Securitas Annual Report 2007

The Work of the Board of Directors
In 2007, the Board held 9 meetings, of which 2 were telephone conferences. The auditors participated and presented the audit at the Board meeting in February 2007. Topics which have been discussed among other things are:
  • The new strategy
  • Interim and Annual Reports
  • Presentation of the divisional business plans and budgets for 2008
  • Discussions regarding timetable for the listing of Loomis and continuous updates on the subsidiary Loomis Cash Management Ltd.
  • Investment and acquisition activities
  • Valuation and impairment assessment regarding goodwill
  • Financing
  • Guidelines for remuneration and bonuses and other personnel related matters
  • Reporting by the Board of Directors’ Committees
  • Policies and instructions
  • Audit and election of auditors for 2008–2011
  • Annual assessment of the work of the Board of Directors
The attendance of each of the Board members during 2007 is presented below:
    Audit Committee Remuneration
  Board   Committee
No of meetings in 2007 9 6 2
Board of Directors      
Melker Schörling 9   2
Gustaf Douglas 8 6  
Alf Göransson1 7    
Thomas Berglund 2 1    
Annika Falkengren 7    
Carl Douglas 8    
Stuart E. Graham 6    
Berthold Lindqvist 6 5 2
Fredrik Palmstierna 9    
Sofia Schörling Högberg 8    
Marie Ehrling3 8 3  
Employee representatives      
Susanne Bergman Israelsson 7    
Gunnar Larsson 9    
Björn Drewa 9    
1 Appointed member of Board of Directors at Annual General Meeting April 17, 2007.
2 Resigned from Board of Directors at Annual General Meeting April 17, 2007.  
3 Appointed member of Audit Committee at the Statutory Meeting of the Board of Directors on April 17, 2007.  
Audit Committee
The Board of Directors has established an Audit Committee, operating under the “Instructions for the Audit Committee appointed by the Board of Directors”, that meets with Securitas’ auditors at least four times per year. The Committee is focuses on accounting matters and the presentation of financial information and its internal control, as well as overseeing risk matters. The Committee presents its findings and proposals to the Board, before the Board’s decision-making.
The Board of Directors has elected Gustaf Douglas (Chairman), Berthold Lindqvist and Marie Ehrling as members of the Audit Committee for the period up to and including the Annual General Meeting 2008. The committee met 6 times in 2007.
Topics which have been discussed among other things are:
  • Continuous updates on the subsidiary Loomis Cash Management Ltd’s operations and its main exposures
  • Discussions and updates within the areas of; accounting, financing, acquisitions, risk, insurance strategy, tax and legal
  • Financial Reporting for 2007
  • Internal control activities
  • Audit-related matters including audit cost and policy for approval of additional services
Remuneration Committee
The Board has also formed a Remuneration Committee to deal with all issues regarding salaries, bonuses, options and other forms of compensation for Group Management, as well as other management levels if the Board of Directors so decides. The Committee presents its proposals to the Board, before the Board’s decision-making.
The Board of Directors has elected Melker Schörling (Chairman) and Berthold Lindqvist as members of the Remuneration Committee for the period up to and including the Annual General Meeting 2008. The committee held 2 meetings during 2007.
Guidelines for Remuneration to Management
The Annual General Meeting 2007 resolved on adoption of guidelines for remuneration to Group Management principally entailing that the remuneration and other terms of employment shall be competitive and in accordance with market conditions in order to ensure that the Group will be able to attract and keep competent Group Management employees. To sum up, the guidelines entail that the total remuneration to management shall consist of fixed annual salary, variable remuneration, pensions and other benefits. The variable remuneration shall amount to a maximum of 50 percent of the fixed annual salary for the President ande CEO, and 35–100 percent for other Group Management employees, and be based on the outcome in relation to financial goals and growth targets within the individual area of responsibility (Group or division).
Pension rights for Group Management employees shall be applicable as from the age of 65 at the earliest. The pension plans shall be fee-based and insurance premiums transferred from the individual’s total remuneration and paid by the company during the term of employment. At dismissal of a Group Management employee, the notice period shall amount to a maximum of 12 months with a right to redundancy payment equivalent to a maximum of 100 percent of the fixed salary for not more than 12 months. At resignation by a management employee, the notice period shall amount to a maximum of 6 months.
Additional information on remuneration to the Board of Directors and Senior Management is disclosed in the Notes and Comments to the Consolidated Financial Statements 2007. See note 8 page 61.
Group Management
