ENVIRONMENTAL REPORT2016

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CONTENTS

1. INTRODUCTION ...................................................................................................................................................................... 32. ENVIRONMENTAL DATA 2016 ................................................................................................................................................. 43. ENVIRONMENTAL REPORT .................................................................................................................................................... 5

3.1 ENVIRONMENTAL POLICY ............................................................................................................................................... 53.2 ENVIRONMENTAL CONDITIONS ...................................................................................................................................... 63.3 ICT LOGISTICS INITIATIVES ............................................................................................................................................ 63.4 EFFORTS AND RESULTS (2016) ...................................................................................................................................... 7

4. COMPANY DETAILS ..............................................................................................................................................................125. ACCOUNTING POLICIES ......................................................................................................................................................136. GLOSSARY, ABBREVIATIONS AND EXPRESSIONS ...........................................................................................................14

6.1 EURO NORMS .................................................................................................................................................................14

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1. INTRODUCTION

ICT Logistics is a logistics and transport solutions provider operating primarily in Scandinavia/Northern Germany/Benelux/UK, connecting them to Russia & CIS countries, the Baltics, Central and Eastern Europe and the Balkans. We aim for our clients to see ICT Logistics as their preferred partner in all our core activities & markets. We plan to achieve this by offering cost effective and innovative logistics solutions through a flexible approach, tailored to meet the demands of each individual customer.

ICT Logistics believes that we all have a shared responsibility for our environment. As a professional and responsible logistics provider, we are under an obligation to implement measures, proactively, that reduces the impact on the environment from our activities. We are open about our efforts to realise the improvements and the results we achieve.

During 2012, we developed a framework for the environmental work and formulated our environmental policy. We measure the effect of our work through a number of KPI’s and review and update our action plan annually. We have chosen 2012 as our base year, and this forms the basis for our improvement measurements.

From 2013, we published our annual environmental report that documents our work in the environmental area and our eco-effi-ciency for the previous year. This, our fifth environmental report, shows the total energy consumption and emissions of carbon dioxide equivalents (CO2e) from ICT Logistics’ transport activities in 2016 as well as the development compared to 2015 and 2012 (the ‘base year’).

In 2016, our management system in Denmark was certified to the ISO 14001:2015 standard.

Our goal is to achieve a 15% reduction in CO2e emissions per tonne/km, from ICT Logistics’ combined transport activities, in relation to 2012 by the end of the year 2017. This report shows that, since 2012, our CO2e emissions per tonne/km has been reduced by 12%. We are confident, we are on track in meeting our goal for 2017.

The key to achieving environmental improvements will continue to be:

• Employee training and awareness. Better utilisation of resources and fuel efficiency.

• Technology. Modern trucks, trailers and use of IT

• Improved logistics. Better utilisation of capacity and reduction in empty mileage

The success of our efforts to create a better environment and reduce the impact of our activities on the global climate depends entirely on the company’s employees sharing our vision for a better environment and to obtain their “Buy In” to ensure our environmental objectives are achieved. Our annual environmental report is a key element in the ongoing communication and dialogue with our clients, employees, and business partners in general, on ways of reducing the environmental impact of our transport activities, which constitutes an ever increasing part of modern society.

April 2017

Leif Pedersen

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2. ENVIRONMENTAL DATA 2016

As outlined in ICT Logistics’ environmental policy the indicators below form the basis of our environmental work.

The report for 2016 is the fifth annual environmental report published by ICT Logistics. ‘Base year’ against which improvements are measured is 2012.

Note CIS/Baltics

Central-/ Eastern Europe

CIS/Baltics

Central-/ Eastern Europe

CIS/Baltics

Central-/ Eastern Europe

Units/meassured (M)or calculated (C)

2016 2015 2012 (base year)

Trailer fleetLong lease units

Curtain trailers 135 210 205 number

Average age 13 10,4 24,8 average age months

See the comments on the notes in section 5. Accounting policies

CO2e emissions, wellgwheel per tonkm

Own trucks 1 0,077 0,079 0,095 kg CO2 e/tonne-km (M)

Subcontractors trucks 2 0,085 0,057 0,097 0,070 0,095 0,079 kg CO2 e/tonne-km (C)

All trucks 0,084 0,057 0,094 0,070 0,095 0,079 kg CO2 e/tonne-km

Ship 3 0,91 0,112 0,100 kg CO2 e/tonne-km (M)

Rail 4 0,022 0,022 0,022 kg CO2 e/tonne-km (C)

Total 0,081 0,057 0,089 0,070 0,082 0,079 kg CO2 e/tonne-km

Modal splitShare of transportation by

Truck 76% 100% 74% 100% 68% 100% % (M)

