Annual Report 2010 - Hannover Re

Corporate Governance
The Supervisory Board once again devoted considerable attention
to the issue of Corporate Governance. The Rules of
Procedure for the Supervisory Board were modified with an
eye to the revised version of the German Corporate Governance
Code (DCGK) as amended 26 May 2010. As far as the
composition of the Supervisory Board is concerned, efforts are
now being made to ensure that at least two members of the
Supervisory Board are women. Despite the high importance
that the Supervisory Board attaches to the standards of good
and responsible enterprise management defined in the German
Corporate Governance Code, the Supervisory Board
again decided not to comply with the recommendation in Code
Item 4.2.3 Para. 4 of the German Corporate Governance Code
concerning a cap on severance payments in management
board contracts. The justification in this respect is provided in
the Declaration of Conformity pursuant to § 161 German Stock
Corporation Act regarding compliance with the German Corporate
Governance Code, which is reproduced in this Annual
Report in the context of the Corporate Governance declaration.
Further information on the topic of corporate governance
is available on Hannover Re’s website.
The deductibles in the D&O cover as well as the system of
Executive Board remuneration were revised and adjusted in
line with the modified legal framework conditions. The Supervisory
Board again conducted an efficiency audit of the Supervisory
Board’s work using a written questionnaire, the overall
outcome of which was very pleasing. With a view to further
improving the work of the Supervisory Board, it was agreed
that henceforth the item “Reports from the Supervisory Board
Committees” should be included in the agenda for Supervisory
Board meetings on a regular basis.
Audit of the annual financial statements and consolidated financial statements
The accounting, annual financial statements, consolidated
financial statements and the corresponding management reports
were audited by KPMG AG Wirtschaftsprüfungsgesellschaft.
The Supervisory Board selected the auditor and the
Chairman of the Supervisory Board awarded the audit mandate.
The auditor’s independence declaration was received. In
addition to the usual audit tasks, the auditors focused particularly
on the issues defined by the Financial Reporting Enforcement
Panel (Deutsche Prüfstelle für Rechnungslegung) as well
as on the implementation of requirements arising out of the
Act on the Modernisation of Accounting Law (BilMoG). In the
context of the consolidated financial statements to be drawn
up by Hannover Re in accordance with International Financial
Reporting Standards (IFRS), the auditors were required to
subject the measurement of deferred acquisition costs and the
fair value determination of investments with a special eye to
the fair value hierarchy of IFRS 7.27 B to particular scrutiny.
The mandate for the review report by the independent auditors
on the interim financial report as at 30 June 2010 was
again also awarded. The special challenges associated with
the international aspects of the audits were met without reservation.
Since the audits did not give rise to any objections
KPMG AG issued unqualified audit certificates. The Finance
and Audit Committee discussed the annual financial statements
and the management reports with the participation of
the auditors and in light of the audit reports, and it informed
the Supervisory Board of the outcome of its examination. The
audit reports were distributed to all members of the Supervisory
Board and scrutinised in detail – with the participation of
the auditors – at the Supervisory Board meeting held to consider
the annual results. The auditors will also be present at
the Annual General Meeting.
The report on the company’s relations with affiliated companies
drawn up by the Executive Board has likewise been examined
by KPMG AG and given the following unqualified audit
certificate:
“Having audited the report in accordance with our professional
duties, we confirm that
1. its factual details are correct;
2. in the case of the transactions detailed in the report, the
expenditure of the company was not unreasonably high.”
We have examined
a) the annual financial statements of the company and the
management report prepared by the Executive Board,
b) the consolidated financial statements of the Hannover Re
Group and the Group management report prepared by
the Executive Board and
c) the report of the Executive Board pursuant to § 312 German
Stock Corporation Act (Report on relations with
affiliated companies)
190 Report BY THE SuPERVISORY BOARD
Hannover Re Group annual report 2010