Report of the Supervisory Board 2021

Dear Sir or Madam,

Following the far-reaching economic and social impact of the coronavirus pandemic that broke out in the previous year, the 2021 financial year continued to hold many challenges. In addition to overcoming operational constraints amid pandemic restrictions, the global shortage of components among manufacturers in particular impacted our business. Nevertheless, we were able to close the 2021 financial year better than originally expected. We would therefore like to express our special thanks to all BLG Group employees during this difficult period, as they have played a major role in helping us to master the challenges together.

In the 2021 financial year, the Supervisory Board of BREMER LAGERHAUS-GESELLSCHAFT -Aktiengesellschaft von 1877- (BLG AG) actively engaged in the duties assigned to it by law, the Articles of Incorporation and rules of procedure and regularly and extensively discussed the company’s position and development. The Supervisory Board continuously monitored and supported the work of the Board of Management in the financial year. The detailed reports made by the Board of Management in written and oral form constituted the basis for this. In addition, the Chairman of the Supervisory Board regularly exchanged information and ideas with the Board of Management, so that the Supervisory Board was always informed promptly and comprehensively about the intended business policy, corporate planning, the current earnings situation, including the risk situation and risk management, as well as the position of the company and the BLG Group.

In accordance with the recommendations and suggestions of the German Corporate Governance Code (Code), the Supervisory Board supported the Board of Management in the management of the company and advised it on management matters.

Whenever management decisions or measures required approval according to law, the Articles of Incorporation or the rules of procedure, the members of the Supervisory Board – prepared by its committees, among others – reviewed the draft resolutions at meetings or adopted them on the basis of written information. In accordance with the recommendations of the Code, the Supervisory Board also meets on a regular basis without the Board of Management, especially relating to matters concerning the Board of Management. The Supervisory Board was intensively involved in decisions of major significance for BLG LOGISTICS from an early stage. The economic and risk situation and the development prospects of BLG LOGISTICS described in the reports of the Board of Management, the separate divisions and business areas as well as major equity investments in Germany and abroad were the subject of detailed discussion.

The Supervisory Board convened at five regular meetings in 2021. Due to the special circumstances created by the coronavirus pandemic, Supervisory Board members had the possibility to participate virtually in individual face-to-face meetings. The overall attendance rate was 98.4 percent; no member of the Supervisory Board took part in fewer than half of the meetings. Average attendance (physical and virtual) at committee meetings in 2021 was again 100 percent. The members of the Supervisory Board elected by the shareholders and by the employees in some cases prepared for the meetings in separate consultations. Details of attendance rates are shown in the above table.

The Mediation Committee (committee in accordance with Section 27 (3) MitbestG (German Codetermination Act)) did not convene in the 2021 financial year. There were no conflicts of interest on the part of members of the Board of Management and the Supervisory Board that required immediate disclosure to the Supervisory Board and about which the Annual General Meeting had to be informed.

The Code requires that members of the Board of Management shall only assume sideline activities, especially supervisory board mandates outside the enterprise, with the approval of the Supervisory Board. The assumed mandates did not give rise to any identifiable conflicts of interest; on the contrary, they were deemed to be consistently in the interest of BLG LOGISTICS.

Issues discussed in the Supervisory Board

The consultations of the Supervisory Board at its five regular meetings in 2021 repeatedly focused on the current business development and the challenges posed by the coronavirus pandemic and the lack of components in manufacturers’ production facilities. Furthermore, important matters regarding the strategy and business activities of BLG LOGISTICS and its divisions, as well as personnel matters, were discussed. In its individual meetings, the Supervisory Board focused on strategic issues and geopolitical assessments, such as the expansion of the industrial logistics, retail logistics, seaport terminals and inland terminals business areas, BLG LOGISTICS’ further growth through new businesses, partnerships and investments, the company’s current risk exposure, including the risk management system and the risk-aware management of the company’s development.

At its meeting on February 25, 2021, the Supervisory Board also discussed the sale of the international forwarding activities and, at its meeting on April 15, 2021, with the new Board of Management remuneration system, which was approved at the Annual General Meeting on June 2, 2021 and introduced with retroactive effect from January 1, 2021. In addition, at its April meeting the Supervisory Board also dealt intensively with the annual and consolidated financial statements, with the agenda for the 2021 Annual General Meeting, and with the preparation of the non-financial Group statement. The declaration of compliance with the Code was issued at the meeting on September 16, 2021.

The Supervisory Board held an extraordinary meeting on June 14, 2021, mainly to decide on the succession of the member of the Board of Management for the CONTRACT Division.

