Securitas Annual Report 2007

Environment
The Group’s and the Parent Company’s operations do not require a permit under the Swedish Environmental Code.
Information regarding the Securitas share
Information about the Securitas share regarding the number of shares of Series A and Series B, differences between shares in Series A and Series B as well as information on major shareholders’ can be found in Note 29. Further information regarding the Securitas share can also be found in the printed version of the Annual Report under the heading; The share, shareholders and dividend on pages 20 and 21.
There are no authorizations by the General Meeting to the Board of Directors to issue new shares or to repurchase any Securitas shares.
A shareholders’ agreement that among other items comprises preemption rights for the sale of Series A shares by any part exists among Gustaf Douglas, Melker Schörling and companies closely related to them. Apart from this, the Board of Directors of Securitas AB is not aware of any shareholders’ agreements or other arrangements between shareholders of Securitas AB.
Group development
The Group’s focus for 2008 will be to implement the strategy established in 2007 and to list Loomis at the end of 2008. The main emphasis of the strategy is to increase the degree of specialization and segmentation, leading to a more customer-oriented organizational structure within Securitas and thereby a platform to maximize value creation for the Group’s customers. The Group is also increasing its investment in sales resources within Mobile and Monitoring to further grow this business area. Securitas also aims to gradually increase its international presence through acquisitions or by starting up operations with an initial focus on Latin America and Asia.
Parent company operations
The Parent Company of the Group, Securitas AB, conducts no operating activities. Securitas AB provides Group Management and support functions.

The Parent Company’s income amounted to MSEK 378 (469) and mainly relates to administrative contributions and other income from subsidiaries.

Income after financial items amounted to MSEK 612 (2,868).
Income after financial items includes gains from the sale of shares in subsidiaries of MSEK 15 (–), dividends from subsidiaries of MSEK 2,434 (5,338), interest income of MSEK 1,208 (1,154), interest expense of MSEK –2,160 (–1,692) and other financial income and expenses, net, of MSEK –972 (–1,726). Included in other financial income and expenses, net are impairment losses relating to shares in subsidiaries of MSEK –639 (–1,539). Impairment losses have been recognized in conjunction with the Parent Company having received dividend from the subsidiary and also as a result of the impairment losses of goodwill recognized in relation to Service’s and Mobile’s operations in the Netherlands. Last year the impairment losses were
also impacted by intra-group restructuring resulting from the dividend of Securitas Direct AB and Securitas Systems AB. Net income for the year amounted to MSEK 588 (2,877).

Cash flow for the year amounted to MSEK 2,374 (–945).

The Parent Company’s fixed assets amounted to MSEK 51,264 (53,032) and mainly comprise shares in subsidiaries of MSEK 51,050 (51,581). Current assets amounted to MSEK 19,453 (13,979) of which liquid funds amounted to MSEK 3,187 (813).
Shareholders’ equity amounted to MSEK 24,483 (24,954).

The Parent Company’s liabilities amounted to MSEK 46,234 (42,057), and mainly consist of interest-bearing debt.

