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SECURITAS INTERNATIONAL AKTIEBOLAG ANNDAL REPORT 1978
The Board of Directors and the Managing Director of Securitas International AB herewith submit their Annual Report and the Consolidated Financial
statements for 1978, the 30th year of business.
Cover picture:
Part of a control panel in
Contents
The Securitas Group... 4 Report of the Board and the Managing Director 5 Group Consolidated Profit and Loss Account.. 8 Group Consolidated Balance Sheet . . . 10 Group Financial Analysis... 13 Paren t Company Profit and Loss Account... 14 Paren t Company Balance Sheet . .. .. . . .. . .. .. .. . . . 15 Paren t Company Financial Analysis . . . 17 Principles used in the drawing
up of the Group Statement... 18 Auditors' Report... 26
THE SECURITAS GROUP
(Trading Companies)
Directors and Auditors
Board of Directors
Axel lveroth, Chairman of the International Council of Swedish Industry, Chairman
Eric Ljung, Managing Director of Dux Möbel AB Jörgen Philip-Sörensen, Managing Director
Deputy members
Sven Philip-Sörensen, Director of seeuritas International (Products) Ltd.
Sten Sandell, Counsellor-at-Law
Au ditors
Arne Holmen, Authorised Public Accountant Reidar Peters, Authorised Public Accountant
Deputy auditors
Ebbe Hägg, Authorised Public Accountant Richard Peters, Authorised Public Accountant
Management
Jörgen Philip-Sörensen, Managing Director and Group Managing Director
Olof Holst, Deputy Managing Director Per Sundfeldt, Deputy Managing Director
Parent Company
Securitas International AB, Malmö Sweden
Subsidiaries in Sweden
Bevaknings AB Securitas, Stockholm AB Securitas Alarm, Stockholm
Securitas Verkskyddstjänst AB, Stockholm V.I.P. Security AB, Malmö
Nordisk Bevakning och Butikskontroll AB Stockholm
Svensk Bevakningstjänst Verner Neosen & Co KB, Västerås
Malmö Natt-Vakts Garanti AB, Malmö Prefera AB, Gothenburg
4
SECURIT AS INTERNATIONAL AB
Fack
S-200 22 Malmö, Sweden Tel: Malmö (040) 29 00 00
Stockholm office:
Box 45 153
S-104 30 Stockholm, Sweden Tel: Stockholm (08) 14 39 90
Subsidiaries abroad
seeuritas NS, Oslo
A/S Gaardvakt-Vaktservice, Oslo
Securitas Brann- og Sikringsservice NS, Oslo Prefera NS, Capenhagen
OY Securitas AB, Helsinki
Group 4 Securitas Ltd, Broadway (England) Nouvelle Societe de Surveillance et de
Securite S.A., Brussels
Securitas, Societe de Surveillance et de Securite S.A., Luxembourg
Securitas, Maatschappij Voor Bewaking
En Veiligheid N.V., Rijswijk, (The Netherlands) Groupe l Proteetian S.A., Paris
Securitas Vigilåncia e Alarmes S.A.R.L.
Lisbon
Securitas (Iran) Ltd, Teheran Prefera G.m.b.H., Frankfurt
ANNDAL REPORT
The Board of Directors and the Managing Director of Securitas International AB herewith submit their Annual Report and the Consolidated Financial statements for 1978, the 30th year of business.
The invoiced tumover of the Group amounted to SKr l 298.5 million, of which SKr 550.9 million or 42 % refers to the Swedish Group campanies and SKr 747.6 million or 58% to Group campanies out- side Sweden. This is a SKr 251.6 million or 24% in- crease of the Group turnover in 1977. The Swedish Group companies recorded an increase of SKr 52.9 million or 10.6 % and non-Swedish Group com- panies SKr 198.7 million or 36 %.
The invoiced tumover of the Parent Company ainounted to SKr 3.6 million. The commission agreement, according to which the operations of AB Securitas Alarm and Nordisk Bevakning & Butiks- kontroll AB were earlier carried out on commission for the Paren t Company, has ceased to operate from the beginning of 1978.
The share capital in AB Securitas Alarm has been increased from SKr 5 000 to SKr 100 000 by a new share issue.
Group 4 Securitas Ltd. increased its share capital from .f. l 160 000 to .f. l 510 000 by a share issue. As the Parent Company did not use its right to sub- scribe, its holding of the share capital fell to 65 % In Norway, A/S Norsk Vakt- og Kontrollselskap Securitas (the name of which was changed on l January 1979 to Securitas A/S) · acquired the remaining 50% of the shares in Alarmselskapet seeuritas A/S from International Service System A/S, Denmark. International Service System A/S acquired 25 % of the share capital in conjunction with the increase of the Securitas A/S share capital from Nkr l 000 000 to NKr 3 000 000. Alarmsel- skapet Securitas A/S merged with Securitas A/Son the l january 1979.
The West German subsidiary, Prefera Gesellschaft flir Unternehmenssicherung. m. b .H., has increased its share ca pi tal from DM 350 000 to DM 500 000 by a new share issue.
In January 1979, the share capital in the Belgian subsidiary Nouvelle Societe de Surveillance et de Securite S.A. was increased, by a new issue of shares, from BFr 15 000 000 to BFr 27 000 000. The Parent Company payment for this new issue was
The Parent Company has sold all its shares in the Finnish subsidiary, in conjunction with w hi ch the company changed its name. A dormant company, OY Securitas AB, has been registered in Finland to proteet the name Securitas.
At the end of the year, 2 197 654 s hares in the Japanese security company Nippon Keibi Hosho K.K. were sold for SKr 54.0 million, w hi ch was fully paid up in the beginning of 1979. In conjunction with the sale, a book capital gain of SKr 32.3 million was noted. The holding in Nippon Keibi Hosho K.K. after this sale amounts to 100 000 shares. On the 31 December 1978, the stock exchange value of this holding was Yen 217 million or SKr 4.8 million, calculated on a rate of exchange of Yen 100 = SKr 2.2. The book value is SKr 1.0 million.
