impossible to boost corporate value without increasing categories of problems: global issues, such as infectious diseases, investment in human talent cultivation. In a country like Japan with global warming, energy problems, etc.; issues in Japan, such as the limited natural resources, I believe that, in order to activate the declining birthrate and aging population, and growing disparities in country’s latent potential, enhancing the capabilities of its human wealth and income; and issues relating to the development of talent is the ultimate engine for economic growth.advanced technology, such as the growth of artificial intelligence (AI) and the Internet of Things (IoT), 5G and 6G communications Aoyama: That’s very true. And that is why I want us to pay even more attention to human talent diversification and capability development technology, etc. The plan takes account of Japan’s goal of than we do at present. In combination with efforts to enhance the contributing toward the realization of the Sustainable Development motivation of our employees working as operatives in the security Goals (SDGs) and realizing a reduction in greenhouse gas emissions (including electronic security, stationed security, and transport of at least 46% by 2030 (compared to fiscal 2014), and of becoming a security), facility management and long-term care businesses, in carbon-neutral nation by 2050.order to enhance productivity in these services, we will be striving While promoting the innovation of the security business model, to implement effective talent cultivation, in terms of recruitment, ALSOK is aiming to become a resilient integrated safety and security education and training, and we will roll out these efforts on a global solutions provider. I believe that we need to strengthen the internal basis. I also want us to strengthen our sustainability initiatives. As I and external infrastructure that we have cultivated in our security, see it, the content of the SDGs represents the concrete embodiment facility management and care businesses, and create new solutions of how to promote our corporate mission in line with the Company’s that integrate diverse service functions. While we have already been management philosophy of emphasizing “arigato no kokoro” and involved in areas such as open innovation, using collaboration with the “bushi no seishin.” Particularly with regard to environmental issues, we university sector and alliances with other enterprises, we need to be are aware that these are issues that affect the whole of humanity, and working with people at other companies with which we are on good we are contributing toward the realization of carbon neutrality and of terms to undertake an evolution in terms of what products and the resource-circulating economy from three perspectives: reducing services we can provide to each market, strengthen our ability to greenhouse gas emissions, the resource-circulating economy and respond to the risks experienced by different customers, and expand society, and biodiversity.into new business areas with security at the core. In this way, by Nakajima: I think that a security industry that uses security to provide continuing to provide concrete solutions for the specific situations that integrated services for ensuring safety and security will be a “21st customers are exposed to on a daily basis, we will continue to be an century growth industry” in the post-COVID era. You need to think enterprise that is needed by the next generation and that creates value.about what you need to achieve next and move forward steadily, one I also feel that it is very important to build a working environment in step at a time, and if you do this properly, I am sure it will lead to which employees can fulfill their potential. We have already started by growth. I find it very reassuring to know that ALSOK is taking the lead holding discussions regarding diverse work styles, and I want us to by following this path.continue with thorough implementation of emphasizing that people Aoyama: The COVID-19 pandemic has led to a dramatic transformation in the environment in which our company operates. These changing circumstances have been accompanied by the growth of diverse safety and security needs, and it is vital that we respond to these needs by putting ourselves in the customer’s place, looking ahead, and emphasizing speed. We will be aiming to realize our vision of being a “resilient, integrated safety and security solutions Postscript to the DialogueOvercoming the COVID-19 PandemicIt is now nearly two years since the COVID-19 pandemic developed into a full-scale pandemic. ALSOK is committed to providing customers with resilient, integrated safety and security solutions, and this mission has remained unchanged during COVID-19; every day, we have continued to do our utmost in locations both within and outside Japan. Having been postponed for a year, and despite the rapid increase in the number of people infected with COVID-19 due to the emergence of the Delta variant, the Olympic and Paralympic Games Tokyo 2020 were held successfully in 2021, thanks to the hard work of all the authorities concerned. On the security side, the 553 member companies of the Olympic and Paralympic Games Tokyo 2020 Security Consortium worked together as one with a common strategy, which I found deeply gratifying. Although the Games were held without spectators, nevertheless, they could not have been held successfully without the hard work and dedication of a wide range of related parties (in ALSOK’s case, handling security and facility management). Based on the results achieved with the Olympic and Paralympic Games, I asked Professor Nakajima to follow on from last year’s dialogue with a further discussion, so that we could reconfirm the validity of the strategy that ALSOK is following. As Professor Nakajima pointed out, Europe and North America have already taken the lead in terms of preparing for the “post-COVID” era. Regarding the acceleration of DX, or in other words the digitalization of the economy, we are starting to see some concrete measures in Japan, including the promotion of remote working during the COVID-19 pandemic, and the establishment of the Digital Agency within the Japanese government in September 2021. Japan is also finally starting to get serious about the greening of the economy, and with the formulation of a new energy policy to meet the goals of making Japan carbon neutral by 2050 and reducing carbon dioxide emissions by at least 46% by 2030 (compared to fiscal 2014) that were announced at the COP26 international conference in 2021, for every sector in Japan, there is no time to waste.CROSS TALKprovider” by strengthening our foundations, ensuring that all employees are working as one, and moving forward steadily. Thank you very much for the valuable opinions that you have shared with us today! ALSOK was founded in 1965. Social and