5 - NH Hotel Group

First NH Hotel in London
05
NH Hoteles
once again takes up
its international
expansion plan
- Banca Intesa acquires a 49%
stake in NH Italy
- Positive trends in Germany
and increased market share in
Spain
- Further innovation with
“nhow” and “Fast GO”
Cuba
Mexico
Brazil
Chile
Uruguay
262 NH Hotels worldwide
30/3/2006
Argentina
Netherlands
United Kingdom
Germany
Hungary
Belgium
Austria
Portugal
Switzerland
Romania
Italy
Spain
Ghana
South Africa
www.nh-hotels.com
1
LETTER FROM THE PRESIDENT
4
2
PORTFOLIO OF HOTELS
8
3
A YEAR OF EXPANSION
12
4
2005 RESULTS
24
5
SHARE PERFORMANCE
30
6
STRATEGY
32
7
SALES FORCE
34
8
TECHNOLOGY:
ONLINE SALES AND WEBSITE (www.nh-hotels.com)
38
summary
9
PRODUCTS
STRONG GROWTH OF THE NHUBE CONCEPT
FAST GOOD AND FAST GO
NHOW
ELYSIUM SPA
NH WORLD
OTHER PRODUCTS
10 CORPORATE SOCIAL RESPONSIBILITY
HUMAN RESOURCES
SOCIAL ACTION
THE ENVIRONMENT
CUSTOMER RELATIONS
SHAREHOLDER RELATIONS
SUPPLIER RELATIONS
FOOD AND BEVERAGE
SPREADING CULTURE
42
42
46
50
53
54
56
58
58
63
68
70
70
70
72
74
11 SOTOGRANDE
76
12 BOARD OF DIRECTORS AND
MANAGEMENT COMMITTEE
84
13 CORPORATE GOVERNANCE
86
Santa Engracia, 120
28003 Madrid - Spain
tel.: +34 91 451 97 18
fax: +34 91 451 97 69
www.nh-hotels.com
1
Letter from the President
letter from the
president
Dear Shareholders,
Once again I am writing to inform you
of the main events that took place in
the company last year, as well as our
business performance and the outlook
for the future.
After three years integrating the
chains acquired in Europe and Latin
America, years in which NH Hoteles
identified all of the synergies,
advantages and cost saving
opportunities, in 2005 we once again
took up the company’s expansion
strategy with renewed enthusiasm.
Accordingly, in 2005 the company
opened a total of 20 hotels with 2,329
rooms and an additional 6 hotels with
1,221 rooms in the first quarter of
2006, bringing the total number of
hotels now open to 262 or 38,054
rooms. In addition, at March 31, 2006,
NH Hoteles had signed contracts for a
Gabriele Burgio, Chairman & CEO of NH Hoteles
4
further 18 establishments and 5
extensions with 3,455 rooms.
NH Obradoiro - Santiago de Compostela (Spain)
5
Letter from the President
Another highlight of 2005 was the addition of several resorts to
management, as they provide most of the investment and place
our portfolio, mainly in the Caribbean, as well as important real
their long-term trust in us.
estate businesses, similar to the Sotogrande model. Specifically,
NH Hoteles signed a contract for a resort with almost 700 rooms
“In 2005 we once again
took up the company’s
expansion strategy with
renewed enthusiasm”
in Cayo Coco in Cuba, which is a 5-star “all inclusive” type
operation. Likewise, similar projects to Sotogrande were added in
Cap Cana (the Dominican Republic) and Riviera Maya (Mexico),
where luxury real estate business, golf and an exclusive hotel
offering, such as can be seen at Donnafugata- Sicily (Italy), are the
main features.To the latter, we have to add the Santa BárbaraCastellón complex (Spain), which Sotogrande is planning to
undertake with local partners.
Also in 2005, we won the support of first-class partners, such as in the
case of Banca Intesa, one of Italy and Europe’s most important financial
With these new additions, the number of rooms operated by
entities, which provided €50M to obtain 49% of the equity in NH Italia.
NH Hoteles under management contracts has gone from 11% of
total rooms to 14%. In absolute terms, the chain now has 40% more
This tremendous support will enable growth in Italy, one of the
rooms under management contract. This data demonstrates
chain’s priority objectives, with the help of one of the main driving
owners’ growing confidence in the NH Hoteles’ product and
forces behind the country’s economy.
With regard to results, hotel performance was very satisfactory, with
was €984.6M, with hotel revenues rising 4.6% to €901.2M, and
improvements in all business units. Particularly noteworthy events
EBITDA increasing 13.3%. With regard to the Sotogrande real
include recovery in Germany, where we experienced magnificent
estate business, it should be pointed out that after a record year in
improvements and expect to see profits in 2006, and an
its 43-year history in 2004, revenues in 2005 were €83.4M, down
improvement in our market share in Spain.
25.6% over the previous year, however, committed sales yet to be
booked at December 31, 2005 totalled €80M compared to €64.8M
“At NH Hoteles we have
continued to innovate, as every
year, in an endeavour to
anticipate customers’ needs and
offer a unique product”
in 2004.
NH Hoteles now has over 14,000 employees and the fact that
we are comprised of 108 different nationalities is significant
proof that we are indeed a true multinational. Furthermore,
according to the latest Employee Satisfaction Survey, four out of
every five employees would recommend NH Hoteles to work for.
At NH Hoteles we place special emphasis on training, which has
become a key element in integrating employees. In 2005 alone,
6
RevPAR (revenue per available room) rose 4.3% in 2005, mainly as a
over 240,000 hours of training were given at the
result of a 5.2% increase in occupancy. The group’s total turnover
NH University.
NH Den Haag – The Hague (The Netherlands)
At NH Hoteles we have continued to innovate, as every year, in an
I would like to take this opportunity to thank all of our partners,
endeavour to anticipate customers’ needs and offer a unique
shareholders and clients for their confidence in the management
product. Specifically, we can mention the creation of a new hotel
team and their support of the company, and also to all company
category, “nhow”, which features the newest trends and the latest in
employees, without whose dedication we would not have been
Italian design, with the best quality hotels situated in the world’s
able to achieve these accomplishments. In 2006, we will continue
most fashionable locations. Moreover, we have developed the “Fast
to orientate our managerial efforts towards achieving an ever more
Good” concept by creating the “Fast GO” shop, with products and
profitable and consolidated company.
recipes designed by prestigious chef Ferran Adriá, which can be
purchased and cooked at home. And, with over 200,000 members,
Yours faithfully,
our guest loyalty programme “NH World” continues to be a great
success among clients. Another important highlight of 2005 was the
boom in Internet sales, which increased three-fold.
Gabriele Burgio
In 2006, we expect to see an improvement in business, mainly as a
result of an increase in average rate, better product positioning
and an improved sales force, in addition to the recovery of the
German economy.
7
2
Portfolio of Hotels
Lobby at the NH Central Convenciones - Seville (Spain)
8
PORTFOLIO
OF HOTELS
BREAKDOWN OF THE PORTFOLIO OF HOTELS
TOTAL
EUROPE
LEASED
OWNED
MANAGED
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Spain
121
13,412
80
9,064
17
2,504
24
1,844
Germany
54
9,246
53
9,102
0
0
1
144
Netherlands
30
5,620
11
1,551
18
3,989
1
80
Belgium
8
1,116
1
241
7
875
0
0
Austria
6
973
6
973
0
0
0
0
Switzerland
4
562
2
330
2
232
0
0
Italy
2
501
1
376
0
0
1
125
Portugal
2
165
2
165
0
0
0
0
Romania
2
161
1
83
0
0
1
78
United Kingdom
1
200
0
0
0
0
1
200
Hungary
1
160
1
160
0
0
0
0
231
32,116
158
22,045
44
7,600
29
2,471
NH HOTELES
TOTAL EUROPE
TOTAL
LATIN AMERICA
LEASED
OWNED
MANAGED
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Mexico
15
3,042
3
354
5
1,126
7
1,562
Argentina
8
1062
0
0
8
1,062
0
0
Cuba
2
967
0
0
0
0
2
967
Uruguay
1
136
0
0
1
136
0
0
Brazil
1
135
0
0
1
135
0
0
Chile
1
122
0
0
1
122
0
0
28
5,464
3
354
16
2,581
9
2,529
NH HOTELES
TOTAL LATIN AMERICA
TOTAL
OTHER COUNTRIES
LEASED
OWNED
MANAGED
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
South Africa
2
240
1
198
1
42
0
0
Ghana
1
234
0
0
0
0
1
234
TOTAL OTHER COUNTRIES
3
474
1
198
1
42
1
234
NH HOTELES
TOTAL
NH HOTELES
TOTAL NH HOTELES
LEASED
OWNED
MANAGED
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
262
38,054
162
22,597
61
10,223
39
5,234
Portfolio of NH Hoteles, March 2006
NH Hoteles are present in 19 countries with 262 hotels
9
Portfolio of Hotels
BREAKDOWN OF ROOMS PER COUNTRY
March 2006
BREAKDOWN BY ROOMS
March 2006
NH Puebla (Mexico)
10
NH Plaza Mayor - León (Spain)
11
3
A year of Expansion
a year of
expansion
12
Cap Cana – The Dominican Republic
13
A year of Expansion
HOTELS OPENED IN 2005
LOCATION
ROOMS
CONTRACT
NHUBE
X
SPAIN
NH CENTRAL CONVENCIONES AND NH CENTRAL
NH OBRADOIRO
NH MERCADER
NH SANT BOI
NH ALCORCÓN
NH ALICANTE
NH PARLA
NH VICTORIA
NH PACÍFICO
NH GRAN CASINO DE EXTREMADURA
NH PLAZA MAYOR
SEVILLE
252
MANAGED
SANTIAGO DE COMPOSTELA
159
LEASED
MADRID
124
LEASED
X
SANT BOI DE LLOBREGAT
124
LEASED
X
ALCORCÓN
102
LEASED
X
ALICANTE
100
LEASED
X
X
MADRID
88
LEASED
GRANADA
69
LEASED
MADRID
62
LEASED
BADAJOZ
60
MANAGED
X
LEÓN
51
MANAGED
LISBON
82
LEASED
THE HAGUE
205
LEASED
X
NÜREMBERG
244
LEASED
X
BUCHAREST
78
MANAGED
BUENOS AIRES
96
OWNED
CIUDAD DE PUEBLA
128
MANAGED
MEXICO
105
LEASED
LONDON
200
MANAGED
HOTELS
ROOMS
20
2,329
X
PORTUGAL
NH CAMPO GRANDE
NETHERLANDS
NH DEN HAAG
GERMANY
NH NÜRNBERG CITY
ROMANIA
NH BUCHAREST
ARGENTINA
NH CRILLÓN
MEXICO
NH PUEBLA
NH CENTRO HISTÓRICO
UNITED KINGDOM
NH HARRINGTON HALL
TOTAL HOTELS OPENED IN 2005
14
HOTELS OPENED IN 2006
LOCATION
ROOMS
CONTRACT
NHUBE
VALLADOLID
120
LEASED
X
TURIN
125
MANAGED
X
CUBA
690
MANAGED
TIMISOARA
83
LEASED
BERLIN
136
LEASED
GRONINGEN
67
LEASED
HOTELS
ROOMS
6
1,221
SPAIN
NH BALAGO
ITALY
NH SANTO STEFANO
CUBA
CAYO COCO
ROMANIA
NH TIMISOARA
GERMANY
NH BERLIN ARTUS
NETHERLANDS
NH HOTEL DE VILLE
TOTAL HOTELS OPENED UP TO MARCH 2006
BREAKDOWN OF OPENINGS BY COUNTRIES
in 2005 and up to March 2006
15
A year of Expansion
NH Bucharest - Bucharest (Romania)
16
EVOLUTION OF THE TOTAL NUMBER OF HOTEL ROOMS
Forecasted rooms for 2008 include projects signed up to March 2006
NUMBER OF ROOMS
1996-2005: +20.3% ANNUAL
In percentage terms, NH was the third worldwide hotel chain to
In percentage terms, no other European hotel
experience the most growth in Europe in 2005.
