GOVERNANCE 66 WHERE DOES THE MONEY GO? Most of the Foundation’s income in 2016 was dividend paid out to the Foundation on the basis of Grundfos’ result in the financial year 2015. Fifty percent (50%) of that result was retained within the Grundfos Group, and the other 50 % was paid out as a dividend to the company’s shareholders. Retained within Grundfos Founder’s descendants Grundfos employees Poul Due Jensen Foundation WHO RECEIVES DIVIDEND The money paid out to shareholders as dividend is divided according to the number of shares held by each shareholder. The Poul Due Jensen Foundation is the majority shareholder in Grundfos. With 88 % of the shares. the Foundation receives 88 % of the dividend (or 44 % of the result). The Founder’s descendants received 11 % of the dividend (or 5.5 % of the result). At the end of the financial year 2015, Grundfos employee shareholders owned approximately 1 % of the shares and were able to take home 0.5 % of the result. The Foundation would like Grundfos’ employees to own 10 % of the shares in the future, so it is a great pleasure to see that the new employee share programmes have been so well received among the employees. SOURCES OF INCOME AND CAPITAL The Foundation has two sources of income. The dividend mentioned above is the primary source of income. Besides this, the Foundation lends out approximately DKK 3.2 billion to Grundfos at arm’s length conditions. The interest on this loan forms the second source of income. 639m DKK1 14m DKK Dividend income in 2016 Interest income in 2016 BUY-BACK OBLIGATION According to two different shareholder agreements, the Poul Due Jensen Foundation is obliged and expected to buy back shares owned by other Grundfos shareholders if they wish to sell their shares. The funds required for these obligations and expectations are estimated to be DKK 2.1 billion. These funds are kept available on short notice through the loan agreements. TAXES According to Danish tax law, the dividend income of a single majority owner like the Poul Due Jensen Foundation is exempt from taxes. However, the Foundation does pay tax on income earned from other sources (such as interest). 1 Dividend received in 2016 was based on Grundfos’ result of the financial year 2015
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