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6. Issue, once a year and prior to the release of the auditor’s report on the financial statements, a report expressing an opinion on the
independence of the auditors or audit firms. The report must always comment on the provision of additional services referred to in the
preceding section.
7. Monitor the independence and efficacy of the internal audit function; propose the selection, appointment, re-election and removal of the
manager of the internal audit service; 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 confidentially and, if deemed appropriate, anonymously, to 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
Consolidated Text of the Corporate Enterprises Act.
11. Inform the Board about the creation or acquisition of any equity investments in special purpose vehicles or in 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 assigned to the Committee by these regulations or which may be assigned by the Board of Directors.
c) Functioning.
The Audit and Control Committee will meet at least once every quarter and as many times as may be necessary, after being called by the
Chairperson on his/her own initiative or upon the request of two of the Committee or the Board of Directors.
The Audit and Control Committee may require any of the Company’s employees or managers, including the Company’s Accounts Auditor, to
attend its meetings.
2) Composition of the Audit Committee.
The composition of the Audit and Control Committee fulfils the regulations laid down by the Board Regulations of NH Hoteles, S.A., which
faithfully reflect the Recommendations of the Unified Code of Good Governance.
Two changes to the composition occurred in 2014, partly due to the Committee’s size. Mr Manuel Galarza Pont (representative of Participaciones y
Cartera de Inversión S.L.) left the Committee while Mr Ramón Lanau Viñals was replaced by Mr Francisco Javier Illa, as member of the Committee.
Although Mr Francisco Javier Illa was appointed to this Committee on 27 January 2015, he had been a member since 23 December 2014 when he
replaced the then departing Mr Ramón Lanau.
As a consequence, the composition of the Audit and Control Committee on 31 December 2014 was as follows:
Chairman:
Mr Carlos González Fernández
Directors:
Mr Xianyi Miu
Mr Francisco Javier Illa
Secretary: Mr Carlos Ulecia Palacios
Without prejudice to the foregoing, and in the interests of complying with the new legal requirements following the entry into force of Law 31/2014
of 3 December, amending the Corporate Enterprises Act with a view to improving corporate governance, the Board of Directors approved, on 27
February 2015 following the favourable report by the Appointments and Remuneration Committee, the appointment of independent director Mr.
Francisco Román Riechmann as a new member of the Audit and Control Committee. This appointment fulfils the requirement of the Committee
having at least two independent directors.
3) Relationships with External Auditors
The parent company of the NH Hotels Group has been audited by renowned companies since 1986. Between 1986 and 1992 it was audited by Peat
Marwick, and by Arthur Andersen between 1993 and 2001. It has been audited by Deloitte since 2002.
The Consolidated Financial Statements for 2014 were audited by five independent firms.
Deloitte is the principal auditor and, as such, issues an auditing opinion on the consolidated financial statements. This auditor verified the accounts
of the companies which form part of the Business Units of Spain (except Portugal), Italy (except the US), Germany, Netherlands/Belgium, Austria/
Switzerland (except Hungary), Mexico and MERCOSUR, which account for 95.6% of all consolidated assets and 98.6% of net turnover.
Deloitte was appointed as the Group’s principal auditor for a one-year period at the General Shareholders’ Meeting of NH Hotel Group, S.A. held
on 26 June 2014 and the auditors for the different Business Units mentioned above were appointed at their respective General Shareholders’
Meetings. This firm has been the Group’s principal auditor since 2002, though changes occurred regarding the partner responsibility for the audit
in 2003, 2005, 2007 and 2014. The total fees received by the firm for its professional auditing services for financial year 2014 amounted to €1.33
million (€1.39 million in 2013).
ANNUAL REPORT OF THE AUDIT AND CONTROL COMMITTEE OF
NH HOTEL GROUP, S.A.
