Annual Corporate Governance Report 2017

27 November 2017 adopted the protocol on the Executive Committee’s intervention in especially important matters so as to enhance corporate governance of the Company. The protocol makes provision for the Executive Committee’s intervention in specific matters which for a variety of reasons are of particular importance to the Group. All directors receive copies of the approved minutes of Executive Committee meetings. Indicate whether the membership of the executive committee reflects the proportion of membership on the board by director class. Yes X No  AUDIT AND CONTROL COMMITTEE Name Position Director class Aurora Catá Sala Chair Independent Elmar Heggen Vice Chairman Proprietary María Entrecanales Franco Member Independent José Manuel Lara García Member Proprietary Mónica Ribé Salat Member Independent % executive directors 0 % proprietary directors 40 % independent directors 60 % other non-executive 0 Describe the functions assigned to the committee and its rules of procedure. Outline the committee’s key activities in the year. Its existence is envisaged in the Company’s articles (article 42), which also establish the composition, functioning and powers and duties, as further specified by the Board Regulations (article 23). The main duties of the Committee are: a) to report to the shareholders at General Meeting on the matters within its scope of concern; b) to supervise the effectiveness of the Company’s internal control, internal audit and risk management systems, and to discuss with the auditor any significant weaknesses in the internal control system identified during the performance of the audit; c) to supervise the functions of the internal control and risk management division; d) to supervise and monitor the internal audit unit; e) to supervise the preparation and presentation of the mandatory financial reporting on the Company and its Group; f) to ensure that the Board of Directors submits the accounts to the General Meeting without reservations, restrictions or qualifications in the auditors’ report; g) to submit to the Board the selection, appointment, re-election and replacement proposals regarding the external auditor; h) to establish the appropriate relations with the external auditor to receive information on the audit plan and its independence; i) to inform the Board of all matters envisaged by law, the Company’s articles and the Board Regulations and, in particular, with respect to: a. Interim financial reporting