Annual Corporate Governance Report 2017

28 b. Acquisition of holdings in special purpose vehicles or in tax havens c. Related party transactions d. Annual Corporate Governance Report j) to establish and supervise a mechanism enabling employees to notify irregularities, especially of a financial and accounting nature; and k) to supervise compliance with the corporate governance rules, codes of conduct and the corporate social responsibility policy. Rules of organisation and procedure: The Committee comprises at least three and no more than five non-executive directors, appointed by the Board, having regard to the accounting and/or auditing expertise of at least one of the directors. Most of its members must be independent. They cease to be Committee members when they cease to be directors, or following a resolution of the Board of Directors. The Chairman of the Audit and Control Committee is independent and his/her term of office is four years. He or she may be re-elected one year after his/her departure. The Committee’s Secretary can be the Secretary to the Board or the Deputy Secretary to the Board. In the event of absence, this role falls to the Committee member appointed by those present at the meeting. The Committee meets when called by the Chairman once every quarter and whenever requested by three or more Committee members, by the Chairman of the Board or by the Chief Executive Officer. The Committee is validly constituted if the number of members present in person or by proxy exceeds those absent. Resolutions are passed by a simple majority of those present. The Chairman has the casting vote. Executive directors may attend Committee meetings when agreed by its members and any Company employee or executive may also be convened to a meeting. The Corporate Director General attends at least once a year for the approval of the Annual Corporate Responsibility Report whenever she must report on matters within her remit. Committee meetings are regularly attended by the Chief Financial Officer and the Chief Audit Executive, who brief directors on the matters within their remit. An authorised representative of the external auditor also attends the meetings, when the Committee considers it necessary and, in any case, when presenting the half-yearly results and preparing the financial statements. The Audit and Control Committee may use external advisers, in accordance with the Board Regulations. Minutes are drawn up of the meetings, which are submitted to the directors. The Committee provides an account of its activity at the first full Board meeting following each of its meetings. In 2017 the Committee focused mainly on the following tasks: Review prior to approval by the Board of Directors of the reports on related-party transactions, the interim financial statements and reports for the CNMV, the 2016 financial statements and the management report, as well as the 2016 audit carried out by KPMG Auditores, S.L.; review of the 2016 Annual Corporate Governance Report; approval of the report on the independence of the external auditor in 2016; approval of the 2016 activity report; approval of non-audit services; monitoring of the general corporate responsibility policy and assessment of its degree of compliance; analysis of the implementation of the annual internal audit plan; approval of the 2017-2018 plan; monitoring of risk management and control projects; monitoring of application of corporate governance policy; supervision of the activities of the Regulatory Compliance Committee (report on the status of criminal proceedings in the Audiencia Nacional in relation to SGAE, review of policies and protocols within the compliance model, risk review and controls in crime prevention matters); analysis of the CNMV Technical Guide 3/2017; and approval of a plan on the Committee’s concerns and activities for 2018.