D.7 Is more than one company in the Group listed in Spain?
YES
Identify the affiliate companies listed in Spain:
Listed subsidiary
SOTOGRANDE, S.A.
Indicate whether the respective areas of activity and the corresponding business relations between themhave been publicly defined in detail,
as well as the areas and relations of the listed subsidiary company with the other companies in the Group;
YES
State any possible business relationships between the parent company and the listed subsidiary, and between the latter and other group companies
The relationships derived from the management contracts that exist between the companies
State the mechanisms created for resolving any conflicts of interest between the listed subsidiary and the other companies in the Group:
Mechanisms for resolving possible conflicts of interest
The mechanisms for resolving possible conflicts of interest that may arise between NH Hoteles, S.A. and the listed company that forms part of its group,
Sotogrande, S.A., are defined by the Audit and Control Committees attached to the respective companies, which propose the corresponding solutions that are
approved, as appropriate, by the Board of Directors of each company.
E - RISK CONTROL ANDMANAGEMENT SYSTEMS
E.1 Explain the scope of the company’s Risk Management System.
Grupo NHHoteles, S.A.
E.2 Identify the company bodies responsible for creating and implementing the Risk Management System.
The Finance Department is the department responsible for establishing the design, implementation and comprehensive monitoring of the Group’s internal
Financial Reporting control system. That involves taking responsibility for the maintenance of the necessary control structure and ensuring that it functions
effectively and continuously over time. The purpose of the internal control system is to provide the company with reasonable guarantees that the financial
reporting generated is reliable.
The entity’s Board of Directors is responsible for overseeing this control structure, in line with the provisions of Article 5 of the Regulation of the Board of
Directors.
In order to carry out this previously-described oversight function, the Board of Directors turns to the Audit and Control Committee, which is obliged, through
its internal auditing function, to implement measures and action plans to ensure that this oversight function is properly fulfilled, as described in Article 25 of the
Regulation of the Board of Directors.
E.3 State the main risks which can affect business goal achievement.
1.
Control system for financial risk
The group controls its financial risks using the following mechanisms:
1.1
ProceduresManual:TherelevantoperationscarriedoutbytheNHHotelesGrouparestandardisedthroughaninternalproceduresmanualcoveringpurchase
cycles, asset management, treasury, end of month processes, etc. The regulations applicable to accounting matters for all national and foreign companies in
the Group are also regulated. .
1.2
Internal Audit: The Internal Audit Department carries out an on-going function that mainly focuses on identifying risk situations and evaluating their
management. To this end it has defined an annual audit plan that aims to verify the correct application of the established rules and procedures, both at the
level of corporate departments and for different hotels, among other objectives.
1.3
Audit Committee: Reporting directly to the Board of Directors, the Audit Committee is responsible for supervising the correct functioning of all the Group’s
Internal Control Systems. It also periodically analyses the principal risks of the businesses and the systems established for their management and control. It
is also the body responsible for relations with the Group’s external auditors.
1.4
Centralised Management: The Group, through the Corporate Finance Department, implements a unified, centralised management policy based on
non-speculative criteria to control financing policies, interest rates and exchange rates.
ANNUAL CORPORATE GOVERNANCE REPORT
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