A clause on the application of the PCGK, as amended, was included in the relevant company documents during the reporting period. In the case of one company, this process could not be finalized before the reporting date.

For some of the limited liability companies (GmbHs) within DB Group, general meetings did not take place in person once a year as recommended by the PCGK; instead, they were held by way of a written resolution in accordance with Section 48 of the Act on Limited Liability Companies (Gesetz betreffend die Gesellschaften mit beschränkter Haftung; GmbHG).

These companies are directly or indirectly wholly owned by DB AG and are integrated into DB Group via a domination and profit and loss transfer agreement. As part of DB Group, meetings held in person to discuss the financial statements with only one person present as shareholder representative would have no added value in terms of content, but would result in a significantly disproportionate administrative burden and additional expenses, due to the presence of the auditor, for example.

A clause on the application of the PCGK, as amended, was included in the relevant company documents during the reporting period. In the case of one company, this process could not be finalized before the reporting date.

Continuous quarterly reporting recommended by the PCGK for the companies it covers in accordance with Section 90 of the German Stock Corporation Act (Aktiengesetz; AktG) is not implemented for four GmbHs (Para. 2) and six GmbHs (Para. 4). The previous cycle of semi-annual reporting has proved successful in these companies. The proper, timely and comprehensive information of the supervisory body continues to be effectively ensured, even with the current reporting period of at least one meeting per calendar half-year. If there are additional events, written reports by the Management Board or extraordinary meetings of the Supervisory Board may continue to take account of the reporting requirements to the Supervisory Board.

The respective rules of procedure for the companies covered by the scope of application of the PCGK generally stipulate that a 14-day period must be observed for convening the ­Supervisory Board, including communication of agenda items. Additions should be communicated no later than one week before the meeting (by means of subsequent dispatch). In justified exceptional cases, additions to the agenda or the submission of documents may be required at short notice so that the Supervisory Board can also be informed in urgent cases or can also make corresponding decisions. During ­the reporting period, some companies covered by the PCGK ­submitted documents within less than 14 days’ notice in isolated cases. The companies strive to comply with the ­­14-day deadline in principle.

In its D&O insurance policy, DB Group does not comply with the deductible recommended by the PCGK for members of GmbH management bodies. DB AG has taken out a Group-wide D&O insurance policy for all its management body members in fully consolidated companies. A deductible for management body members of GmbH companies is not prescribed by law. Unlike executives of stock corporations, for whom the deductible is prescribed by law, there are hardly any corresponding insurance offers on the market to cover such a deductible for members of the management body of GmbHs. DB AG continuously monitors the insurance market. If the corresponding offers are available on the market, DB AG will aim to implement this recommendation from the PCGK.

In D&O insurance, there is no deductible for members of ­supervisory bodies.

DB AG has taken out a Group-wide D&O insurance policy for all its Board members in fully consolidated companies, which also covers the members of the supervisory bodies.

A deductible makes it difficult to obtain suitably qualified candidates for members of the supervisory bodies, especially since comparatively low remuneration is already paid.

A significant portion of the compensation paid to representatives on DB Group Supervisory Boards who are delegated by/elected at the behest of the Federal Government is transferred to the Federal Treasury, unless they waive their compensation altogether. Members of the Supervisory Board representing employees also transfer a significant amount of their compensation to the Hans Böckler Foundation. DB executives who take on Supervisory Board mandates within DB Group do not receive any separate compensation for DB Group-internal Supervisory Board mandates. This being the case, it does not seem appropriate to allow members of the supervisory bodies to share in the risks arising from Directors’ and Officers’ liability cases.

DB Group has complied with the recommendation of the PCGK to subject the entity responsible for compliance directly to the management body, with three exceptions.

In a company, the compliance officer is indirectly subordinated to the management body, and the performance of the compliance function only represents a small proportion of their overall activity. However, there is a direct right to report to the management body and professional independence, meaning that in this case the indirect subordination is considered to be justifiable. In another case, responsibility for compliance is assigned to the chairman of the management body. The compliance officer assigned to him is responsible for compliance issues across a number of companies in this business unit. As a result of the evaluation and audit, the overall approach presented was considered to be efficient and therefore preferred to the establishment of compliance officers in the respective legal entities, who then report directly to the respective management body. In another company, ­direct reporting to the management body is not feasible, as the company does not have any employees, but only consists of the members of the management body and the supervisory body.