All major business transactions, the position of the company, the development of the financial position, financial performance and cash flows, as well as the budget to actual variance analyses for corporate planning (incl. forecasts) were discussed intensively and in a timely manner with the Board of Management. Corporate planning as well as short-term earnings and financial planning were discussed in detail at the meeting on December 9, 2021. In addition, the heads of the Internal Audit and Compliance departments reported to the Supervisory Board at the meeting.

The composition of the Supervisory Board changed as follows compared with December 31, 2020:

Karl-Heinz Dammann resigned as a member of the Supervisory Board with effect from June 30, 2021. He was replaced by Jörn Schepull. Jörn Schepull was elected as a substitute member for Karl-Heinz Dammann in 2018.

Klaus Pollok resigned as a member of the Supervisory Board with effect from December 31, 2021. He was replaced by Fabian Goiny. Fabian Goiny was elected as a substitute member for Klaus Pollok in 2018.

Vera Visser resigned as a member of the Supervisory Board with effect from February 28, 2022. Martin Peter was appointed to succeed her as a member of the Supervisory Board by court order of the District Court of Bremen on March 11, 2022.

No former members of the Board of Management of BLG AG are represented on the Supervisory Board.

The following changes were made to the composition of the Board of Management in the 2021 financial year:

Jens Wollesen (originally appointed until June 30, 2024), member of the Board of Management for the CONTRACT Division, left the company at his own request with effect from September 30, 2021 to pursue other professional activities. He had been released from his duties since June 30, 2021. He was succeeded from October 1, 2021 by Matthias Magnor, who was appointed at the Supervisory Board meeting on June 14, 2021 for a period of three years.

At its meeting on February 24, 2022, the Supervisory Board decided to extend the contract with Frank Dreeke for two years, until he reaches the standard retirement age for Board of Management members. He is now appointed until December 31, 2024.

Work of the committees

To perform its duties efficiently, the Supervisory Board has additionally set up four committees. These committees of the Supervisory Board are the Audit Committee, Human Resources Committee, Investment Committee and Mediation Committee in accordance with Section 27 (3) MitbestG (German Codetermination Act). They prepare the resolutions of the Supervisory Board in the plenary session and, where permissible, decide in individual cases in its place. Separate rules of procedure apply to the Audit Committee and the Investment Committee. All committees have equal representation.

The Audit Committee held two meetings in the 2021 financial year. The main subject of the meeting on April 13, 2021 was the extensive discussion and examination of the annual financial statements, the consolidated financial statements and the management reports for the 2020 financial year. Representatives from the auditing firm took part in the meeting when the annual financial statements were discussed and they reported on the results of their audit. In addition, the Audit Committee discussed the appropriation of the net retained profits (HGB) as well as the invitation to the Annual General Meeting and submitted resolutions to the Supervisory Board.

The Audit Committee oversees the selection, independence, rotation and efficiency of the auditor as well as the services it provides and is concerned with conducting an evaluation of the quality of the audit process. Any questions in this regard are discussed in the plenary session. In addition, a newly designed questionnaire was used for the first time in the reporting year to review the quality of the audit of the financial statements. No impediments to the selection of PricewaterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft, Bremen, as statutory auditor for the 2021 financial year were identified.

BLG LOGISTICS changes the auditor regularly. Within the scope of the respective tendering process, the Audit Committee considers the expertise, experience and independence of the candidates.

At its meeting on December 7, 2021, the Audit Committee dealt primarily with corporate planning, including medium-term earnings and financial planning, and the approval of non-audit services. A further focus of the activity was on reporting on the audit and on the compliance system.

The Human Resources Committee held four meetings in the reporting year. At all meetings, it dealt primarily with personnel matters relating to the Board of Management. One focus of the consultations was on determining and appointing a replacement for the Board of Management position for the CONTRACT Division. At the meeting on April 15, 2021, it dealt in particular with the new remuneration system for the Board of Management that was approved at the Annual General Meeting on June 2, 2021.

The Investment Committee held one meeting on October 7, 2021 at which it resolved on investments relating to the expansion of services for a customer.

The Mediation Committee (committee in accordance with Section 27 (3) MitbestG (German Codetermination Act)) did not convene in the reporting year.

The meetings and decisions of the committees were prepared on the basis of reports and other information provided by the Board of Management. Members of the Board of Management regularly took part in the committee meetings. The chairs of the committees reported to the Supervisory Board on the activities and their results following the meetings and submitted resolution recommendations.