chain grew as much as NH in Europe.
17
A year of Expansion
HOTELS SIGNED UP TO MARCH 2006
LOCATION
ROOMS
CONTRACT
SPAIN
NH PUERTA DE LA CATEDRAL
SALAMANCA
37
LEASED
NH CONSTANZA
BARCELONA
308
LEASED
FUENLABRADA
FUENLABRADA (MADRID)
132
LEASED
NH BERRIOPLANO
BERRIOPLANO (NAVARRA)
60
MANAGED
TENERIFE
65
OWNED
MADRID
224
LEASED
SAGUNTO PROJECT
VALENCIA
100
LEASED
C/ ÁLAVA PROJECT
BARCELONA
138
LEASED
MÁLAGA PROJECT
MÁLAGA
93
OWNED
MILAN
256
LEASED
SANTA CRUZ TENERIFE PROJECT
VIRGEN DEL PUERTO PROJECT
ITALY
NHOW MILAN TORTONA
NH ORIO AL SERIO
DONNAFUGATA
SESTO SAN GIOVANNI PROJECT
BERGAMO
118
LEASED
RAGUSA (SICILY)
217
OWNED
MILAN
155
LEASED
SANTA FE
136
OWNED
MEXICO
NH SANTA FE
NH QUERETARO
NH RIVIERA MAYA
QUERETARO
140
OWNED
RIVIERA MAYA
550
MANAGED
DAKAR-DIOFF
120
MANAGED
DAKAR
199
MANAGED
HOTELS
ROOMS
18
3,048
SENEGAL
NH BAOBAB LES MAMELLES
NH BAOBAB CAP MANUEL
TOTAL HOTELS SIGNED
18
LOCATION
ROOMS
CONTRACT
BARCELONA
73
LEASED
STUTTGART
91
LEASED
NH CITY HOTEL
BUENOS AIRES
67
OWNED
NH CRILLON
BUENOS AIRES
26
OWNED
HAVANA
150
MANAGED
HOTELS
ROOMS
5
407
EXTENSIONS SIGNED UP TO MARCH 2006
SPAIN
NH NUMANCIA
GERMANY
NH STUTTGART AIRPORT
ARGENTINA
CUBA
NH LA HABANA
TOTAL EXTENSIONS
ROOMS
TOTAL SIGNED AND EXTENSIONS
3,455
ROOMS SIGNED AND EXTENSIONS
UP TO MARCH 2006
19
A year of Expansion
ENTRY INTO
ENGLAND AND FRANCE
NH Hoteles also continued its growth and expansion strategy
in Europe, with the addition of a hotel in England in March
2005 and the signing of a contract for a hotel in France.
As a result, the hotel chain will be present in 20 countries.
In England, NH Hoteles added NH Harrington Hall to its
portfolio, a four-star city hotel situated in the South
Kensington district (Chelsea), one of London’s most
exclusive addresses, next to Hyde Park and very close to
Kensington Palace and Gardens, the Natural History and
Science Museums and the Royal Albert Hall.
The hotel has 200 rooms and suites, a restaurant that
accommodates 250 diners, a bar, gym and 10 conference
and meeting rooms with a total area of 1,200 m2 and a
capacity for 700 people. The property is located in a
historical complex comprised of twelve adjoining buildings
that were completely restored in 1997.
NH Hoteles will open its first hotel in France, a new
property situated at Saint Exupéry airport in Lyon. The hotel
will be operational in 2008 and will be a part of a new area
to be constructed in front of Terminal 1 of the airport.
This will be a 4-star hotel with 245 rooms, 900 m2 of
banqueting and meeting space with a total capacity for 850
people and a gym. The establishment will occupy the
central building of a business centre, with offices in 3
parallel buildings on an area of 9,250 m2. NH Hoteles
already has extensive experience in operating airport hotels
in Amsterdam, Brussels, Frankfurt, Geneva, Madrid, Mexico,
Munich, Vienna and Zurich.
NH Harrington Hall - London (England)
20
RESORT SEGMENT AND REAL ESTATE MARKET
LOCATIONS (MEXICO, THE DOMINICAN
REPUBLIC AND CUBA)
NEW RESORT PROJECTS
COUNTRY
LOCATION
HOTELS
ROOMS
ALL-INCLUSIVE
HOTEL CONTRACTS
VILLAS
VILLA
CONTRACTS
Mexico
Riviera Maya
2
630
X
20% Owned
350
90% Owned
Cayo Coco
1
690
X
Managed
No
No
Cap Cana
1
90
50% Owned
350
50% Owned
Sicily-Ragusa
1
217
Owned
No
No
HOTELS
ROOMS
5
1,617
LOCATION
HOTELS
ROOMS
Baden-Baden
NH Schlosshotel
90
Cuba
The Dominican Republic
Italy
TOTAL RESORT PROJECTS
RESORTS OPENED
COUNTRY
Germany
ALL-INCLUSIVE
CONTRACT
Leased
Bühlerhöhe
Cuba
Cayo Coco
Los Cayos
690
Spain
Spain
Spain
Mexico
X
Managed
Sotogrande
Almenara
148
Owned
Sotogrande
NH Sotogrande
106
Owned
Marbella
NH Alanda
199
Cancun
NH Krystal Cancún
325
X
Managed
Leased
Mexico
Ixtapa
NH Krystal Ixtapa
255
X
Managed
Mexico
Puerto Vallarta
NH Krystal Puerto Vallarta
533
X
Managed
Mexico
Veracruz
NH Krystal Veracruz
108
HOTELS
ROOMS
9
2,454
HOTELS
ROOMS
13
3,381
TOTAL RESORTS OPENED
TOTAL RESORTS OPENED
AND SIGNED
Managed
21
A year of Expansion
In 2005, NH Hoteles reinforced its presence in the resort and real
CAP CANA PROJECT
estate market using the same model as Sotogrande.
- Agreement with CAP CANA to develop an upscale resort in a
In addition to the complex signed in Sicily (Italy), the company also
luxury complex in the Dominican Republic.
finalised three projects in the Caribbean: in Cap Cana (the
Dominican Republic); Riviera Maya (Mexico); and Cayo Coco (Cuba).
- A luxury “boutique” hotel with 90 rooms and a fine dining
restaurant.
- 350 luxury beachfront villas that will go on sale in 2006; these will
avail of the hotel’s services and will be part of a rental pool
programme (i.e., owners will allow the hotel to manage their
apartments when they are unoccupied).
- The CAP CANA complex is the most important real estate
tourism project in the Caribbean, situated in Punta Cana, the
Dominican Republic, and just 10 minutes from the international
airport. It will offer an exclusive beach club and six 18-hole golf
courses, 3 of which are being designed by Jack Nicklaus, the
world’s greatest golfer. CAP CANA also boasts a marina, which
will have a capacity for 500 boats in the near future and a Grand
Canal surrounded by luxury shops and haute cuisine restaurants.