Ship 17% 0% 16% 0% 14% % (M)

Rail 7% 0% 11% 0% 18% % (M)

Share of empty km

Own trucks 5 24% 26% 20% % (M)

Subcontractors trucks 6 30% 5% 30% 5% 20% 5% % (M)

Fuel consumption/km

Own trucks 7 0,32 0,32 0,38 litres/km (M)

Subcontractors trucks 8 0,33 0,38 0,38 0,38 0,38 0,38 litres/km (C)

Trucks

Own

Distribution by Euronorm 4,81 4,81 4,21 average Euronorm (M)

Subcontractors trucks

Distribution by Euronorm 9 3,81 5,85 3,46 5,13 3,25 4,51 average Euronorm (M)

ICT Logistics’ environmental performance in 2016, 2015 and 2012 (base year), environmental indicators

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3. ENVIRONMENTAL REPORT

The senior management at ICT Logistics believes that the environmental report for 2016 contains all the information necessary to assess the environmental issues that are most important for the company to deliver its environmental objectives.

3.1 ENVIRONMENTAL POLICY

As a transport and logistics company, we have a responsibility for minimising the environmental impact of our activities. Our goal is to be the preferred transport and logistics partner in all our core markets, and for all customers who deem the environment as a key focus area. We are committed to reducing the environmental impact of our activities, through continuous improvements, and by complying with all statutory requirements.

The focus of our environmental efforts is:

• Partner and employee involvement

• Employee conduct and training

• Modern and efficient fleet

• Open and pro-active approach to new ideas and initiatives which can lead to further streamlining

• Measurements of our eco-efficiency and openness about the progress we have made towards a better environment

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3.2 ENVIRONMENTAL CONDITIONS

The most important environmental impacts for the company are:

• Energy consumption for and CO2e emissions from ICT Logistics’ transport activities in connection with the company’s combi-ned logistics system. This also includes subcontractors’ energy consumption and CO2e emissions.

• In addition, the other emissions from our transport activities (NOX, SO2, HC and particles) also constitute a significant environ-mental impact. We have decided to measure these emissions according to the Euronorm for our own vehicles and for the trucks that our subcontractors use to transport our customers’ goods.

We measure the development in our eco-efficiency according to a number of indicators:

• CO2e emissions per tonne/km for our two land areas Central and Eastern Europa and the Baltics/CIS countries. We measure the development in CO2e per tonne/km from road, rail and sea.

• Development in modal split, i.e. the split on transport modes (road, sea and rail)

• Proportion of empty trips by truck

• Energy consumption measured as litres/km by truck

• Age of trailer fleet (trailers on long-term lease)

• Split of tractor units according to Euronorm

3.3 ICT LOGISTICS INITIATIVES

At ICTL, we have chosen the following focus areas for our environmental activities:

• Our drivers focus on eco-conscious driving.

• Maintenance of the company’s own vehicles and trailers.

• Cooperation with our regular subcontractors on eco-conscious driving and environmental data concerning the activities they perform for ICT Logistics.

• We aim to minimise the number of kilometres driven with empty trucks and reduce the environmental impact of each tonne of goods we carry by focusing on routes and return loads.

• Our fleet of tilt trailers on long-term lease comprising of more than 130 units, must not be more than three years old before being replaced. As the figures show, the average age is currently 13 months, i.e. just over one year.

• We use sea transport between Central Europe and the Baltics. This is a more direct route (thereby ensuring lower CO2e emissions), and we relieve the road network of heavy goods traffic. In 2016, transport by sea accounted for 10% of the total transport activities performed by ICT Logistics.

• We use rail transport when possible and financially viable. Rail transport is widely used for regions in central Russia where it is often difficult to find return loads. Rail transport emits less CO2e per tonne/km. In 2016, rail transport accounted for 4% of the total transport activities performed by ICT Logistics.

In 2016, our management system in Denmark was certified to the ISO 14001:2015 standard.

In addition to tilt trailers, ICT Logistics also has approx. 60 specialist trailers at its disposal. These do less annual mileage and are replaced less frequently than the tilt trailers.

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3.4 EFFORTS AND RESULTS (2016)

12% reduction in CO2e per tonne/km since 2012.

In 2016, the average emission of CO2e per tonne/km was 71,5 g CO2e - compared to 81,5 g CO2e per tonne/km in 2012 (base year) and 81,5 g CO2e per tonne/km in 2015. In ICT Logistics we have seen a reduction in CO2e emissions per tonne/km of ap-prox. 12% compared to our base year.

