Procedure for approving related party transactions
Articles 33.1.c) of the Bylaws and 5.5 c) of the Board Regulations assign the Board of Directors the duty of approving related party transactions, understood
to be transactions between the Company and Directors, significant shareholders or bodies represented on the Board, or people tied to them, as defined in the
LSC. This approval will follow a Report by the Audit and Control Committee (Bylaw Article 48.4 and 25 b) of the Board Regulations).
Authorisation of the Board shall not be required however, for related party transactions that simultaneously meet the following three conditions:
1.
That are carried out under agreements with standardised conditions and are applied in a general way to numerous clients;
2.
That are carried out at established rates or prices, which in general are set by the supplier of the good or service;
3.
For an amount not exceeding 1% of the company’s annual revenues.
The above notwithstanding, Article 3.2.7.f) of the NHHoteles Code of Conduct, approved by the Board of Directors on 24May 2011, interprets the foregoing
internal regulation as follows:
“
Alltransactionsreferredto inthissectionwillbesubjecttopreviousauthorisationbytheBoard,afterafavourablereportbytheAuditandControlCommittee
of NHHoteles S.A.
In the case of transactions forming part of normal company business, which are habitual and recurring, the general authorisation of the line of transactions
and its execution conditions will be sufficient.
However, authorisation by the Board shall not be required for related party transactions that simultaneously meet the following conditions: (i) that are due
to contracts with standard conditions; (ii) that take place under market conditions and general conditions applicable to companies in the Group, and (iii) that
the amount does not exceed 1% of the annual revenues of NHHoteles, in relation to the audited annual consolidated accounts for the last year ended before
the date of the transaction in question.
If the authorisation of the Board of Directors should not be mandatory due to the foregoing requirements not being found, people subject to substantive rules
on conflicts of interest, shareholders and the heads of the departments which have to formalise the related party transactions between companies in theGroup,
must provide a written report on the transactions in which they take part, or if applicable, their respective Related Parties, by a notification to the Secretary of
the Audit and Control Committee. This notificationmust be sent every sixmonths, in the first week of January and July of each calendar year. The notification
must include the following:
(
a) Nature of the transaction;
(
b) Transaction start date;
(
c) Payment conditions and terms;
(
d) Identity of the person carrying out the transaction, and their relationship, if any with the person people subject to substantive rules on conflicts of interest;
(
e) Amount of the transaction; and
(
f) Other relevant aspects, such as pricing policies, guarantees issued and received, and any other aspect of the operations permitting a suitable interpretation
of the transaction, including information on operations which were not carried out under market conditions.
For these purposes, every six months the Secretary of the above Committee will send the Directors and people subject to substantive rules on conflicts of
interest a notification requiring them to send the relevant information to the Company. The Secretary of the Company Audit and Control Committee will
draw up a Register of transactions with people subject to substantive rules on conflicts of interest, significant shareholders, companies in the Group, or the
respective related parties. The information in the Register will regularly be made available to the Board of Directors. The transactions in the Register will be
published in the cases and within the scope set out in the applicable regulations.
Explain whether the approval of related party transactions has been delegated, and if so, indicate the body or persons to whom it is delegated.
Article 33.2 of the Board Regulations explicitly stipulates that “The powers reserved exclusively to the Board by law or the Company’s bylaws, or those needed
for the responsible exercise of its basic duties of supervision and control, cannot be delegated.” Therefore, the duty of approving related party transactions, which
the Bylaws assign expressly to the plenary Board, cannot be delegated.
D.2 List transactions which are significant for their amount or relevant due to their subject, between the company or entities in its
group, and significant shareholders of the company:
Name or corporate name of significant shareholder
Name or corporate name of company or
group company
Nature of the
relationship
Type of
operation
Amount
(
thousands of euros)
INTESA SANPAOLO, S.P.A.
JOLLYHOTEL HOLLANDNV
Contractual
Other
625
INTESA SANPAOLO, S.P.A.
NH ITALIA, S.R.L.
Contractual
Other
1.389
INTESA SANPAOLO, S.P.A.
NH ITALIA, S.R.L.
Contractual
Other
63.750
GRUPO INVERSORHESPERIA, S.A
HOTELES HESPERIA, S.L.
Contractual
Other
1.520
BANCO FINANCIERO Y DE AHORROS, S.A.
NH FINANCE, S.A.
Contractual
Other
69.870
BANCO FINANCIERO Y DE AHORROS, S.A.
NHHOTELES, S.A.
Contractual
Other
35.000
PONTEGADEA INVERSIONES, S.L.
NHHOTEL RALLYE PORTUGAL
LTD.
Contractual
Other
878
PONTEGADEA INVERSIONES, S.L.
NHHOTELES ESPAÑA, S.L.
Contractual
Other
8.488
ANNUAL CORPORATE GOVERNANCE REPORT
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