PVA TePla : Non Financial Group Report 2020

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NON-FINANCIAL GROUP REPORT 2020

2 PVA TePla AG Non-financial Group Report 2020

Contents

1.	GENERAL INFORMATION	3
2.	SUSTAINABLE CORPORATE GOVERNANCE	5
2.1.	Research and Development	6
	R&D activities within the scope of customer projects
	Non-project-related R&D activities
2.2.	Employee issues	8
	Occupational health and safety
	Training and education
	Employee satisfaction
	Company diversity
2.3.	Environmental issues	11
	Increase in energy efficiency and reduction of CO2 emissions
	Waste
2.4. Human rights and corruption and bribery	13
	Respect for human rights
	Combating corruption and bribery
3.	RISK ASSESSMENT	15

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1. GENERAL INFORMATION

Reporting Company and Business Model

PVA TePla AG, Wettenberg, (hereinafter "PVA TePla AG") is a stock corporation in accordance with German law. The Company is entered in the commercial register of the Gies- sen Local Court under HRB 6845 and is domiciled in 35435 Wettenberg. PVA TePla AG's shares have been listed in the Prime Standard of the Frankfurt Stock Exchange since June 21, 1999 (ISIN: DE0007461006).

PVA TePla AG and its subsidiaries (hereinafter "PVA TePla Group") produce systems enabling customers to manufacture and process materials for use in the semiconductor and other industries. The focus of the operating activities in the PVA TePla Group is the development, manufacture and sale of high-temperature and vacuum systems, crystal growing systems, and quality inspection systems for finely structured objects. With locations in Germany, Italy, the USA, the People's Republic of China, Taiwan, and Singapore, the PVA TePla Group maintains business relationships around the world. For further explanations of the Group's business model, please refer to the statements in the combined management report of PVA TePla AG in Section 2, "Basic prin-

ciples of the Group".

Principles of Presentation and Review by the Supervisory Board

PVA TePla AG is required in accordance with Section 315b of the Handelsgesetzbuch (HGB - German Commercial Code) to draw up a non-financial Group report for the 2020 fiscal year for the first time. PVA TePla AG has made use here of the option to prepare a separate non-financial Group report. According to Section 289b HGB, on the other hand, PVA TePla AG acting as the financial holding of the PVA TePla Group is not required to prepare a non-financial declaration.

This non-financial Group report fulfills the requirements pursuant to Section 315c in conjunction with Sections 289c to 289e HGB and also pursuant to German Auditing Standard (GAS) no. 20 and contains the mandatory disclosures that are necessary for understanding the business development, the business performance, and the position of the PVA TePla Group, as well as the impacts of its operating activities on aspects such as employee and environmental issues, respect for human rights, and combating corruption and bribery. Following a thorough review, the aspect relating to "Social issues" specified in Section 315c in conjunction with Section 289c(2) HGB was assessed as not material, while "Research and development" was voluntarily added given its particular importance for the Group's growth and for customer satisfaction. As the existing international frameworks are not a perfect fit with the processes of the PVA TePla Group, their use has been dispensed with for the time being.

The Supervisory Board of PVA TePla AG reviewed this separate non-financial Group report for the 2020 fiscal year and adopted it at its meeting to discuss the financial statements on March 19, 2021, approving it for publication on the homepage of PVA TePla AG. Furthermore, this report was subjected to a voluntary critical analysis ("review") in accordance with ISAE 3000 (Revised) by Ebner Stolz GmbH & Co. KG Wirtschaftsprüfungsgesellschaft Steuer- beratungsgesellschaft on behalf of the Supervisory Board in order to obtain limited assurance that the report complies with the reporting criteria required by law.

NON-FINANCIAL GROUP REPORT 2020

4 PVA TePla AG Non-financial Group Report 2020

Difference between Parent Company and Group

To make it clear which disclosures refer to the parent company and which refer to the Group, "PVA TePla AG" is always used to designate the parent company, while "PVA TePla Group" or "Group" is used to designate the Group. Where this distinction is not made and no other indication is given, the disclosures refer both to the Group and to the parent company.

Gender

For simplification, only one gender is used. This explicitly covers all other genders.

Fiscal Year

PVA TePla AG's fiscal year 2020 began on January 1, 2020 and ended on December 31, 2020. The corresponding prior-year period thus covers the period from January 1, 2019 to December 31, 2019.

Rounding Differences

The figures in this report may contain rounding differences of +/- one unit (KEUR, %, etc.) for reasons related to the calculations.

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2. SUSTAINABLE CORPORATE GOVERNANCE

In addition to cost efficiency, quality is a key factor in the products manufactured by the PVA TePla Group and in the services it performs and constitutes an important criterion for sustainable corporate governance. In order to ensure and further improve quality, the PVA TePla Group follows the requirements of the ISO 9001 quality management standard throughout the group.

The focus of this non-financial Group report is the non-financial aspects that are of great importance for the operating activities of the PVA TePla Group. Key non-financial aspects within the meaning of Sections 315c(2) and 289c(3) HGB and relevant sustainability issues for the PVA TePla Group were identified in the 2020 fiscal year in the course of a materiality analysis in a multistage process involving management and specialist departments using surveys and discussions. Concepts and targets that define the sustainability strategy were derived from the areas that are essential for the PVA TePla Group. In fiscal 2021, building on the findings already obtained, the materiality analysis of the individual criteria will be consolidated and enhanced in more detail and the group of stakeholders included in the analysis expanded. This relates to the correspondingly increased detail on the objectives to the defined non-financial performance indicators and the relevant measures to achieve the targets.

The following aspects that are subject to reporting requirements or that have been voluntarily added are derived for the PVA TePla Group from the analyses carried out in the 2020 fiscal year.

NON-FINANCIAL GROUP REPORT 2020

Aspects	Material facts	Key non-financial performance indicators
Research and	R&D activities as part of customer projects	R&D ratio
Development
	Non-project-related R&D activities	Average number of employees assigned directly to R&D
Employee issues	Occupational health and safety	Accident rate
Absence rate
	Training and education	Training and education expenses
	Number of trainees
	Employee satisfaction	Staff turnover
	Average length of service
		Average age
	Company diversity	Proportion of women
	Proportion of employees with disabilities
		Diversity of nationalities
Environmental	Increase in energy efficiency and reduction of	Electricity consumption
issues	CO2 emissions	CO2 equivalents
	Waste	Waste
	Waste generation rate
Respect for human	Conscientious selection of stakeholders within	Number of suspected cases of human rights violations reported
rights	the supply chain and customer markets
to management within the established Compliance Management
	Code of conduct	System processes
Combating	Conscientious selection of stakeholders within	Number of suspected cases of corruption and bribery reported
the supply chain and the sales regions	to management within the established Compliance Management
corruption and
	System processes
bribery	Code of conduct