Had the emissions per tonne/km in 2016 remained the same as in 2012, it would have meant increased emissions of approx. 7.900 tonnes of CO2e.

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*2016*2015*2012 (base year)

CO2e emissions per tonne/km in 2016, 2015 and 2012 (base year)

The improvements in emissions per tonne/km within ICT Logistics’ transport system since 2012, are a result of:

• Employee conduct and training

• Improved logistics performance (less empty mileage and better utilization within our transport system)

• Changed split in no. of tonne/km on truck, by ship and rail

Points elaborated below.

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CIS/Baltic States region – own trucks – ICT Logistics

Since 2012, the emission of CO2e per tonne/km has dropped by 19%, for ICTs own trucks, in the CIS/Baltic States region. The improvement is the result of better utilization of trailers (improved filling degree) and fuel (distance per litre). Due to the changed market conditions on the Russian market, the share of empty mileage (kilometres without load) has increased.

CIS/Baltic States region – subcontractors

Since 2012, the emission of CO2e per tonne/km has dropped by 11%, for subcontracted trucks, in the CIS/Baltic States region.Our subcontractors have improved their performance through focusing on eco-conscious driving and through better utilization of trailers. ICT Logistics cooperates with a number of regular subcontractors in the region where we share and analyse the diesel consumption per km with them. The results are used as a base of this environmental report.

As for ICT Logistics’ own trucks, due to the changed market conditions in the Russian market, the share of empty mileage (ki-lometres without load) has increased.

Central Eastern Europe – Subcontractors trucks

Since 2012, the emission of CO2e per tonne/km has dropped by 27%, for subcontracted trucks, in the Central Eastern European region. The improvement is the result of better utilization of trailers (improved filling degree) and fuel (distance per litre). As is the case in the CIS/Baltic States region ICT Logistics cooperate with a number of regular subcontractors in the region where we share data on eco-conscious driving and analyse the diesel consumption per km with them.

Ship

ICT Logistics use RO-RO vessels on a number of routes between Denmark, Germany, Sweden and Lithuania - as well as routes between Denmark and the UK. As can be seen, the CO2e emissions from the vessels, per tonne/km, is the same as for trucks. However, as the RO-RO routes mean a more direct line of transport, CO2e emissions are reduced when going by sea.

Compared to 2012, the CO2e emission per tonne/km has been reduced by 9%. The CO2e emission per tonne/km has varied th-rough the period. This is due to the shipping company regularly replacing vessels to reflect the demand on their routes. Changed market conditions on the Russian market has also meant less cargo and poorer utilization of vessel capacity.

0 20 40 60 80 100 120

*2012 (base year)*2015*2016

*own trucks

*subcontractors trucks

*ship

*rail

*average ICT

Emissions of g CO2 e per tonne/km in 2016, 2015 and 2012 (base year)

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Rail

ICT Logistics use rail transport to a number of destinations in the Russian/CIS market. CO2e emissions per tonne/km are lower for rail transports than for truck and ship. CO2e per tonne/km for rail transports are calculated.

The use of rail has declined by 14% in 2012 to 4% in 2016. The decrease in rail transport is due, partly to a reduction in the ac-tivities where rail transport is financially viable, due to a changed pricing structure from the rail companies.

Transport activities – distributed between modes of transport

86% of the combined transport activities measured in tonne/km through 2016 were carried by truck, 10% by ship, and 4% by rail. Note that, while rail accounted for 4% of the transport work, it only contributed 1% of the total CO2e emissions.

Compared to 2012, the share of the collective transport work by truck has risen from 75% to 86%. Ship transport has declined from 11% to 10% and goods by train from 14% to 4%. As stated above the reason for this is the shift in our market situation where Central Eastern Europe has overtaken our CIS/Baltic States traffics. Rail transport is mainly relevant in relation to the CIS/Baltic States market.

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*Rail*Ship*Subcontractors trucks*Own trucks

*2012 (base year)

*2015

*2016

Development in transport activities from 2012 (base year) to 2015 & 2016. Indexed development (2012=100)

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Truck fleet Euronorm

In 2016, the average Euronorm for ICT Logistics’ own tractor units was 4,8, while the average Euronorm for subcontractors’ tractor units driving for ICT Logistics in 2016 was 3,81 for tractor units driving in CIS/the Baltic and 5,85 for tractor units driving in Central and Eastern Europe.

As shown in the figures below, since 2012, there have been positive developments in all categories of vehicles, used by the subcontractors commissioned, with an increase in the average Euronorm.

Average Euronorm for tractor units used for transport activities in 2016, 2015 and 2012 (base year).

