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Financial Information

>	Annual Report 2010

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Relationship with Shareholders

Danfoss’ share capital amounts to 1,024m DKK and is divided into two share classes: A-shares, which total 425m DKK, and B-shares, which total 599m DKK. The A-shares give the right to ten votes for every 100 DKK of shares (nominal value), while B-shares give the right to one vote for every 100 DKK shares (nominal value). A-shareholders also have a pre-emption right to A-shares in the event of share capital increases. No other shares or share types carry special rights. The Bitten and Mads Clausen Foundation, along with the Clausen family, own all issued A-shares and a number of B-shares corresponding to 98.4 of the share votes. The remaining votes go to the employee shareholders.

The Bitten and Mads Clausen Foundation

The Bitten and Mads Clausen Foundation is the largest shareholder in Danfoss. Through its ownership, the Foundation is set to contribute to making sure that founder Mads Clausen’s visions and ideas are continued.

The Foundation’s five main objectives:

Safeguarding Danfoss
Ensuring generational succession among the descendants
Supporting the Danfoss brand
Taking part in the regional development of Southern Jutland
Appointing Danfoss Board members

The Foundation was set up on December 23 1971, by Mrs Bitten Clausen and is managed by a nine-member board. The descendants of Bitten and Mads Clausen elect three of the members, while three of the members must be appointed outside the family. The remaining three members are the employee-elected Board members.
The Board members are up for election every second year and the age limit of Board members is 70.
According to the charter of the Foundation, its capital base must at least be a nominal 400m DKK A-shares in Danfoss.

Own shares
The holding of shares is primarily used as a guarantee for the provision of shares in connection with the Board’s options.

Listing on VP Securities
In 2006, the Danfoss A/S shares were registered at VP Securities (Værdipapircentralen (VP)). The registration was as a consequence of the lifting of the placing on trust of the employee shares sold in 2001. The lifting took place on January 1 2007. Once shares are no longer placed on trust, the shareholders are free to transfer the shares from the current deposit at Danske Bank to a deposit in a different bank. Following the expiry of the placing on trust period, the registration at VP is, therefore, Danfoss’ only opportunity to monitor any movement of shares – and thereby to know in which deposits the shares are stored.
Following the registration at VP, the shares in Danfoss A/S are covered by the rules pertaining to securities registered at VP (the rules are available on VP’s homepage: www.vp.dk).
In order for the shares to be registered at VP, conversion restrictions must not be attached to the shares – in other words, the shares must be freely negotiable. Since Danfoss A/S’ Articles of Association include different conversion restrictions, they have now been removed. In terms of the shareholders, this means that the shares are free to be sold to others outside the Bitten and Mads Clausen Foundation. Amendments made to the Articles of Association also entail that the rule concerning Bitten and Mads Clausen Foundation’s pre-emptive right to acquire the shares has been removed. This also applies to the duty of takeover which lies with Danfoss A/S, should the Foundation not want to repurchase the shares. However, the Bitten and Mads Clausen Foundation will, as it has been so far, be willing to buy the shares in Danfoss A/S at the applicable price at any time. The price is set once a year at the General Meeting. To make sure that Danfoss A/S will also be owned by the Clausen family and the Bitten and Mads Clausen Foundation in the future, the main shareholders also entered into a mutual shareholder agreement.

>	The Bitten and Mads Clausen Foundation

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About Us

With our aspiration, promise and behaviour as foundation, Danfoss lives up to the expectations being a responsible world citizen.
This is deeply rooted in our history and culture and it shall be reflected in the way we carry out our daily business.

Danfoss' relationship with all stakeholders shall be characterised by trust. We are, of course, aware that trust must be earned through our actions and corporate reputation.