Annual Report 2008 - Securitas

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68 Annual report Notes and comments to the consolidated financial statements Notes Note 1. General corporate information Operations Securitas AB (the Parent company) and its subsidiaries (together the Securitas Group) provide security services that protect homes, workplaces and society. Our core business is guarding services and the main service offering categories are specialized guarding, mobile services, monitoring and consulting and investigation services. Securitas is present in 37 countries in North America, Latin America, Europe, the Middle East and Asia, with more than 240,000 employees. Information regarding Securitas AB Securitas AB, corporate registration number 556302-7241, is a Swedish public company and has its registered office in Sweden. The address of the head office is: Securitas AB Lindhagensplan 70 SE-102 28 Stockholm Securitas AB has been listed on the NASDAq OMX Stockholm since 1991 and is included in the OMX Stockholm All Share, OMX Stockholm 30 and OMX Stockholm Benchmark cap indexes. Information regarding the Annual Report and the Consolidated Financial Statements This Annual report including the consolidated Financial Statements was signed by the Board of Directors of Securitas AB and also approved for publication on March 10, 2009. The statements of income and balance sheets for the Parent company and the Group included in the Annual report and the consolidated Financial Statements are subject to adoption by the Annual General Meeting on May 7, 2009. Note 2. Accounting principles Basis of preparation Securitas’ consolidated financial statements are prepared in accordance with International Financial reporting Standards (IFrS) as endorsed by the European Union (EU), the Swedish Annual Accounts Act and the Swedish Financial reporting Board’s standard rFr 1.1 Supplementary Accounting Rules for Groups. The consolidated financial statements have been prepared in accordance with the historical cost convention method with the exception of available-for-sale financial assets and financial assets or financial liabilities at fair value through profit or loss (including derivatives). Estimates and judgments The preparation of financial reports requires the Board of Directors and Group Management to make estimates and judgments. Estimates and judgments will impact both the statement of income and the balance sheet as well as disclosures such as contingent liabilities. Actual results may differ from these judgments under different assumptions or conditions. For further information regarding estimates and judgments refer to Note 4. Adoption and impact of new and revised IFRS for 2008 IAS 39 (amendment) and IFRS 7 (amendment) Reclassification of financial instruments This amendment has no impact on the Group’s financial statements and has not led to any additional disclosures in the annual report. Securitas Annual report 2008 IFRIC 11 Group and treasury share transactions according to IFRS 2 This interpretation has no impact on the Group’s financial statements. IFRIC 12 Service concession arrangements This interpretation is still subject to approval from EU. It is not relevant for the Group’s operations. IFRIC 14 The limit according to IAS 19 on a defined benefit asset, minimum funding requirements and their interaction This interpretation has no impact on the Group’s financial statements. Introduction and effect of new and revised IFRS When the consolidated financial statements as of December 31, 2008 were being prepared, a number of standards and interpretations had been published but had not yet come into effect. The following is a preliminary assessment of the effect that the introduction of these standards and interpretations will have on Securitas’ financial statements: IFRS 1 (amendment) First time adoption of IFRS and IAS 27 Consolidated and separate financial statements The amendment is effective from January 1, 2009. The amended standard deals with first-time adopters’ valuation of investments in subsidiaries, joint ventures and associated companies. The amendment also removes the definition of the cost method from IAS 27 and replaces it with a requirement to present dividends as income in the separate financial statements of the investor. The Group will apply IFrS 1 (amendment) from January 1, 2009. IFRS 2 (amendment) Share-based payment The amendment is effective from January 1, 2009. The amended standard deals with vesting conditions and cancellations. The Group will apply IFrS 2 (amendment) from January 1, 2009, but it will have no impact on the Group’s financial statements, since the Group has no program for share-based payments. IFRS 3 (revised) Business combinations The revised standard, effective from July 1, 2009, is still subject to approval from EU. The standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the statement of income. There is a choice on an acquisition-by- acquisition basis to measure the non-controlling interest in the acquired business either at fair value or at the non-controlling interest’s proportionate share of the acquired business’ net assets. All acquisition related costs should be expensed. The Group will apply IFrS 3 (revised) prospectively to all business combinations from January 1, 2010. IFRS 5 (amendment) Non-current assets held for sale and discontinued operations (and consequential amendment to IFRS 1 First-time adoption) The amendment is effective from January 1, 2009. The amendment clarifies that all of a subsidiary’s assets and liabilities are classified as held for sale if a partial disposal sale plan results in loss of control. The Group will apply IFrS 5 (amendment) prospectively to all partial disposals of subsidiaries from January 1, 2010.