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*2015

*2012 (base year)

*Trucks (subcontractors)*Trucks (own)CIS/BALTICS CIS/BALTICSCEO CEO

In 2016, the average age of tilt trailers on long-term leases was 13 months.

Age of tilt trailers on long-term leases in 2016, 2015 and 2012 (base year) Months

Age of trailer fleet

0 5 10 15 20 25

*2012 (base year)

*2015

*2016

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COMBINED CO2e EMISSIONS

The total transport activities carried through ICT Logistics’ collective transport system in 2016 accounted for a total emission of approx. 56.500 tonnes carbon dioxide equivalents (CO2e).

86% of the total emissions came from road transport while transport by ship accounted for 13% and rail for 1%.

In 2016, ICT Logistics’ collective transport activities, measured in tonne/km was 14% than 2012. As we have seen efficiency improvements in CO2e per tonne/km of 12% since 2012, the total CO2e emissions have been reduced by approx. 24% when comparing 2016 to 2012.

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10000

20000

30000

40000

50000

60000

70000

80000

Rail

Ship

Subcontractors trucks

Own trucks

*2016*2015*2012 (base year)

3.5 PLANNED INITIATIVES FOR 2017

In 2017, the most important activities aimed at improving ICT Logistics’ environmental performance will be:

Improved diesel economy for ICT Logistics’ own trucks

Since 2012, ICT Logistics have been closely monitoring diesel economy of its own vehicles. From 2012 to 2016, the company achieved an overall improvement in diesel economy per km driven of 16%.

Twenty-two of ICT Logistics’ own trucks are fitted with fleet management systems that support energy-efficient driving. This has played an important role in achieving the total improvement of almost 16%.

The target for 2017 further improvement of diesel consumption, primarily through continued efforts to support energy-efficient driving and to reduce time spent with engines running idle as much as possible.

Cooperation with selected subcontractors (hauliers) on more energy-efficient driving

Work performed by ICT Logistics’ own road haulage unit has increased our knowledge of how to use fuel more efficiently, and we would like to share this knowledge and experience with our contracted subcontractors. We initiated a pilot project in 2014 with a number of selected subcontractors on the implementation of a system for benchmarking diesel consumption per kilometre and coaching of drivers. From 2016 we are collecting data from a number of our main subcontractors regarding consumption per kilometre. This data is incorporated in this report and the aim is to continue the cooperation through 2017 to achieve further improvements.

More environment and better logistics

For a number of the transport movements performed by ICT Logistics between Central Europe and Russia today, efficiency may potentially be improved (better utilisation of loading capacity and fewer kilometre driven with empty trucks) by introducing extra hubs, typically where the customer has several production sites around Western Europe from where goods are delivered to Russia.

ICT Logistics is in ongoing dialogue / cooperation with a number of selected customers assessing the potential for more efficient logistics and better environmental performance.

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4. COMPANY DETAILS

Company ICT Logistics A/S

Transportbuen 6

7400 Herning

CVR: 20 21 98 90

Homepage: www.ict-as.dk

Management and Signatory CEO Leif Midtgaard Pedersen

Tlf: 70 266 288

Mail: lmp@ict-as.dk

Industry designation Other transport-related services

DB03: 52.2990Main activity International freight, logistics and shipping

Environmental data period January 1st. 2016 – December 31st. 2016

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5. ACCOUNTING POLICIES

ICT Logistics A/S’s environmental report is prepared with a view to providing our customers and other stakeholders with an overview of the company’s environmental performance. The notes below explain how the data in the environmental report are procured.

Note 1.The development in energy consumption for trucks based on the total number of vehicle-kilometres (measured) and the diesel consumed when operating the company’s own vehicles. Energy consumption and CO2e emissions are calculated based on diesel consumption. Calculations of energy consumption and CO2e, uses key figures from the DS EN 16258 standard, ‘Methodo-logy for calculation and declaration of energy consumption and GHG emissions of transport services (freight and passengers)’. Transported freight volumes are calculated from a representative sample of all transport assignments performed by ICT Logistics in 2016.

Note 2.

From 2016 we are basing our environmental report on data collected from a number of our main subcontractors regarding con-sumption per kilometre. From 2012 and 2015 the diesel consumption by subcontractors is estimated, in that period it is assumed that the fuel consumption per kilometre of subcontractors’ vehicles is approximately the same as that of ICT Logistics’ own trucks in the 2012 base year. Vehicle-kilometres are calculated on the basis of the invoices submitted by subcontractors. Transported freight volume per trailer has been calculated using a representative sample of all transport jobs performed by ICT Logistics in 2016.