For further information refer to the Parent Company’s financial statements and the accompanying notes and comments.
Proposed guidelines for remuneration to senior management in Securitas for 2008
The Board of Directors of Securitas AB (publ) proposes that the Annual General Meeting on April 17 2008 adopt the following guidelines for remuneration to senior management according to the following;
The fundamental principle is that remuneration and other terms of employment for management shall be competitive and in accordance with market conditions, in order to ensure that the Securitas Group will be able to attract and keep competent management employees.
The total remuneration to management shall consist of a fixed basic salary, variable remuneration, pensions and other benefits. In addition to a fixed annual salary the group management may also receive variable remuneration, based on the outcome in relation to financial goals and growth targets within the individual area of responsibility (group or division) and agree with the interest of the shareholders. The variable remuneration shall amount to a maximum of 50 percent of the fixed annual salary for the President and CEO and a maximum of 35–200 percent of the fixed annual salary for other individuals of the Group Management.
The undertakings of the company as regards variable remuneration may, at maximal outcome within all divisions during 2008, amount to a maximum of MSEK 43.
The pension rights of senior management employees shall be applicable as from the age of 65 at the earliest and the entire Group Management shall be subject to defined contribution pension plans for which insurance premiums are transferred from the individual’s total remuneration and paid by the company during the term of employment. Variable compensation shall in principle not qualify for pension purposes.
Other benefits, such as company car, special health insurance or occupational health service shall be provided to the extent this is considered customary for management employees holding equivalent positions on the employment market where the management employee is active.
At dismissal, the notice period for all management employees shall amount to a maximum of 12 months with a right to redundancy payment after the end of the notice period, equivalent to a maximum of 100 per cent of the fixed salary for a period not exceeding 12 months. At resignation by a management employee, the notice period shall amount to a maximum of 6 months.
These guidelines shall apply to individuals who are included in the Group Management during the term of application of these guidelines. The guidelines shall apply to agreements entered into after the adoption by the Annual General Meeting, and to changes made in existing agreements after this date. The Board shall be entitled to deviate from the guidelines in individual cases if there are particular grounds for such deviation.
Further information regarding remuneration to the senior management, and the 2007 guidelines adopted by the AGM on April 17, 2007, is provided in Note 8.
Proposed allocation of earnings
The statements of income and the balance sheets of the Parent Company and the Group are subject to adoption by the Annual General Meeting on April 17, 2008.
Funds in the Parent Company available for distribution:  
  SEK
Hedging reserve 4,870,363
Translation reserve 266,566,503
Retained earnings 15,895,922,492
Net income for the year 588,401,473
Total 16,755,760,831
The Board of Directors propose a dividend to the shareholders of:  
  SEK
SEK 3.10 per share 1,131,682,581
To be carried forward 15,624,078,250
Total 16,755,760,831
The Board’s statement on the proposed dividend
With reference to the Board’s dividend proposal, the Board of Directors hereby makes the following statement pursuant to Chapter 18, section 4 of the Swedish Companies Act.

The Company’s unappropriated earnings as per December 31, 2007 amount to SEK 16,167,359,358.

The net income for the year amounts to SEK 588,401,473, of which SEK –2,982,709 is the result of financial instruments being valued pursuant to Chapter 4, section 14 a of the Swedish Annual Accounts Act.
The Company’s equity would have been SEK 624,845 lower as per December 31, 2007 if financial instruments, having been valued at actual value pursuant to Chapter 4, section 14 a of the Swedish Annual Accounts Act, had instead been valued at the lower of cost or market.

Unappropriated earnings of SEK 16,755,760,831 are therefore at the Annual General Meeting’s disposal.
Provided that the 2008 Annual General Meeting resolves to allocate the results in accordance with the Board’s proposal, SEK 15,624,078,250 will be carried forward. After distribution of the proposed dividend, there will be full coverage for the Company’s restricted equity.
The Board has considered the Company’s and the Group’s consolidation requirements and liquidity through a comprehensive assessment of the financial position of the Company and the Group, as well as the possibilities of the Company and the Group to discharge at sight its obligations. The proposed dividend does not jeopardize the Company’s ability to make the investments that have been deemed necessary. The Company’s financial position does not give rise to any other assessment than that the Company can continue its operations and that the Company is expected to comply with its obligations in a short as well as long term perspective. In addition to the assessment of the Company’s consolidation requirements and liquidity, the Board has also taken into consideration all other known circumstances that may impact the Company’s financial position.
With reference to the above, the Board makes the assessment that the dividend is justifiable considering the requirements that the nature, scope and risks of the operations pose on the size of the Company’s and the Group’s equity as well as the Company’s and the Group’s consolidation requirements, liquidity and position in general.

As regards the Company’s and the Group’s result and position in general, please refer to the statements of income, balance sheets and statements of cash flow as well as comments and notes.
Environment
The Group’s and the Parent Company’s operations do not require a permit under the Swedish Environmental Code.
 