Training and self-assessment

The members of the Supervisory Board take responsibility for undertaking any training or professional development measures necessary to fulfill their duties, for example to bring them up to speed with changes in the legal framework and new technologies, and are supported in this by BLG LOGISTICS. In-house training courses or information events for targeted further training are offered as required. In the previous year, in-house training took place on the topics of organization and responsibilities (incl. remuneration of the Board of Management), rights and duties, and liability. New Supervisory Board members have the opportunity to meet with members of the Board of Management and managers from the individual divisions to exchange views on fundamental and topical issues and thus obtain an overview of the main topics relevant to the company (onboarding). To provide additional, deeper insight into the company, it is planned to hold regular meetings also at other company locations, to the extent that the pandemic situation permits.

The Supervisory Board assesses, at regular intervals, how effectively the Supervisory Board as a whole and its committees fulfill their tasks. The results are discussed in depth by the Supervisory Board and, where appropriate, necessary action is taken. The last review based on a questionnaire to be completed anonymously and evaluation of the results in plenary session took place in financial year 2021. This did not give rise to any indications of significant deficits.

Corporate governance and declaration of compliance

The Supervisory Board worked on the application of the German Corporate Governance Code within the company. The 21st declaration of compliance with the recommendations of the Code, dated September 16, 2021, and prepared by the Supervisory Board and the Board of Management pursuant to Section 161 of the German Stock Corporation Act (AktG), corresponds to the amended version of December 16, 2019, published on March 20, 2020. The joint declaration of compliance is permanently accessible on the BLG LOGISTICS website at www.blg-logistics.com/en/investor-relations in the Download area and is also included in the corporate governance statement.

Audit of the annual and consolidated financial statements

The representatives of PricewaterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft, Bremen, the auditing firm duly elected as auditor, were present at the Supervisory Board’s accounts meeting for the 2021 financial year and at the preparatory meeting of the Audit Committee and reported in detail on the results of their audit.

The annual financial statements, management report and financial statements for the purpose of fulfilling the duty of BLG AG to prepare consolidated financial statements, and the consolidated financial statements and group management report of BLG LOGISTICS have been prepared by the Board of Management in accordance with the statutory provisions and in compliance with German legally required accounting principles and have been audited and issued an unqualified auditor’s report by PricewaterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft, Bremen, the auditing firm elected by the Annual General Meeting.

The auditing firm has reviewed the report on relationships to affiliated companies (dependent company report) prepared by the Board of Management for the 2021 financial year and issued the following auditor’s report:

“After conducting our audit and assessment in accordance with our obligations, we confirm that

1. the factual statements contained in the report are correct,
2. benefits derived by the company from the legal transactions specified in the report were not unreasonably high.”

The annual financial statements and management report, the financial statements for the purpose of fulfilling the duty to prepare consolidated financial statements, including the management report, the consolidated financial statements and group management report as well as the audit reports of the company’s auditor were made available to all members of the Supervisory Board in due time.

For its part, the Supervisory Board has reviewed the annual financial statements, the consolidated financial statements, the financial statements for the purpose of fulfilling the duty to prepare consolidated financial statements, the management reports and the group management report of the Board of Management as well as the proposal of the Board of Management concerning appropriation of the net retained profits (HGB). The Supervisory Board concurs with the result of the audit of the annual financial statements, the consolidated financial statements and the financial statements for the purpose of fulfilling the duty to prepare consolidated financial statements, including the management reports, conducted by the auditing firm. The Supervisory Board has approved and adopted the annual financial statements prepared by the Board of Management. The Supervisory Board has also approved the financial statements for the purpose of fulfilling the duty to prepare consolidated financial statements prepared by the Board of Management and the consolidated financial statements. The Supervisory Board concurs with the management reports and in particular with the evaluation of BLG LOGISTICS’ further development. This also applies to the dividend policy and the decisions regarding reserves at BLG AG.

Furthermore, the Supervisory Board has reviewed the report of the Board of Management on the relationships with affiliated companies and the result of the audit of this report conducted by the auditing firm. The Supervisory Board concurs with the result of the audit of the dependent company report conducted by the auditing firm. Based on the final results of the Supervisory Board’s review of the dependent company report, there are no objections to the final statement of the Board of Management in the latter report.

Non-financial report

BLG LOGISTICS has prepared a non-financial Group statement in accordance with Section 315b HGB since the 2017 financial year. This statement for the 2021 financial year is integrated as a separate non-financial report into the 2021 sustainability report and its contents have been reviewed by the Supervisory Board. The review did not give rise to any objections. reporting.blg-logistics.com

In this once again exceptionally challenging year, the Supervisory Board would like to thank the members of the Board of Management and all employees for their high level of commitment and unswerving efforts to keep our company on a path to success. The Supervisory Board is confident that BLG LOGISTICS will continue to master the challenges together going forward and can secure its earnings power on a long-term basis.

Bremen, April 2022

For the Supervisory Board

Dr. Klaus Meier
Chairman