Group Management is charged with overall responsibility for conducting the business of the Securitas Group in line with the strategy and long-term goals adopted by the Board of Directors of Securitas AB. Group Management 2007 comprised the President and CEO and ten executives. For further information on the members of the Group Management, please see pages 104–105.
Financial Reporting
The Board ensures the quality of financial reporting through a series of Group policies, procedures, frameworks, clear structures with defined responsibilities and through documented delegation of authority which is further described in the Internal Control report. The Board has also set up an Audit Committee that is instructed to review and recommend all financial reports delivered by the Group to the Board. Financial reporting including valuation issues, judgments and potential changes in estimates and accounting policies where necessary, is continually considered by the Audit Committee and presented to the Board. The Audit Committee also covers legal matters and litigations on a quarterly basis. All interim reports and the full year reports are approved by the Board.
The auditors of the company submit a report to the Board of Directors annually stating that they have audited the company and the results thereof. This report shall be presented orally by the auditors at the Board meeting that deals with the year-end report. During this meeting, the members of the Board shall be given the opportunity to ask questions of the auditors. It is expected that the statement of the auditors shall, inter alia, indicate whether the company is organized in a way that makes it possible to supervise, in a safe manner, accounting, management of assets and the financial relations of the company. The auditors also issue a review report on the half year interim report. In addition the auditors take part in the Audit Committee meetings where the contents are reported back to the Board.
Immediately before signing the Annual Report and half year interim report The Board of Directors and the President and CEO certify that the reports give a true and fair overview of the Parent Company’s and Group’s operations, their financial position and results of operations, and describes significant risks and uncertainties facing the Parent Company and other companies in the Group.
Auditors
The Annual General Meeting 2004 elected PricewaterhouseCoopers AB as audit firm, with authorized public accountant Göran Tidström as auditor in charge, for a period of four years.
The auditors’ work is performed from an audit plan, which is determined in agreement with the Audit Committee and Board of Directors. The auditors participate in all meetings with the Audit Committee and present their findings from the audit at the Board meeting in February. In addition the auditors shall annually inform the Board of Directors of services rendered other than auditing fees received for such services and other circumstances that might effect the evaluation of the auditors’ independence. The auditors shall also participate in the Annual General Meeting, presenting their performed audit work and conclusions.
The audit is performed in compliance with the Swedish Companies Act and generally accepted auditing standards in Sweden, which is based on International Standards on Auditing (ISA). The auditors have, upon instruction from the Board of Directors, conducted a general examination of the Interim Report for the period January 1 until June 30, 2007.
Göran Tidström has been an auditor of Securitas AB since 1999. In addition to the Securitas assignment, in 2007 he acted as auditor in charge for TeliaSonera, Trelleborg, Meda and Volvo, among other stock listed companies.
Audit Fees and Reimbursement
The following fees and reimbursements to auditors have been paid for audit and other review in accordance with existing laws, as well as for advice and assistance in connection with reviews undertaken. Fees have also been paid for independent advice. The advice is mainly audit-related consultations in accounting and tax matters in relation to restructuring work.
Audit Fees and Reimbursement (PwC)1        
      Group   Parent Company
MSEK 2007 2006 2005 2007 2006 2005
Audit Assignment 43.9 40.6 38.0 7.7 8.2 6.9
Other Assignments 32.0 54.6 44.6 3.1 12.7 3.0
1 Audit fees and reimbursement to PwC relates to continuing operations (excluding Systems and
Direct). Comparatives have been restated.        
The Work of the Board of Directors
In 2007, the Board held 9 meetings, of which 2 were telephone conferences. The auditors participated and presented the audit at the Board meeting in February 2007. Topics which have been discussed among other things are:
  • The new strategy
  • Interim and Annual Reports
  • Presentation of the divisional business plans and budgets for 2008
  • Discussions regarding timetable for the listing of Loomis and continuous updates on the subsidiary Loomis Cash Management Ltd.
  • Investment and acquisition activities
  • Valuation and impairment assessment regarding goodwill
  • Financing
  • Guidelines for remuneration and bonuses and other personnel related matters
  • Reporting by the Board of Directors’ Committees
  • Policies and instructions
  • Audit and election of auditors for 2008–2011
  • Annual assessment of the work of the Board of Directors
 