Note 3.CO2e emissions from ships have been calculated on the basis of data supplied by the shipping lines used by ICT Logistics. Transported trailers have been calculated on the basis of settlements with the shipping line. Freight volume per trailer and pro-portion of empty trailers have been calculated using representative samples.

Note 4.CO2e emissions from rail transport are calculated on the basis of the goods transport module in the Danish Business Authority’s Climate Compass. The calculations are based on the freight that has been carried by rail, and on the assumption that all ship-ments have been carried out using trains pulled by diesel engines in Russia.

Note 5.The proportion of empty trips by the company’s own vehicles has been calculated using data from ICT Logistics’ (LMS) Logistics Management System.

Note 6.The proportion of empty trips by subcontractors’ vehicles in the Baltics and the CIS countries are estimated on the assumption that it is the same as for ICT Logistics’ own trucks in the region. The proportion of empty trips in Central and Eastern Europe has been calculated using data from the subcontractors with whom ICT Logistics cooperates.

Note 7.Energy consumption (km per litre diesel) by ICT Logistics’ own trucks is measured on the basis of vehicle-kilometres travelled and the volume of diesel used.

Note 8.Energy consumption (km per litre diesel) by subcontractors’ vehicles is estimated on the assumption that the number of vehicle-ki-lometres per litre of diesel is the same as for ICT Logistics’ own vehicles in the 2012 base year.

Note 9.The distribution of subcontractor tractor units by Euronorm has been calculated on the basis of reports submitted by subcontra-ctors.

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6. GLOSSARY, ABBREVIATIONS AND EXPRESSIONS

CO2e (carbon dioxide equivalents). Carbon dioxide (CO2) is emitted when fossil fuels are combusted. Carbon dioxide is the most important greenhouse gas. In Europe, the transport sector accounts for approx. 32% of total CO2 emissions. The Kyoto Protocol, the international treaty to reduce greenhouse gas emissions, lists – in addition to CO2 – the greenhouse gases as being: methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).

Emissions of the six greenhouse gases are often calculated as a total value, CO2e (carbon dioxide equivalents), where the shares of the six gases are combined according to their relative global warming potential (GWP).

The CO2e values are calculated as well-to-wheel, i.e. total emissions including those from the processes of extracting, refining and transporting the fuel to the fuel tanks of the means of transport, and tank-to-wheel, which only comprises emissions from combustion in the engine of the respective means of transport.

NOX (nitrous oxides) is a generic term for compounds of nitrogen (N) and oxygen (O). Produced during combustion, nitrous oxides lead to acidification of subsoil and groundwater and may irritate the airways.

HC (hydrocarbons) are formed through the incomplete combustion of fossil fuels. Hydrocarbons is a generic term for methane and non-methane hydrocarbons (NMHC). Some hydrocarbons are carcinogenic. In addition, hydrocarbons contribute to the formation of ozone and greenhouse gases.

Partikler from diesel engines constitute a significant health risk in the local environment and increase the risk of cancer. New engine technology (particle filters) is contributing to reducing particle emissions in exhaust gases.

SO2 (sulphur dioxide) is formed through the combustion of sulphur in diesel. Today, the amount of sulphur in truck diesel fuels is very limited. Sulphur dioxide is the main cause of deforestation and acidification of the subsoil and groundwater. Sulphur dioxide also causes breathing difficulties. From 2015 ships, sailing in the Baltic Sea must use sulphur-free fuel. Alternatively, the SO2 must be removed from the exhaust passing through the ship’s funnel.

6.1 EURO NORMS

Since the early 1990s, it has been a requirement within the EU (and before it the UN) that heavy diesel vehicles weighing more than 3.5 tonnes must, on being registered for the first time, meet limits for emissions of air polluting substances – the so-called European emissions standards (Euronorms). Over the years, these norms have been raised several times. The implementation dates and threshold limits are stated below.

NOX HC CO PM

EURO 3 - Type approval 1/10 2000, new vehicles 1/10 2001 5,0 0,66 2,1 0,10EURO 4 - Type approval 1/10 2005, new vehicles 1/10 2006 3,5 0,46 1,5 0,02EURO 5 - Type approval 1/10 2008, new vehicles 1/10 2009 2,0 0,46 1,5 0,02EURO 6 - Type approval 31/12 2012, new vehicles 31/12 2013 0,4 0,13 1,5 0,01

Limits for emissions of NOX, HC, CO and particles (PM) from heavy diesel vehicles (g/kWh) for EURO 3, 4, 5 and 6 trucks, as well as the dates for introducing the engine technology.

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ICT Logistics A/STransportbuen 6DK-7400 Herning

+45 70 266 288CVR nr.: 20 21 98 90