Download Complete PDF - Informe Anual 2012
Download Complete PDF - Informe Anual 2012
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ANNUAL REPORT<br />
OF THE AUDIT COMMITTE<br />
1) Functions, competencies and functioning of the Audit Committee<br />
The Audit and Control Committee’s primary function is to provide the Board of Directors with support in its oversight and control functions, the most important of<br />
which consist of ensuring that generally accepted accounting standards are correctly applied and the integrity of the internal control systems used to draw up the<br />
individual and consolidated Annual Accounts is maintained.<br />
On 31 March 2004, the Board of Directors approved the Board of Directors Regulations which developed the Audit and Control Committee’s framework, the way<br />
it is run and its composition. One of the most significant changes has been caused by the entry into force of the following legislation: Law 12/2010 of 30 June,<br />
amending Law 19/1988 of 12 July, on the Auditing of Accounts, Law 24/1988 of 28 July on the Securities Market and the consolidated text of the Law on Limited<br />
Companies, approved by Royal Legislative Decree 1564/1989 of 22 December, for its adaptation to EU regulations, by virtue of which the Audit Committee has been<br />
given a specific legal framework regarding its functioning and powers, with the bylaw provisions and content of the Board Regulations on this matter having been<br />
appropriately modified for the purposes of adaptation to the aforementioned legal text.<br />
Consequently, both the text of the Articles of Association, as well as the regulations contained in the Board Regulations govern all matters concerning the composition,<br />
competencies and functioning of the Audit Committee, which can essentially be summarised as follows:<br />
a) Composition<br />
The Audit and Control Committee shall comprise at least three and at most five Directors appointed by the Board of Directors. All the members of said Committee<br />
must be external or non-executive Directors.<br />
The Audit and Control Committee’s members, and particularly its Chairman, shall be appointed on the basis of their knowledge and experience in accounting,<br />
auditing or risk management.<br />
The Chairman of the Audit and Control Committee shall be an independent director and shall be appointed from among the directors who hold neither<br />
management nor executive responsibilities in the organisation nor maintain a contractual relationship other than the office to which they have been appointed.<br />
The Chairman shall be appointed from among the Committee’s members who are non-executive directors. The chairman shall be replaced every four years and<br />
may be re-elected one year after standing down from office.<br />
b) Competencies<br />
Notwithstanding any other tasks it may be entrusted with by the Board of Directors, the Audit and Control Committee’s primary function consists of providing<br />
support to the Board of Directors in its oversight functions and, more specifically, it holds at least the following competencies:<br />
1. By means of its Chairman, to report, within the sphere of its competence, on any issues raised by shareholders at the General Shareholders’ Meeting.<br />
2. Supervising the effectiveness of the company’s internal control, internal auditing, where applicable, and risk-management systems, as well as discussing any<br />
significant weaknesses in the internal control system, identified during audits, with auditors or audit companies.<br />
3. To supervise the process of preparing and the integrity of financial reporting relating to the Company and, should it be the case, to the Group, reviewing<br />
compliance with regulations, correct scope of consolidation and the proper application of accounting standards.<br />
4. To propose to the Board of Directors the appointment of the Auditor of Accounts for submission to the General Shareholders’ Meeting, as well as, where<br />
appropriate, the conditions under which the Auditor’s services are engaged, the scope of their professional mandate and the revocation or renewal of their<br />
appointment.<br />
5. Establishing suitable relationships with auditors or audit firms in order to receive information regarding any issues that may endanger their independence,<br />
so that these can be examined by the committee, as well as any other matters related with the process of conducting accounts auditing, as well as any other<br />
communications stipulated in the accounts auditing legislation and audit regulations. In any event, it shall receive written confirmation on an annual basis<br />
from the auditors of accounts or auditing firms of their independence from the Company or from any entities related to it either directly or indirectly, as well<br />
as information on any additional service of any kind whatsoever provided to such entities by the aforementioned auditors of accounts or by persons related to<br />
them in accordance with the provisions set forth in Act 19/1988 of 12 July on the Auditing of Accounts.<br />
6. Issuing, once a year and prior to the release of the accounts auditing report, a report expressing an opinion regarding the independence of the auditors or audit<br />
firms. This report must, in all cases, make a statement regarding the provision of any services additional to those mentioned in the previous section.<br />
7. To safeguard the independence and efficiency of the internal auditing area; to propose the recruitment, appointment, reappointment and removal of the<br />
person in charge of internal auditing; to propose said service’s budget; to receive periodic information about its activities; and to verify that senior management<br />
is aware of the conclusions and recommendations made in internal audit reports.<br />
8. To set and oversee a mechanism that allows employees to report in confidence and, if appropriate, anonymously, any irregularities that could be potentially<br />
important, especially any financial and accounting irregularities they may notice within the company, and specifically those related to the Code of Conduct.<br />
9. To supervise compliance and internal codes of conduct, as well as the rules of corporate governance.<br />
10. To inform the Board about all matters connected with related-party transactions, which shall be construed as they are defined by the prevailing Capital<br />
Companies Act.<br />
11. To inform the Board about the creation or acquisition of any equity investments in special purpose vehicles and companies registered in tax havens, as well as<br />
about any other transactions or operations of a similar nature which, due to their complexity, might negatively affect the group’s transparency.<br />
12. To exercise any other competencies said Committee has been assigned by virtue of these Regulations or by the Board of Directors.<br />
c) Functioning<br />
The Audit and Control Committee shall meet at least once a quarter and as many times as may be necessary after being called by its Chairman at his/her own<br />
initiative or upon the request of two of its members or of the Board of Directors.<br />
The Audit and Control Committee may require any of the Company’s employees or executives to attend its meetings, in addition to the Company’s Auditor of<br />
Accounts.<br />
2) Composition of the Audit Committee<br />
The composition of the Audit and Control Committee fulfils the regulations laid down by the Board Regulations of NH Hoteles, S.A.,.which faithfully reflects the<br />
Recommendations of the Unified Code of Good Governance.<br />
ANNUAL REPORT OF THE AUDIT COMMITTE 121