Struc­ture of the risk man­age­ment sys­tem of the Uzin Utz Group

Ex­ec­u­tive Board/Su­per­vi­sory Board

The Ex­ec­u­tive 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. In doing so, the Su­per­vi­sory Board, to­gether with the Ex­ec­u­tive 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 local and 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 Ex­ec­u­tive 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. In doing so, 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 early warn­ing sys­tem, which has been set up in ac­cor­dance with Sec­tion 91 (2) AktG, en­ables us to iden­tify all sig­nif­i­cant de­vel­op­ments and/or 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 geared to­wards rec­og­niz­ing risks that could jeop­ar­dize the com­pany's con­tin­ued ex­is­tence at an early stage and tak­ing coun­ter­mea­sures if nec­es­sary, as well as en­sur­ing 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:

The risk groups were spec­i­fied in more de­tail com­pared to 2023 and ex­panded to in­clude the cat­e­gories "Sales" and "En­vi­ron­ment". The "Other" cat­e­gory com­prised a range of po­ten­tial risk fac­tors which, after analy­sis, were at­trib­ut­able to the sales area in par­tic­u­lar. In ad­di­tion, the "En­vi­ron­ment" cat­e­gory was added mainly due to the in­tro­duc­tion of the Cor­po­rate Sus­tain­abil­ity Re­port­ing Di­rec­tive (CSRD).

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 sit­u­a­tion" and "Fi­nan­cial risks" sec­tions of this re­port apply to fi­nan­cial in­stru­ments. In ad­di­tion, the earn­ings and liq­uid­ity risks of fi­nan­cial as­sets are mapped in the form of an early warn­ing sys­tem. The main el­e­ments here are de­tailed monthly re­port­ing on all key in­come state­ment items and a quar­terly re­port from the port­fo­lio com­pa­nies on the de­vel­op­ment of the gen­eral en­vi­ron­ment, the re­ceiv­ables and in­ven­tory risk as well as the liq­uid­ity and fi­nanc­ing sit­u­a­tion. Reg­u­lar re­view meet­ings with the af­fil­i­ated com­pa­nies, group-​wide ac­count­ing guide­lines and manda­tory, di­rect com­mu­ni­ca­tion chan­nels be­tween the man­ag­ing di­rec­tors of the af­fil­i­ated com­pa­nies and the Ex­ec­u­tive Board of Uzin Utz SE in all key mat­ters are 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 ap­plied 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, 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 Ex­ec­u­tive 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 ex­is­tence and func­tion­al­ity of the early risk de­tec­tion sys­tem in ac­cor­dance with Sec­tion 91 (2) AktG. In ad­di­tion, an an­a­lyt­i­cal re­view of the risk maps and the risk-​bearing ca­pac­ity cal­cu­la­tion based on them is car­ried out in­ter­nally. This audit mea­sure en­ables po­ten­tial ir­reg­u­lar­i­ties to be iden­ti­fied at an early stage, the ap­pro­pri­ate­ness of the risk man­age­ment strate­gies im­ple­mented to be checked and risks to be dealt with ap­pro­pri­ately in ac­cor­dance with the com­pany's ob­jec­tives.