Report of the
Supervisory Board

A new Supervisory Board was elected at the Annual General Meeting on 25 June 2025. Mr Stefan Heimöller, Mr Jens Große-Allermann and Dr Nanna Rapp stood for re-election. Mr Klaus Möllerfriedrich, the founder of GESCO, who had been a member of the Supervisory Board since the Company’s IPO in 1998, stepped down for reasons of age. Dr Mathias Saggau stood for election as Mr Möllerfriedrich’s successor. All nominations were accepted with majorities ranging from 86% to 90%.

We would like to take this opportunity to thank Mr Klaus Möllerfriedrich most sincerely for his decades of commitment to GESCO SE. Without his tireless dedication, GESCO SE would not exist in its current form!

The Company’s Executive Board remained unchanged in the 2025 financial year, comprising CEO Johannes Pfeffer and CFO Andrea Holzbaur.

There was at all times close and trusting cooperation between the Supervisory Board and the Executive Board. Throughout the reporting year, the Supervisory Board conscientiously fulfilled its supervisory and advisory duties in accordance with the law, the Articles of Association and the Rules of Procedure. This included the regular exchange of information with the Executive Board and the monitoring of the Company’s management regarding legality, regularity, appropriateness and cost-effectiveness.

The Supervisory Board was directly involved in all fundamental corporate decisions. In particular, the financial position of GESCO SE and its subsidiaries was discussed in detail. The appointment of new management positions at the subsidiaries of GESCO SE was a key focus of the Supervisory Board’s work, as was the monitoring of (potential) M&A transactions.

The Executive Board regularly informed the Supervisory Board, both in writing and orally, in a timely and comprehensive manner, on all relevant matters of corporate planning and strategic development, on the course of business, the situation of the Group and the individual subsidiaries, including the risk situation, as well as on risk and compliance management. The Supervisory Board was also kept continuously informed between meetings, both in writing and verbally, in detail about all projects and initiatives of particular significance to the Company. At the regular quarterly meetings, the Supervisory Board received a detailed report from the responsible officer at GESCO SE on the compliance management system as well as the internal control and risk management system. The Supervisory Board dealt, as planned, with the structure and content as well as the functionality of these systems. In all cases, the members of the Supervisory Board examined the reports submitted to them intensively and critically and contributed their own suggestions. The scope and manner of risk reporting are thus continuously updated. The topic of ESG/CSRD is becoming increasingly important and was dealt with comprehensively in the non-financial statement.

The course of business was discussed in detail with the Executive Board. Any deviations from the respective annual plans and targets were explained in full to the Supervisory Board during its meetings and analysed jointly by the Executive Board and the Supervisory Board. The Supervisory Board thoroughly reviewed the Executive Board’s reports and proposed resolutions and, where required by statutory and Articles of Association provisions, cast its vote on them.

Significant strategic investments in subsidiaries were accompanied by detailed discussions based on comprehensive investment analyses. Companies that were more severely affected by the economic situation were subject to particular scrutiny by the Supervisory Board.

Changes in the management of subsidiaries were discussed in detail by the Supervisory Board and the Executive Board. In the case of new appointments, the candidates were interviewed by the Supervisory Board prior to the approval decision.

The organisation of the Supervisory Board’s work at GESCO SE remained unchanged. The Supervisory Board continues to consist exclusively of shareholder representatives. These were re-elected for the next five years at the Annual General Meeting on 18 June 2020. A new election of the Supervisory Board took place on 25 June 2025. Mr Heimöller, Mr Große-Allermann and Dr Rapp were re-elected. Dr Saggau was elected as the fourth member of the Supervisory Board. At the inaugural meeting, Mr Heimöller was elected Chairman of the Supervisory Board.

The deliberate limitation of the size of the Supervisory Board enables efficient working and in-depth discussions on both strategic and detailed matters. Consequently, the formation of Supervisory Board committees is generally dispensed with. In the 2025 financial year, no committees were formed except for the Audit Committee. Mr Große-Allermann, who possesses extensive knowledge in this area, chairs the Audit Committee, supported by Mr Möllerfriedrich, a chartered accountant (until 25 June 2025), Dr Saggau (since 25 June 2025) and Dr Rapp.

