Kim S v ensson pre viously Senior V ice President Corpor ate Finance and Aime L y a gre formerly the C OO of Securit y Ser vices Europe ha v e s tepped do wn from Securit as Group M ana g ement on October 25 2012 Kim S v ensson has been appointed R e g ional President of Securit as China and South Eas t Asia Aime L y a gre has been appointed CT O Chief T echnology Ofcer Securit y Ser vices Europe Risk and uncert ainties M ana g in g risk is necessar y for Securit as to be able to fulfll its s tr ate g ies and achie v e its corpor ate objectiv es Securit as approach to enterprise risk mana g ement is described in more det ail on pa g es 4044 Securit as risks fall into three main cate g ories contr act risks oper ational assignment risks and fnancial risks Contr act risks This cate g or y encompasses the risks related to enterin g into a cus tomer contr act and also those risks related to the acquisition of a new business When enterin g into a contr act with a cus tomer a balanced division of responsibilities and risks bet w een Securit as and the cus tomer is essential St andar diz ed contr acts are the norm R ea sonable caps on potential liabilit y and indemnifcation for thir d part y claims are import ant Signifcant focus is de v oted to con tr act risks and the mana g ement of contr act risks Each se gment has de v eloped policies and procedures t ailored to their specifc needs These policies are all based on the contr act policies appro v ed b y the Boar d of Director s in the Group policies and guidelines In addition to or ganic gro wth resultin g from new and or increased cus tomer contr acts the Group has gro wn b y a signif cant number of acquisitions o v er the y ear s and will as part of the Group s s tr ate gy continue to acquire securit y companies The inte gr ation of new companies alw a ys carries cert ain risks T o a hig her de gree than pre viously such acquisitions are also t akin g place in new mark ets such as L atin America the Middle Eas t Asia and Africa The proft abilit y of the acquired compan y ma y be lo w er than e xpected and or cert ain cos ts in connection with the acquisition ma y be hig her than e xpected The acquisitions and div es titures made durin g 2012 are described under the headin g Acquisitions and div es titures abo v e and in note 16 Oper ational assignment risks Oper ational assignment risks are risks associated with daily oper ations and the ser vices w e pro vide to our cus tomer s for e xam ple when ser vices do not meet the required s t andar ds and result in loss of propert y dama g e to propert y or bodily in jur y Proper recruitment tr ainin g and super vision of securit y ofcer s are import ant to mitigate these risks Another t ype of oper ational assignment risk which ma y impact proft abilit y is the risk that Securit as will not be able to increase prices to be paid b y cus tomer s in or der to compensate fully for increases in w a g es and related cos ts Financial risks Financial risks are mainly mana g ed throug h continuous measure ment and follo w up of fnancial per formance with the help of Securit as fnancial model This model identifes cert ain k e y fgures that are vit al to the proft abilit y of the oper ations and facilit ates the detection and handlin g of risks The fnancial model is described in more det ail on pa g es 5051 In addition fnancial risks other than relatin g to fnancial reportin g arise because the Group has e xternal fnancin g needs and oper ates in a number of foreign currencies The risks are mainly interes t r ate risk foreign currenc y risk fnancin g and liquidit y risk and credit counterpart y risk The cus tomer credit risk that is the risk of Securit as cus tom er s not bein g able to fulfll their obligation of pa yin g in v oices for ser vices bein g pro vided increased durin g the current recession The risk is reduced b y the fact that the numerous cus tomer s are spread o v er man y business sector s and g eo gr aphies and b y es t ablished routines for monitorin g and collectin g of accounts receiv able within Group companies f urther information re gar din g fnancial risk mana g ement is pro vided abo v e under the section Capit al emplo y ed and fnancin g Financin g and in note 6 The prepar ation of fnancial reports requires the Boar d of Director s and Group M ana g ement to mak e es timates and jud g ments Es timates and jud gments will impact both the s t atement of income and the balance sheet as w ell as disclosures such as contin g ent liabilities Actual results ma y difer from these es timates and jud gments under diferent circums t ances and conditions f urther information re gar din g critical es timates and jud gments is pro vided in note 4 F or the forthcomin g t w elv e month period the fnancial impact of cert ain items afectin g compar abilit y pro visions and contin g ent liabilities as described in note 11 note 32 note 35 and note 37 respectiv ely ma y v ar y from the current fnancial es timates and pro visions made b y mana g ement This could afect the proft abilit y and the fnancial position of the Group P er sonnel With more than 300 000 emplo y ees in 52 countries Securit as number one responsibilit y is to be a solid trus t w orth y and s t able emplo y er to all our emplo y ees s trivin g to ofer g ood w orkin g conditions fair w a g es and opportunities for per sonal de v elop ment Our basic requirement is to act within the fr amew ork of la ws and international con v entions This means that w e respect and comply with labor mark et la ws a greements and safet y requirements and other pro visions that set the par ameter s for our oper ations The foundation for our w ork with responsibilit y issues is our ethic s code Securit as V alues and Ethic s which upholds and pro motes hig h ethical business s t andar ds Securit as v alues and Ethic s is based on our three fundament al v alues Inte grit y V ig i lance and Helpfulness Inte grit y means bein g hones t and also the rig ht to openly e xpress one s opinion V ig ilance ent ails s trivin g to be at tentiv e and able to obser v e lis ten and e v aluate Helpfulness is about our emplo y ees alw a ys bein g ready to assis t within the conte xt of a particular assignment 64 Securit as Annual R eport 2012 Annual R eport R eport of the Boar d of Director s