22
RIVIERA MAYA PROJECT
- The project is situated in Puerto Morelos between Cancún and
Tulúm. It is located in a low density tourist complex comprised of
CAYO COCO
- (All inclusive) 5-star resort in Cayo Coco (Cuba), under
management contract.
luxury guest rooms, shopping centres, a marina and yacht club, a
museum, botanical gardens and an ecological tourist park, all
- 690 four-star plus rooms already operational.
located in the picturesque fishing village of Puerto Morelos which
has 283 hectares of coastline.
- Accommodation in rooms and villas built on stilts in the lagoon;
speciality restaurants (Cuban, Italian and seafood restaurants,
- Plot nº 1:
grills, beach and swimming pool barbeques and a branded
110,000-m2 plot
restaurant), four swimming pools, a night club, water sports and
550-room hotel (superior segment, all inclusive)
activities, a children’s club, entertainment and shows. Located on
one of the most beautiful white sandy beaches in the world.
- Plot nº 2:
146,000-m2 plot
- Situated in a quiet area with clear waters and several water sports.
80-room hotel (luxury segment, all inclusive)
+ 350 residential villas
23
4
2005 Results
2005
results
Group earnings in 2005 climbed to €984.6 million,
which is 1.1% more than in 2004, and hotel sales
revenue was €901.2 million, some 4.6% above the
figure for the previous year.
NH Hoteles made a total of €62.2M in 2005,
With respect to EBITDA by business unit, the salient
12.8% more than it did the year before, thanks to
aspects were the recoveries in Germany, with
a fine performance from hotel activities.
operating earnings there in 2005 improving by
Operating earnings for the group’s hotel activities
92.7%, in Switzerland and Austria, where EBITDA
were actually €127.2M, 8.5% above those
was up by 79.8%, and in the Benelux zone, which
recorded in 2004.
saw an increase of 16.8%.
A good indicator of positive progress is that in
These results were from a rise in REVPAR of 4.3% in
each quarter of 2005 hotels performed better than
comparable hotel terms, after average occupancy
the one previously, in earnings, EBITDA and also
was recorded of 66.8%, up 5.2%, and an average
in REVPAR.
price of €71.20, down 0.8%.
Group earnings for 2005 came to €984.7M, 1.1%
In the fourth quarter ratios were better, with average
more than in 2004, and hotel-related sales revenue
occupancy in comparable hotel terms of 68.3% and
was €901.2M, 4.6% above the previous year’s
an average price of €72.20.
figure. The Spain and Portugal business unit was
the one which posted the biggest earnings,
The savings drive was reflected in a drop of 2.7% in
totalling €348.4M and rising 2.1%, and there were
the cost per occupied room for comparable hotels.
notable increases for the business units in
24
Switzerland, Austria and Hungary (11.3%), in the
As regards Sotogrande, earnings came to €83.4M,
Benelux area (5.8%) and in Germany, which yet
which is 25.6% less than in 2004 and EBITDA was
again has shown clear signs of recovery with
€53.6M, down 29%. Notwithstanding this, signed up
earnings rising 4.9% in like-for-like hotel terms.
sales pending posting as at 31 December 2005
Latin America showed a 10% increase in
amounted to €80M, against the figure of €64.8M
comparable earnings.
entered the previous year.
NH Plaza Mayor - León (Spain)
25
2005 Results
NH Centro Histórico (Mexico)
26
NH HOTELES
PROFIT AND LOSS ACCOUNT AS A DECEMBER
05/04
Var.
As of December 31st 2005
M Euros
As of December 31st 2004
M Euros
Revenue Hotel Operations
897.45
855.32
4.9%
Real estate sales and other
83.44
111.36
(25.1%)
3.77
6.84
(44.9%)
REVENUES
984.66
973.51
1.1%
Real estate cost of sales
(16.89)
(20.04)
(15.7%)
Staff cost
(316.04)
(304.88)
3.7%
Operating expenses
(299.29)
(291.21)
2.8%
Other non recurring revenues
Other non recurring expenses
(2.10)
0.68
(408.9%)
GROSS OPERATING PROFIT
350.34
358.06
(2.2%)
Leases payments and property taxes
(169.49)
(164.39)
3.1%
EBITDA
180.85
193.67
(6.6%)
Depreciation
(68.82)
(77.31)
(11.0%)
EBIT
112.03
116.37
(3.7%)
Interest income (expense)
(23.13)
(24.33)
(5.0%)
Income from minority equity interests
(0.65)
(0.55)
18.2%
EBT
88.25
91.49
(3.5%)
Corporate income tax
(17.85)
(25.68)
(30.5%)
NET INCOME before minorities
70.41
65.80
7.0%
Minority interests
(8.17)
(10.60)
(23.0%)
NET INCOME
62.24
55.20
12.8%
27
2005 Results
REVPAR TRENDS FOR THE VARIOUS BUSINESS UNITS
Shown in these charts is the Revpar (Revenue per Available Room) performance for all the markets which NH Hoteles operates in.
It can be seen that Revenue per Available Room in Germany, Netherlands and Belgium started to grow in 2004 and did so in Spain and Latin
America from 2005.
EBITDA (millions of €): average of +25% annually
28
NH Victoria - Granada (Spain)
29
5
30
NH Latino - Buenos Aires (Argentina)
Share Performance
PERCENTAGE REVALUATION OF NH HOTELES AND IBEX 35
NH HOTELES OWNERSHIP STRUCTURE
DIVIDEND PAYOUT
In line with the dividend policy of recent years, NH Hoteles, subject
to approval at the General Shareholders’ Meeting, will pay its
shareholders a dividend of €0.26 per share.
TAKEOVER BID FOR 100% OF SOTOGRANDE
NH Hoteles has launched a takeover for 100% of Sotogrande’s
share capital, via a share swap at the ratio of one new NH Hoteles
share per Sotogrande share. The offer is subject to approval at the
General Shareholders’ Meeting. NH Hoteles already owns 79.06%
of Sotogrande’s share capital, and the bid is therefore aimed at the
remaining 20.94%.
La Sociedad de Promoción y Participación Empresarial Caja de
Madrid, which owns a 17.27% interest in Sotogrande, notified on 16
January 2006 that it would accept the offer, thus taking its stake in
NH Hoteles to more than 10%.
* Stable NH Hoteles shareholders are considered to be those represented
on the Board of Directors.
31
6
Strategy
strategy
32
NH Central Convenciones - Seville (Spain)
NH Hoteles is focused on continuing to combine growth and
Furthermore, the company expects to grow in the resorts segment,
profitability. Following its entry into Hungary, Rumania and Italy in
mainly in the Caribbean, and in the real estate market, with a
2004, and the UK and France in 2005, NH Hoteles is pursuing its
model along the lines of Sotogrande.
European expansion plan, especially in Italy and in markets where it
does not currently operate and which will help to boost its
leadership in the European urban hotel sector, where it ranks third.
33
7
Sales force
Sales force
In 2005, NH Hoteles’ already-consolidated sales force absorbed the
event, convention and congress organisers worldwide. All of these
opening of 20 new hotels. With sales delegations located in the 19
agreements are keyed into the single database, enabling clients
countries where the chain operates hotels, and offices in another 3
to make reservations at their agreed rate via the various booking
where it does not operate establishments (United States - New
channels, including the Internet via the Client Pages
York, Miami, Houston, France - Paris, and Sweden - Stockholm),
(personalised Website for businesses) or Trade Pages
NH Hoteles is present in all the main markets that generate
(personalised Website for travel agencies) – all in line with
business for its hotels.
revenue management policy.
Worldwide, the sales force is centralised and segmented as follows:
In a joint effort with the department of e-commerce, 2005 also saw
major accounts, SMEs, travel agencies, tour operators and
an increase in connectivity between the NH Hoteles’ booking
conventions and congresses. Its single database connects all sales
system and the systems of other intermediaries, in order to speed
representatives worldwide (as well as all the hotel receptions and
up and optimise the pricing and availability consultation process
marketing and client care departments), enabling sales policies to
and the booking itself. At the same time, in 2005 new strategies
have been successfully integrated, enhancing knowledge and
were implemented for the entire NH Hoteles online business via
monitoring of clients and affording a detailed analysis of client
third-party websites.
requirements. This has boosted cross sales (most notably in the
MCI segment), optimised resources and generated synergies in
Preferential agreements with the world’s leading travel agencies
sales processes.
continued to be pivotal in achieving greater visibility and
penetration in corporate accounts. The number of RFPs (proposals
34
NH Hoteles currently manages more than 120,000 commercial
from major corporations with regards to hotel requirements)
agreements with businesses, travel agencies, tour operators and
accepted in 2005 increased by 29% as compared to 2004.
Front office of the NH Den Haag – The Hague (Netherlands)
35
Sales force
NH HOTELES
SALES DELEGATIONS
New York
Houston
Miami
In 2005, NH Hoteles also launched its “NH VIP Desk”, offering an
Mexico
exclusive service to some 3,000 clients, including some
shareholders.
The single worldwide database
has allowed integration of sales
policies, and has enhanced
knowledge and monitoring of
clients and yielded a detailed
analysis of their needs
Also worth noting is the project launched in the second half of 2005
in Spain for further segmentation and portfolio allocation of
Spanish corporate accounts. 9,000 accounts were revised and
portfolio-allocated in order to better adapt the most efficient
commercial resources and marketing strategies to accounts’
potential and NH Hoteles’ penetration therein in 2006. Similarly, the
concept of “return by seller” was introduced, in a bid to render the
sales process more profitable.
