Risk management and monitoring - Kuo

Risk

management

and monitoring

GRI 2-12, 2-13, 2-25
SASB RT-CH-530a.1

We strive to ensure a sustainable operation

by strengthening our ability to address

emerging challenges and capitalize on

available opportunities

Gestión y

monitoreo

de riesgos

Nos esforzamos por asegurar una operación

sostenible, reforzando nuestra capacidad

para abordar desafíos emergentes y

capitalizar las oportunidades disponibles

At KUO, we apply robust policies and procedures for Risk Management and Monitoring, recognizing the critical importance of this process to our operations

Risk management at KUO is based on the Enterprise Risk Management-COSO (ERM-COSO) methodology, which provides a comprehensive approach to identify, assess, monitor, and manage a wide range of risks that could impact the achievement of our strategic, operational, reporting and compliance objectives.

This methodology addresses different types of risks, including financial, operational, reputational, cybersecurity, environmental, among others, thus ensuring a comprehensive management of risk exposures.

To implement this methodology, we have adopted “The Three Lines of Defense” approach, which involves multiple teams with specific roles and responsibilities working together to strengthen internal control and create value.

FIRST LINE

Our internal control structure is composed of key managers and process managers from the Strategic Business Units, the Shared Services Unit and the Service and Control Units. Their main objective is to ensure compliance with the group's general internal control guidelines and to supervise their day-to-day implementation.

This structure plays a key role in risk management and in safe guarding the company's assets. It is also responsible for ensuring transparency and efficiency in all operations, thus promoting the integrity and long-term sustainability of the organization.

SECOND LINE

In accordance with Article 44, Section XII of the Securities Market Law, General Management is responsible for internal control at KUO. To carry out this function, it is supported by the Assistant Directorate General Management, in charge of the Legal area, the Finance and Planning Department, and the various Comptrollership areas within KUO.

THIRD LINE

The Board of Directors and the Audit Committee, supported by the Internal and External Audit, work together to independently evaluate the effectiveness of the Internal Control system, in accordance with Article 28 Section V of the Securities Market Law. Their main objective is to add value through improvements in the controls established and to reduce risks in operations, thus strengthening risk management and promoting integrity in all the company's activities.

This approach allows us to maintain a comprehensive view of risks and opportunities

Ensuring that we have the right processes and controls in place to mitigate identified risks. It also enables us to adapt nimbly to changes in the operating environment and respond proactively to emerging challenges. Ultimately, our sound risk management positions us to ensure the long-term sustainability and continued success of our operations.