Financial information

The individual and consolidated annual accounts of the Company that must be stated by the Board of Directors, are previously certified by the Chairman and Chief Executive Officer and by the Chief Financial Officer.

The Audit and Control Committee, mostly made up of non-executive independent directors, meets with the financial auditors in order to review the Company’s annual accounts and certain periodic financial information that the Board of Directors must provide to the markets and their supervisory boards, overseeing compliance with the legal requirements and correct application of generally accepted accounting principles in the drawing up thereof. In such meetings, any disagreement or difference of opinion existing between the management of the Company and the external auditors is put forward, where appropriate, so that the Board of Directors may take the necessary steps in order for the auditors’ reports to be issued without qualifications. In line with best practices in the area of corporate governance, members of the Audit and Control Committee meet with the financial auditors without any officer of the Company being present.

Furthermore, previously to the drafting of the annual, half-yearly or quarterly financial statements, the management of the Company also meets with the Audit and Control Committee and is subjected by the latter to suitable questions as to, inter alia, the application of accounting principles or the estimates made in the preparation of the financial statements. These topics are subject to discussion with the external auditors.

The auditors’ report on Financial Statements for financial year 2014 has been issued without qualifications.

Auditors’ independence

Mechanisms set to preserve the independence of the external auditor are:

• The relationship of the Board of Directors with the financial auditors of the Company shall be channeled through the Audit and Control Committee.
• The Audit and Control Committee shall abstain from proposing to the Board of Directors, and the latter shall abstain from putting forward to the General Meeting of Shareholders, the appointment as auditor of the Company of an audit firm subject to any incompatibility in accordance with the legislation on auditing as well as those audit firms where the fees that the Company estimates to pay them, for all services, are higher than 5% of the latter’s total revenues over the last financial year.
• The Board of Directors shall publicly disclose the aggregate fees paid by the Company to the audit firm for services other than financial auditing.
• The Audit and Control Committee, mostly made up of independent Directors, proposes to the Board of Directors, to be subsequently submitted to the Annual General Meeting, the appointment of the financial auditors as well as the terms of their agreement, the scope of their professional mandate and, where appropriate, the termination or non—renewal of their appointment;
• Among the functions of the aforementioned Committee is that of liaising with financial auditors in order to receive information on those matters that could jeopardise their independence and on any other matter related to the conduct of the financial auditing process, as well as those other notices envisaged by auditing legislation and auditing standards.
• The Audit and Control Committee shall issue a report every year, prior to the issue of the auditors’ report, expressing an opinion on the independence of external auditors of the Company, and addressing at any rate the rendering by the external auditors of any manner of additional services other than those covered in the audit agreement.
• The Audit and Control Committee oversees the terms and the enforcement of the contracts entered into with the external auditors of the Company to carry out assignments or tasks other than those covered in the audit agreement.
• The external auditors regularly meet with the Audit and Control Committee, in order to review the annual accounts of the Company that the Board of Directors must provide to the markets and their supervisory boards.
• The Company discloses in its consolidated annual report the fees paid to its external auditors for each item other than financial auditing.

As regards the mechanisms established to guarantee the independence of the financial analysts, the Company releases information to the market following the principles included in the Internal Regulations of Conduct regarding Transactions in Securities, especially regarding the obligation that the information must be accurate, clear, quantified and complete, avoiding any subjective views that lead or may lead to confusion or deceit.

External audit fees