36
Argentina
Sweden
United Kingdom
The Netherlands
Germany
Belgium
Hungary
France
Portugal
Austria
Switzerland
Spain
Italy
37
8
“nhube” at the NH Alcorcón - Madrid (Spain)
38
technology:
online sales and
website
(www.nh-hotels.com)
NH Hoteles has designed an online tool for agencies (Trade Page)
which allows administrative processing to be more efficient
In 2005 NH Hoteles enhanced the tools needed to lift direct
virtual visits which help the clients to make up their minds
sales over the Internet and, thanks to this, the company has
when booking. The promotions section has also been
managed to triple the number of rooms reserved through its
boosted and now users can find the product which best suits
website. NH Hoteles has by the same token raised the visitor
their preferences or their profile or create their own promotion
rate to its website by 70%.
by choosing from among the various services on offer.
Internet and e-distribution have generated a new scenario
2005 has seen improvements made to the online service
that is becoming more important by the day, in which the
for companies (Client Page) by providing an exclusive and
main aspect for NH Hoteles is to control distribution and
customised website featuring all the services required for
intermediation online and look after the customer, thereby
managing one’s commercial dealings with NH Hoteles
keeping an eye on its inventory management and ensuring
more efficiently.
price parity between the different channels.
NH Hoteles can be found as a distribution channel on the
Internet, both on the websites of agencies and companies
and for end-users (www.nh-hotels.com), and offers benefits
vis-à-vis other distribution channels. In this way, both
NH Hoteles has managed to
triple the number of rooms
reserved using its website
agencies and all kinds of customers of the hotels’ chain have
a greater chance of accessing the best available rate at any
Moreover, in 2005 NH Hoteles has designed an online tool
given time, immediate access to the inventory and room
for agencies (Trade Page), which makes for smoother
availability at all hotels, a 24 hour service, access to
processing, including a queries service, modification and
promotions, immediate access to information and
cancelling of reservations, application of trade agreements,
descriptions of any of the NH products, online reservations
the issue of an agency voucher and customisation
and on-the-spot confirmation.
according to every profile. Over 500 agencies have already
signed up.
Reservations at any of the chain’s hotels can be made very
simply through the NH Hoteles website (ww.nh-hotels.com).
Finally, with the intention of optimising relations with
This year browsing through it and the hotels content have
intermediaries, NH Hoteles has made a big effort to
been improved, it being possible to reserve according to
connect its reservations systems with those of its distributors
preference, and it includes an extensive gallery of photos and
through interfaces.
39
Technology: online sales and website
CHANGE 05/04
2005 COMPARISON
NH Hoteles website
Revenue
Visits
72.5%
Visitors
47.6%
Rooms
187.4%
Other services
178.2%
Total Revenue
185.8%
Nights
198.5%
2004/2005 WEB SALES PERFORMANCE
2005 WEB SALES
Website vs NH
Website nights /Total NH nights
COUNTRY BREAKDOWN (revenues)
40
172.2%
CHANGE 05/04
GERMANY
353.8%
NETHERLANDS
234.4%
LATIN AMERICA
462.8%
MEXICO
119.4%
SPAIN
302.0%
SWITZERLAND
258.3%
ONLINE RESERVATIONS
PURCHASING
In keeping with the theme of simplifying and speeding up
Finally a common purchasing system was launched for the whole
reservations generated through travel agencies, NH Hoteles has
group. Information on suppliers and their terms is kept at a single
striven towards a direct and unique access to its reservations
point and is avalable from all the hotels. This makes it possible to
centre. Travel agencies who are connected can check at a glance
find out the volume for and behaviour of corporate and local
for the availability of places at hotels and book directly. In 2006
suppliers. The integration of direct purchasing systems from suppliers
the company will extend the number of agencies connected to
over the Internet is currently in the testing phase.
this service.
HUMAN RESOURCES
In the area of services for its staff, in Spain in 2005 NH Hoteles got
underway a wage slip receipt service by way of secure e-mail.
41
9
Products
PRODUCTS
Strong
growth of the
Last year, NH Hoteles incorporated 11 more “nhube” spaces
NH Hoteles now has a total of 16 “nhube” establishments in
Spain, Germany, Austria and Netherlands. Last year, NH Hoteles
incorporated 11 new “nhube” spaces, which merge the hotels’
restaurant, leisure and relaxation services. The new “nhube”
spaces are in Madrid, Seville, Barcelona, León, Alicante and
Valladolid (Spain), Nuremberg (Germany), Vienna (Austria) and
The Hague (Netherlands).
“Nhube” combines a lounge, dining area, café-bar, working area,
Internet facilities and even a library. It is a multi-functional space
where guests can watch television, surf the Net, listen to music,
eat, drink and relax.
In 2005, NH Hoteles, in collaboration with Ferran Adrià and his
team, designed a new range of meals for “nhube”. Each
establishment can choose its own menu, from 115 different
dishes, including 77 new proposals created by Ferran Adrià.
The new dishes follow the same basic guidelines as other
gastronomic creations offered by this great restaurateur and
NH Hoteles’ culinary advisor. They are simple, healthy recipes,
made with top quality fresh products. The service and
presentation have been carefully planned to make the customer
feel at home.
The range of food offered at “nhube”, based on simple dishes
made using top quality ingredients, is complemented by the
décor, designed in accordance with the defining characteristics of
all “nhube” spaces: neutral colours, natural fabrics and carefully
designed lighting to create the right atmosphere for each area.
Following the success of the concept, NH Hoteles has now
signed another four agreements to incorporate more “nhube”
spaces in Spain, Germany and for the first time, in Mexico.
42
“nhube” at the NH Den Haag - The Hague (Netherlands)
43
Products
STANDARDISATION
“NHUBE” SPACES OPENED EVERY YEAR
Because of the ambitious expansion plan for “nhube” spaces both
in Spain and abroad, the hotel chain has gone to great lengths to
achieve consistency in all the new spaces opened, and to maintain
the standards set by the team from El Bulli. Particular attention has
been paid to the following aspects:
• Coordination of all new spaces opened, with greater support
provided for establishments outside of Spain.
• Internal training for all future executive chefs and the managers
selected to work in “nhube” spaces.
• In collaboration with the team from El Bulli, the implementation
of a six-monthly audit plan for quality control in ”nhube” spaces,
in terms of products and services.
• Creation of standardised recipes.
• Ensuring that the range of food offered is dynamic, changing
menus every three months.
“nhube” at the NH Alcorcón - Madrid (Spain)
44
TOTAL NUMBER OF “NHUBE” SPACES OPENED
16
TOTAL NUMBER OF “NHUBE” SPACES PLANNED (UP TO MARCH 2006)
4
“NHUBE” SPACES OPENED
LOCATION
DATE OPENED
MADRID
Mar-03
SPAIN
NH BALBOA
NH CARTAGENA
CARTAGENA
Feb-04
NH SAN SEBASTIÁN DE LOS REYES
MADRID
Apr-04
NH PACÍFICO
MADRID
Jan-05
NH CENTRAL CONVENCIONES
SEVILLE
Jan-05
MADRID
Mar-05
BARCELONA
Jul-05
NH ALCORCÓN
NH SANT BOI LLOBREGAT
NH PLAZA MAYOR
NH PARLA
NH ALICANTE
NH MERCADER
NH BÁLAGO
LEÓN
Jul-05
MADRID
Sept-05
ALICANTE
Sept-05
MADRID
Oct-05
VALLADOLID
Jan-06
Total “nhube” spaces open in Spain
12
GERMANY
NH FRANKFURT AIRPORT
FRANKFURT
Dec-04
NH NÜRNBERG CITY
NUREMBERG
Oct-05
2
Total “nhube” spaces open in Germany
AUSTRIA
NH VIENNA AIRPORT
VIENNA
Total “nhube” spaces open in Austria
Dec-05
1
NETHERLANDS
NH DEN HAAG
THE HAGUE
Total “nhube” spaces open in The Netherlands
“NHUBE” PROJECTS AGREED
Jul-05
1
LOCATION
DATE OPENED
NH CONSTANZA
BARCELONA
2006
NH NUMANCIA
BARCELONA
2006
SPAIN
Total “nhube” projects agreed in Spain
2
MEXICO
NH SANTA FE
SANTA FE
Total “nhube” projects agreed in Mexico
2006
1
GERMANY
NH STUTTGART AIRPORT
Total “nhube” projects agreed in Germany
STUTTGART
2007
1
45
Products
and Fast GO
46
The unprecedented success of “Fast Good” is reflected by its widespread
popularity among consumers
Fast Good and Fast GO at Juan Bravo - Madrid (Spain)
47
Products
FAST GOOD AND FAST GO
chicken, the world of ice cream and the world of wine. The “world
of eggs” offers different and original ways of preparing eggs. The
The restaurant culture created by NH Hoteles in collaboration with
“world of pasta” sells individual servings of fresh pasta that can be
Ferran Adrià has become a gastronomic phenomenon that began
combined with a wide range of home-made sauces and topped off
when the first “Fast Good” restaurant was opened in Madrid. The
with different types of cheese. In the “world of chicken” customers
hotel chain currently has three “Fast Good” restaurants open, two
buy a whole chicken, take it home and heat it up, serving it in
in Madrid and one in Santiago de Chile. NH Hoteles has also
various different ways: Cantonese, Marrakech, Classic or Thai. The
incorporated further innovations such as the “Fast GO” shop, in
“world of ice cream” shows customers different uses and
the latest establishment opened in Madrid in December 2005.
combinations of ice cream. And finally the “world of wine” offers
different suggestions on the perfect wine to go with all the meals
The “Fast GO” shops provide complete solutions for customers
available at “Fast GO”.
who wish to eat simple, original and quick food made at home.