As part of the implementation of the PCGK recommendations, a standard procedure/sample documents were developed for a transparent selection procedure and gradually applied during the reporting period. As these were established during the reporting year, the sample documents were not yet used in all companies during the entire reporting period. In companies with minority shareholdings, there are, in some cases, rights to designate on the part of the minority shareholder for individual management mandates. In these cases, there is no room for DB AG to apply a structured selection procedure.

In one company, a member of the management body was reappointed 1.5 years before the end of their term and the current mandate was simultaneously terminated in the reporting period. This was necessary to ensure continuity in the general management.

The recommendations under No. 5.3.2 Clauses 1 and 2 of the PCGK, in accordance with which remuneration of management body members should be decided by the responsible corporate body, are, for the most part, complied with. In individual cases, there are still ongoing Group employment contracts for historical reasons. In these cases, where the contractual partner is not the corporate body, but rather DB AG as management holding company, the recommendations of this section shall be deviated from during the term of these Group employment contracts. There are no plans to conclude new Group employment contracts in the future.

DB AG intends to comply with the recommendation to establish malus and clawback clauses in the employment contracts for members of a management body. This recommendation will be integrated into contractual regulations, predominantly in the context of new appointments and reappointments. Accordingly, it will take several years for the companies covered by the PCGK to fully comply with this recommendation.

The recommendations under Nos. 5.3.3 and 5.3.4 of the PCGK with regard to the determination of variable compensation components by the responsible corporate body are, for the most part, complied with. In individual cases, there are still ongoing Group employment contracts for historical reasons. In these cases, where the contractual partner is not the corporate body, but rather DB Group Management is, the recommendations of this section shall be deviated from during the term of these Group employment contracts, as the targets in these cases are agreed with Group management. There are no plans to conclude new Group employment contracts in the future.

The methods for the variable remuneration/profit share in DB Group were revised in the 2022 financial year. The established methodology meets the requirements of the PCGK.

In the case of DB Projekt Stuttgart — Ulm GmbH, DB Group does not comply with the PCGK’s recommendation to anchor a supervisory body in the articles of association where this is not provided for by law. In 2013, the Management Board and Supervisory Board agreed to establish the project company DB Projekt Stuttgart — Ulm GmbH for the implementation of the major Stuttgart 21/Wendlingen — Ulm projects and to set up an advisory board of specialist experts to support the company. The Advisory Board of DB Projekt Stuttgart — ­Ulm GmbH does not have any tasks, rights or duties within the meaning of the German Stock Corporation Act (Aktienrecht). However, the Chairman of the Advisory Board regularly brings the committee’s positions into the deliberations of DB AG’s Supervisory Board on the Stuttgart 21 project. ­In addition, the auditors PricewaterhouseCoopers GmbH Wirtschaftsprüfungs­gesellschaft (PwC) and the engineering firm Emch + Berger provide regular, independent support and quarterly reporting on the project status on DB AG’s Audit and Compliance Committee. There is, therefore, no intention to establish a separate supervisory board for DB Projekt Stuttgart — Ulm GmbH.

The majority of the relevant delegation clauses have been deleted from company documents. Apart from one exception, the deletion of which is planned for the next possible date, the PCGK is be complied with.

DB AG does not comply with the recommendation that all companies covered by the PCGK hold one regular meeting of the supervisory body per calendar quarter. DB AG believes that holding meetings less frequently has proven to be effec­tive, particularly in the case of smaller companies, and – given the size of the companies and the smaller variety of topics or reportable business transactions compared to large companies – it also constitutes proper monitoring of the management body. The proper, timely and comprehensive information of the supervisory body continues to be effectively ensured, even with the current reporting period of at least one meeting per calendar half-year. If there are additional events, written reports by the management body or extraordinary meetings of the Supervisory Board may continue to take account of the reporting requirements to the Supervisory Board.

To date, circular resolutions have been documented in a separate resolution. Additional consideration was arranged in the minutes of the subsequent meeting of the supervisory body. The procedure was introduced during the reporting year for three companies and has not yet been implemented for the full reporting period.

DB AG does not follow the recommendation to disclose the compensation of the executive bodies of the subsidiaries covered by the PCGK on an individual basis in the Corporate Governance report.

Publishing the compensation awarded to the respective members of management bodies, especially without their consent, would be questionable with regard to data protection. As yet, relevant consents have not been contractually agreed for the members of management bodies, with the exception of the DB Group Management Board.