Financial report
The following Profit and Loss accounts for the Group and the Parent Company, which form a part of the Annual Report, show that the Group net profit for the year amounted to SKr 34.2 million and that of the Parent Company to SKr 32.7 million.
The Group profit, after the deduction of capita!
gains and other extraordinary items, has improved.
The operating profit before depreciation rose from SKr 21.7 million to SKr 44.8 million, i.e. 3.5 % of the turnover as compared to 2.1 % in 1977. Group companies in Sweden, Norway and Belgium com- pleted rebuilding or new construction work and ful- ly utilised current taxation legislatian in respective countries to set off the costs associated with these works against their results. These costs amounted to SKr 5.3 million. A reservation has been made in the Parent Company for possible costs in conjunc- tion with the relinquishing of its holding in the Iranian subsidiary in 1979. As regards long-term loans in non-Swedish currencies, in contrast to the 1977 accounts, where only accrued parts of the in- curred exchange losses were charged, the result for 1978 has been charged with the total amount of in- curred exchange losses after the liabilities referred to in the final accounts had been valued at the rele- vant rate of exchange on the day the books were closed. These exchange losses amount to SKr 2.2 million. The Parent Company' s taxable capital gain on the sale of the shares in Nippon Keibi Hosho
million. However, according to current regulations, 1979 is the taxation year for this capita! gain.
Following examination by the National Swedish Tax Board, a property belonging to the Parent Company has been sold during 1979 for a price which results in a capita! loss in excess of the capita! gain on the shares sold (the book value of the property is written down to SKr 8.8 million, so that an accounting profit of SKr 1.4 million will oc- cur in 1979). As the capita! gain on the shares will be balanced against the capita! loss on the properly, the 1978 final accounts have not been charged with any appropriation for the SKr 4.3 million of tax.
Operations in Sweden
The Swedish security market is divided up into a seetian which is open to free competition and pric- ing and a part which is completely controlled, in which competition and price setting are not prac- ticed. This controlied part of the market which, from a total defence point of view includes many important security objects, is served by the State- owned security group ABAB and the Alarm Div- ision of the Swedish Telecommunications Ad- ministration on a monopoly basis. In its report (SOU 1978:48), the Monopolies Commission has proposed that this monopoly situation should be discontinued after a transition period. In addition, the training of guards and the use of uniformed guards has been the subject of an investigation.
The state of the Swedish market has been divided.
As a result of trade union pressure, a certain tendency for campanies to set up their own security operations was noted. On the free seetian of the security market, stiffer competition was noted from the State-owned ABAB Group and the Alarms Division of the Swedish Telecommunications Administration- occasionally at prices which can scarcely cover their costs. In spite of this, the·.
Swedish campanies in the Group were well able to hold their own and, in certain cases, even improve their positions.
Bevaknings AB Securitas has worked out a new form of organisation in order to increase its effec- tiveness on the market. The new organisation came into operation on the l January 1979. Considerable investments have been made in a new generation of alarm reception and communications centres - Securitas centres - in Stockholm, Gothenburg, Malmö and Växjö. The computer controlled, elec-
6
tronie Securitas centre in Stockholm, which is to be taken into operation during 1979, is probably the most modern of its type in Europe. The company improved its financial position considerably over the previous year. The invoiced turnover of the company amounted to SKr 491.3 million which was an increase of 14% over the 1977 figure.
AB Securitas Alarm, which develops and manufac- tures alarm equipment, was reorganised and restructured and managed to improve its result.
The products of the company were sold mostly on the Swedish market through the Group Company Bevaknings AB Securitas. The invoiced tumover of the company amounted to SKr 32.5 million which earresponds to an increase of 4% over 1977 figures.
Nordisk Bevakning & Butikskontroll AB (NBB), the operations of which are concentrated in the Stockholm region, has bad several very interesting assignments, including that of guarding Sveriges Riksdag (the Swedish Parliament), the Cultural Centre in Stockholm and Skansen. The invoiced tumover of NBB and its subsidiary in Västerås, Svensk Bevakningstjänst, was SKr · 26.4 million which, as campared to 1977, is an increase of 8 %.
Prefera AB, which specialises in the security aspects of goods distribution and retail sales out- lets, was affected by the falling profitability of the retail trade. However, a recovery was noted during the latter part of the year. The invoiced tumover of the company was SKr 23.8 million and represents an 8 % increase over the 1977 figures.
The remaining Group campanies in Sweden developed largely according to plan. Their invoiced turnover increased by 8 % over 1977 figures to SKr 1.6 million.
Operations outside Sweden
Securitas
NS
of Norway strengthened its position as the market learler. A price freeze was declared in Norway during the year. An application for per- mission to increase prices be cause of increased costs was only granted in part, so that the profit margin of the company was reduced. Reconstruction work was started on a property purchased in Oslo. Staff are moving in as space becomes available during 1979. The invoiced tumover amounted to NKr 148.7 million, which is an increase of38% over 1977. The company proposes a 12 % dividend on the share capital, which has been increased to NKr 3 million.Group 4 Securitas Ltd., ofthe United Kingdom, de- veloped well and extended its range of operations with a new service for wages collection. The com- pany acquired the remaining 51 % of the shares in Securitas Properties Ltd., which owns the property the company uses for its operations. The invoiced turnover amounted to E 26.7 million which was a 26 % increase on 1977. The company proposes a 5 % dividend on the share capita!, which has been in- creased to E l 510 000.
