44.
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 section: E
Complies
45.
It is the responsibility of the Audit Committee to:
1
º In relation to internal control and information systems:
a) The main risks identified due to supervising the effectiveness of the company’s internal control and internal auditing, where applicable, are managed
and reported appropriately.
b) Safeguard the independence and effectiveness of the function of the internal audit; propose the 69/75 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 the conclusions and recommendations of its reports into account.
c) Establish and supervise the mechanism that allows employees to report confidentially, and if considered appropriate, anonymously any irregularities
which might be significant, especially in finances and accounting, within the company
2
º In relation to the external auditor:
a) Regularly receive information from the external auditor about the auditing plan and results of its implementation, and verify that senior management
takes its recommendations into account.
b) Ensure the independence of the external auditor, and for this purpose:
i) The company must notify the Spanish National Securities Market Commission (CNMV) of a change in auditor by way of a Relevant Fact, and
accompany it with a statement on the existence of any disagreements with the outgoing auditor, and if such exist, their content.
ii) If the external auditor resigns, examine the circumstances causing thi
See sections: C.1.36, C.2.3, C.2.4 y E.2
Complies
46.
The Audit Committee can call on any company employee or manager, and even require an interview without the presence of any other manager.
Complies
47.
The Audit Committee informs the Board, before it adopts the corresponding decisions, on the following matters, as set out in Recommendation 8:
a) The financial reports that the company, as a listed company, must periodically publish. The committee must ensure that interim accounts are drawn up
following the same accounting principles as the annual ones, and therefore consider the advisability of a limited review by the external auditor.
b) The creation or acquisition of shares in entities with special purposes or domiciled in countries or territories that are considered tax havens, as well as any
other transactions or operations of a similar nature which, due to their complexity, might be detrimental to the transparency of the Group.
c) Related party transactions, unless this duty of prior reporting has been attributed to another committee than the Supervision and Control committees
See sections: C.2.3 y C.2.4
Complies
48.
The Board of Directors, where possible, will present the accounts to the General Meeting without reservations or caveats in the auditor’s report, and in the
unusual case that there are any, both the Chairman of the Audit Committee and the auditors will clearly explain to the shareholders the content and scope of
these reservations or caveats.
See section: C.1.38
Complies
49.
Most of the members of the Appointments Committee, or the Appointments and Remuneration Committee if a single body, will be independent directors.
See section: C.2.1
Explain
On 31 December 2013, the Appointments and Remuneration Committee consisted of one independent director (Mr. Gilles Péllison), who also acts as Chairman,
and three proprietary directors.
ANNUAL CORPORATE GOVERNANCE REPORT
52
