Mr. José Barreiro Hernández – Coordinating Director – Independent
Mr. Paul Jeffery – Independent
Mr. Daniel B.More – Independent
Summary of powers and responsibilities
The powers of the Audit Committee, shall be those stipulated in the Law and at least he following:
- (a) Inform the Shareholders General Meeting about issues raised in relation to those matters that are the competence of the Committee.
- (b) Monitor the effectiveness of the Company internal control, the internal audit and risk management, including the tax systems, as well as to discuss with the accounts auditor the significant weakness of the system of internal control detected in the development of the audit.
- (c) Supervise the mandatory preparation and presentation of financial information procedure.
- (d) Take to the Board of Directors proposals for selection, appointment, re-election and replacement of the external auditor, as well as the conditions of his/her contract and regularly gather information on the audit plan and its implementation, in addition to preserving its independence in the exercise of his/her responsibilities.
- (e) Establish appropriate relations with external auditors to receive information on those matters, which may compromise their independence, for their consideration by the Committee, and any others related to the audit process of development, as well as any other communications provided for in the accounts auditor law and the auditing standards. In any case, they must receive annually from external auditors their independence declaration in relation to the entity or entities related to it, directly or indirectly, as well as the information of additional services of any kind provided and corresponding fees perceived from these entities by the external auditor or by persons or entities related to it in accordance with the provisions of the law on accounts audits.
- (f) Annual issuing, prior to the issuance of the accounts audit report, a report that will express an opinion on the independence of the accounts auditor. This report must contain, as the case may be, the valuation of the provision of additional services referred to in the above section, individually and jointly considered, different from the legal audit and in relation to the regime of independence or regulatory audit standards.
- (g) Report, prior to the Board of Directors on all matters stipulated by law, the bylaws and the Board Regulation and particularly:
- (i) the financial information that the Company should make public periodically;
- (ii) the creation or acquisition of shares in entities with special purpose or registered offices in countries or territories which are considered as tax havens; and
- (iii) transactions with related parties.
The following will also be the responsibility of the Audit Committee: 31.10.1 In relation to internal control and information systems:
- (a) Supervise the preparation process and completeness of financial information on relation with the Company and, where applicable, the group, reviewing compliance with regulatory requirements, the proper delimitation of the consolidation perimeter and the correct application of the criteria accounting.
- (b) Ensure the independence of the unit that assumes the internal audit function; propose the selection, appointment, reappointment and removal of the head of internal audit; propose the budget for this service; adopting the guidance and approve the work plans, ensuring that their activity is mainly focused on significant risks facing the Company; receive periodic information on its activities; and verify that senior management takes into account the conclusions and recommendations of its reports.
- (c) Establish and supervise a procedure that allows employees to communicate, confidentially, irregularities of potential significance, especially financial and accounting, which they observe within the company.
In relation to the external auditor:
- (a) If the external auditor resigns, examine the circumstances that have caused it.
- (b) Ensure that the remuneration of the external auditor for his work does not compromise quality or independence.
- (c) Supervise that the Company communicates as a relevant fact to the CNMV the change of auditor accompanied by a declaration about the possible existence of disagreements with the exiting auditor and, if any, it’s content.
- (d) Ensure that the external auditor annually hold a meeting with the full Board of Directors to inform on the work done and the evolution of accounting and risk situation of the Company.
- (e) Ensure that Company and the external auditor respect the regulations in effect about the rendering of different services than auditing ones, the limits to the concentration of the business of the auditor and, in general, about the independence of the Auditors.
Audit Committee may call any employee or officer of the Company, even ordering their appearance without the presence of any other manager. Furthermore, the Audit Committee shall be informed of operations and corporate structural changes that the Company plans to carry out for analysis and prior to the Board on their economic conditions and their accounting impact report and, in particular, where appropriate, on the proposed exchange ratio.