Activities performed

Economic and financial information

The Audit and Control Committee is responsible for helping the Board of Directors to ensure that the financial information which the Company is required to report periodically is accurate and reliable.

The Committee, with the collaboration of the General Economic and Financial Management, has analyzed both the annual financial statements and quarterly and half-yearly data prior to their examination by the Board of Directors and presentation to authorities or markets.

Relations with the external auditor

Review of annual accounts

As has been the case for several years, the Company's external auditors appeared before the Committee in relation to the presentation of the annual accounts for 2006. During this meeting, they provided information with respect to the scope of the audit undertaken, the audit methodology, specific aspects of the annual accounts, progress made in compliance with recommendations made by the auditors in prior years, and other matters of interest. A similar appearance is planned in relation to the annual accounts for the year 2007.

The external auditors of other Group companies also reported to the Committee.

All these appearances took place without any members of the Company's management team being present.

Finally, and in this connection, the Audit and Control Committee is to propose to the Board of Directors - which in turn will refer the matter for consideration by the General Meeting in 2008 -, that the appointment of the Company's external auditor be renewed.

Other activities relating to the external audit

  • The Committee proposed to the Board of Directors, which shall in turn refer the matter for approval by the General Meeting of Shareholders, the renewal of the appointment of the external auditor currently serving the Company and its consolidated group.

  • In accordance with the procedure established in the Board of Directors' Regulations, and coinciding with the fifth year of the external auditor's mandate, the Committee has undertaken an evaluation of the services provided by it.

  • Exercising the new powers included in the Board Regulations which were approved in 2007, the Committee examined in detail the corporate group whose financial statements are to be reviewed by the Grupo Ferrovial auditor and assessed the advisability of a voluntary review of half-yearly financial statements.

  • Lastly, the Committee resolved to update the content of the monitoring system in respect of provisions of advisory and consulting services by external audit firms, which was already in place in the Company and for which responsibility also rests with the Audit and Control Committee.

Control procedures

The work program which commenced in 2005 for the examination of verification procedures in respect of information and economic-financial control systems has continued in 2007. This stage of such work has involved the analysis of the procedures in place in the construction division.

A report was prepared and presented in collaboration with external advisors explaining the flow of financial information and identifying the controls in place. The conclusion reached was that the internal control system is good and that it ensures a high level of compliance. 

Unified Code of Best Practice in Corporate Governance

In 2006 the Committee carried out the work required for the analysis of, and establishing of criteria in relation to, the recommendations of the Unified Code of Best Practice in Corporate Governance (UCBP), and it presented a proposal to the Board of Directors for the internal implementation of such Recommendations.

As a result of this process, approval was given during 2007 to a new text for the Board of Directors' Regulations and a proposal presented to the General Meeting of Shareholders for the amendment of the Articles of Association and General Meeting Regulations.

The Committee has also supervised the implementation of the UCBP. Attention is drawn, among other work undertaken by the Committee and which is mentioned throughout this Report, to the following:

  • A criterion was established with respect to the presence of Executive Directors or Senior Management at meetings of the Committee.

  • An examination was made of the systems and instruments which can be understood to define the policy assumed by the Board of Directors in respect of each of the issues referred to in Article 8 of the Board of Directors' Regulations.

  • An analysis was made of the proposal for the organization of the mechanism for the reporting of irregularities (the "suggestions box"), which was already in place in Ferrovial, certain rules being introduced in relation to the way this mechanism works in order to comply with the Board of Directors' Regulations, which attribute to this Committee competence for its implementation and supervision.

Other steps in relation to Corporate Governance and the compliance regime

The Committee has also undertaken the following work in this area:

  • It examined the Annual Corporate Governance Report for 2006 prior to its presentation to the Board of Directors.

  • It reported on transactions taking place between directors or senior management and the Company and group companies, for subsequent approval by the Board of Directors. In accordance with the stipulations of Board Regulations, the applicants remained absent from the meeting throughout the deliberation and approval of these operations.

  • It was informed with respect to the updating of the Internal Code of Conduct in relation to group companies whose directors are subject to such Code.

  • It approved the engagement of external advisors linked to audit firms, for which responsibility for authorization, pursuant to the terms of the control procedure implemented, as referred to above, rests with this Committee.

The Annual Corporate Governance Report for 2007 will be presented to the Committee in 2008 so that the Committee may report on it prior to its approval by the Board of Directors.

Internal audit

Organization

Exercising the powers which the new Board of Directors' Regulations attribute to the Audit and Control Committee, it has made an analysis of the current organization of the Internal Audit Management and its relationship with the Committee.

2007 work plan

The Internal Audit Director set out to the Committee the internal audit work plan for 2007, which envisages recurrent audits and a series of specific projects in Grupo Ferrovial's various business areas.

Other work

The Committee was informed with respect to the progress made on a project initiated some time ago for the analysis of possible areas of fraud risk and preventative measures.

Risk analysis and risk control systems

Monitoring of risk analysis work and risk control systems by the Committee, which is one of the functions attributed it, has continued throughout 2007. The Quality and Environmental Management has appeared before the Committee periodically to update information with respect to risks and the related systems of coverage.

Evaluation of the Audit and Control Committee

The Company's Board of Directors' Regulations stipulate that an analysis is to be made once a year of the operation of Board Committees, based on the information which such Committees present to the Board.

The Audit and Control Committee, accordingly, has examined its composition, duties and performance during 2007 and presented the corresponding report to the Board of Directors.

1000 Images, one word: Ferrovial

1000 Images, one word: Ferrovial

Ferrovial is one of the leading infrastructure groups in the world employing 100,000 people in 43 counties worldwide. The company’s investment strategy is focused on 4 main business areas: construction, airports, toll roads and car parking, and services.