The attendance of each of the Board members during 2007 is presented below:

    Audit Committee Remuneration
  Board   Committee
No of meetings in 2007 9 6 2
Board of Directors      
Melker Schörling 9   2
Gustaf Douglas 8 6  
Alf Göransson1 7    
Thomas Berglund 2 1    
Annika Falkengren 7    
Carl Douglas 8    
Stuart E. Graham 6    
Berthold Lindqvist 6 5 2
Fredrik Palmstierna 9    
Sofia Schörling Högberg 8    
Marie Ehrling3 8 3  
Employee representatives      
Susanne Bergman Israelsson 7    
Gunnar Larsson 9    
Björn Drewa 9    
1 Appointed member of Board of Directors at Annual General Meeting April 17, 2007.
2 Resigned from Board of Directors at Annual General Meeting April 17, 2007.  
3 Appointed member of Audit Committee at the Statutory Meeting of the Board of Directors on April 17, 2007.  
 
Audit Committee
The Board of Directors has established an Audit Committee, operating under the “Instructions for the Audit Committee appointed by the Board of Directors”, that meets with Securitas’ auditors at least four times per year. The Committee is focuses on accounting matters and the presentation of financial information and its internal control, as well as overseeing risk matters. The Committee presents its findings and proposals to the Board, before the Board’s decision-making.
 
The Board of Directors has elected Gustaf Douglas (Chairman), Berthold Lindqvist and Marie Ehrling as members of the Audit Committee for the period up to and including the Annual General Meeting 2008. The committee met 6 times in 2007.
 
Topics which have been discussed among other things are:
  • Continuous updates on the subsidiary Loomis Cash Management Ltd’s operations and its main exposures
  • Discussions and updates within the areas of; accounting, financing, acquisitions, risk, insurance strategy, tax and legal
  • Financial Reporting for 2007
  • Internal control activities
  • Audit-related matters including audit cost and policy for approval of additional services
 
Remuneration Committee
The Board has also formed a Remuneration Committee to deal with all issues regarding salaries, bonuses, options and other forms of compensation for Group Management, as well as other management levels if the Board of Directors so decides. The Committee presents its proposals to the Board, before the Board’s decision-making.
 
The Board of Directors has elected Melker Schörling (Chairman) and Berthold Lindqvist as members of the Remuneration Committee for the period up to and including the Annual General Meeting 2008. The committee held 2 meetings during 2007.
 
Guidelines for Remuneration to Management
The Annual General Meeting 2007 resolved on adoption of guidelines for remuneration to Group Management principally entailing that the remuneration and other terms of employment shall be competitive and in accordance with market conditions in order to ensure that the Group will be able to attract and keep competent Group Management employees. To sum up, the guidelines entail that the total remuneration to management shall consist of fixed annual salary, variable remuneration, pensions and other benefits. The variable remuneration shall amount to a maximum of 50 percent of the fixed annual salary for the President ande CEO, and 35–100 percent for other Group Management employees, and be based on the outcome in relation to financial goals and growth targets within the individual area of responsibility (Group or division).
 