IFRS 8 Operating segments The Group will from January 1, 2009 adopt IFrS 8 Operating segments, which replaces IAS 14 Segment reporting. The new standard requires that segment information is presented from a management perspective. The adoption of IFRS 8 will for the Group result in that the primary segments: • Security Services North America, • Security Services Europe and • Mobile and Monitoring will be replaced by the following reportable segments: • Security Services North America, • Security Services Europe (consisting of an aggregation of the two operating segments Security Services Europe and Aviation), • Mobile and Monitoring (consisting of an aggregation of the two operating segments Mobile and Securitas Alert Services) and • a reportable segment named Other for all other operating segments. The evaluation of the segments and the measurements used for follow up are not different from the measurements used earlier. The primary measurement for income is still Operating income before amortization but information will also going forward be provided for Operating income after amortization. Refer to Note 3 for a definition of these two measurements. The concept of secondary segments that was defined in IAS 14 is not found in IFrS 8. IFrS 8 on the other hand has certain other disclosure requirements, which for the Group will result in that information will be disclosed about the sales and non-current assets for countries that are deemed to be material. The Group has concluded that this is the case if they constitute more than ten percent of either of these two items. IAS 1 (revised) Presentation of financial statements The revised standard is effective from January 1, 2009. It will prohibit the presentation of items of income and expenses, that is non-owner changes in equity, in the statement of changes in equity, requiring non-owner changes in equity to be presented separately from owner changes in equity. All nonowner changes in equity will be required to be shown in a performance statement, but entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the statement of income and the statement of comprehensive income). where entities restate or reclassify comparative information, they will be required to present a restated balance sheet as at the beginning comparative period in addition to the current requirement to present balance sheets at the end of the current period and comparative period. The Group’s presentation of the financial statements will thus be affected by this standard. The Group will apply IAS 1 (revised) from January 1, 2009. IAS 1 (amendment) Presentation of financial statements The amendment is effective from January 1, 2009. It clarifies that some, rather than all, financial assets and liabilities classified as held for trading in accordance with IAS 39 Financial instruments: Recognition and measurement, are examples of current assets and liabilities respectively. The Group will apply IAS 1 (amendment) from January 1, 2009. It is expected to have no impact on the Group’s financial statements. IAS 19 (amendment) Employee benefits The amendment is effective from January 1, 2009. • The amendment clarifies that a plan amendment that results in a change in the extent to which benefit promises are affected by future salary increases is a curtailment, while an amendment that changes benefits attributable to past service gives rise to a negative past service cost, if it results in a reduction in the present value of the defined benefit obligation. • The definition of return on plan assets has been amended to state that plan administration costs are deducted in the calculation of return on plan assets only to the extent that such costs have been excluded from measurement of the defined benefit obligation. • The distinction between short-term and long-term employee benefits will be based on whether benefits are due to be settled within or after 12 months of employee service being rendered. Annual report Notes and comments to the consolidated financial statements • IAS 37 Provisions, contingent liabilities and contingent assets requires contingent liabilities to be disclosed, not recognised. IAS 19 has been amended to be consistent. The Group will apply IAS 19 (amendment) from January 1, 2009. IAS 23 (amendment) Borrowing costs The amendment is effective from January 1, 2009. The definition of borrowing costs has been amended so that interest expense is calculated using the effective interest method defined in IAS 39 Financial instruments: recognition and measurement. This eliminates the inconsistency of terms between IAS 39 and IAS 23. The Group will apply IAS 23 (amendment) prospectively to the capitalisation of borrowing costs from January 1, 2009, but it is expected to have no material impact on the Group. IAS 27 (revised) Consolidated and separate financial statements The revised standard, effective from July 1, 2009, is still subject to approval from EU. The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in the statement of income. The Group will apply IAS 27 (revised) prospectively to transactions with non-controlling interests from January 1, 2010. IAS 28 (amendment) Investments in associated companies (and consequential amendments to IAS 32 Financial Instruments: Presentation and IFRS 7 Financial instruments: Disclosures) The amendment is effective from January 1, 2009. An investment in an associated company is treated as a single asset for the purposes of impairment testing. Any impairment loss is not allocated to specific assets included within the investment, for example, goodwill. reversals of