The Group has established a model for supervising financial reporting control systemwhich:
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Enables ExecutiveManagement and the Board of Directors to be provided with enough information to determine the correct functioning over time of the
internal financial reporting control system.
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Helps Executive Management to detect and correct deficiencies in control before they can significantly affect the quality of financial reporting.
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Maintains adequate control operations, as the defined supervision model is designed to prioritise risks, i.e., supervision is based on identifying the most
significant risks, identifying key controls, and testing the sufficiency of those controls.
This supervision of the Internal Financial Reporting Control System takes the form of the following actions by the Internal Audit department:
1.
Description and identification of the risks and controls associated with each process, and creation of the corresponding matrix.
2.
Drawing up a Model Report for the Financial Reporting Control System and the Approval Matrix. .
3.
Sending the reports to each manager in charge.
4.
Filling in the reports by the manager in charge, reporting the operativity of the controls under their responsibility.
5.
Supervision and obtaining evidence corresponding to the correct implementation of the controls described.
6.
Communication of the results and most significant defects to the responsible managers, their managers, and the Audit and Control Committee, and
correcting these defects so that the prioritisation is most efficient by drawing up an action plan.
It should be mentioned that each year, the Internal Audit Department and the manager responsible for the processes affecting financial reporting review
the design internal control system and how it operates to assess its effectiveness in mitigating the associated risks..
Supervision is complemented by the actions included in the auditing plan by Grupo NHHoteles Internal Audit Department. This Plan includes financial
and operating audits which help assess the efficiency and effectiveness of the controls established in the Company. The Audit Plan is approved annually by
the Audit and Control Committee, and applies to all the Group’s business units.
In the process of reviewing and reporting the results, the internal audit teammeets with the centre managers at the end of each review, and quarterly with
the directors of the business units. At those meetings, incidents are examined and future action plans are defined.
F.5.2 Whether there is a discussion procedure through which the accounts auditor (as established in the NTA), the internal auditing area and other experts
can report to senior management and the Audit Committee or company administrators on the significant weaknesses in internal control detected during
the process of reviewing the annual accounts, or others for which they are responsible. Likewise, whether there is an action plan to correct or mitigate the
weaknesses found.
The supervision results and the most significant deficiencies of the internal financial reporting control system are reported to the managers of those
responsible, and reviewed in the Audit and Control Committee sessions, which requires the presence of both external and internal auditors.
F.6 Other relevant information
The Internal Audit team is present in the Group’s main business units, some of the most significant of which are Spain, Germany, Benelux and Italy, and its
ongoing work helps to guarantee the effectiveness of the supervisory tasks needed to ensure proper application of the Company’s internal control system.
F.7 Report by the external auditor
Report on
F.7.1. Whether the SCIIF reports sent to the markets have been reviewed by the external auditor, in which case the company must include the corresponding
report as an appendix. If not, it must report its reasons.
The Audit and Control Committee has sufficient evidences with regard to the correct functions of the SCIIF within NH Hoteles Group and has not
considered necessary to request for an additional revision on behalf of the external auditors.
ANNUAL CORPORATE GOVERNANCE REPORT
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