TUI AG DISCLOSUREOther Disclosures

Capital management

(41) Financial instruments RISKS AND RISK MANAGEMENT RISK MANAGEMENT PRINCIPLES Due to the nature of its business operations, TUI Group is exposed to various financial risks, including mar ket risks (consisting of currency risks, interest rate risks and market price risks), credit risks and liquidity risks. In accordance with TUI Group’s financial goals, financial risks have to be mitigated. In order to achieve this, policies and procedures have been developed to manage risk associated with financial transactions undertaken. The rules, responsibilities and processes as well as limits for transactions and risk positions have been defined in policies. The trading, processing and control have been segregated in functional and organisational terms . Compliance with the policies and limits is continually monitored. All hedges by TUI Group are consistently based on recognised or forecasted underlying transactions. Standard software is used for assessing, moni toring , reporting, documenting and reviewing the effectiveness of the hedging relationships for the hedges entered into. In this context, the fair values of all derivative financial instruments determined on the basis of the Group’s own systems are regularly compared with the fair value confirmations from the external counterpar ties. The processes, the methods applied and the organisation of risk management are reviewed for compliance with the relevant regulations on at least an annual basis by the internal audit department and external au ditors.