Customers can buy the ingredients used in their favourite dishes
The “Fast Good” restaurants have been a resounding success.
and prepare them at home following the instructions provided by
The three restaurants opened in Santiago de Chile and Madrid, in
Ferran Adrià.
2005, are already extremely popular with customers.
“Fast GO” is divided into five main sections or “five worlds and
The hotel chain has received over 300 franchise applications from all
cultures”: the world of eggs, the world of pasta, the world of
over the world since the first restaurant was opened.
“Fast Good” aims to implement a new restaurant culture based on
healthy eating habits and which is aimed at anyone who wants to
eat well but has little time.
After introducing several new features into this project, “Fast Good”
is ready to expand. The company has already signed five
agreements for new “Fast Good” restaurants to be opened in
Spain; in Madrid, Barcelona, Valencia and Las Palmas de Gran
Canaria. The company hopes to have a total of 12 new project
agreements signed by the end of the year and to begin its
international expansion.
Gabriele Burgio and Ferran Adrià
48
FAST GOOD SHOPS OPEN
COUNTRY
Spain
Chile
LOCATION
ADDRESS
Madrid
Padre Damián
Madrid
Juan Bravo
Santiago de Chile
Isidora Goyenechea
LOCATION
ADDRESS
FAST GO SHOPS
Madrid
Orense
X
FAST GO SHOPS
X
FAST GOOD SIGNED (up to March 2006)
COUNTRY
Spain
Alcobendas (Madrid)
Anabel Segura
X
Las Palmas de Gran Canaria
Simón Bolívar
X
Valencia
Gran Vía Marqués del Turia
X
Barcelona
Balmes
X
AVERAGE DAILY TURNOVER IN THE MAIN FAST FOOD
CHAINS IN 2005, PER ESTABLISHMENT (€)
49
Products
50
WE ARE DESIGNING A NEW KIND
OF HOTEL
“nhow” is a new kind of NH hotel, designed for an avant-garde,
sophisticated and international clientele. This is a new and
exclusive category of hotel for a new era, which incorporates the
new philosophies of contemporary living: technology, creativity
and luxury.
Created especially for customers who follow the latest trends,
“nhow” offers features that are ideal for contemporary
generations, who are in themselves diverse, globalised,
ever-changing, bohemian and searching for a different kind of
hotel, which is exactly what “nhow” can provide.
“nhow” reinterprets spaces, times, services and functions and will
become a point of reference in the most modern city areas.
Choosing “nhow” means becoming part of a community, a
cutting-edge way of living and life.
An “nhow” hotel should be a social focal point in a city, where
people go to see and be seen. The core identity of “nhow” hotels
focuses on avant-garde design, innovation and individuality.
The design reflects a specific type of person, lifestyle, a place to
meet people and be recognised, to be comfortable in your
surroundings, to eat good food, use the spa, organise a work
meeting or hold a social event.
“nhow” is the very latest category of hotel offered by the
NH group, the result of research and the continuous development
of new concepts. The first establishment will open in Milan in the
second half of 2006.
51
Products
52
ELYSIUM - INGESPORT
Six Elysium centres will be opened in all the terminals at Barajas
Airport (three in T4, two in T1 and one in T2), the very first centres
In 2005, NH Hoteles acquired a 30% stake (with the option to
of this kind in a Spanish airport. They are pioneering centres,
acquire a further 30%) in Ingesport, a company that specialises in
offering relaxation services and massages, located close to VIP
spas, sports centres, beauty and health services. Ingesport
areas, with exclusive services and changing rooms for travellers who
coordinates the Elysium brand offered by NH Hoteles, both in
have to wait for any length of time at the airport.
terms of creation, implementation and centre management. This is
a strategic tool used by the group in the range of health and sports
services it provides for its customers.
ELYSIUM SPA MADRID
Important facts from 2005:
ELYSIUM AT MADRID AIRPORT
- It now has 800 members
- The International Olympic Committee chose to stay at the
The 6 concessions located at the Barajas International Airport
NH Eurobuilding hotel during their visit to Spain, after having
terminals will give millions of travellers the chance to discover the
seen its facilities and in particular the Elysium Spa.
Elysium Spa brand and services offered by NH Hoteles. Two new
- An agreement was reached with the Spanish Basketball
spa concepts have been created specifically for these new
Federation for the use of its facilities.
concessions: Elysium Beauty Spa and Elysium Travel Spa.
- The Padel Club was officially opened.
- Advert promotion in the TV series "Aquí no hay quien Viva" on
Antena 3 Television.
- Widespread media coverage in Spain: Antena 3 Television,
Telecinco, Telemadrid, Expansión, El Mundo, ABC...
ELYSIUM SPA SOTOGRANDE
The Elysium Spa Sotogrande has been extended from 1000 m2 to
1800 m2 and now offers new healthcare services and highly
innovative facilities.
OTHER PROJECTS
There are plans to build new Elysium Spa centres in the following
Elysium, the Spa of Madrid - NH Eurobuilding - Madrid (Spain)
complexes: Donnafugata (Sicily-Italy), Riviera Maya (Mexico) and
the NH Krasnapolsky (Amsterdam-Netherlands).
53
Products
NH World
• Development and implementation of new functions and
advantages for members of the programme:
- Giveaway credits: Cardholders can give away the credits they
have earned to anyone, regardless of whether that person holds
• 200,000 NH World cards now active.
• Over 230 NH Hoteles, in 14 countries, are included in the programme.
an NHW card. The aim of this promotion is:
- If the person who receives the credits is an NHW Card holder,
the NHW card holder giving the credits away can make good use
• The programme has been made available to new groups:
of unused credits.
1. Agreements have been reached with various groups and
- If the person who receives the credits does not own an NHW
prestigious organisations to create NH World cards for their
Card: engagement of new members for the programme since the
employees that are personalised and carry the organisation’s
only way the credits can be used is through the programme, with
own logo.
an account.
2. Shared card: this involves creating a card with a special design
- Use of the credits programme to pay for restaurant services: as
for various groups:
long as the person is staying at an NH hotel, the total expenses
- Sports clubs
incurred for food and drink during the stay can be partly or fully
- Civil servants
paid by using these credits.
- Other customer loyalty programmes
- Constant updating of the NHW webpage with new developments,
fast information, exclusive and personalised promotions, etc.
• Extension of the NH World Programme to include a:
- Shareholders’ Card.
- Civil Servants’ Card.
54
• Promotion credits: a new promotion system to encourage
bookings according to destination, date, type of customer, etc.
NH Timisoara (Romania)
NH Nürnberg City (Germany)
55
Products
OTHER
PRODUCTS
CHOOSE YOURS
“Choose yours!” is an innovative product created by
NH Hoteles, designed so that companies can give a very
special gift to their employees, customers or friends.
There are gift vouchers valid for one night’s stay for two
people including an NH buffet breakfast. This promotion
allows the bearer to choose from a wide range of NH Hoteles
in Spain and Portugal. Furthermore, the vouchers can be
personalised, making it a truly unique gift.
EVENTS WITH CONTENTS
In their endless search for innovative products, at the end of 2003,
NH Hoteles designed an original product that offered new
alternatives to traditional tourism: “Weekends with Content”.
After the success of the original product, NH has launched a
IBERIA CAMPAIGN
NH Hoteles and Iberia airlines signed an agreement last
December to reward customers of both companies.
specialised version: “Events with Content”. The hotel chain offers
companies a different and exclusive option for their events,
conventions or incentive trips, any day of the week and wherever
the customer decides.
Thanks to this pioneering agreement, Iberia Plus
members can get a free plane ticket for someone
travelling with them, using the same route, as long as
they have stayed at an NH hotel. This very special offer
does not end here, since if the customers’ destination
is a city in Spain or Europe with an NH hotel,
NH doubles the points earned with Iberia Plus if they
stay at that hotel.
International show jumping competition in La Coruña - Casas Novas (Spain)
56
Gabriele Burgio at the NH Hoteles stand in FITUR - Madrid (Spain)
PERSONALISED
PRODUCT VOUCHERS
CITY LIFE
In order for our customers to find out
The hotel chain has created a catalogue of all its
personalised products, including the Weekends with Content,
the Pack Collection and Choose Yours deals.
All these products can be included in a booklet
of vouchers that are valid for the activities selected.
This new product gives the customers a
wide choice of hotels, leisure options,
sports activities and
relaxation centres.
about the wide range of destinations
offered by our chain, a series of
postcards has been created with
picturesque images of the cities and a
short text about the typical events,
monuments and people from each city.
They are available for all the hotels in
Spain and can help customers to decide
on future destinations.
57
10
Corporate Social Responsibility
Corporate Social
Responsibility
HUMAN RESOURCES
NH HOTELES IS THE FAVOURITE PLACE
TO WORK IN THE SECTOR
PARTICIPATION IN THE SURVEY
According to a survey carried out in 2005 by Universum among
students from the 22 most prestigious Spanish universities,
NH Hoteles is the favourite company to work for in the hotel and
catering sector. Thanks to the effort made by everyone who forms
part of NH Hoteles, it has climbed five places in the ranking of all
the most desirable companies to work for, from position 17 in
2004 to number 12 in 2005.
The Satisfaction Survey shows that four out of five employees
(82.7% of those surveyed) “would recommend working at
The most notable aspects of the survey this year were:
NH Hoteles”.
• The high degree of participation by almost 10,000 employees.
• The greater degree of satisfaction among employees,
compared with the results two years ago.