Group campanies in the Benelux countries con- tinued to develop satisfactorily, even though the company in the Netherlands continued to show a small loss. The Belgian company, Nouvelle Societe de Surveillance et de Securite S.A., which is one of the largest security campaniesin Belgium, took its own newly-built office and service premises into operation. The invoiced turhaver of the company amounted to BFr 630.7 million, which is an increase of 30 %over the 1977 figures. Securitas Maatschap- pij Voor Bewaking En Veiligheid N.V. of the Netherlands increased its tumover by 45 % to HFl 1.9 million. Securitas, Societe de Surveillance et de Securite S.A. of Luxembourg startedthe construc- tion of a new office block which is to be completed during 1979. The invoiced tumover of the company amounted to LFr 50.7 million, an increase of 16% over 1977 figures. The company proposes a 5 % divi- dend on the LFr 7.5 million s hare capita! and a bonus share issue of LFr 2.5 million, after which the share capita} will amount to LFr 10 million.
Groupe l Proteetian S.A., of France, in which the Group has a 51 % holding, has been able to increase the prices for its servicesafter previous years' strict price control. As a consequence, the result has been
considerably improved. But the company continues to be depressed by high financing costs and was therefore unable to achieve the calculated O result.
The invoiced tumover amounted to FFr 261.9 million, which is a 16 % increase over 1977 figures.
Securitas Vigiläncia e Alarmes S.A.R.L. of Portugal has considerably increased its turnover, despite the economic position of the country, and shows a profit for 1978. The invoiced tumover increased by 45 % to Esc 207.6 million.
Operations in Denmark and West Germany are less extensive and had a total invoiced tumover of SKr 4.9 million. The operations of the company in Iran, in which the Group holding amounts to 60 %, was strongly affected by the political developments in the country during the latter part of the year and i t has proved impossible to maintain contact with the company.
Personnel, Pay and Remuneration
The average number of employees in the Parent Company was 54, all of whom were salaried em- ployees.
The Parent Company paid out SKr 928 000 in salaries and remuneration to the Board ofDirectors, the Managing Director and the Deputy Managing Directors and SKr 3 327 000 to other employees. In- formation about locations in Sweden where the Group employs an average of more than 20 persons is shown in the Parent Company Note 10. The average number of employees in subsidiary cam- panies outside Sweden, tagether with their wages and remunerations, are specifled in the Group Note 16.
GROUP CONSOLIDATED PROFIT AND LOSS ACCOUNr
1978 SKr 1S77 SKr
(in thousands)
Trading revenue
Invoiced sales l 298 527 999 l 046 982
Trading expenditure
Surveillance, production, sales
and administrative costs - 1 253 706 638 - 1025 292
Result before depreciation + 44 821 361 + 21690
Calculated depreciation
Leaseholds and similar rights (Note 6) 35 702 lO
Goodwill (Note 6) 49 550
Plant, equipment (Note 6) -22 274 006 -17 344
Property (Note 7) 2 429 904 1480
Buildings on leasehold ground 553 222
Goodwill on consolidatian l 673 376 2 787
Shares 27 015 760 72 21693
Result after depreciation + 17 805 601 3
lFinanciaU income and expenditure
Dividends from shares + 530 819 + 423
Interest recei ved + 5 828 378 + 5 925
Interest paid - 10 449 300 7 861
Currency exchange losses (Note 12) - 2 972 484 7 062 587 1810 3 323
Result after financial income and expenditure + 10 743 014 3 326
lExtraordinary income and expenditure Capital gain on sales of
seeurities (Note 13) + 31 897 744
propert y + 370 069 + 399
Investment grant + 62
Other extraordinary income + 125
Ca pitalloss on sale of plant and equipment 44 826
Costs incurred in issuing shares 39 273 120
Other extraordinary costs {Note 14) 848 935 + 31 334 779 475 9
Result before appropriations and taxes + 42 077 793 3 335
8
Appropriations
Change in Stock Reserve (Note 2)
Difference between book depreciation and calculated depreciation:
Plant and equipment Property
Change in the Pension Fund Return oflnvestment Reserve
Allocation from Investment Reserve for depreciation of property
Allocation from Special lovestment Reserve for improvements to premises Allocation from Working Environment Fund for depreciation
Foreign currency exhange differences Allocation to the Capital Reserve Result before taxes
Tax e s
Minority shares in the result Result for the year
1978 SKr
+ l 225 043
+ 1177 052 295 568
+ 886 877
3 233 177 + 41 838 020 - 5 123 210 - 2 523 162
+ 34 191 648
1977 SKr (in thousands)
1147
227
267 + 604 + 225 + 26 + 231 4137
8 027 4 767
+ 5 202 7 592
GROUP CONSOLIDATED BALANCE SHEET
1978 SKr 1977 SKr
(in thousands)
Assets
Current assets
Cash in hand, postal and bank accounts 75 805 685 54 574
Quoted shares (Note l) 729 125 773
Ronds and other seeurities 323 l 779
Bills receivable 778 014 351
Accounts receivable 135 685 053 110 6tl8
Tax claims l 575 963 2 926
Prepaid expenditure and accrued income 12 997 788 12 462
Other receivables 66 985 061 10187
Stocks (Note 2) 56 287 388 57 292
Advances to suppliers 549 110 74