The full Supervisory Board delegates specific tasks to individual members, who prepare them and submit them to the Board for final discussion and decision. This applies in particular to M&A transactions, personnel decisions and the audit of the financial statements. The four members of the Supervisory Board contribute diverse, complementary areas of expertise, thereby ensuring appropriate professional diversification, as set out in a competence matrix published in the Corporate Governance Declaration.

Since 2023, the Supervisory Board has had access to a database containing all documents relevant to the Supervisory Board.

In the 2025 financial year, a total of 13 ordinary and extraordinary Supervisory Board meetings took place. In addition, the Supervisory Board held various internal telephone and video conferences and, where necessary, took decisions by circular resolution. All members of the Supervisory Board attended all ordinary Supervisory Board meetings that took place in person.

The topics of ongoing discussions within the Supervisory Board included the economic performance of the GESCO Group, the performance of individual subsidiaries, personnel matters at the subsidiaries and GESCO SE, the achievement of targets in relation to the annual plan, and ongoing M&A projects. On a quarterly basis, a member of staff from GESCO SE reported to the Supervisory Board on the compliance management system and the internal control and risk management system. In addition, the Supervisory Board discussed the following key topics and, where necessary, passed resolutions:

• Discussion of the annual financial statements and the consolidated financial statements of GESCO SE as at 31 December 2024; adoption of the annual financial statements and approval of the consolidated financial statements as at 31 December 2024
• Report of the Supervisory Board; Corporate Governance Statement; Non-Financial Statement; Declaration of Conformity and Corporate Governance
• Preparation for and follow-up to the 2025 Annual General Meeting
• Annual planning for 2025/2026
• Supervisory Board, Executive Board and personnel matters; in particular, the election of new members to the Supervisory Board
• Internal Control, Risk and Compliance Management System
• Appointments to managing director positions at subsidiaries
• Investments in subsidiaries
• Acquisition of (shares in) companies; in particular, the acquisition of Eckart Hydraulics GmbH
• Changes to the Company structure, in particular the carve-out of CASTEON and the merger of the Eckart companies
• Employee Share Ownership Scheme 2025
• Advice on capital allocation
• Tender for auditors
   

The Supervisory Board was also kept fully informed between meetings, via written reports, of all projects and initiatives of particular significance to the Company.

The Audit Committee met six times in 2025. The meetings in the first quarter focused on the work and findings of the auditor and the auditor’s proposal for 2025, whilst the meetings in the fourth quarter centred on the approval of the audit of the 2025 annual financial statements, an interim report on the 2025 audit and the tender for the auditor.

The Supervisory Board has continuously monitored the further development of corporate governance standards. The Executive Board and Supervisory Board report on corporate governance at GESCO SE in their joint statement on corporate governance, which is published both on the website and in the current annual report.

In December 2025, as required, the Executive Board and Supervisory Board issued and published the statutory declaration of conformity with the German Corporate Governance Code. According to this, GESCO SE complies with the recommendations of the “Government Commission on the German Corporate Governance Code”, except for the deviations listed and justified in the declaration of conformity.

All members kept abreast of current Supervisory Board issues during the reporting year through trade journals and the internet. In addition, individual members attended seminars and other training courses.

The remuneration system adopted in 2021 applies to all Executive Board employment contracts that have been concluded or extended since 1 July 2021 or will be concluded in the future, provided no other remuneration system is adopted. The employment contracts of all Executive Board members are accordingly based on the remuneration system adopted in 2021.

The Annual General Meeting of 30 June 2021 had approved the remuneration system presented at that time, which considered the amendments introduced by the Act Implementing the Second Shareholders’ Rights Directive (ARUG II) as well as the then-new recommendations of the German Corporate Governance Code. The Annual General Meeting of 25 June 2025 also approved the remuneration system.

