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D - RELATED AND IN-GROUP TRANSACTIONS
D.1 Identify the competent body and explain the procedure, if any, to approve transactions with related parties and
parties within the group.
Competent body for approving related party transactions
The Board of Directors, after receiving the Report of the Audit and Control Committee
Procedure for approving related party transactions
Articles 33.1.c) of the Articles of Association 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 associated with them,
as defined in the LSC. This approval will follow a Report by the Audit and Control Committee (Article 48.4 of the articles of association 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 generally established rates or prices, set by the supplier of the good or service;
3. For an amount not exceeding 1% of the company’s annual revenues.
Without prejudice to the above, Article 3.2.7.f) of the NH Hotel Group, S.A. Code of Conduct, approved by the Board of Directors on 24 May 2011, interprets the
foregoing internal regulation as follows:
“All the transactions referred to in this section shall be subject to the prior authorisation of the Board after having received a favourable report from the NH Hotel
Group S.A. Audit and Control Committee
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 transactions that simultaneously meet the following conditions: (i) that are carried out under
agreements with standardised 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 NH Hotel Group 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 the Group, 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. Such notices shall be sent on a half-yearly basis within 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 subject to substantive rules on conflicts of interest;
(e) Value 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.”
Finally, on 26 March 2014 the Board of Directors approved a Procedure on Conflicts of Interest and Related Party Transactions which includes the approval of
such transactions in greater detail.
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 Articles of
Association, 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 articles of association 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 business name of the major shareholder
Name or company name of the
company or group company
Nature of the
relationship
Type of transaction Amount (€ thousands)
INTESA SANPAOLO, S.P.A.
NH ITALIA, S.P.A.
Contractual
Others
6,083
INTESA SANPAOLO, S.P.A.
NH ITALIA, S.P.A.
Contractual
Others
36,250
GRUPO INVERSOR HESPERIA, S.A.
HOTELES HESPERIA, S.L.
Contractual
Others
2,960
BANCO SANTANDER, S.A.
NH FINANCE, S.A.
Contractual
Others
21,717
ANNUAL CORPORATE GOVERNANCE REPORT