Total of current assets 351 393 510 251106
Blocked accounts for Investment Reserves (Nate 3) 4 977 302 5 546
Fixed assets
Accounts receivable 3 456 214 1888
Shares (Note 4) 2 110 523 25 999
Bonds and other seeurities 206 440 192
Advances to suppliers 103 506
Patents and similar rights 26 202
Tenancy and similar rights 411 280 397
Goodwill 216 227 95
Plant and equipment (Note 5) 62 864 759 52 078
Property (Note 5) 65 771 962 52 513
Buildingson leasehold ground (Note 5) 5 127 666 3 121
Buildings under construction 2 686 208 1671
Goodwill on consolidatian 5 054 157 6 753
Total of fixed assets 148 035 144 144 707
Tota]
504 405 956 401 359lO
· ·-·
*4 F"#1r i '·' *"&54Sa:; J·&?- ·- =- >.t. =•Liabilities and shareholders' equity
Current liabilities Bills payable Bank overdraft
Liabilities to suppliers Tax liability
Prepaid income and accrued expenditure (Note 8) Current part of long-term liabilities (Note 10) Other current liabilities (Note 9)
Advances from customers Total of current liabilities Long-term liabilities
Loan from the ATP Pensions Fund Loan from the STP Pensions Fund Mortgages and debentures
Other long-term liabilities Provisions for pensions to
The Pensions Registration Institute Other pension committments
Reserve for unrealised currency exchange profit Total of long-term liabilities
Minority interests (Nate 11) Untaxed ll'eserves
Stock Reserve (Note 2) Investment Reserve (Note 3) Pension Fund
Capital Reserve
Total of untaxed reserves
Shareholders' equity
Non-disposable capita) (Note 15)
Share ca pi tal: 16 000 A shares at a nominal value of SKr 100 and 83 205 B shares at a nominal value of SKr 100 and 60 795 C shares at a nominal
value of SKr 100 Legal reserves Disposable capita) Balanced loss Result for the year
Total of shareholders' equity
Total
1978 SKr
507 583 26 701 503 41 727 274 2 985 210 104 707 355 14 634 535 77 862 766 13 166 042 282 292 268
26 178 500 9 938 020 41 233 613 8 533 917 9 780 445 3 081 346 2 066 379 100 812 220 11 532 905
21 401 311 l 068 493 3 958 111 3 233 177 29 661 092
16 000 000 40 549 973 10 634 150 34 191 648 80 107 471 504 405 956
1977 SKr (in thousands)
s • i r-;; .. ' p l .... , .... . _ c=--·
561 15 620 27 447 3 885 82 428 84 471 12 592 227 004
17 439 4 751 50 005 12 511 9 368 2 183 96 257 4 538
22 627 1068 .J 845 28 540
16 000 40 448 3 836 7 592 45 020 401 359
1978 SKr 1977 SKr (in thousands)
seeurities pledged
Funds in blocked accounts 33 574 500 12 150
Shares in subsidiaries - 1267
Shares 276 920 14 875
Mortgages on property 49 006 996 34 075
Other seeurities pledged 10 902 800
- - -
Total of securi ties pledged 93 761 216 62 367
ContingeJ;lt liabilities
Discounted bills 528 997 356
Guarantee liabilities 10 623 280 5 763
Pension obligations not shown among liabilities and not
covered by the net val u e of the Pension Fund 2 941 770 1105
Other contingent liabilities 24 190 960 17 053
- -
Total of contingent liabilities 38 285 007 24 277
12
GROUP FINANCIAL ANALYSIS
l_
1978 SKr 1977 SKr
(in thousands) (in thousands)
Source of funds
Result before appropriations and taxes +42 077 - 3 335
Depreciation included in this result +27 016 + 21 693
Gain on sal e of fixed assets -32 268
-
399Tax e s - 5 123 - 4 767
Withdrawal from blocked accounts + 569 + 123
Foreign currency conversion differences
-
- 4137Miscellaneous + 895 - 769
Funds from the year's intemal sources + 33 166 + 8 409
Sales of fixed assets +56 180 + 6 343
Increase in long-term Iiabilities + 4 555 +45 765
Increase in minority interests + 4 481 + l 737
Total of funds from all sources +98 382 + 62 254
Applications offunds
Investments in fixedassets 53 730 67 376
Dividend
-
15 ()()()Total funds applied 53 730 82 376
Change in working ca pitall
+44 652 -20 122Specification of change in working capita!:
Decrease/increase in stocks - l 004 + 10 458
Increase/decrease in short-term receivables +79 713 - 7 456
lncrease in short-term liabilities -55 288 - 33 220
Increase in cash and bank accounts +21 231 + 10 096
Total change in working capita! +44 652 -20122
.
PARENT COMPANY PROFIT AND LOSS ACCOUNT
.----
-
1978 SKr 1977 SKr•
(in thousands)
l
l l
N et revenue from subsidiaries:
Interest received 473 493.30 93
Dividends 508 406.12 524
Group contribution 19 875 500.- 13 297
Interest paid 7 452.10 6
Total of net reven u e from subsidiaries 20 849 947.32 13 908
Dividends from non-Group companies 410 633.09 194
Other interest income 3 031 321.59 4135
24 291 902.- 18 237.
Deductions:
General administration costs -14 008 694.27 -12 5692
Calculated depreciation on plant and equipment (Note 3) 442 900.- l 324
Calculated depreciation on property (Note 3) 434 365.- 183
Calculated depreciation on tenancy rights (Note 3) 10 759.- 44
Other interest costs - 4 042 643.43 2 930
Currency exhange differences (Note l) - 2 904 787.- 1271
Result before extraordinary income and expenditure + 2 447 753.30 84
Investment grant + 62
Surplus on liquidation of a subsidiary + 125
Costs incurred in issuing shares 120
Capital gain on sale of:
Securities (Note 8) +32 363 894.40
Property + 370 069.- + 381
Result before appropriations and taxes +35 181 716.70 + 364
') The figures for 1977 have been calculated again on the basis used for the 1978 year's figures to facilitate comparison.
