In 2012 there was one change in the make-up of the Audit Committee, brought about by the resignation tendered by D.Juan Llopart, having designated D.Manuel
Galarda Pont as his replacement in representation of Participaciones y Cartera de Inversion S.L.
After this change, the composition of the Audit Committee is as follows:
Chairman:
Mr Carlos González Fernández
Members:
Mr Iñaki Arratíbel Olaziregi
Mr Ignacio Ezquiaga Domínguez (acting on behalf of Hoteles Participados, S.L.)
Mr Manuel Galarza Pont (acting on behalf of Participaciones y Carrtera de Inversion S.L.)
3)
Relationships with External Auditors
The parent company of Grupo NH Hoteles has been audited by well-renowned companies since 1986. Between 1986 and 1992 it was audited by Peat Marwick, and
by Arthur Andersen between 1993 and 2001. It has been audited by Deloitte since 2002.
The Consolidated Annual Accounts for financial year 2012 were audited by five independent firms.
Deloitte is the principal auditor and, as such, issues an auditing opinion on the consolidated annual accounts. It verified the accounts of the companies which form
part of the Spain (except Portugal), Italy, Germany, The Netherlands/Belgium, Austria, Switzerland, Mexico. MERCOSUR and Sotogrande Business Units, which
account for 96,5 % of consolidated assets and 98,6 % of turnover.
Deloitte was appointed as the Group’s principal auditor for a one-year period at the General Shareholders’ Meeting of NH Hoteles held on 29 June 2012 and the
auditors of the different Business Units mentioned above were appointed at their respective General Shareholders’ Meetings held over the course of the first half of
2012.
This firm has been the Group’s principal auditor since 2002, though changes occurred regarding the partner responsibility for the audit in 2003, 2005 and 2007.
The total fees received by the firm for its professional auditing services for financial year 2012 amounted to 1,40 million euros (1,46 million euros in 2011).
PriceWaterhouseCoopers was appointed as auditor of the Dutch, Belgian and Swiss companies in 1998, of the Austrian companies in 2004 and of a Luxembourg
company in 2009, having been replaced in this role by Deloitte in 2011.
The companies in Portugal are audited by Batista, Costa y Asociados; the US companies are audited by McGladrey & Pullen, LLP and the Hungarian company by
Ernst & Young. The total fees for the auditing services provided in financial year 2012 by all these auditing firms amounted to 0.04 million euros (0.04 million euros
in 2011).
The Audit Committee has received information about such issues as may have endangered the independence of the auditors and, after carefully reviewing this
information, has issued a report expressing its opinion regarding their independence and the provision of services in addition to those of auditing.
4)
Contents and Results of the Audit Committee’s Work
The Audit Committee held twelve meetings in 2012, which covered the following matters:
a) Analysis and assessment, along with the external auditors, of the Financial Statements and the Annual Reports for 2011 and 2012, ensuring that the auditing
opinion was issued under conditions of absolute independence.
b) Review of the information relating to any issues that may endanger the independence of the auditors. Issuance of the report on the independence of the
auditors.
c) Review of periodic financial reporting prior to its analysis and approval by the Board of Directors in order to ensure said reporting is reliable, transparent and
drawn up using uniform accounting standards and principles.
d) Monitoring of the Internal Audit Plan for 2012, including an examination of its conclusions and the implementation, as appropriate, of the necessary corrective
measures.
e) Review and updating of the Group’s Risk Map. Analysis and assessment of the specific risks related to the Financial information issuing.
f) Examination of the Annual Corporate Governance Report prior to its submission to the Board of Directors for analysis and approval, placing special emphasis
on analysing how the situations of Directors and Executives had been recorded.
g) Analysis of related-party transactions in order to verify that they had been performed under market conditions, as has been the case.
h) Monitoring the most significant projects carried out by the internal auditing team. Audits Performance in Italy and Resorts. SCIIF development and
implementation. Continuous audit evolution analysis.
5)
Priorities for 2013
This Committee’s priorities for this year, apart from those related to drawing up and issuing public financial reporting, are focused on:
1.
Continuation of the project to implement the Systemof Internal Control over Financial Reporting. Periodical reviewof the implementation performed (Corporate
and Spain/ Portugal Business Unit)
2.
Development and Implementation of the Continuous Auditing Project:
-
Obtaining, preparing and analysing the main operational / financial indicators (KPI/KRI).
-
Use of the mentioned indicators for the selection of risk areas. Internal control system implementation based on sending the KPI to the different profit
centres.
-
New Audit working papers implementation, following these steps:
a. Previous analysis of risk areas.
b. Remote audit process. Risk control through KPI.
c. Face audit. Substantive test performance in the hotels.
3.
Analysis and review of the operational and administrative risk map with regard to hotels:
-
Review and improvement of the controls implemented at present.
-
Design of new controls, implementation in IT tools.
4.
Follow up of the incidences detected in the audits performed in previous months. Compliance of the action plans issued by the departments and Business
Units.
5.
Analysis and evaluation of all the processes related to IT systems related to the Front area of the company (Booking, Production, Invoicing). Controls and
procedures development.
To conclude this report, it should be highlighted that this Committee has had access to external experts (auditors, appraisers or consultants) and members of the
economic and financial management teams whenever it has deemed it necessary in order to carry out the aforementioned work.
Madrid, 27th of March, 2013
122
ANNUAL REPORT
OF THE AUDIT COMMITTE