impairment are recorded as an adjustment to the investment balance to the extent that the recoverable amount of the associated company increases. The Group will apply IAS 28 (amendment) to impairment tests related to investments in associated companies and any related impairment losses from January 1, 2009. IAS 32 (amendment) Financial instruments: Presentation and IAS 1 (amendment) Presentation of financial statements – Puttable financial instruments and obligations arising on liquidation The amendments are effective from January 1, 2009. The amended standards require entities to classify puttable financial instruments and instruments, or components of instruments, that impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation as equity, provided the financial instruments have particular features and meet specific conditions. The Group will apply the IAS 32 and IAS 1 (amendment) from January 1, 2009. It is not expected to have any impact on the Group’s financial statements, since the Group at present has not issued this type of financial instruments. IAS 36 (amendment) Impairment of assets The amendment is effective from January 1, 2009. Where fair value less costs to sell is calculated on the basis of discounted cash flows, disclosures equivalent to those for value-in-use calculation should be made. The Group will apply IAS 28 (amendment) and provide the required disclosure where applicable for impairment tests from January 1, 2009. IAS 38 (amendment) Intangible assets The amendment is effective from January 1, 2009. A prepayment may only be recognised in the event that payment has been made in advance of obtaining right of access to goods or receipt of services. The Group will apply IAS 38 (amendment) from January 1, 2009. Securitas Annual report 2008 69
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Annual Report 2008
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Securitas in short Sales by busines
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” Business relationships are loca
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during the second half of the year.
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The cornerstones of our strategy Hi
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The Business model for Specialized
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Industry/Manufacturing - Case #1 pa
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Our Security officer Andy Price per
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Estuardo Turcios, one of Securitas
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Euclides Vieira, a mobile services
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Page 23 and 24: Security Services North America pro
Page 25 and 26: Events and key figures for 2008 ·
Page 27 and 28: Leading the Specialization in Europ
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Page 31 and 32: Events and key figures for 2008 Acq
Page 33 and 34: Growing in New Markets A cornerston
Page 35 and 36: services. Asia is the third-largest
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Page 39 and 40: work with independent and strong lo
Page 41 and 42: Volume-related factors The first tw
Page 43 and 44: Business Risk Evaluation Model Secu
Page 45 and 46: A Securitas risk management case to
Page 47 and 48: an environmental impact from a life
Page 49 and 50: Turnover The turnover of Securitas
Page 51 and 52: DATA PER SHARE SEK/share 2008 2007
Page 53 and 54: Taxes, net income and earnings per
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Page 57 and 58: GRB Security, United Kingdom Securi
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Page 63 and 64: Proposed allocation of earnings The
Page 65 and 66: Securitas’ financial model - cons
Page 71: Note 1 General corporate informatio
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Page 79 and 80: Employee benefits (IAS 19) The Grou
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Page 91 and 92: Shareholdings The Board of Director
Page 93 and 94: JANUAry - DEcEMBEr 2007 MSEK Income
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Page 111 and 112: MAIN AcTUArIAL ASSUMPTIONS 2008 200
Page 113 and 114: Globe and other Securitas companies
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Page 117 and 118: Balance sheet MSEK Note 2008 2007 2
Page 119 and 120: Note 40. Accounting principles The
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cHANGE ANALySIS OF SHArES IN SUBSID
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To the annual meeting of the shareh
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Significant Shareholders The princi
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The Work of the Board of Directors
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Insider Policy and Records The Boar
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3. Financial Reporting controllers
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E. Management Assurance - Function
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Sofia Schörling Högberg b. 1978 D
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Bart Adam Bart Adam b. 1965 Divisio
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MSEK 2004 2005 2006 2007 2008 CAPIT
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Statement of income 2007 MSEK q1 20
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Securitas AB Box 12307 SE-102 28 St
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Annual Report 2008 - Securitas

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