2.
Audit and Control Committee
Its composition, duties, and responsibilities or competencies are fully regulated by Article 48 of the Company’s bylaws and Article 25 of the Board
Regulations
a) Composition.
The Audit and Control Committee shall comprise a minimum of three and a maximum of five directors, appointed by the Board of Directors. All members
of the Committee must be external or non-executive directors.
Themembers the Audit and Control Committee, and particularly its Chairman, shall be appointed after taking into account their knowledge and experience
in accounting or auditing matters, or both.
The Chairman of the Audit and Control Committee must be an independent director and be appointed from among its non-executive members. The
Chairman must also be replaced every four years; previous chairmen may be re-elected one year after their previous mandate has ended.
b) Duties
The Audit and Control Committee shall meet at least once every quarter and as often as considered necessary by its Chairman, or when requested by two of
its members or the Board of Directors.
The Audit andControl Committeemay summon any employee ormanager of theCompany, and also theCompany’s accounts auditor, to attend itsmeetings.
Through its Chairman, the Audit and Control Committee will give the board an account of its activities and work done, either at the meetings scheduled for
the purpose or at the very next meeting when the Chairman of the Audit and Control Committee deems it necessary. The minutes of its meetings will be
available to any member of the board that requests them.
b) Competencies.
The primary function of the Audit and Control Committee, notwithstanding any other task that the Board of Directors may assign it, shall be to support the
Board in its supervisory duties, specifically:
The primary function of the Audit and Control Committee, notwithstanding any other task that the Board of Directors may assign it, shall be to support the
Board in its supervisory duties, specifically:
1.
Report to the General Meeting on any matters broached within the sphere of its competence.
2.
Oversee the efficacy of the company’s internal controls, its internal auditing, as appropriate, and its risk management, as well as to discuss with the
auditors of accounts or auditing firms any significant weaknesses detected in the internal control system during the course of an audit.
3.
Oversee the process of drawing up and submitting mandatory financial reporting.
4.
Propose the appointment of the auditors of accounts or auditing firm, in accordance with legislation applicable to the company, to the company’s
governing body so that it may be brought before the General Shareholders’ Meeting or other of the company’s equivalent bodies, depending on its legal
nature.
5.
Establish the appropriate relations with the auditors or auditing firms for the purpose of receiving information about matters that may jeopardise the
independence of the auditors and should be brought before the committee, and any other matters relating to the financial auditing process, as well
as other disclosures required by financial auditing laws and audit regulations. In any event, they must receive annual written confirmation from the
auditors or auditing firms of their independence with regard to the entity or entities linked to this corporation, either directly or indirectly, as well
as information about additional services of any kind provided to those entities by such auditors or firms, or by persons or entities linked to them, in
accordance with Act 19/1988, of 12 July, on Financial Auditing.
6.
Every year, prior to issuing the audit report, issue a report giving its opinion on the independence of the auditors or auditing firms. The report must
always comment on the provision of additional services referred to in the preceding section.
7.
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.
8.
Set and oversee a mechanism that allows employees to confidentially and, if deemed appropriate, anonymously report any breaches of the Code of
Conduct.
9.
Supervise compliance and internal codes of conduct, as well as the rules of corporate governance
10.
Inform the Board about all matters connected with related-party transactions, which shall be construed as they are defined by the Revised Text of the
Capital Companies Act.
11.
Inform the Board about the creation or acquisition of any equity investments in special purpose vehicles and companies registered in tax havens, as
well as about any other transactions or operations of a similar nature which, due to their complexity, might negatively affect the group’s transparency;
and
12.
Exercise any other competencies such Committee has been assigned by these Regulations or which may be assigned by the Board of Directors. .
3.
The Appointments and Remuneration Committee
Article 47 of the Company bylaws and Article 26 of the Board Regulations govern every aspect of the Committee’s organisation and the duties and
competencies pertaining to it.
a) Composition.
The Appointments and Remuneration Committee shall comprise aminimumof three and amaximumof five directors. All members of the Committee shall
be non-executive directors and the majority of its members must be independent directors.
The Chairman of the Appointments and Remuneration Committee must be an independent director and be appointed by the Committee itself from among
its members.
ANNUAL CORPORATE GOVERNANCE REPORT
36