• 1 The 1977 general management cost, SKr 12 569 000 consists of invoiced sales SKr 51"687 000
trading expenditure SKr --64 256 000
Appropria tio n s
Change in Stock Reserve 118 146.20 + 542
Difference between book depreciation and calculated depreciation:
Plant and in ventory items 3 346.55 220
Buildings 289 917.35 499
Allocation from lnvestment Reserve for
depreciation of property + 225
All!)cation from Special lnvestment
Reserve for improvements topremises + 26
Result before taxes +34 770 306.60 + 438
Taxes - 2 081 048.- 436
Result for the year +32 689 258.60 + 2
14
1
l
' l
PARENT COMPANY BALANCE SHEET
1978 SKr 1977 S.Kr
(in thousands)
Assets
Current assets
Cash in hand, postal and bank accounts 19 691 693.69 26170
Accounts receivable 15 513.- 2145
Tax claims
-
2548Other receivables (Note 9) 55 877 825.50 1260
Stocks (Notes l and 6) 6 599 308.- 26 335
Advances to suppliers - 2
Total of current assets 82 184 340.19
- -
58 460Blocked accounts with the Bank of Sweden
for the Investment Fund 34 500.- 35
for the Special Investment Fund 666 433.- 666
- -
Total of blocked account with the Bank of Sweden 700 933.- 701
Fixed assets
Shares in subsidiaries (Note 5) 7 256 865.- 5 082
Other shares (Note 4) l 463 949.- 23 239
B onds 2 287 075.- 2 287
Long-term claims on subsidiaries 12 649 063.66 5 752
Other long-term claims l 161 979.44 977
Tenancy and similar rights (Note 2) 25 103.- 102
Plant and inventory items (Note 2) l 107 491.- 3 666
Buildings (Note 2) 10 116 760.20 10 593
Land (Note 2) l 604 921.- .2 523
- -
Total of fixedassets 37 673 207.30 54 221
Total
120 558 480.49 113 382.
Securities pledged
(Note 11)Funds in blocked accounts 13 600 000.- 12 150
Quoted shares
-
14 582Mortgages on property 6 235 100.- 7 568
- -
Total of seeurities pledged 19 835 100.- 34 300
16
Liabilities and shareholders'
equity -
Current liabilities Bills payable Tax Hability
Prepaid income and accrued expenditure
Current part oflong-term liabilities Other current liabilities
Advances from customers Totat of current liabilities
lLong~terrm lli~l!lrrni'lnetl
Tax liability
Liabilities to subsidiaries Mortgages and debentures Provisions for pensions Total oflong-term liabilities U n tax ed reserves
Stock Reserve (Nöte 6) Investment Reserve
Special Investment Reserve Total of untaxed reserves
Shareholders' equity
(Note 7) Non-disposable capita}Share capita!: 16 000 A shares at a nominal value of SKr 100 and 83 205 B shares at a nominal val u e of SKr l()() and 60 795 C shares at a nominal value of SKr 100 Legal reserves
Disposable capita!
Balanced profit Resul t for the y ear
Total ofshareholders' equity
Total
Contingen t liabilities
16 000 000.- 2 198 000.-
4 785 244.38 32 689 258.60
Personal guarantees and other contingen t liabilities (ofwhich SKr 2 940 750 is to subsidiaries)
Pension obligations not shown among the libialities and not covered by the net value of the Pension Fund Other contingent liabilities
Total of contingent liabilities
1978 SKr
l 028 532.70 177 795.-
2 226 431.66 5 795 778.55 7 162 867.65
16 391 405.56
l 800 000.- 29 288 476.95 14 449 594.-
45 538 070.95
2 215 068.- 75 000.- 666 433.- 2 956 501.-
18 198 000.-
37 474 502.98 55 672 502.98 120 558 480.49
3 369 780.-
l 610 850.- -å 300 000.-
s
280 630.-16 000 2197
4 784 2
1977 SKr (in thousands)
3 757
5838 2 791 8699
3 21 088
37 840 16 455 503 54 798
13 772 75 666 14 513
18 197
4 786 22 983 113 382
4 174
l 105 - - - 5 279
PARENT COMPANY FINANCIAL ANALYSIS
The Financial Analysis has been affected by the discontinuance of the commission arrangement (see page 5 in the Annual Report)
Source of funds
Result before appropriations and taxes Depreciation included in this result
Gain on sale of fixed assets Taxes
Withdrawal from blocked accounts for Special Investment Reserve Funds from the year's interna! sources Sale of fixed assets
Reduction in long-term receivables Increase in long-term liabilities Transferred Stock Reserve
Transferred equipment and shares Total of funds from all sources
Applications of funds
lnvestments in land, buildings, plant and equipment Investments in shares and bonds
Reduction in long-term liabilities Transferred Stock Reserve
Dividend
Increase in long-term receivables Total funds applied
Change in working capital
Specification of change in working capita}:
Decrease/increase in stocks
!ncrease/decrease in short-term receivAbles Increase/decrease in short-term liabilities Decrease/increase in cash and bank accounts Total change in working ca pi tal
1978 SKr (in thousands)
+ 35 182 + 887 - 32 734 2 081
+ l 254 +56 836
+ 2 447 + 60 537
l 825 2 274 9 260 11 675 7 082 32 116 + 28 421 - 19 736 + 49 938 + 4 697 - 6478
+ 28 421
1977 SKr (in thousands)
+ 364 + l 551 381 436
+ 26 + 1124 + 2 519 + 1160 + 3 674 + 11 675 + 20152
13 159 4866
15 000
33 025 - 12 873 + 20 521 - 33 712 - 7836 + 8154 12 873
PRINCIPLES USED IN THE DRAWING UP OF THE GROUP ACCOUNTS
The Group accounts comprise those of the Parent Company and companies in which the Group holds rnore than 50 % of the voting rights. No final ac- counts have been received from the company in Iran, in which the Group has a 60% holding, so the accounts of this company have not been included in the consolidated accounts.
