Concerning Committees

Delegate Committee

42. "That when a Delegate or Executive Committee (henceforth, "Delegate Committee") exists, the participation structure of the different categories of director be similar to that of the Board itself and that its secretary be the Secretary of the Board"

Visto bueno The Company complies.

43. "That the Board be aware at all times of the matters discussed and the resolutions adopted by the Delegate Committee and that all members of the Board receive a copy of the minutes of Delegate Committee meetings".

Visto bueno The Company complies.

Supervision and control committees

44. "That, besides the Audit Committee required by the Securities Market Law, the Board of Directors form from among its members one Nomination and Remuneration Committee, or two separate committees of this type.

That the rules for the composition and functioning of the Audit Committee and the Nomination and Remuneration Committee(s) appear in the Board of Directors Regulations, and include the following:

  • That the Board designate the members of these Committees, bearing in mind the knowledge, abilities and experience of the directors and each Committee's mission; that it debate their proposals and reports; and that they must report before it at the first plenary session of the Board held after their meetings, on their activity and answer for the work carried out;

  • That the above-mentioned Committees be formed exclusively by external directors, with a minimum of three. The foregoing is understood to be without prejudice to the attendance of executive directors or senior managers, when this is expressly agreed by the Committee members.

  • That their Chairmen be independent directors.

  • That they be permitted to request external advice, whenever they consider this necessary for the performance of their functions.

  • That minutes of their meetings be written up and a copy of same sent to all members of the Board".

Visto bueno The Company complies.

45. "That supervision of compliance with the internal codes of conduct and the corporate governance rules be a responsibility conferred on the Audit Committee, the Nomination Committee or, should they  exist separately, on the Compliance or Corporate Governance Committees".

Visto bueno The Company complies.

Audit Committee

46."That the members of the Audit Committee and, in particular its chairman, be appointed bearing in mind their knowledge and experience in accounting, auditing or risk management matters".

Visto bueno The Company complies.

47. "That listed companies possess an internal audit function which, under the supervision of the Audit Committee, strives to ensure the good functioning of the internal information and control systems".

Visto bueno The Company complies.

48. "That the officer responsible for the internal audit function present to the Audit Committee his/her annual work plan; that he/she  inform it directly of the incidents that occur in its performance; and that he/she present it with an activities report at the end of each business year"

Visto bueno The Company complies.

49. "That the risk control and management policy identify at least:

  • The different types of risk (operative, technological, financial, legal, relating to reputation, etc.) that the company faces, including contingent liabilities and other risks outside the balance sheet among the financial or economic risks;

  • The establishing of the risk level that the company considers acceptable:

  • The measures envisaged for mitigating the impact of identified risks, in the event they should materialize;

  • The internal information and control systems used for monitoring and managing the above-mentioned risks, including contingent liabilities or risks outside the balance sheet".

Visto bueno The Company complies.

50. "That the Audit Committee be responsible:

In relation to internal information and control systems:

  • For supervising the drafting process and completeness of the financial information relating to the company and, where appropriate, the group, reviewing compliance with regulatory requirements, the appropriate delimitation of the consolidation perimeter and the correct application of accounting criteria.

  • For periodic review of the internal risk control and management systems, so that the main risks are identified, managed and suitably reported on.

  • Safeguarding the independence and efficiency of the internal audit function; proposing the selection, appointment, re-appointment and dismissal/resignation of the internal audit service manager; proposing the budget for this service; receiving periodic information about its activities; and checking that senior management takes the conclusions and recommendations of its reports  into account.

  • Establishing and supervising a mechanism that allows employees to communicate, in confidence and, if considered appropriate, anonymously, any potentially far-reaching irregularities, particularly of a financial and accounting nature, that they notice occurring inside the company.

In relation to the external auditor:

  • For submitting to the Board of Directors its proposals for selection, appointment, re-appointment and replacement of the external auditor, and also the contract conditions for the latter.

  • For receiving regular information from the external auditor about the audit plan and the results of its execution, and for verifying that senior management takes its recommendations into account.

