45.
Supervision of compliance with the internal codes of conduct and the rules on corporate governance is the responsibility of the Audit Committee, the
Appointments Committee, or if separate, the committees for compliance or corporate governance.
Complies
46.
Members of the Audit Committee, particularly its chairman, are appointed on the basis of their knowledge and experience in accountancy, audit or
risk management.
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47.
Listed companies have an internal audit which, supervised by the Audit Committee, ensures the correct operation of the information and internal
control systems.
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48.
The internal audit manager presents their annual work plan to the Audit Committee; they inform the committee directly of the incidents arise during
its implementation; and, at the end of each financial year, they submit an activity report to the committee.
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49.
The risk management and control policy identifies at least the following:
a) The different types of risk (operational, technological, financial, legal, reputation-related, etc.) to which the company is exposed, including
contingent liabilities and other off-balance sheet risks among financial and economic risks;
b) The level of risk that the company considers acceptable;
c) The measures planned to mitigate the impact of identified risks should they materialise;
d) The internal control and information systems that will be used to control and manage the aforementioned risks, including contingent
liabilities or off-balance-sheet risks.
See sections: D
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50.
It is the responsibility of the Audit Committee to:
1
º In relation to internal control and information systems:
a) Supervise the process of preparing and safeguard the integrity of the financial reporting relating to the company and, should it be
the case, to the group, reviewing compliance with regulations, the adequate delimitation of the consolidated group and the proper
application of accounting standards.
b) Periodically review the internal control and risk management systems so that the principal risks are identified, managed and
appropriately recorded.
c) Ensure the independence and effectiveness of the internal audit; propose the selection, appointment, re-election and removal of the
internal audit service manager; propose the budget for this service; receive periodic information about its activities; and verify that
senior management takes into account the conclusions and recommendations of its reports.
d) Establish and supervise a mechanism that allows employees to confidentially, and as applicable anonymously, communicate any
potential irregularities, particularly financial and accounting, they discover within the Company.
2
º In relation to the external auditor:
a) Present to the Board of Directors proposals to select, appoint, re-elect and substitute the external auditor, as well as the conditions
of its contract.
b) Receive information about the audit plan and its results from the external auditor on a regular basis and verify that senior management
takes its recommendations into account.
c) Ensure the independence of the external auditor, and for this purpose:
i) That the company notifies the Spanish Securities and Exchanges Commission of the change of auditor as a significant event
and accompanies it with a statement about the existence of disagreements with the outgoing auditor and the content of such
disagreements, if they exist;
ii) That it ensures that the company and the auditor follow prevailing regulations on the provision of services other than audit services,
the limits on the concentration of business with the auditor and, in general, any other regulations established to ensure the
independence of the auditors;
iii) That in the case of the resignation of the external auditor, to examine the circumstances that may have caused it.
d) In the case of groups, encourage the group auditor to take responsibility for the audits of the companies that comprise it.
See sections: B.1.35, B.2.2, B.2.3 and D.3
Complies
51.
The Audit Committee may summon any employee or director of the company, and may require the appearance of the same without the presence of
any other director.
Complies
ANNUAL CORPORATE
GOVERNANCE REPORT
55