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42.In addition to those provided for by the law, the audit committee is responsible for the following functions:
1. In relation to internal control and information systems:
a) Supervising the preparation and safeguarding the integrity of the financial reporting relating to the company and, if applicable, to
the group, reviewing compliance with regulations, the adequate delimitation of the consolidated group and the proper application of
accounting standards.
b) Ensuring the independence of the unit that performs internal audits; proposing the selecting, appointment, re-election and removal of
the manager of internal audits; proposing a budget for this service; approving the guidelines and work plans, ensuring that its activity
is mainly focused on the company’s relevant risks; receiving periodic information on its activities; and verifying that senior management
keeps the conclusions and recommendations from its reports in mind.
c) Establishing and supervising a mechanism that allows employees to report confidentially and, if possible and considered appropriate,
anonymously, any potentially significant irregularities, particularly financial and accounting, they discover within the Company.
2. In relation to the external auditor:
a) In the case of the resignation of the external auditor, examining the circumstances that may have led to this.
b) Ensuring that the external auditor’s remuneration for their work does not compromise their quality or independence.
c) Monitoring 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.
d) Ensuring that the external auditor has an annual meeting with the Board of Directors in plenary to report on the work carried out and
on the evolution of the accounting position and risks to the company.
e) Ensuring that the company and the external auditor follow prevailing regulations on the provision of services other than audit services,
the limits on the concentration of business with the auditor and, in general, any other regulations on the independence of the auditors;
Complies
43.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.
Complies
44.The audit committee is informed about structural and corporate amendment transactions that the company plans to carry out for analysis
and prior reporting to the Board of Directors about their financial terms and their accounting impact and, in particular, as appropriate, on
the proposed swap ratio.
Complies
45.The risk management and control policy identifies at least the following:
a) The different types of risk, either financial or non-financial, (operational, technological, legal, social, environmental, reputational,
amongst others) to which the company is exposed, including contingent liabilities and other off-balance sheet risks amongst 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.
Complies
46.Under the direct supervision of the audit committee or, as appropriate, a specialist committee of the Board of Directors, there is an
internal risk control and management system run by an internal unit or department at the company which is expressly given the following
functions:
a) Ensure the proper functioning of the risk control and management systems and, in particular, that all significant risks that may affect
the company are adequately identified, managed and quantified.
b) Actively take part in drawing up risk strategy and in important decisions on its management.
c) Ensure that risk control and management systems suitably mitigate risks within the framework of the policy defined by the Board of
Directors.
Complies
47. The members of the appointments and remuneration committee (or the appointments committee and remuneration committee, if they
are separate) are appointed endeavouring to ensure that they have suitable knowledge, skills and experience for the functions that they
are called to perform and that the majority of such members are independent Directors.
Partially complies
Complies will all the provisions of this Recommendation, except the proposal that the majority of said members be independent Directors.
The Company’s Appointments, Remunerations and Corporate Governance Committee is currently comprised of six members, of whom
three are proprietary Directors and three are independent. Therefore, we are in compliance with the provisions of article 529n LSC which
establish that at least two of the members of the Appointments and Remuneration Committee must be independent Directors.
ANNUAL CORPORATE GOVERNANCE REPORT
