Report of the Supervisory Board
In the year under review, the Supervisory Board of Deutsche Bahn AG (DB AG) observed the entirety of the responsibilities within its remit in accordance with the law, the company’s articles of association and its bylaws. The Supervisory Board extensively advised and supervised the Management Board in the management of the company and business operations. The Management Board reported regularly, without delay and in detail to the Supervisory Board regarding corporate planning and the business, strategic and financial development of DB AG and its subsidiaries. All significant business events were discussed by the Supervisory Board and the responsible committees based on reports of the Management Board. Significant deviations in actual business development were explained by the Management Board and reviewed by the Supervisory Board. The Chairman of the Supervisory Board maintained close contact at all times with the Chairman of the Management Board, who regularly reported on the latest business developments at DB AG, upcoming business decisions and risk management.
Meetings of the Supervisory Board
The Supervisory Board was involved in all decisions of fundamental significance for DB AG. In the year under review, the Supervisory Board held four ordinary meetings and one extraordinary meeting, as well as one strategy meeting. The 2020 annual financial statements were also presented in detail to the Supervisory Board at an information event in preparation for the resolution at the financial statements meeting. In two further information events, the Supervisory Board discussed the methodical revision of the Short Term Incentive (STI) for the Management Board as a blueprint for a revision of the profit share throughout the Integrated Rail System. In the year under review, all members of the Supervisory Board attended at least half of the meetings in full. In the 2021 financial year, the Supervisory Board adopted six resolutions by written procedure. Meetings of the Executive Committee, the Personnel Committee and the Audit and Compliance Committee were held in preparation for the scheduled meetings of the Supervisory Board of DB AG. In the reporting period, the main focus of the deliberations in the full meetings remained the significant impact of the Covid-19 pandemic on the development of DB Group. In this context, issues relating to developments in revenues, profit and employment in the individual business units and developments in significant capital expenditure and investment projects were also discussed. During the reporting period, the Supervisory Board regularly discussed the progress and the cost development of the major Stuttgart 21/Wendlingen — Ulm project in its scheduled meetings, on each occasion joined by the Chairman of the Advisory Board of DB Projekt Stuttgart — Ulm GmbH. In the annual strategy discussion, the Board discussed the concepts submitted by the Management Board for a “green rail group” for Europe and for further European growth initiatives particularly at DB Long-Distance and DB Cargo and in infrastructure.
The Supervisory Board also consulted on individual material issues, such as the procurement of additional ICE trains through a second high-speed transport (Hochgeschwindigkeitsverkehr; HGV) 2.0 batch order or the foundation of companies following the award of a tender for S-Bahn Berlin, and adopted the necessary resolutions. In the reporting period, the Supervisory Board also approved the reappointment of three Members of the Management Board and the appointment of a new member of the Management Board of DB AG.
Its main topic in the reporting period was the severe consequences of the Covid-19 pandemic for DB Group, which continued to have a significant impact on the economic situation of the Group in 2021. The Management Board discussed the economic situation of the Group, the impact on revenue and profit development in the business units and the corporate planning as well as the planned measures to compensate for the economic impact together with the Supervisory Board. In December, the Supervisory Board discussed the medium-term planning for DB Group from 2022 to 2026 and initially approved DB Group’s budget for the 2022 financial year and DB Group’s project and capital expenditure plan for the medium-term period. The Group’s medium and long-term planning was noted.
Meetings of the Supervisory Board committees
The Supervisory Board of DB AG has established four permanent committees to enable it to conduct its work efficiently. The Supervisory Board’s Executive Committee met five times in the year under review and was in regular contact with the Management Board regarding all major business policy issues. In its meetings, it focused in particular on preparing the focal topics for each of the Supervisory Board meetings. In the year under review, the Audit and Compliance Committee held six meetings, and in preparation for the discussions in the full sessions of the Supervisory Board, focused particularly on the effects of the Covid-19 pandemic on the economic situation of DB Group and its individual business units using the current monthly or half-year figures respectively. In line with its agenda, the committee discussed the progress and, in particular, the cost development of the major Stuttgart 21 project on the basis of the quarterly reports of the Management Board, each of which was reviewed by the auditors and an engineering firm. The cost development was also considered in an extraordinary meeting. In its December meeting, the committee also discussed in detail the risk report, the budget and capital expenditure plan presented and DB Group’s medium and long-term planning. The committee also continued to address updates in corporate governance and the internal control system necessitated by the German Accounting Law Modernization Act (Bilanzrechtsmodernisierungsgesetz; BilMoG). The Audit and Compliance Committee also received regular information on compliance issues and the findings of audits by the intra-Group auditors. In addition, the committee discussed the hiring of the auditor for the financial statements and the progress of the auditing process for the reporting period. The committee was also informed of individual issues of economic significance, including the current status of the implementation of the recommendations of the Federal Government’s revised 2020 Public Corporate Governance Code (PCGK) by the Corporate Governance Officer of DB Group.The Chairman of the Audit and Compliance Committee was in regular contact with the Management Board and the external auditor, and reported regularly and in detail on the committee’s work to the full Supervisory Board.
