Calculation of t ax es and timin g of outfo ws Deferred t ax is calculated on tempor ar y diferences bet w een the carr yin g amounts and the t ax v alues of assets and liabilities. Assumptions and assessments afect recogniz ed deferred t ax, partly to determine the carr yin g amounts of the diferent assets and liabilities, and partly related to forecas ts re gar din g future t axable profts, where future utilization of deferred t ax assets depends on this. Signifcant assessments and assumptions are also made re gar din g recognition of pro visions and contin g ent liabilities relatin g to t ax risks and the potential impact of on g oin g t ax audits. T ax audits are often len g th y processes that g o on for se v er al y ear s. It is thus not possible to dis - close an y det ailed information re gar din g the timin g of outfo ws from t ax es. The balance sheet includes deferred t ax assets which amounts to M SEK 1 542.3 (1 511.1 and 1 353.4), deferred t ax liabilities which amounts to M SEK 719.0 (669.4 and 432.1) and pro visions for t ax es which amounts to M SEK 195.1 (195.0 and 164.7) included in other lon g -term pro visions (note 32), which are all are subject to critical es timates and jud gments. F urther information re gar din g t ax es is pro vided in note 15, note 32 and note 37. The impact on the Group ’ s fnancial position of on g oin g litigations and the valuation of contin g ent liabilities Ov er the y ear s, the Group has made a number of acquisitions in diferent countries. As a result of such acquisitions, cert ain contin g ent liabilities of the businesses acquired ha v e been assumed. Companies within the Group are also in v olv ed in a number of other le gal proceedin g s and t ax audits arisin g out of the oper ations. The accountin g for litigations, le gal proceedin g s and t ax audits are subject to critical es timates and jud gments. f urther informa - tion is pro vided in note 32, note 35 and note 37. N O TE 5 E v ent s af t er the balance shee t dat e Appro v al of the Annual R eport and Consolidated Financial St atements for 2012 This Annual R eport includin g the Consolidated f inancial St atements w as appro v ed b y the Boar d of Director s of Securit as AB on M arch 15, 2013. Acquisitions The follo win g acquisition has been completed after the balance sheet date but before the appro v al of the Annual R eport: · Selectron, U rugua y . All shares ha v e been acquired. Enterprise v alue is es timated to M SEK 20 (M UYU 60). Selectron has annual sales of appro ximately M SEK 27 (M UYU 80) and 90 emplo y ees. It is included in the business se gment Securit y Ser vices Ibero- America. Other signifcant e v ents after the balance sheet date There ha v e been no signifcant e v ents with efect on the fnancial reportin g after the balance sheet date e x cept the acquisition lis ted abo v e . N O TE 6 Financi al risk management Financial risk factor s The Group ’ s business activities create e xposure to fnancial risks, such as interes t r ate risk, foreign currenc y risk, fnancin g and liquidit y risk and credit / counterpart y risk, as det ailed in the sections belo w . The Group ’ s o v er all fnancial risk mana g ement progr am focuses on the unpredict abilit y of the fnancial mark ets and aims to minimiz e potential adv er se efects on the fnancial per formance of the Group . T reasur y or ganization and activities The aim of the treasur y or ganization in Securit as is to support business oper ations b y identif yin g, quantif yin g and minimizin g fnancial risks and to the e xtent possible , to t ak e adv ant a g e of economies of scale in the treasur y oper ations. Business se gments T reasur y oper ations in the business se gments concentr ate on impro vin g cash fo w b y focusin g on proft abilit y in the business oper ations, reducin g capit al tied-up in accounts receiv able , and in the mos t efcient w a y handlin g both in v es tments and local cash mana g ement . Countries In countries with e xtensiv e oper ations, liquidit y surpluses and liquidit y defcits in local subsidiaries are matched at countr y le v el with the help of local cash-poolin g solutions. In addition, Securit as oper ates an o v er all cash-poolin g s tructure incorpor atin g countries in the Euro z one and the U SA . All local lon g -term fnancial requirements are fnanced directly from the Group ’ s internal bank, Group T reasur y Centre (G T C), in Dublin. Group T reasur y Centre B y concentr atin g the fnancial risk mana g ement in a sin g le location, the Group can readily monitor and control these risks and beneft from the e xpertise of dedicated treasur y per sonnel. Also , b y concentr atin g internal and e xternal fnancin g throug h G T C, economies of scale can be used to obt ain the bes t possible pricin g of in v es tments and loans. G T C also has responsibilit y for matchin g local liquidit y surpluses and defcits bet w een countries and cash-pools. G T C identifes, e v aluates and hed g es fnancial risks in co-oper ation with the oper atin g units. The Boar d of Director s of Securit as AB es t ablishes policies for o v er all risk mana g ement , as w ell as policies co v erin g specifc areas such as foreign e x chan g e risks, interes t r ate risk, credit risk, use of deriv ativ e fnancial ins truments and in v es tin g e x cess liquidit y . Deriv ativ es are used for the follo win g main purposes: hed g in g the inter - es t r ate element of e xternal debt and chan g in g its currenc y profle , g earin g r atio hed g in g and hed g in g of internal borro win g s and in v es tments. Interes t r ate risk Interes t r ate risk is the risk that the Group ’ s net income will be afected b y chan g es in mark et interes t r ates. The Group has r aised funds in mainly U SD , E UR and SEK with both fx ed and foatin g interes t r ates. Det ailed information on lon g -term borro win g s is pro vided in note 30. The Group uses interes t r ate deriv ativ es in designated fair v alue and cash fo w hed g es to hed g e chan g es in the risk free r ate , con v ertin g the interes t r ate profle of this debt . Since income is tied to cus tomer contr acts with an annual price re view and this impact usually follo ws each countr y’ s economic de v elopment and infa - tion r ate , interes t r ate risks are mos t efectiv ely minimiz ed throug h short interes t r ate periods. Stron g cash fo ws from oper ations reduce the Group ’ s dependenc y on e xternal fnancin g and thereb y also minimiz e interes t r ate risk. Other e xternal fnancin g requirements ma y arise from time to time in connection with acquisitions. The interes t r ate e xposure on this acquisition fnancin g is mana g ed on a case b y case basis. Information on the Group ’ s debt profle is pro vided in the t able belo w as w ell as information on interes t r ate fxin g s. The t ar g et for the free cash fo w to net debt r atio is alw a ys to e x ceed 0.20. F ree cash fo w to net debt as of December 31, 2012 w as 0.21 (0.08 and 0.24). The Group ’ s interes t co v er a g e r atio , a measure of its abilit y to pa y interes t cos ts, w as 5.0 (6.1 and 7.4) as of December 31, 2012. 85 Annual R eport Notes and comments to the consolidated fnancial s t atements Securit as Annual R eport 2012