As an international company, we are subject to a large number of internal and external developments and events that can have a significant impact on the achievement of financial and non-financial targets. Successful and targeted opportunity and risk management are therefore integral components of corporate management.

To this end, we have a system for identifying, recording, assessing and controlling current and future business and financial risks. Nevertheless, this is a system that is subject to a permanent optimization process as part of continuous improvement.

The elements of the risk management system are:

• Risk identification
• Risk assessment
• Risk reporting
• Risk management

Structure of the risk management system of the Uzin Utz Group

Executive Board/Supervisory Board

The Management Board of Uzin Utz bears overall responsibility for an effective risk management system. It reports in detail to the Supervisory Board at least twice a year on the risk management system. The Supervisory Board, together with the Management Board, has the task of counteracting risks that could jeopardize the company's existence at an early stage and of reviewing the appropriateness and functioning of the risk management system in order to counteract the risks.

Risk Management

The Risk Manager, who reports directly to the Chief Financial Officer, is responsible for the operational implementation and coordination of the risk management system. He collects the risk maps of all companies, evaluates them at Group level and determines whether there are any risks that could jeopardize the continued existence of the company. Based on this risk analysis, he prepares the risk report for the Management Board and Supervisory Board.

National companies

Responsibility for identifying, assessing and reporting risks lies with the operating companies. They identify their risks with the help of the Group-wide risk catalog and evaluate the identified risks in a uniform Group-wide risk map, which contains criteria such as the expected loss value or the probability of occurrence. Further assistance and active support in recording risks in the risk maps are provided by the Risk Manager. These risk maps are recorded by all risk owners and all companies using a project tool and reported to the Risk Manager after approval by the local managing director. The legal requirements within the risk reporting of the individual companies are taken into account. Each individual risk of a risk owner must be reviewed and approved by the respective local managing director before processing by the Risk Manager can take place. This ensures that the management of the individual companies is informed about all risk areas of the respective company at all times.

Process of the risk management system

The risk management process established in accordance with Section 91 (2) of the German Stock Corporation Act (AktG) enables us to identify all significant developments that could jeopardize the company's continued existence at an early stage. This is achieved through uniform framework conditions and standards for the design of risk identification within the Group.

The entire risk management system is designed to identify risks that could jeopardize the continued existence of the company at an early stage and, if necessary, to take countermeasures and ensure that business objectives are achieved. The principles, guidelines, processes and responsibilities of the internal risk management system have been defined and established. The risk management system essentially comprises the following risk groups:

• Business environment and industry risks
• Prodct risks
• Financial and economic risks
• Risks relating to production and essential IT-supported processes
• Investment risks
• Purchasing, supplier and raw material price risk
• personnel risks

In addition to risk-specific management measures, safety-oriented, commercially prudent corporate management, appropriate insurance cover and company-wide guidelines and instructions form the basis for risk-conscious action.

The explanations in the "Financial position" and "Financial risks" sections of this report apply to financial instruments. In addition, the earnings and liquidity risks of the financial investments are mapped in the form of an early warning system. The main elements of this are detailed monthly reporting on all key income statement items and a quarterly report by the investee companies on the development of the general environment, the receivables and inventory risk and the liquidity/financing situation. Regular audit meetings in the affiliated companies, group-wide accounting guidelines and mandatory, direct communication channels between the managing directors of the affiliated companies and the Management Board of Uzin Utz SE in all material matters represent the remaining main elements.

Identified risks are divided into different risk categories using a special weighting system. These are the following risk categories:

• Insignificant risk
• Low risk
• Medium risk
• High risk
• Risk threatening the existence of the company

The weighting system used is made up of various characteristics of the risks, such as the probability of occurrence, the extent of damage and qualitative criteria such as the measures taken to reduce the risks, any classification of the risk as an early warning indicator or the frequency with which the risk is reviewed. Based on this qualitative weighting system, the risks are classified into the above-mentioned categories and reported to the Management Board. The financially quantifiable risks are additionally assessed on the basis of Uzin Utz's risk-bearing capacity.

Process-independent monitoring

The auditor of Uzin Utz - as an independent external body within the scope of the audit of the consolidated financial statements - reviews the risk management system in accordance with Section 91 (2) AktG for its appropriateness for risk identification, assessment, control and with regard to risk reporting.