The Group accounts have been drawn up according to the past equity method, in which the acquisition value of the Parent Company's shares in subsidi- aries is eliminated against the bookshare capita! in the subsidiaries at the time of pureliase and other shareholders' equity. Group accounts include capita! in subsidiaries only to the extent that it has been earned after this date. The over-valuation which has occurred by the elimination has been termed integration goodwill. The value of this goodwill amounted to SKr 6.7 million at the begin- ning of the year and has been depreciated in the Profit and Loss Accounts for the year by SKr 1.7 million, which is 10 % in all cases, with one excep- tion, in which 20 % depreciation was considered necessary. In this respect, there has been no change since last year.
The monetary-non-monetary method has been used w hen converting the Balance Sheets and Profit and Loss Account figures of non-Swedish sub- sidiaries. The monetary items have been converted
18
using the rates of exchange on the day the books were closed and the non-monetary items have been converted at the investment rate of exchange. When this method was introduced, the l January 1977 was regarded as the day of purchase by most companies, with the exception of those in the U.K. and France, where a more detailed investigation was carried out.
The conversion of the non-Swedish accounts provided a profit of SKr 2.066 million, which has been placed in a reserve among long-term liabilities, in the Group Balance Sheet.
All internal sales between campanies included in these accounts have been eliminated. A total of SKr 2.8 million has been eliminated in interna! profit.
Accounts receivable and liabilities in foreign currencies have been valued at the lowest and the highest rate of exchange respectively on the day the books were closed.
A capita! reserve has been set aside among the un- taxed res~rves, because one non-Swedish subsidiary has used local taxation advantages by carrying out a single depreciation on a property.
Provisions made to Pension Fund are shown among the untaxed reserves for a non-Swedish subsidiary.
This provision is paid to an externa! account and the amount is shown under Funds in blocked ac- counts, in the Group Balance Sheet.
Note l Quoted shares
The figures refer to holdings by non-Swedish com- panies in the Group. Specification of shares:
Note 2 Stocks
The stocks have been valued at the procurement cost or the replacement cost, whichever is the lower, and allowances for obsolescence have been made.
The write-down of stocks, excluding obsolescence, isenteredas Stock Reserve, under the heading Un-
Note 3 Blocked accounts for Investment Reserves Blocked accounts for Investment Reserves in Sweden refers to SKr 34 500 of the General lovest- ment Reserve and SKr 666 433 of the Special lovestment Reserve. In Norway, SKr 4 276 369 has been put into reserves as blocked funds, of which SKr 3 840 257 refers to the Pension Fund and is entered under Untaxed reserves on the liability side of the Balance Sheet. The following investment reserves are included in untaxed reserves:
Note 4 Shares
The following list concems the non-Swedish com- panies, in addition to the shares for the Swedish Number
The Swedish operation
Number
l 590 Andersens Bank A/S Norway
4 000 Bergen Bank A/S Norway
l 126 Chr Bank og Kreditkasse NSNorway
1130 Den Norske Kreditbank NSNorway
110 Nordengruppen NS Norway
Miscellaneous shares Total:
Nominal value NKr
Book value SKr
159 000 136 104 400 000 350 960 112 000 110 845 113 000 111 237 11000 9 603 10 376 729 125
taxed reserves, among the·liabilities on the Balance Sheet, and refers to Sweden, the U.K. and Norway.
The change in the Stock Reserve is shown under ap- propriations.
General Investment Reserves, Sweden 75 000 327 060 666 433 Investment Reserve, Norway
Special Investment Reserve, Sweden
- - - ' - - -
Total: SKr l 068 493
operations, which are shown in the Parent Com- pany Note, 4.
Nominal value Book value SKr 75 000
555 5 010 500 400 25
TNT Group 4Total Security Pty Ltd A$ 75 000 55 500 501 000 50 000 40 000 2 500
l 463 949 450 552 17 780 176194 2 048 Societe Mulhousienne de Surveillance FFr
Societe Strasbourgeoise de Surveillance FFr
SPS Lorraine FFr
SECFRA FFr
Ste Colmatienne de Surveillance FFr
Nate 5 Plant and equipment, property and build- ings on leasehold ground
Acquisition Acquistion
value val u e
1977 SKr
SKr 1 000
97 623 Plant and
equipment 133 419 199
66111 Property* 83 767 681
3 670 Buildings on
leasehold ground 7 216 488
*The taxable valuation on the Swedish operations is SKr 6 672 000, of which the taxable valuation on the land amounts to SKr l 617 000.
Nate 6 Tenancy rights, goodwill, plant and inven- tory items
The calculated depreciation is based on the useful life. The depreciation requirement in certain com- panies is set at a level which is lower than that per- mitted by tax legislation. The difference between the calculated depreciation and that permitted by tax legislatian is shown in the Profit and Loss Ac- count under Appropriations, as Difference between book depreciation and the calculated depreciation.
Tenancy rights and goodwill have been depreciated by the maximum amount for tax purposes.
Nate 7 Property
Calculated depreciation is considered to correspond to the depreciation requirement based on the useful life and historical cost.
Nate 8 Prepaid income and accrued expenditure The figure includes the holiday reserve, accrued expenditure for national insurance payments, ac- crued interest charges, advance payments of irt- terest income and rents, etc.
Nate 9 Other current liabilities
The figure includes debts to staff, P.A.Y.E.
payments for employees and other intermediate items.
20
Accumulated Book Bookdepr.
bookdepr. value for the year
SKr SKr SKr
70 554 440 62 864 759 21 096 954 17 995 719 65 771962 2 725 472
2 088 822 5 127 666 553 222
Nate 10 Current part of long-term liabilities This item was included in last year's Group Balance Sheet under the heading Other current liabilities.
Nate 11 Minority interests
The minority interest of the Group has been in- fluenced by the share in this year's loss in France and by the increase in the minority interest in the U.K.