THE COMPANY IS KEEN TO
KNOW THE OPINION OF ALL
ITS EMPLOYEES
• The points best rated by the employees were the new
measures brought in after the survey carried out in 2003
(the creation of an employee card, the employee rate, new
international communication tools, etc.), as well as overall
Aware that a high degree of satisfaction among our employees
satisfaction with the company.
translates as a high quality in the service provided, the company
held the 2nd Edition of the bi-annual Satisfaction Survey this year.
On the basis of the results of the 2nd Edition of the Satisfaction
Survey, action plans have been drawn up at work centre, country
and corporate level, aimed at ongoing improvement and the
consolidation of leadership.
58
59
Corporate Social Responsibility
A DIVERSITY OF NATIONALITIES AND
CULTURES: 108 DIFFERENT
NATIONALITIES
NATIONALITY DISTRIBUTION IN NH HOTELES
NH Hoteles is now present in 19 countries and has a workforce of
over 14,000 employees, but the most striking figure is the number
of different nationalities encompassed in the company: 108.
Managing this huge diversity of cultures is only possible if
guidelines are established to promote integration, foster tolerance,
acceptance and the search for ongoing equilibriums.
The number of foreigners in each Business Unit has spiralled.
In 1997, the percentage of employees at NH Hoteles of
nationalities other than that of the country where they were
rendering their services was under 0.01%; today that percentage
The policy of respect for diversity, its management and equal
stands at around 10%.
opportunities in all NH Hoteles processes are firmly entrenched
principles in the company’s culture.
PERCENTAGE OF FOREIGN EMPLOYEES PER BUSINESS UNIT - NH WORLD – 9.7%
Mexico
0.5%
United Kingdom
72.8%
Germany
10.5%
Benelux
18.2%
Switzerland-Austria-Hungary
39.2%
Sotogrande
2.3%
Mercosur
1.0%
60
Spain
6.1%
A large number of training projects were put into practice in 2005,
in particular the following:
• Internal Development Programmes (PDI).
• Specific Talent Management Programmes, for staff from
Operations, F&B, Sales and Resorts.
NH UNIVERSITY: MORE HOURS OF
TRAINING FOR MORE EMPLOYEES
• Train the Trainer programmes to increase the number of internal
trainers in view of the good results they have achieved to date.
• 100%-personalised online training courses.
NH University excelled itself again in 2005. During the year, more
• Tailor-made training scheme for a “hotel opening team”.
than 240,000 hours of classes were given, 9% more than in 2004.
• Periodical launching of new “Principles of Service” programmes
The objectives followed when designing the training were:
to the hotels, to strengthen the chain’s business strategy.
• To integrate all employees in a single NH culture.
• Back to basics.
Finally, and in line with the continuous search for quality that
• To place the focus of attention on the customer.
characterises NH University, training management has been
• To try to make training available to all employees.
internalised in countries in Northern and Central Europe.
We are convinced that in this new stage of development we will be
capable of continuing to design and organise training projects with
the maximum commitment, innovation and quality, as befits
NH Hoteles.
NH HOTELES CLASS AT THE UNIVERSITY
OF GLION IN SWITZERLAND
One of the things that goes to show that NH Hoteles is a
successful business model in the hotel industry is the fact that, in
2005, the prestigious University of Glion in Switzerland, one of the
world’s top universities, has created the “NH Hoteles classroom”
for its students to learn how to run a hotel chain. The University of
Glion has also appointed Francisco Zinser, Chief Operating Officer
at NH Hoteles, as a member of its board.
2005 Internal Development Programme
61
Corporate Social Responsibility
SAFETY, HEALTH AND HYGIENE
In the field of Food Safety and Hygiene, NH Hoteles abides by all
the laws in force by putting in place the ADCCP programme
The Health and Safety Area aims to foster the culture of prevention
(Analysis of Dangers and Critical Control Points) in the field of Food
by putting in place actions laid down by law (risk assessment,
and Beverages which ensures the attention to and prevention of
training, information…) and providing the different areas,
any risk. In addition, monthly audits of large kitchens are
departments, work centres and workers at NH Hoteles with advice
conducted, and three-monthly audits of smaller-sized kitchens.
on the subject of the Prevention of Labour Risks.
During 2005, a Food Handler training programme was run for more
The most noteworthy features are the report on bed raisers to
than 1,800 people.
minimise and prevent the risk of accidents in the workplace among
chambermaids; active participation by the Area in the Product
Circle, where consultancy is provided and specific reports are
drawn up on health and safety risks for employees; the DVD in six
languages on Training in Prevention of Labour Risks, to improve
Health and Safety Standards among the local employees and
foreign staff working in Spain; the Stop Smoking Programme, 80%
subsidised, available for all workers wanting to give up smoking;
the “Pre-opening of work centres” reports, etc.
Administrative staff convention at the NH Príncipe de la Paz hotel - Aranjuez - Madrid (Spain)
62
SOCIAL ACTION
SOCIAL RESPONSIBILITY
Social responsibility forms part of the culture of NH Hoteles.
This year, the company has taken part in 28 different projects,
For that reason, the company renews its commitment with the most
engaging in social activities to help a very wide variety of spheres
underprivileged sectors every year.
of society.
Volunteers from the Menudos Corazones Foundation
63
Corporate Social Responsibility
The following actions warrant special mention:
“STREET CHILDREN” PROJECT IN
MEXICO
NH Hoteles and the Codespa Foundation have completed their
third year working together on the “Street Children” programme in
Mexico. The project aims to give young people who lack resources
an opportunity, promoting their career development and social
reintegration through training in the hotel and catering business.
The programme aims to help the youth get jobs and to do so it
gives them technical training at secondary-school level in the
“Street children” project - Mexico
speciality of tourism in private institutions, which is then rounded
off with job experience in NH Hoteles.
The street-children phenomenon is a symptom of the poverty and
social disintegration that exists in Mexico. For that reason, since 2003,
The “Street Children” programme is a pioneering initiative in the
NH Hoteles has had the collaboration of several Mexican shelter
hotel industry and the only project of its kind carried out by a
homes, institutions with ample experience and understanding of these
Spanish company in Mexico.
children such as El Caracol, Ama la Vida, Casa Alianza and Reintegra.
CAROLINA FOUNDATION
The Leader Scholarship programme sets out to give budding
leaders in Spain and Latin America a deep insight of Spain,
For the third year running, NH Hoteles is collaborating with the
encouraging them to take the country into account as an
Leader Scholarships awarded by the Carolina Foundation, an
alternative option for pursuing their personal, entrepreneurial and
institution run by the Ministry of Foreign Affairs.
training trajectories, as well as creating links between the
participants which may lead to greater rapprochement between the
In 2005, the best 60 new graduates from Latin America, Spain and
countries in the future.
Portugal (48 from Latin America, 10 from Spain and two from
Portugal) were selected. During the 3-week course, the
During the programme, which lasted for about a fortnight, the
participants took part in a programme of lectures, visits and
students stayed in NH hoteles while they were in Spain and during
meetings with key figures from the political, social, cultural and
their tour of Europe.
economic arena in Spain.
As from 2006, NH Hoteles is going to participate with the Carolina
In July 2005, an encounter with NH Hoteles was held at the
NH Eurobuilding when Gabriele Burgio, the Executive Chairman of
NH Hoteles, and Andrés Pastrana, former President of Colombia
and the Director of the Programme, met the 60 Leader Scholarship
participants.
64
Foundation in the new European programme.
need of accommodation while the children were in hospital.
In 2005, NH Hoteles provided accommodation for periods of one
to two months for approximately 50 families while the children
underwent treatment and surgery.
VALORA FOUNDATION
The Valora Foundation collects products that the hotels are going
Gabriele Burgio meets students taking part in
the Leader Scholarship programme
to replace and distributes them to different shelters, centres for
immigrants, NGOs, parishes and foundations.
In 2005, NH Hoteles worked in close collaboration with the
Foundation, which collected a large range of products such as
YOUNG HEARTS
furniture, bedclothes, crockery and glass, etc…
Since 2003, NH Hoteles has collaborated with “Menudos
By engaging in these projects, NH Hoteles aims to create a
Corazones”, providing rooms in hotels in Madrid for children being
culture of solidarity and social responsibility vis-à-vis its
treated abroad for congential heart diseases and their relatives in
employees, clients and shareholders.
OTHER AREAS OF COLLABORATION
FUNDACIÓN MADRINA
FUNDACIÓN PEQUEÑO DESEO
During 2005, NH Hoteles collaborated with the following
FUNSIDA
institutions:
IGLESIA EVANGÉLICA DE HABLA ALEMANA
INTERMÓN OXFAM
ABRE SUS OJOS
HERMANAS DE LA MADRE TERESA DE CALCUTA
ACCIÓN CONTRA EL HAMBRE
MENSAJEROS DE LA PAZ
AKTION UMWELT FÜR KINDER E.V (Germany)
MUNICH ORPHANAGES (Germany)
ASOCIACIÓN ACOGER Y COMPARTIR
NUEVO FUTURO
ASOCIACIÓN CATALANA PARA EL PARKINSON
SOCIETÁ ITALIANA DI BENEFICENZA (Italy)
ASOCIACIÓN VÍCTIMAS DEL TERRORISMO 11M
SOLIDARIOS
CARITAS ZIELONA GORA (Germany)
FEDERACIÓN ESPAÑOLA DEL SÍNDROME DE DOWN
FORO ECUMÉNICO SOCIAL
FUNDACIÓN ACTIVA
Our employees can take an active part in social projects as
FUNDACIÓN HISPANO-NEERLANDESA DE FOMENTO
volunteers or by making financial contributions or contributions in
EMPRESARIAL
kind (donating their Christmas hamper, their children’s toys at
FUNDACIÓN LETICIA CASTILLEJO
Christmas, etc.).