Pension rights for Group Management employees shall be applicable as from the age of 65 at the earliest. The pension plans shall be fee-based and insurance premiums transferred from the individual’s total remuneration and paid by the company during the term of employment. At dismissal of a Group Management employee, the notice period shall amount to a maximum of 12 months with a right to redundancy payment equivalent to a maximum of 100 percent of the fixed salary for not more than 12 months. At resignation by a management employee, the notice period shall amount to a maximum of 6 months.
 
Additional information on remuneration to the Board of Directors and Senior Management is disclosed in the Notes and Comments to the Consolidated Financial Statements 2007. See note 8 page 61.

Page 95

 
Group Management
Group Management is charged with overall responsibility for conducting the business of the Securitas Group in line with the strategy and long-term goals adopted by the Board of Directors of Securitas AB. Group Management 2007 comprised the President and CEO and ten executives. For further information on the members of the Group Management, please see pages 104–105.
 
Financial Reporting
The Board ensures the quality of financial reporting through a series of Group policies, procedures, frameworks, clear structures with defined responsibilities and through documented delegation of authority which is further described in the Internal Control report. The Board has also set up an Audit Committee that is instructed to review and recommend all financial reports delivered by the Group to the Board. Financial reporting including valuation issues, judgments and potential changes in estimates and accounting policies where necessary, is continually considered by the Audit Committee and presented to the Board. The Audit Committee also covers legal matters and litigations on a quarterly basis. All interim reports and the full year reports are approved by the Board.
 
The auditors of the company submit a report to the Board of Directors annually stating that they have audited the company and the results thereof. This report shall be presented orally by the auditors at the Board meeting that deals with the year-end report. During this meeting, the members of the Board shall be given the opportunity to ask questions of the auditors. It is expected that the statement of the auditors shall, inter alia, indicate whether the company is organized in a way that makes it possible to supervise, in a safe manner, accounting, management of assets and the financial relations of the company. The auditors also issue a review report on the half year interim report. In addition the auditors take part in the Audit Committee meetings where the contents are reported back to the Board.
 
Immediately before signing the Annual Report and half year interim report The Board of Directors and the President and CEO certify that the reports give a true and fair overview of the Parent Company’s and Group’s operations, their financial position and results of operations, and describes significant risks and uncertainties facing the Parent Company and other companies in the Group.
 
Auditors
The Annual General Meeting 2004 elected PricewaterhouseCoopers AB as audit firm, with authorized public accountant Göran Tidström as auditor in charge, for a period of four years.
 
The auditors’ work is performed from an audit plan, which is determined in agreement with the Audit Committee and Board of Directors. The auditors participate in all meetings with the Audit Committee and present their findings from the audit at the Board meeting in February. In addition the auditors shall annually inform the Board of Directors of services rendered other than auditing fees received for such services and other circumstances that might effect the evaluation of the auditors’ independence. The auditors shall also participate in the Annual General Meeting, presenting their performed audit work and conclusions.
 
The audit is performed in compliance with the Swedish Companies Act and generally accepted auditing standards in Sweden, which is based on International Standards on Auditing (ISA). The auditors have, upon instruction from the Board of Directors, conducted a general examination of the Interim Report for the period January 1 until June 30, 2007.
 
Göran Tidström has been an auditor of Securitas AB since 1999. In addition to the Securitas assignment, in 2007 he acted as auditor in charge for TeliaSonera, Trelleborg, Meda and Volvo, among other stock listed companies.
 
Audit Fees and Reimbursement
The following fees and reimbursements to auditors have been paid for audit and other review in accordance with existing laws, as well as for advice and assistance in connection with reviews undertaken. Fees have also been paid for independent advice. The advice is mainly audit-related consultations in accounting and tax matters in relation to restructuring work.
 

Audit Fees and Reimbursement (PwC)1        
      Group   Parent Company
MSEK 2007 2006 2005 2007 2006 2005
Audit Assignment 43.9 40.6 38.0 7.7 8.2 6.9
Other Assignments 32.0 54.6 44.6 3.1 12.7 3.0
1 Audit fees and reimbursement to PwC relates to continuing operations (excluding Systems and
Direct). Comparatives have been restated.