In the year under review, the Personnel Committee held a total of nine – two regular and seven extraordinary – meetings or telephone conferences to prepare Management Board-related matters for discussion by the Supervisory Board, discussed questions regarding compensation for the members of the Management Board, and prepared the corresponding resolutions for the Supervisory Board.
The Mediation Committee established in accordance with section 27 (3) of the Co-Determination Act (Mitbestimmungsgesetz; MitbestG) did not have occasion to meet in the year under review.
During the year under review, the Management Board and Supervisory Board of DB AG again considered the further development of corporate governance. In a Cabinet decision on July 1, 2009, the Federal Government adopted the PCGK and revised it in its resolution of September 16, 2020. The PCGK sets out the essential provisions of applicable law governing the management and monitoring of non-listed companies in which the Federal Republic of Germany holds a majority stake, while outlining the internationally and nationally acknowledged principles of good and responsible corporate governance. The Supervisory Board of DB AG dealt with the application of the PCGK within DB Group and adopted the necessary resolutions. The implementation of the requirements resulting from the amendment to the PCGK was examined. At the time of reporting, the about 100 recommendations have been largely implemented. The Supervisory Board will continue to address this matter in the 2022 financial year and discuss the progress of its implementation with the Management Board.
Annual financial statements
The annual financial statements and management report of DB AG, as prepared by the Management Board, and the consolidated financial statements and Group management report for the period ending on December 31, 2021 were audited and awarded an unqualified audit opinion by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC), the auditor appointed by resolution of the Annual General Meeting. The auditors’ report was reviewed by the Audit and Compliance Committee in its meeting held on March 25, 2022, and was discussed in full at the Supervisory Board’s financial statements meeting held on March 30, 2022, in the presence of the auditors who signed the audit reports. The auditors reported on the salient audit findings and were available to answer questions. The Supervisory Board concurred with the audit findings. The Supervisory Board reviewed the annual financial statements and management report of DBAG, the consolidated financial statements and Group management report for the year under review, and the proposal for the disposition of profit, noting no objections. The DBAG annual financial statements for the 2021 financial year were approved and thereby adopted. The auditor additionally reviewed the report on relationships with affiliated companies prepared by the Management Board. The auditors issued an unqualified audit opinion and reported on their audit findings. The Supervisory Board also reviewed this report, raising no objections concerning the Management Board’s concluding declaration contained in the report or the result of the audit conducted by PwC.
Changes in the composition of the Supervisory Board and the Management Board
In the reporting period, the following changes were made to the Management Board and Supervisory Board of DB AG:
With effect from May 31, 2021, the appointment of Prof. Dr. Sabina Jeschke as a member of the Management Board of DB AG was terminated by mutual agreement. The Supervisory Board appointed Dr. Daniela Gerd tom Markotten as her successor as Member of the Management Board responsible for Digitalization and Technology in its regular meeting on June 15, 2021, with effect from September 15, 2021.
Dr. Tamara Zieschang resigned her mandate on the Supervisory Board with effect from September 16, 2021. Mr. Enak Ferlemann (Member of the German Parliament; former Parliamentary State Secretary) was appointed as her successor on the Supervisory Board of DB AG with effect from October 11, 2021.
The Supervisory Board thanks the departing members of the Supervisory Board and the Management Board for their committed and constructive support to the company.
The Supervisory Board would also like to thank the Management Board, the employees and the works council representatives of DB AG and affiliated companies for their achievements in the year under review.
Berlin, March 2022
For the Supervisory Board
Chairman of the Supervisory Board
of Deutsche Bahn AG