Nate 12 Currency exchange losses
These currency exchange losses are in respect of the Parent Company and it has not been considered possible to use them to reduce the currency exchange profit which occurred in conjunction with the conversion of the accounts of non-Swedish sub- sidiaries. This currency exchange profit is entered as a reserve in the Balance Sheet.
Nate 13 Sale of seeurities
Most of this figure refers to the Parent Company (see Parent Company Note 8).
Nate 14 Extraordinary expenditure
Most of this figure refers to the personnel costs in the reorganisation in the French company
Note 15 Change in shareholders' equity
Share Non-dispos- capital able capita!
SKr SKr
Amount at beginning
oftheyear 16 000 000 40 447 808
Result for the year Allocation to non-
disposable reserves + 457 064
Change in balance at the
beginning of the year + 340 588
Reorganisation in subsidiaries
Unused subscription
rights in issue of shares - 1337 000 Increase in share-
holders' equity in conjunction with new share issue and re- organisation in one
subsidiary company + 641 513
16 000 000 40 549 973 Mandatory allocations to non-disposable funds in Group companies amount to SKr 2 212 619.
Note 16 The average number of employees in sub- sidiary campanies and their salaries and remunerations as shown in the following table:
Disposable Resultfor
ca pi tal theyear Total
SKr SKr SKr
-11427 399 45 020 409
+34 191 648 +34 191 648 457 064
+ 697 325 + l 037 913
+ 95 524 + 95 524
1337 000
+ 457 464 + l 098 977
- 10 634 150 34 191 648 80107 471
Pay and remuneration to Board and Other Management employees
Number of SKr Skr
Country employees (in thousands) (in thousands)
France 5 324 129 897
United Kmgdom 5 082 438 147 655
Norway 1260 521 81401
Denmark 17 110 1232
Belgium l 028 636 51317
Luxembourg 73 258 4 578
The Netherlands 65 26 1829
Portugal 854 198 12 131
German y 96 192 2 078
!re land 292 9 883
Sweden 5 727 2 082 313 041
- -
PARENT COMPANY
Nate l Valuatian principles
Accounts receivable and liabilities in foreign currencies have been valued at the highest and the lowest rate of exchange respectively on the day the books were closed. The currency exchange losses in- curred during the year on long-term foreign loans
Nate 2 Tenancy and similar rights, plant and equipment, buildings and land
have been charged against the results for the year in their entirety, to a value of SKr 2.905 million.
The stock has been valued at cost after a general 5% writedown for obsolescence.
Acquisition value 1977
SKr
(in thousands)
Acquisition value 1978 SKr
Accumulated book depreciation SKr
Book value SKr
Bookde- preciation
this year SKr
Taxable value SKr
Tenancy and
similar rights 254 159 484
Plant and
equipment 7 173 2 860 359
Buildings 22 777 22 796 314
Land 2 523 l 604 921
Total 32 727 27 421 078
The reduction in plant and equipment is mainly explained by the discontinuance of the commission arrangement (see page l in the Annual Report).
Note 3 Calculated depreciation
Calculated depreciation is 25 %per year for vehicles and 20% for other equipment. Tenancy rights are depreciated in accordance with the tax legislatian method for accounting depreciation.
Nate 4 Other shares
Nippon Keibi Hosho K.K.
(Security Patrols Co Ltd) Grupo 4 Securitas Espaiia S.A.
Ljunghusens Golf Club Handelsbolaget
Svenska Dagbladets AB & Co Tenant-owners Association Veterinären No. 2 Stockholm Total
22
Number
100 000 2 000 l
lO l
134 381 25103 10 759
l 752 868 1107 491 446 247
12 679 554 10 116 760 724 282 4 765 000
l 604 921 l 507 000
14 566 803 12 854 275 1181 288 6 272 000
The calculated depreciation on buildings ear- responds to the depreciation permitted by tax legislation. However, the calculated depreciation for one building is less than the depreciation per- mitted by tax legislation, by anamount correspond- ing to the primary deduction.
Percentage
50.0
Nominal value
Yen 500 000 Pts. 2 000 000
Book value SKr
990 552 l 475
l
472 920 l 463 949
Note 5 Shares in subsidiary campanies
Nomber Percentage N o min al value Book value
Skr Skr
Bevaknings AB Seeuritas 19 525 97.6 l 952 500 l 952 500
Seeuritas Verkskyddstjänst AB 50 100.0 50000 25 {)()()
AB Securitas Alarm l {)()() 100.0 100 000 100 {)()()
Stockholms Fastighetsbevakning AB 400 100.0 40 000 40000
Västsvenska Vakt AB 100 100.0 10 000 10 000
Blommeröds Gård AB 1500 100.0 150 000 l
AB Svensk Nattvakt 50 100.0 5 000 5 000
Securitas Express AB 500 100.0 50 000 50000
Nordisk Bevakning & Butikskontroll AB l 000 100.0 100 000 100 000
Städernas Vakt AB 50 100.0 5 000 5 {)()()
Förenade Svenska Vakt AB 50 100.0 5 000 5 000
Stoekholms N attvakt AB 50 100.0 5 000 5000
V.I.P. Security AB 100 100.0 10 000 .55 000
Nordisk Vakthundtjänst AB 500 100.0 50000 25 000
Prefera AB 2 000 100.0 200 000 200 000
Malmö N att- V akts Garanti AB 100 100.0 5000 5 000
Sydvakt/Nordvakt AB 2 000 100.0 200 000 l
Nouvelle Societe de Surveillanee
et de Securite S.A., Belgium' 31605 94.8 B Fr 14 220 000 l
Paid in for share subseription 1 12 000 B Fr 12 000 000 l 788 {)()() Securitas, Societe de Surveillance
et de Securite S.A., Luxembourg 7 850 100.0 B Fr 7 500 000 Seeuritas Maatsehappij Voor Bewaking
En Veiligheid O.V., The Netherlands 100 100.0 Fl 100 000 L
Group 4 Secoritas Ltd., England 979 980 65.0 t 979 980
Securitas NS, Norway 2 248 75.0 NK r 998 000
Securitas Vigilåncia e Alarmes
S.A.R.L., Portugal 1950 97.5 E se l 950 000 l
Securitas (Iran) Ltd., Iran 600 60.0 Rls 6 000 000 l
OY Securitas AB, Finland 100 100.0 Fmk 100 l
Prefera NS, Denmark 29 100.0 D Kr 200 000 l
Groupe l Protection S.A.,France 57 375 51.0 FFr 5 737 500 l 982 078 Prefera Gesellschaft ftir Unternehmens-
sicherung m.b.H. 20 100.0 DM 500 000 904 276
Total shares in Group Companies 7 256 865
1 The amount was paid in to the Nouvelle Societe de Surveillance et de Securite S.A., Belgium
before the 31 December 1978 and the increase in the share capita! was registered on the 30 January 1979.
