Financial planning and control

Financial planning and control

Financial planning and control - Group Policy

The Group’s budget and information system will be constantly adjusted in order to support the short- and long-term planning at Group, segment, regional and company level. The finance functions of the Group shall ensure that decisions concerning operations can be made on the basis of relevant and correct information and analyses.

Major investments must always be based on cost-benefit analyses and other relevant financial analyses. If at all possible, the Group will follow up on these analyses when the investment has been effected.

Product line profitability statements must be worked out for all the production companies and updated Group calculations must be made for all the main product lines.

In their strategic planning, the segments shall make sure that relevant cost-benefit analyses are made for the individual main strategies, including annual contribution margin analyses for the segment product lines.

The controller function shall carry out, annually or as required, internal control of the Group’s processes, accounting and information systems.

Group transfer prices shall be decided according to the "arm’s length principle" in the OECD guidelines on transfer prices.

Transfer prices shall normally be negotiated once a year between the buying and the selling company. Once a year, transfer price documentation must be established for possible use by local tax authorities.

Grundfos companies shall follow local legislation governing annual accounts as well as Group guidelines for presentation of annual accounts. In case these two are in conflict, the Grundfos company shall follow the local annual accounts legislation.

The Group’s controller function is responsible for carrying through - at least annually - internal control of all the companies in the Group according to approved instructions for internal control in the Grundfos Group. During this internal control the Grundfos Management A/S controllers must have access to all information except information about salary and pension relating to the managing director or general manager of the company.

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