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45.It is the responsibility of the Audit Committee to:
1. In relation to internal control and information systems:
a) Manage and report the main risks identified due to supervising the effectiveness of the company’s internal control and internal
auditing appropriately.
b) Safeguard the independence and effectiveness of the internal audit area; 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.
c) Establish and supervise a mechanism that allows employees to report confidentially and, if appropriate, anonymously any potentially
significant irregularities, particularly financial and accounting, they discover within the Company.
2. In relation to the external auditor:
a) Receive information about the audit plan and its results from the external auditor on a regular basis and verify that senior management
takes its recommendations into account.
b) Ensure the independence of the external auditor, and for this purpose:
i) That the company notifies the Spanish Stock Market Commission (CNMV) of the change of auditor as a significant event and
accompanies it with a statement about the existence of disagreements with the outgoing auditor and the content of such
disagreements, if they exist.
iii) In the case of the resignation of the external auditor, to examine the circumstances that may have caused it.
See sections: C.1.36, C.2.3, C.2.4 and E.2
Compliant
46.The Audit Committee may summon any employee or director of the company, and may require the appearance of the same without the
presence of any other director
Compliant
47. The Audit Committee notifies the Board, prior to it adopting the corresponding decisions, about the following issues indicated in
Recommendation 8:
a) The financial information that the company, as a listed company, must periodically disclose. The Committee must ensure that the interim
accounts are drafted using the same accounting criteria as the annual accounts, and therefore consider the appropriateness of a limited
review by the external auditor.
b) The creation or acquisition of stakes in special-purpose entities or those domiciled in countries or territories deemed to be tax havens,
as well as any other transactions or operations of an analogous nature which could erode the group’s transparency due to their
complexity.
c) Related party transactions, unless another supervision and control committee has been appointed to draw up the report.
See sections: C.2.3 and C.2.4
Compliant
48.The Board of Directors shall make every effort to present financial statements to the General Shareholders’ Meeting that are free from
reservations or qualifications in the audit report and, in exceptional circumstances where they may exist, both the Chairman of the Audit
Committee and the auditors shall provide the shareholders with a clear explanation of the content and scope of such reservations or
qualifications.
See section: C.1.38
Compliant
49.The majority of the members of the Appointments Committee (or Appointments and Remuneration in the case of a single committee) are
independent directors.
See section: C.2.1
Explain
On 31 December 2014, the Appointments and Remuneration Committee consisted of one Independent Director (Francisco Román
Riechmann), who was also its chairman, and two Proprietary Directors. Nevertheless, on 26 January 2015 the Board appointed a new
independent director as a new member of this Committee
50.In addition to the functions indicated in the preceding Recommendations, the following correspond to the Appointments Committee:
a) Evaluating the skills, knowledge and experience required by the Board in order to define the abilities and functions required by
candidates to cover each vacancy, and assessing the time and dedication required to correctly carry out their functions.
b) Examining or organising, as they deem appropriate, the Chairman’s and the chief executive’s succession, and if necessary bringing
proposals before the Board so that such successions are effected in an orderly and well-planned fashion.
c) Reporting appointments and departures of senior managers proposed by the Chief Executive Director to the Board.
d) Informing the Board about the gender diversity issues indicated in Recommendation 14 of this Code.
See section: C.2.4
Compliant
ANNUAL CORPORATE GOVERNANCE REPORT
