Treasury management

Treasury management

Treasury management - Group Policy

Grundfos aims at an appropriate capitalisation of the Group operating companies. This capitalisation must be co-ordinated through Grundfos Finance A/S. When raising capital, the current capital structure must be taken into consideration in order to ensure an appropriate combination of short- and long-term loans. Whenever possible, borrowing must be made through Grundfos Finance A/S. Capital must be raised on the best obtainable terms and conditions. As a principal rule, borrowing made by individual Grundfos companies must be in the local currency.

The Group will provide security for company loans if this ensures better loan terms or lower rates of interest. No Grundfos company may provide security for its own loans and credits without prior agreement with Grundfos Finance A/S.

As a principal rule, each company shall use two bankers to be appointed in co-operation with Grundfos Finance A/S.

Flows of payments must be controlled in such a way that the costs of transferring money are minimized and the amount of passive capital limited.

The Group will reduce the financial risks caused by foreign exchange and interest fluctuations. Grundfos Finance A/S shall handle this according to guidelines approved by the Group Management and the board of Grundfos Management A/S.

The total liquidity reserves of the Group must be kept at a level ensuring that significant fluctuations of ingoing and outgoing payments can be absorbed. Surplus liquidity in the operating companies must be offered to Grundfos Finance A/S. The Group will aim at holding sufficient financial reserves to ensure the covering of short-term capital requirements as well as capital requirements in connection with future strategic investments.

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