  • For ensuring the independence of the external auditor, and to this end:

    • That the company notify the CNMV of the change of auditor as a relevant event, attaching a statement of the possible existence of disagreements with the outgoing auditor and, if there were any, explaining their contents;

    • That it make certain that the company and the auditor respect prevailing regulations on the provision of services other than those of an auditing nature and, in general, all other regulations established for guaranteeing the independence of the auditors;

    • That in the case of resignation of the external auditor, it examine the circumstances giving rise to this

  • In the case of groups, for encouraging the group's auditor to take responsibility for auditing the companies that comprise it".

Visto bueno The Company complies partially.

In relation to accepting the recommendation concerning the possible existence of disagreements with the outgoing auditor and, if any, explaining them, the Board of Directors considers that this statement represents a strain factor in possible episodes involving a change of auditor and a restricting element in the decision-making capacity of the company in respect of changing its external auditor.

51. "That the Audit Committee be able to call on any company employee or director, and even order them to appear without any other director being present"

Visto bueno The Company complies.

52. "That the Audit Committee inform the Board, prior to the latter adopting the corresponding resolutions, about the following matters stated in Recommendation 7:

  • The financial information that, because it is listed, the company must publish periodically. The Committee must strive to ensure that the intermediate accounts are drawn up using the same accounting criteria as for the annual statements and, to this end, to consider the suitability of a limited review by the external auditor.

  • The creation or acquisition of equity holdings in special purpose companies or firms domiciled in countries or territories regarded as tax havens, as well as any other transactions or operations of a similar nature that, because of their complexity, might put the transparency of the group at risk.

  • Related-party transactions, unless that prior reporting function has been conferred on another supervision and control Committee".

Visto bueno The Company complies.

53. "That the Board of Directors endeavour to present the accounts to the Shareholders' Meeting without reservations or qualifications in the audit report and that, in the exceptional cases where they exist, both the Chairman of the Audit Committee and the auditors clearly explain to the shareholders the contents and scope of such reservations or qualifications".

Visto bueno The Company complies.

Nomination and Remuneration Committees

Nomination Committee

54. "That the majority of the members of the Nomination - or Nomination and Remuneration - Committee, should they be just one -  be independent directors" 

Visto bueno The Company complies.

55. "That besides the functions stated in the foregoing Recommendations, the Nomination Committee be responsible for the following:

  • Assessing the abilities, knowledge and experience necessary on the Board, defining, therefore, the functions and aptitudes necessary in the candidates who must cover each vacancy, and evaluating the time and dedication necessary for them to be able to carry out their mission well.

  • Examining or organizing, in the manner considered appropriate, who is to succeed the Chairman and the top executive officer and, where appropriate, making proposals to the Board, so that this succession may take place in an orderly and well planned manner.

  • Informing on the appointments and dismissals/resignations of senior managers proposed to the Board by the top executive officer.

  • Informing the Board about issues of a varied nature as indicated in Recommendation 14 of this Code".

Visto bueno The Company complies, although the powers of the Nomination and Remuneration Committee on the subject of the Chairman's and CEO's succession refer to the process that permits the orderly succession of the Chairman and the CEO (smooth transition).

56. "That the Nomination Committee consult the Chairman and the top executive officer of the company, particularly in cases of matters relating to executive directors. And that any director be enabled to request the Nomination Committee to consider potential candidates, in the event they should be deemed suitable, for covering directorship vacancies".

Visto bueno The Company complies.

Remuneration Committee

57. "That besides the functions stated in the foregoing Recommendations, the Remuneration Committee be responsible for the following:

a) Proposing to the Board of Directors:

  • The remuneration policy for directors and senior managers;

  • The individual remuneration of executive directors and other conditions of their contracts.

  • The basic conditions of senior managers' contracts.

b) Ensuring the observance of the remuneration policy established by the company".

Visto bueno The Company complies partially.

It should be mentioned that in relation to the function of proposing the individual remuneration of Executive Directors to the Board, besides other conditions of their contracts, this must continue to be the responsibility of the Chairman or, where appropriate, the Chief Executive Officer and that, as a result, the function of the Nomination and Remuneration Committee must continue to be that of providing information.

58.  "That the Remuneration Committee consult the Chairman and the top executive officer of the company, particularly on matters relating to executive directors and senior managers"

Visto bueno The Company complies.