Board o f Direct ors The activities of the Boar d of Director s, and the division of responsibilit y bet w een the Boar d and the President and CEO and Group M ana g ement , are g o v erned b y formal procedures. The Boar d consider s risk assessment and control fundament al to achie vin g its corpor ate objectiv es with an accept able risk/ rew ar d profle . The Boar d pla ys an import ant role in the on g oin g process of identif yin g and e v aluatin g signifcant risks faced b y the Group and the efectiv eness of related controls. The processes used b y the Boar d in or der to re view the efectiv eness of the sys tem of internal control include: · Discussion with Group M ana g ement re gar din g risk areas identifed b y Group M ana g ement and the per formed risk assessment procedures · R e view of signifcant issues arisin g from e xternal audits and other re views / in v es tigations The Boar d of Director s has es t ablished an Audit Commit tee in or der to monitor the efectiv eness of the Group ’ s internal control sys tems and fnancial reportin g process. A udit Commit t ee The Audit Commit tee re views all annual and quarterly fnancial reports before recommendin g their publication on behalf of the Boar d. The Audit Commit tee , in particular , discusses the signifcant accountin g policies, es timates and jud gments that ha v e been applied in preparin g the reports. The Audit Commit tee super vises the qualit y and independence of the e xternal auditor s. Management As surance The Group has a coor dinatin g and monitorin g function in relation to cert ain internal control activities at Group le v el. The M ana g ement Assur ance s t af function oper ates as the Group ’ s internal audit function and reports directly to the Senior V ice President Finance with an open line of communication to the Audit Commit tee . This function prepares an annual plan for its w ork, which is appro v ed b y the Audit Commit tee . The results of the function ’ s w ork, which includes the e x ecution and coor dination of internal audit -related activities durin g the y ear , are presented at the Audit Commit tee meetin g s. The M ana g e - ment Assur ance Director participated in all Audit Commit tee meetin g s durin g 2012. In line with one of the Group ’ s fundament al principles, this function has continued to de v elop s tep-b y -s tep impro v ements of the Group ’ s internal control throug h v arious activities throug hout the y ear , includin g fne-tunin g of follo w -up procedures and reportin g, identifcation of risks related to fnancial reportin g and e xamination of the efectiv eness of related internal controls. In 2012, specifc focus la y on dia gnos tic s in new mark et countries and new businesses. Sharin g kno wled g e throug h diferent activities is also a k e y part of impro vin g the control en vironment . The function utiliz es a combination of internal resources and e xternal resources in the form of e xternal auditor s, consult ants and e xperts, dependin g on the specifc situa - tion and area. This enables greater fe xibilit y and responsiv eness to the risks faced b y the Group , which fts Securit as ’ business model. F or more information on the current responsibilities of the M ana g ement Assur ance function, refer to www .securit as. com / mana g ement -assur ance . The function is subject to an annual assessment b y the Boar d to ensure that the activities undert ak en enable a w ell-functionin g monitorin g s truc- ture , tog ether with the other components of the Group ’ s internal control described within this report . Stockholm, M arch 15, 2013 The Boar d of Director s of Securit as AB Auditor ’ s report on the Corpor ate G o v ernance St atement T o the Annual G ener al M eetin g of the shareholder s of Securit as AB, corpor ate identit y number 556302-7241 It is the Boar d of Director s who is responsible for the Corpor ate G o v ernance St atement for the y ear 2012 on pa g es 32–47 and that it has been prepared in accor dance with the Annual Accounts Act . W e ha v e read the Corpor ate G o v ernance St atement and based on that readin g and our kno wled g e of the compan y and the Group w e belie v e that w e ha v e a sufcient basis for our opinions. This means that our s t atutor y e xamination of the Corpor ate G o v ernance St atement is diferent and subs t antially less in scope than an audit conducted in accor dance with International St andar ds on Auditin g and g ener ally accepted auditin g s t andar ds in S w eden. In our opinion, the Corpor ate G o v ernance St atement has been prepared and its s t atutor y content is consis tent with the annual accounts and the consolidated accounts. Stockholm, M arch 15, 2013 Pricew aterhouseCooper s AB P e t er Nyllinge , A uthoriz ed Public A c c ount ant 47 Securit as Annual R eport 2012 G o v ernance and mana g ement Boar d of Director s ’ report on corpor ate g o v ernance and internal control