Information regarding the Securitas share
Information about the Securitas share regarding the number of shares of Series A and Series B, differences between shares in Series A and Series B as well as information on major shareholders’ can be found in Note 29. Further information regarding the Securitas share can also be found in the printed version of the Annual Report under the heading; The share, shareholders and dividend on pages 20 and 21.
 
There are no authorizations by the General Meeting to the Board of Directors to issue new shares or to repurchase any Securitas shares.
 
A shareholders’ agreement that among other items comprises preemption rights for the sale of Series A shares by any part exists among Gustaf Douglas, Melker Schörling and companies closely related to them. Apart from this, the Board of Directors of Securitas AB is not aware of any shareholders’ agreements or other arrangements between shareholders of Securitas AB.
 
Group development
The Group’s focus for 2008 will be to implement the strategy established in 2007 and to list Loomis at the end of 2008. The main emphasis of the strategy is to increase the degree of specialization and segmentation, leading to a more customer-oriented organizational structure within Securitas and thereby a platform to maximize value creation for the Group’s customers. The Group is also increasing its investment in sales resources within Mobile and Monitoring to further grow this business area. Securitas also aims to gradually increase its international presence through acquisitions or by starting up operations with an initial focus on Latin America and Asia.
 
Parent company operations
The Parent Company of the Group, Securitas AB, conducts no operating activities. Securitas AB provides Group Management and support functions.

The Parent Company’s income amounted to MSEK 378 (469) and mainly relates to administrative contributions and other income from subsidiaries.

Income after financial items amounted to MSEK 612 (2,868).
 
Income after financial items includes gains from the sale of shares in subsidiaries of MSEK 15 (–), dividends from subsidiaries of MSEK 2,434 (5,338), interest income of MSEK 1,208 (1,154), interest expense of MSEK –2,160 (–1,692) and other financial income and expenses, net, of MSEK –972 (–1,726). Included in other financial income and expenses, net are impairment losses relating to shares in subsidiaries of MSEK –639 (–1,539). Impairment losses have been recognized in conjunction with the Parent Company having received dividend from the subsidiary and also as a result of the impairment losses of goodwill recognized in relation to Service’s and Mobile’s operations in the Netherlands. Last year the impairment losses were
 
also impacted by intra-group restructuring resulting from the dividend of Securitas Direct AB and Securitas Systems AB. Net income for the year amounted to MSEK 588 (2,877).

Cash flow for the year amounted to MSEK 2,374 (–945).

The Parent Company’s fixed assets amounted to MSEK 51,264 (53,032) and mainly comprise shares in subsidiaries of MSEK 51,050 (51,581). Current assets amounted to MSEK 19,453 (13,979) of which liquid funds amounted to MSEK 3,187 (813).
 
Shareholders’ equity amounted to MSEK 24,483 (24,954).

The Parent Company’s liabilities amounted to MSEK 46,234 (42,057), and mainly consist of interest-bearing debt.

For further information refer to the Parent Company’s financial statements and the accompanying notes and comments.
 
Proposed guidelines for remuneration to senior management in Securitas for 2008
The Board of Directors of Securitas AB (publ) proposes that the Annual General Meeting on April 17 2008 adopt the following guidelines for remuneration to senior management according to the following;
 
The fundamental principle is that remuneration and other terms of employment for management shall be competitive and in accordance with market conditions, in order to ensure that the Securitas Group will be able to attract and keep competent management employees.
 
The total remuneration to management shall consist of a fixed basic salary, variable remuneration, pensions and other benefits. In addition to a fixed annual salary the group management may also receive variable remuneration, based on the outcome in relation to financial goals and growth targets within the individual area of responsibility (group or division) and agree with the interest of the shareholders. The variable remuneration shall amount to a maximum of 50 percent of the fixed annual salary for the President and CEO and a maximum of 35–200 percent of the fixed annual salary for other individuals of the Group Management.
 