65
Corporate Social Responsibility
66
Likewise, a major effort is being made to identify, from within the
- The Adecco Foundation:
workforce at NH Hoteles, actions aimed at helping our own
The Adecco Foundation for integration in the Workplace,
employees or their relatives financially and, in some cases,
founded in 1999 and classed as a Social Work Charity by the
arranging training courses for employees’ offspring or relatives who
Ministry of Labour and Social Affairs, is a non-profit-making body
are looking for their first job, etc.
pledged to helping people who, for various reasons, find it very
hard to get a job. The Foundation collaborates with the
The Human Resources Area works with foundations, NGOs and
organisations that help us identify people to join the company,
who then take part in the selection processes with equal
opportunities.
following groups of people:
- The over-45 age group.
- Women with family responsibilities.
- Persons with disabilities.
- Former sportspersons.
These are some of the key organisations:
- The Randstad Foundation:
The aim of the Randstad Foundation is to promote access to the
- Pueblos Unidos
A social entity that works with financially underprivileged families
from the Ventilla district (Madrid-Spain).
job market by underprivileged groups of people: the disabled
and women at risk of social exclusion (shouldering the burden of
providing for their family on their own, victims of domestic
violence, women aged over-45 who have been unemployed for a
long period of time).
The main aim of the Randstad Foundation is to help eliminate
all kinds of barriers and obstacles to enable those persons to
gain access to the job market under the same conditions as
anyone else.
- D Parajes de Jarama
The aim of this association is to help people who find it
particular hard to gain access to or get back into the job market.
It is intended for persons at particular risk of exclusion: persons
with disabilities, women and immigrants, among others.
The association backs the principle of equal opportunities in
gaining entry to the job market and promotes the global
management of job opportunities in the East of Madrid.
- The Semilla Association:
The Semilla Foundation for the Social Integration of Young
People came into being in 1974, and was legally founded in
February 1982 under the name “Asociación Juvenil Semilla”. It
defines itself as an association of people committed to social
transformation, promoting a society without inequalities,
focusing its action on the social integration of the most
underprivileged children and young people.
- Norte Joven:
Norte Joven is a non-profit-making cultural association which,
since it was founded in 1985, works to help underprivileged
young people or youth at risk of social exclusion. Its aims are to
ward off social exclusion by giving young people the
professional and cultural training they need to build their future
in society, to raise social awareness, to involve society in this
problem and to support and encourage volunteer social work as
a key element in society today.
- The Integra Foundation:
Founded in May 2001, the Integra Foundation is a non-profit-
- The Tomillo Foundation:
making organisation that aims to provide a nexus between
The aim of the Tomillo Foundation is to make a contribution to
companies and institutions that work with marginal groups of
society by fostering the spirit of solidarity. For that purpose, it
people (drug addicts, prostitutes, prison inmates, battered
carries out activities in the following fields:
women, youth experiencing difficulties in getting a job). At the
- Support for school-age education.
same time it collaborates with a wide range of NGOs, such as:
- Training and socio-labour insertion for underprivileged groups
Proyecto Hombre, Fundación San Martín de Porres, Horizontes
of people.
Abiertos, Eslabón, Acope, Dirección General de la Mujer, Meaux
- The creation of direct employment through insertion entities.
Fundación Social, Fundación Diagrama, Acogem, Caritas, and
- Courses and lectures for developing human potential.
Sociedad San Vicente de Paul, among others.
- Economic and social research.
67
Corporate Social Responsibility
THE ENVIRONMENT
Pursuing the policy
embarked on years
ago to reduce the
environmental impact
of our hotels, in 2005
the actions continued
in an effort to minimise
that impact in a
number of ways.
• Environmental auditing and certification of the hotels in
Catalonia (Spain) commenced.
• As part of the improvements made in functioning hotels, special
attention was placed on selecting equipment and new systems to
help reduce atmosphere-contaminating emissions. By using more
efficient equipment, less contaminating fuels and by taking direct
energy-saving measures, emissions of CO2 will be reduced by
around 400 tonnes a year.
• Specific energy-saving programmes have been put in practice in
each of our hotels, such as the integration of intelligent
air-conditioning control systems with the “front office” of NH;
improvements in lighting efficiency, the rational use of
equipment, etc. Despite higher occupancy levels, they have
68
made it possible to avoid higher consumption levels and have
even lowered them. For comparable hotels, in Mexico electricity
consumption has dropped by 2.5% despite a rise in occupancy of
3.1%; in Austria consumption has dropped by 4.3% while
occupancy has increased 8%; in Germany electricity consumption
has dropped 5% and in Spain, by 2%, despite an increase in
occupancy of 5.7%.
• In 2005, two plants generating thermal energy with solar panels
have started operating in two of our hotels and another two are
planned for 2006 in the programme bolstering energy saving and
environmental protection measures.
The programmes specifically aimed
at energy saving have made it
possible, despite higher occupation
levels, to prevent consumption
from rising and even reduce it.
• Our new hotels use materials and systems causing the least
possible environmental impact, standardise energy control
systems, apply efficient lighting sources, incorporate water-saving
elements, use materials free from fluorocarbons, vinyl paper in
rooms and optimise the use of materials such as wood, among
many other actions.
69
Corporate Social Responsibility
CUSTOMER
RELATIONS
SHAREHOLDERS
RELATIONS
There is a centralised Customer Service Department and a
During 2005, meetings were held with 170 investment funds in
customer service at each hotel.
the form of road-shows, sectorial conferences and meetings at
head offices. The aim was to maintain a direct relationship with
Any incident in the NH Customer programmes (NH World
current and potential investors and so make the company’s
and Frequent Travellers Programme) is dealt with on a
strategy more transparent.
personal basis.
NH Hoteles shareholders can ask for their shareholder card,
which gives them even more advantages than the NH World
card, (exclusive booking, special prices, etc.).
An Information Office for shareholders has been set up. On the
NH Hoteles web site (www.nh-hotels.com), shareholders have a
direct and transparent channel of information about NH Hoteles
where they can ask questions. The “link” contains full information
about Corporate Governance.
SUPPLIER
RELATIONS
NH Hoteles, through the Purchases Department, approves its
providers, abiding by ethical, social and environmental criteria
and the criteria of objectivity and transparency.
During the financial year, a major effort was made to work with
NH Hoteles, official sponsor of the Madrid Masters Series (Spain)
providers whose workforces included underprivileged or disabled
groups of people.
70
NH Obradoiro - Santiago de Compostela (Spain)
71
Corporate Social Responsibility
FOOD AND
BEVERAGES
Throughout 2005, NH Hoteles has made a strong bid for in-house
GASTRONOMY AWARDS
training in the area of Food and Beverages, as a means of
enhancing corporate spirit among members of staff working in
In recognition of the work done by NH Hoteles in the field of
this field. For that purpose, exchanges between our kitchen
gastronomy, mention should be made of the wide array of prizes
managers in different countries have been encouraged, they have
awarded to our chefs and advisors in 2005:
been invited to take part in international projects, the
inauguration of hotels and opening of “nhube” spaces and,
- “Chef L´Avenir (Chef of the future) prize awarded by the
thanks to company sponsorship, they attended two of the top
International Academy of Gastronomy to Paco Roncero,
gastronomy congresses in Spain: “Madrid Fusión” and “Lo Mejor
Executive Chef at El Casino de Madrid (Spain).
de la Gastronomía”: two events which, apart from attending them
as congress members, enabled them to pass on information to
- “Best Somillier of the year” prize, awarded by the International
other colleagues, who did not attend, about the latest
Academy of Gastronomy to María José Huertas, Somillier at
gastronomic breakthroughs.
El Casino de Madrid (Spain).
Added to that, training courses have been held for the Maîtres,
- “Prize for innovation” awarded by Servihostel at the 8th edition
work has continued on projects focused on standardising services
of the “La Cazuela” prizes to Paco Roncero, Executive Chef at
that convey company image, such as breakfast, room service and
El Casino de Madrid (Spain).
the minibar, and the first services handbook was produced. In
short, all the energy of the Food and Beverages team has been
- “Best Entrepreneur of Navarre Prize” awarded by the magazine
focused on raising customer satisfaction levels and maintaining
Actualidad Económica and the financial daily Expansión to
their loyalty to our services.
Enrique Martínez, the chain’s gastronomy consultant.
At the same time, and not overlooking the local gastronomy
-“Tourism Merit Award” won by Enrique Martínez for the
component, each country held its own events, such as the start
restaurant, La Ontina, that he runs in the NH Gran Hotel -
up in The Netherlands and Belgium of the so-called “Culinary
Zaragoza (Spain).
year calendar”, or the gastronomy conference held each year at
the NH Gran Hotel de Zaragoza (Spain). All with a view to
72
- “Sánchez Cotán Prize 2005” to the best restaurant menu design
showing the importance that NH Hoteles continues to place on
awarded to La Terraza of El Casino de Madrid by the Spanish
gastronomy.
Academy of Gastronomy.
Restaurant at the NH Palacio del Duero hotel - Zamora (Spain)
73
Corporate Social Responsibility
SPREADING
CULTURE
9th Edition of the NH Mario Vargas Llosa Short-Story Awards
10 th EDITION OF THE NH MARIO VARGAS
LLOSA SHORT-STORY AWARDS
The NH Mario Vargas Llosa Short-Story Awards, with a prize money
of 60,000 euros, aims to foster reading and literary creation, to
prove support for contemporary writers and contribute to the
The award ceremony for the 10th Edition of the NH Mario Vargas
promotion of cultural leisure offerings.
