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 two extraordinary meetings, as well as one strategy meeting. The 2022 annual financial statements were also presented to the Supervisory Board at an information event in preparation for the resolution at the financial statements meeting. In a further information event, the Supervisory Board discussed the status and the starting points for a further development of the remuneration system for the Management Board. In the reporting period, all members of the Supervisory Board participated in at least half of the meetings. In the reporting period, the Supervisory Board passed six resolutions by way of a 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 2023 financial year, the discussions in the plenary meeting focused on issues relating to revenues, profit and employment development in the individual business units, the debt situation of DB Group and the course of significant capital expenditure and equity investment projects. There was a particular focus on the operational situation and the financing of the infrastructure by the Federal Government, especially the effects of the budgetary ruling of the Federal Constitutional Court of November 15, 2023. The Supervisory Board has decided to create an infrastructure division focused on the common good and the associated establishment of DB InfraGO AG through the merger of DB Station&Service AG with DB Netz AG. In the 2023 financial year, a methodological further development of the remuneration for members of the Management Board was also decided. While the target remuneration remains the same from the second term of office, this provides for a stronger weighting of the basic salary and the proportion of long-term variable remuneration, while reducing the proportion of short-term variable remuneration and substantially reducing the maximum achievable remuneration. At its regular meetings in the reporting period, the Supervisory Board – in some instances including the Chairman of the advisory council of DB Project Stuttgart – Ulm GmbH – regularly dealt with the progress and cost development of the major project Stuttgart 21 and, in December 2023, approved the adjustment of the total project costs and the financing scope requested as a result of a project plan and cost analysis. In the annual strategy discussion, the Supervisory Board discussed with the Management Board the status of the implementation of the Strong Rail strategy that has been in place for four years, especially against the background of the challenges that have arisen in recent years, such as the Covid-19 pandemic, the trend of energy prices and the war in Ukraine.

The Supervisory Board discussed other significant individual matters and passed the necessary resolutions. In the reporting period, these included a considerable amount of capital expenditures in rolling stock, especially high-speed trains. The Supervisory Board also discussed and decided on changes in subsidiaries. In this process, it advised on preparations for a sale of DB Schenker and decided to sell 100% of shares in Arriva plc. In its December meeting, the Supervisory Board also discussed mid-term planning, approved DB Group’s budget for the 2024 financial year and approved the conclusion of a supplementary agreement for the Performance and Financing Agreement III between Deutsche Bahn Group (DB Group) and the Federal Government.

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 held four regular meetings 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 four regular meetings, one extraordinary meeting and one conference call, and intensively discussed the economic situation of DB Group and the individual business units in preparation for the discussions in the full Supervisory Board, based on the current monthly and half-year figures. In addition, at regular intervals, 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 development of costs, in particular the results of a project plan and cost analysis, was also examined in more detail in preparation for the discussion of the full Supervisory Board. In addition the committee also discussed in detail the risk report, the submitted budget and investment planning as well as the medium- and long-term planning of the DB Group. The committee also continued to address updates in corporate governance and the internal control system necessitated by the German Accounting Law Modernization Act. The Audit and Compliance Committee was regularly informed about Group-related compliance issues. The Chief Compliance Officer regularly reports on his work there as well as significant cases for DB Group (on compliance instruments in the combined management report). Likewise, the intra-Group auditors report to the committee on a regular basis on the audit program and the key findings of the audit activities. The committee also receives regular reports on significant legal disputes. 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.

In addition, the committee has discussed individual matters of economic significance for the business and financial situation or the risk situation of DB Group, such as the development of DB Cargo and the DB Regional Road line of business, the status of large capital expenditure projects and the situation concerning DB Group’s cybersecurity activities and the M&A decisions requested by the Management Board in advance of the resolution of the discussion of the Supervisory Board, and has made appropriate recommendations.

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 prepared Management Board matters for a decision by the Supervisory Board in four regular and four extraordinary meetings. The work focused on the methodological further development of the remuneration system for members of the Group Management Board, which the Supervisory Board approved in the reporting period.

The Mediation Committee established in accordance with section 27 (3) of the Co-Determination Act (MitbestG) did not have occasion to meet in the year under review.

Corporate governance

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 Public Corporate Governance Code (PCGK) and revised it in its resolution of September 16, 2020, and again with a resolution on December 13, 2023. 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 management. The Supervisory Board of DB AG dealt with the application of the PCGK 2020 within DB Group. At the time of reporting, the approximately 100 recommendations have been largely implemented. The Supervisory Board will continue to address this matter in the 2024 financial year and discuss the progress of its implementation with the Management Board.

Annual financial statements

The annual financial statements of DB AG, as prepared by the Management Board, and the consolidated financial statements and Group management report of DB AG, which is consolidated with the company’s management report, for the period ending on December 31, 2023, 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 15, 2024, and was discussed in full at the Supervisory Board’s financial statements meeting held on March 20, 2024, 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 examined the annual financial statements of DB AG and the consolidated financial statements together with the Group management report of DB AG, which is combined with the company’s management report, for the year under review and raised no objections. The DB AG annual financial statements for the 2023 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

There were no changes to the Management Board or the Supervisory Board of DB AG during the reporting period.

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 2024

For the Supervisory Board

Werner Gatzer
Chairman of the Supervisory Board
of Deutsche Bahn AG