Detailed information on the structure of the Executive Board’s remuneration is provided in the remuneration report and the notes to the financial statements of GESCO SE and the Group.

The Supervisory Board remuneration system was revised in 2020 and, except for a few Company-specific provisions, largely aligned with the requirements of the DCGK. The modified remuneration system was approved by the 2020 Annual General Meeting and incorporated into the Articles of Association.

In accordance with statutory requirements, the auditor elected by the Annual General Meeting on 25 June 2025, Forvis Mazars GmbH & Co. KG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, was appointed to audit the annual financial statements and the consolidated financial statements. The auditor has confirmed its independence to us and has also demonstrated that it is authorised to audit listed companies through successful participation in a quality control review conducted by the Chamber of Public Accountants.

The annual financial statements of GESCO SE for the financial year from 1 January to 31 December 2025, prepared by the Executive Board in accordance with the provisions of the German Commercial Code (HGB), and the management report were audited by the auditor. The auditor issued an unqualified audit opinion on 26 March 2026.

The consolidated financial statements and the group management report of the GESCO Group for the financial year from 1 January to 31 December 2025 were prepared by the Executive Board in accordance with Section 315e of the German Commercial Code (HGB) and in accordance with International Financial Reporting Standards (IFRS) and were audited by the auditor. On 26 March 2026, the auditor issued an unqualified audit opinion on the 2025 consolidated financial statements and consolidated management report.

The key audit matters for this year’s audit of the single-entity financial statements of GESCO SE were the impairment of investments in associates, the impairment of receivables from associates, management override of controls, the process of preparing the annual financial statements, the presentation of corporate transactions, the existence and accrual of investment income, the completeness and measurement of other provisions, the completeness and measurement of income tax, and the verification of the completeness and accuracy of the disclosures in the notes and the consolidated management report. The key audit matters for the consolidated financial statements were the impairment of goodwill and customer bases, management override of controls, sales recognition, segment reporting, recognition, measurement and presentation of deferred taxes, the impairment of receivables, the valuation of inventories, the process for preparing the consolidated financial statements, the presentation of corporate transactions in the annual financial statements and geopolitical risks and uncertainties. The key audit matters were agreed with the auditor prior to the commencement of the audit procedures. The Supervisory Board did not issue any specific instructions to the auditor. The key audit matters identified by the auditor already included areas of audit that the Supervisory Board had requested. There was also personal contact between the Chair of the Audit Committee and the auditor during the ongoing audit work regarding the exchange of information about the audit. During the audit and in the final phase of the audit procedures, the Audit Committee engaged in intensive discussions with the auditor regarding the status of the audit in order to further prepare for the decision of the full board. At four Audit Committee meetings on 20 November 2025, 8 December 2025, 16 January 2026 and 9 March 2026, the auditor provided the committee members with detailed information on the conduct of the audit at GESCO SE, the Group and the individual subsidiaries, and answered questions. The discussions with the auditors also covered the accounting-related internal controls established by the legal representatives within the group and the risk management system.

The complete financial statements and the accompanying audit reports from the auditor were sent to all members of the Supervisory Board in good time prior to the financial statements meeting and were included in the Supervisory Board’s review process. They were also the subject of in-depth discussions at the Supervisory Board meeting on 26 March 2026. The auditors attended this meeting, reported comprehensively on the key findings of the audits and were available to the Supervisory Board to answer questions and provide further information. All questions raised by the Supervisory Board were answered comprehensively by the auditors. Following the final outcome of the review conducted by the Supervisory Board, no objections are to be raised against the annual financial statements and the management report, nor against the consolidated financial statements and the consolidated management report. Following its own review of the annual financial statements, the consolidated financial statements and the combined management report, the Supervisory Board agreed with the findings of the audit conducted by the auditors and unanimously approved the annual financial statements and the consolidated financial statements at the meeting on 30 March 2026. The 2025 annual financial statements of GESCO SE are thus adopted. The Supervisory Board endorsed the Executive Board’s proposal for the appropriation of retained earnings, taking into account the Company’s earnings and financial position.