economic conditions, both within and outside Japan, were much different at that time from the current situation in the 21st century. In Japan, the declining birthrate and the aging of the population have accelerated, and the nation’s population structure is undergoing dramatic change. Other major transformations include labor shortages, the depopulation of rural areas and increasing concentration of the population in the major cities, and resource and environmental constraints. It has become apparent that Japan’s overall economic strength has weakened, and the competitiveness of individual enterprises is significantly changed. We are also in the middle of a major transformation in technology, including the widespread adoption of AI and the transition to 5G and 6G communications technology. Regarding the international situation, the end of the Cold War was followed by the emergence of a multipolar global economy characterized by regional economic integration, which in turn was followed by an upsurge in regionalism and the revival of Islamic fundamentalism, and then by the proliferation of terrorism, the rise of China and friction between the U.S. and China. The COVID-19 pandemic emerged against the backdrop of these dramatic changes in the international situation. It is precisely because we are living through a period of this kind that Schumpeter’s “creative destruction” is happening, without people necessarily being aware of it, in the era of “living with COVID” and “post-COVID.” I hope that we at ALSOK can play at least a small role as pioneers in this process and as a platformer of the SDGs. As Professor Nakajima noted, the ALSOK Group attaches great importance to people, and has been proactively investing in human capital cultivation. I hope that, by working steadily to provide safety and security solutions not only in Japan but also in other Asian countries, we can further enhance the way ALSOK is viewed.Yukiyasu AoyamaPresident and Representative Director, ALSOKYukiyasu AoyamaProfileMarchApril1975197519801992199319952000200220032008200920102012JulyJulyJulyAugustJuneJulyJulyJulyJulyAugustJuneAprilAprilGraduated from the University of Tokyo, Faculty of LawJointed the Ministry of FinanceDistrict Director of the Itako Tax OfficeVisiting Researcher at the University of OxfordDirector, Minister’s Secretariat and Research and Planning Division, Minister’s Secretariat1994Deputy Commissioner (Large Enterprise Examination and Criminal Investigation), Tokyo Regional Taxation BureauChief of the Wakayama Prefectural PoliceDirector of the Planning and Coordination Division, Planning and Coordination Bureau, Environment AgencyDirector-General, Yokohama CustomsCounselor and Deputy Director-General of the Customs and Tariff Bureau of the Minister’s Secretariat December2005Visiting Professor at the University of Tokyo2006Director-General, Customs and Tariff Bureau2008Retired from the postJoined the Company as Senior Executive OfficerExecutive Vice President and Representative DirectorSenior Executive Vice President and Representative DirectorPresident and Representative Director (Current)Atsushi NakajimaProfileMarchAprilAugustAprilMay19751975198719921995JuneOctoberJune199719992000April MarchMarch March2002– 20032003– 2004April MarchAprilApril2004– 201120112020June2020Graduated from the University of Tokyo, Faculty of LawJoined the Industrial Bank of Japan, Ltd. (IBJ)Senior Manager, Research Department, Head Office, IBJSenior Manager, International Finance Department, Head Office, IBJSenior Deputy General Manager, Industry Research Department, Head Office, IBJDeputy General Manager, General Manager, IBJ Paris BranchPresident, Banque IBJ (France) S.A.Chief Economist & General Manager, Research Department, Head Office, IBJExecutive Officer & Chief Economist, Mizuho Research Institute Ltd.; Chief Economist & General Manager, Research Division, Mizuho Corporate BankExecutive Officer, Chief Economist & General Manager, Research Division, Mizuho Corporate Bank; Executive Officer & Chief Economist, Mizuho Research Institute Ltd.Senior Managing Executive Officer & Chief Economist, Mizuho Research Institute Ltd.Chairman, Research Institute of Economy, Trade and Industry (RIETI), IAAProfessor, University of Niigata Prefecture (Current); Consulting Fellow, RIETI, IAA (Current)Chairman, Maison franco-japonaise (Current)* ALSOK was a Tokyo 2020 Official Partner (Security Services and Planning).06ALSOK REPORT 2021Overview and VisionALSOK’s History of Value CreationHelping to Address Social Issues by Taking on Advanced Challenges and Demonstrating OriginalitySince its foundation, ALSOK has consistently endeavored to protect the safety and security of society. Throughout its history of more than half a century, ALSOK has pursued technologies in security services, service quality, and education of human resources, and has taken them as its strengths. We will continue to take on advanced challenges and demonstrate originality to help resolve social issues.¥248.3 billion¥181.2 billion¥469.9 billion¥279.2 billionNet Sales■■■■Net Sales of Security ServicesNet Sales of Services Other Than Security Services■■■■¥40.1 billion¥0.15 billion¥0.7 billion¥120.1 billion1965–Founding Era1985–196619711976198119861991199620112016(FY)2021Building Up and Maintaining EraSecond Founding EraThird Founding Era20012003(Stock listing)20061999–2010–GD2020GD20171965Foundation of Sohgo Security Services Co., Ltd. with the main business purpose of providing contract security services1988Developed and launched TAKURUS® in electronic security services for individual customers1995Began use of the Tokyo Operations Center, which provides centralized monitoring and command for Electronic Security Services provision within Tokyo1997Developed and launched the MMK® multifunctional ATM, which integrates such functions as receiving agent and data search functions with conventional cash dispenser functionalityLaunched new HOME ALSOK brand of services for individual users20122013Launched HOME ALSOK MIMAMORI SUPPORT® emergency reporting and consultation service for senior citizens20022003Listed stock on the first section of Established the new corporate the Tokyo Stock Exchangebrand, “ALSOK”20052005Expanded the ALSOK ANSHIN KYOSHITSU crime prevention class Developed and launched a new automated patrolling program to cover the whole of Japan, GUARD ROBOT, making it with ALSOK staf f (who are exper ts possible to provide Stationed in ensuring safety) assigned to give Security Services that classes in schools, with the aim of incorporate robotshelping to keep children safe2015Developed and launched a new Cash Deposit and Dispenser Machine Online System, enabling the payment and changing of small change used in stores, and enabling store owners to deposit sales proceeds without needing to take the money to the bank1997Developed and launched Cash Deposit Machine On-line System, which facilitates the movements of cash