The undertakings of the company as regards variable remuneration may, at maximal outcome within all divisions during 2008, amount to a maximum of MSEK 43.
 
The pension rights of senior management employees shall be applicable as from the age of 65 at the earliest and the entire Group Management shall be subject to defined contribution pension plans for which insurance premiums are transferred from the individual’s total remuneration and paid by the company during the term of employment. Variable compensation shall in principle not qualify for pension purposes.
 
Other benefits, such as company car, special health insurance or occupational health service shall be provided to the extent this is considered customary for management employees holding equivalent positions on the employment market where the management employee is active.

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At dismissal, the notice period for all management employees shall amount to a maximum of 12 months with a right to redundancy payment after the end of the notice period, equivalent to a maximum of 100 per cent of the fixed salary for a period not exceeding 12 months. At resignation by a management employee, the notice period shall amount to a maximum of 6 months.
 
These guidelines shall apply to individuals who are included in the Group Management during the term of application of these guidelines. The guidelines shall apply to agreements entered into after the adoption by the Annual General Meeting, and to changes made in existing agreements after this date. The Board shall be entitled to deviate from the guidelines in individual cases if there are particular grounds for such deviation.
 
Further information regarding remuneration to the senior management, and the 2007 guidelines adopted by the AGM on April 17, 2007, is provided in Note 8.
 
Proposed allocation of earnings
The statements of income and the balance sheets of the Parent Company and the Group are subject to adoption by the Annual General Meeting on April 17, 2008.
 

Funds in the Parent Company available for distribution:  
  SEK
Hedging reserve 4,870,363
Translation reserve 266,566,503
Retained earnings 15,895,922,492
Net income for the year 588,401,473
Total 16,755,760,831
 

The Board of Directors propose a dividend to the shareholders of:  
  SEK
SEK 3.10 per share 1,131,682,581
To be carried forward 15,624,078,250
Total 16,755,760,831
 
The Board’s statement on the proposed dividend
With reference to the Board’s dividend proposal, the Board of Directors hereby makes the following statement pursuant to Chapter 18, section 4 of the Swedish Companies Act.

The Company’s unappropriated earnings as per December 31, 2007 amount to SEK 16,167,359,358.

The net income for the year amounts to SEK 588,401,473, of which SEK –2,982,709 is the result of financial instruments being valued pursuant to Chapter 4, section 14 a of the Swedish Annual Accounts Act.
 
The Company’s equity would have been SEK 624,845 lower as per December 31, 2007 if financial instruments, having been valued at actual value pursuant to Chapter 4, section 14 a of the Swedish Annual Accounts Act, had instead been valued at the lower of cost or market.

Unappropriated earnings of SEK 16,755,760,831 are therefore at the Annual General Meeting’s disposal.
 
Provided that the 2008 Annual General Meeting resolves to allocate the results in accordance with the Board’s proposal, SEK 15,624,078,250 will be carried forward. After distribution of the proposed dividend, there will be full coverage for the Company’s restricted equity.
 
The Board has considered the Company’s and the Group’s consolidation requirements and liquidity through a comprehensive assessment of the financial position of the Company and the Group, as well as the possibilities of the Company and the Group to discharge at sight its obligations. The proposed dividend does not jeopardize the Company’s ability to make the investments that have been deemed necessary. The Company’s financial position does not give rise to any other assessment than that the Company can continue its operations and that the Company is expected to comply with its obligations in a short as well as long term perspective. In addition to the assessment of the Company’s consolidation requirements and liquidity, the Board has also taken into consideration all other known circumstances that may impact the Company’s financial position.
 
With reference to the above, the Board makes the assessment that the dividend is justifiable considering the requirements that the nature, scope and risks of the operations pose on the size of the Company’s and the Group’s equity as well as the Company’s and the Group’s consolidation requirements, liquidity and position in general.

As regards the Company’s and the Group’s result and position in general, please refer to the statements of income, balance sheets and statements of cash flow as well as comments and notes.