Note 6 Goods, untaxed reserves
The reduction is due to a discontinuance of the commission arrangement (see page l in the Annual
Note 7 Change in shareholders' equity
Figures at the beginning of the year Profit allocation in accordance with the Annual General Meeting:
Allocated to the Legal Reserve Figures at the end of the year
Note 8 Capital gain from the sale of seeurities This refers mainly to the sale of shares in Nippon Keibi Hosho K.K. (see page 5 in the Annual Report).
Note JO Personnel
The Parent Company and its subsidiaries employ an average of more than 20 persons at the following locations in Sweden:
Securitas Interna- Jönköping 68
tional AB 54 Kalmar 26
Bevaknings· AB Karlskoga 36
seeuritas Karlstad 70
Avesta 22 Katrineholm 24
Borlänge 49 Kristianstad ·33
Borås 87 Köping 33
Enköping 28 Linköping 92
Eskilstuna 48 Ludvika 20
Fagersta 25 Luleå 39
Forsmark 39 Lund 108
Gislaved 38 Malmö 364
Gävle 63 Motala 33
Gothenburg 539 Norrköping 93
Helsingborg 93 Nyköping 37
Härnösand 26 Oskarshamn 75
Note Il Securities pledged
In addition to the piedges mentioned, l 227 000 shares in Nippon Keibi Hosho K.K. have been mortgaged by the puchaser.
24
Share capital Legal reserve Balanced profit
SKr SKr SKr
16 000 000 2 197 000 4 786 244
+ l 000 l 000
16 000 000 2 198 000 4 785 244
Note 9 Other claims
The item includes the claim for shares in Nippon Keibi Hosho K.K. which were sold for SKr 54.0 million (see page 5 of the Annual Report).
Piteå 32 Örebro 139
Ringhals 123 Prefera AB
Skoghall 21 Gothenburg 68
Skövde 82 Malmö 42
stenungsund 43 Stockholm 62
Stockholm 1328 Norrköping 31
Sundsvall 94 Ludvika 23
Söderhamn 44 AB Securitas
Södertälje 42 Alarm Stockholm 129 Trelleborg 24 Malmö Natt-Vakts Trollhättan 89 Garanti AB
Umeå 53 Malmö 49
Uppsala 70 Nordisk Bevakning
Varberg 87 och Butikskontroll Västerås 107 AB Stockholm 244
Växjö 58 Västerås 24
53f?.:J
Proposal for the distribution of profit
From the capital gain of SKr 32.3 million from the sale of shares in Nippon Keibi Hosho K.K., the Board of Directors and the Managing Director propose an increased profit dividend on C shares to Group 4 International, which operates in the Euro- pean Community and a reinforcement of the share capitalin the Swedish Parent Company by a bonus issue of shares.
The Board of Directors and the Managing Director propose that
The profit for the y ear and the unappropriated profit brought forward
Totalling
be allocated as follows:
Transferred to the Legal reserve Bonus share issue
5% dividend on company A shares
5% dividend on company B shares
Dividend on company C shares
Carried forward
Malmö May 1979
Axel lveroth Eric Ljung Jörgen Philip-Sörensen Managing Director Our Auditors' Report on this Annual Report and Consolidated Accounts was submitted on 18 June 1979
Arne Holmen
Authorised Public Accountant
Reidar Peters
Authorised Public Accountant
SKr 32 689 258.60 SKr 4 785 244.38 SKr 37 474 502.98
SKr l 802 000.- SKr 4 000 000.- SKr 80 000.- SKr 416 025.- SKr 15 153 975.- SKr 16 022 502.98 SKr 37 474 502.98
AUDITORS' REPORT
SECURITAS INTERNATIONAL AKTIEBOLAG FOR
We have examined the Annual Report, the Con- solidated Financial Accounts and the administra- tion of the company by the Board of Directors and the Managing Director, for 1978. The audit was made in accordance with generally accepted auditing practice.
The Parent Company
The Annual Report has been prepared in accor- dance with the Swedish Companies Act. The list of
loans, seeurities pledged and contingent liabilities required by this law has been drawn up.
We recommend
that the Profit and Loss Account and the Balance Sheet be adopted,
that the profit be allocated in accordance with the proposal in the Report of the Board and the Managing Director and
that the members of the Board and the Managing Director be discharged from all personal Hability for this financial year
The Group
The Consolidated Financial Accounts have been prepared in accordance with the Swedish Com- panies Act.
We recommend
that the Consolidated Profit and Loss Account and Balance Sheet be adopted.
Malmö 18 June 1979
26
Arne Holmen
Authorised Public Accountant
Reidar Peters
Authorised Public Accountant
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