Llosa Short-Story Awards will be held at the Casino de Madrid
again in 2006. NH Hoteles is once again honoured by the
The prize-winning stories are published in English, Spanish and
collaboration of the prestigious writer, Mario Vargas Llosa, in the
German and distributed in all the rooms of the chain’s hotels, as a
pledge to culture.
free service for customers.
This competition is the most important award in the Spanish-
Since 1996, NH Hoteles has had some three million books printed
language short-story category. As a result, participation in each
and distributed in Spain, Germany, Netherlands, Austria,
competition is high and almost 4,000 short stories are entered for
Switzerland, Belgium, Argentina, Portugal, Chile, Cuba, Uruguay
each of them. The support of the prestigious author Mario Vargas
and Mexico. More than 10,000 writers from all over Spain and from
Llosa is due not only to the prestige that the prize has won among
28 other countries on different continents have taken part in
both newcomers and the most veteran writers, but also the writer’s
previous competitions.
commitment to encouraging and supporting young people who
engage in literary creation.
74
NH STOCK ART
NH Hoteles continues to support contemporary art. All the new
hotel openings that took place in 2005 reflect that sensitivity,
adding new generations of artists to its art collection.
Specifically, the establishments in The Hague, Nuremberg,
Dusseldorf, Leeuwenhorst, Timisoara, Santiago de Compostela,
León, Seville, Valladolid, Mexico City, Alicante, Sotogrande,
Lisbon... All of them have works by local and international artists,
who contribute to the image of modernity and commitment to
culture that defines NH to the interior decoration of the public
areas of the hotels.
This pioneering initiative in the hotel industry, which showcased the
trends of the 1980s and ’90s in Spain, is gathering pace, enlarging
the number of artists at international level and presenting latestgeneration artistic support media: from photography to sculpture,
and including digital image processing.
After presenting its travelling collection, “NH Stock Art”, from 2000
to 2004 in Spain, Netherlands and Germany, which included 50
works by 50 artists, the Company is preparing a new travelling
show which will reflect the company’s new acquisitions in the field
of international painting.
chain’s collection. “NH Stock Art” supports the art of young
painters, reflecting the creative trends of the 1980s and ’90s.
During 2003, the collection was presented in The Netherlands for
the first time and from then on it began its internationalisation, with
exhibitions in Amsterdam, Maastricht and Rotterdam. In 2004,
“NH Stock Art” was presented in Germany, visiting the cities of
In a pioneering initiative in the hotel industry, in 1998 NH Hoteles
Berlin, Frankfurt and Hamburg.
created “NH Stock Art”, a travelling collection made up of 50
original pieces selected from among the works that make up the
The collection currently has 3,500 original works by 170 artists from
Europe and America.
Artists included in the collection in 2005:
BADO, Claudio (Montevideo, 1960)
BASSOLÉ, Dominique (Mali, 1965)
CASAÑÉ, Albert (Barcelona, 1961)
FONTANET, Rosanna (Terrassa, 1954)
GONZALEZ-ADALID, Luis (Cartagena,1958)
JIMENEZ, Elena (Alicante, 1965)
MACZACSSEK, Waltraud (Frankfurt am Main)
OUATTARA, Hamed (Burkina Faso, 1971)
RAIGORODSKY, Santiago (Buenos Aires, 1944)
SANTOS, Jesús (Segovia, 1961)
75
11
Sotogrande
Sotogrande is the setting for a whole new style of living, with its
covers 180 acres, with four lakes and greens of the highest quality,
residential areas designed with quality of life and attention to the
designed by Tom Lamb. Plans for a second 18 hole course are also
family in mind. Its values make it a unique point of reference within
well under way.
the tourist sector. For the first time, this singular concept is to be
exported beyond its original frontiers.
The Club House, occupying nearly 7,200 square yards, is built in the
traditional Andalusian style, and, as one might expect from such an
exclusive club house, has magnificently luxurious changing rooms
76
THE LA RESERVA DE
SOTOGRANDE COMPLEX
and areas in which to relax.
The La Reserva de Sotogrande complex, a little over a year since it
was opened, has quickly become one of Spain’s leading golf courses.
SALE OF PLOTS OF LAND AND ESTATE
VILLAS WITHIN LA RESERVA
A private and exclusive golf club in a spectacular setting with
La Reserva de Sotogrande is a luxury complex in one of the most
wonderful views of the mountains and sea. The demanding 18 hole
sought after areas of the Sotogrande estate, stretching over
course, designed by Cabell B. Robinson, is 7,600 yards long and
more than 1,250 acres of land. This is a truly privileged location
Hotel Almenara - Sotogrande - San Roque - Cádiz (Spain)
with infrastructures and services of the highest quality. Allowing
occupation in the third quarter of 2006. 37 of the original 76 which
you to live the whole year round in an atmosphere of luxury,
were put on the market have been sold to date.
privacy and security.
The La Reserva de Sotogrande complex offers a wide range of
large plots of land for sale. Some actually overlook the golf course,
and can be considered to be the finest plots of land to be put on
LA MARINA AND OTHER
DEVELOPMENTS
the market in the 40 year history of Sotogrande. These exceptional
sites enjoy truly magnificent views out over the golf course, the
Sotogrande also offers a product of the very highest quality at its
lakes, the lower part of the Sotogrande estate and the
La Marina development:
Mediterranean Sea. At the present moment, 187 plots have been
sold out of a total of 274 which have been put on the market.
• Ribera del Marlin
Sotogrande and Ponte Gadea formed a 50-50 Joint Partnership
Situated on either side of the avenue which leads to the La Reserva
in August 2004 in order to undertake the Sotogrande La Marina
Club House are the “Los Cortijos de La Reserva” - the Estate Villas.
project, to be known as Ribera del Marlin.
These are 76 luxury villas and private estates which will be ready for
The plot of land for this development was sold for €37M.
77
Sotogrande
The project, responsibility for which has been handed to the
apartments with spectacular views out over the leisure port, with
architectural studio Ramseyer Waisman, includes luxury housing
the housing ready for occupation in September 2005.
in four main blocks, a pedestrianised sea front promenade with
space set aside for 42 shops directly fronting the pavement and
This is an ideal location, situated at the entrance to the Marina
an underground public car park.
and only the shortest of walks from a wide selection of shops,
bars and restaurants, as well as the beach and the entrance to the
Sotogrande has been responsible for the overall management of
leisure port. It is worth highlighting that by March 2006, 24 of the
the project, as well as acting as promoter and marketing the
29 apartments placed on the market had already been sold.
venture. The development, situated at the entrance to the
leisure port, is due to be finished in 2007. To date, 12 shops and
During the first six months of 2005, the second phase of Las
60 apartments have already been sold.
Cimas de Almenara was also put on the market, through RESCOSotogrande (another 50-50 Joint Partnership). This is a
• Other Developments
The Ribera del Obispo is a building development housing 29
development of housing with a cutting edge architectural design
situated next to the Hotel Almenara’s golf course.
Ribera del Marlin - Sotogrande - San Roque - Cádiz (Spain)
SOTOGRANDE: A SUCCESS STORY READY
TO BE EXPORTED FOR THE FIRST TIME
Mediterranean, with 2,691 moorings for boats between 32 and 115
feet, an 18 hole golf course, a hotel, a shopping centre and 3,200
public parking spaces. In addition to this, scattered around the golf
The success of the Sotogrande concept as a reference point for the
course and the estate’s numerous islands, 5,289 apartments and
quality residential and hotel tourist sector has led the company to
houses are due to be built on spacious plots of land, providing
seek to export the model beyond the confines of the original
housing for an expected population of 18,500 people.
estate, both in Spain, at Castellón, and further afield, in Italy (Sicily),
the Dominican Republic (Cap Cana) and Mexico (Riviera Maya).
The Integrated Action Plan (known as the PAI in Spanish) is
currently being finalised. Sotogrande is to be the company given
SOTOGRANDE SANTA BÁRBARA
(CASTELLÓN - SPAIN)
the task of exploiting the leisure activity and tourist services
potential of the estates, which will consist of nautical installations
and a leisure marina, a golf club, a beach club, as well as all the
Sotogrande has set up the Santa Bárbara Golf company in order to
corresponding hotel services one can expect.
develop a tourist complex of the same name in the Spanish sea front
location of Burriana, in the province of Castellón, with a shareholder
The state plans to create a large Beach Club area next to the sea,
structure which ensures the necessary technical and financial solvency.
thus restoring more than a kilometer of beach to its former glory.
Pedestrian and bicycle paths are also due to be built, thus
78
The future Santa Bárbara Golf residential complex, designed by
improving access to the beach for visitors and residents alike. The
Sotogrande and stretching over 887 acres, features the largest
project also envisages providing the whole area with an access
marina for leisure pursuits on the whole of the Spanish
infrastructure of the very highest quality.
79
Sotogrande
NH Sotogrande - San Roque - Cádiz (Spain)
As was the case with the Sotogrande Marina, the tourist –
island, near Ragusa as well as being very close to the future airport
residential model envisaged for the Santa Bárbara Golf complex, is
at Comiso and the sea.
based around the idea of a “lakeside village” with the inner
marina’s islands and waterways, making the complex a showcase
This new development, currently under construction, will
for the whole Valencia region and situating Burriana at the very
feature a new 5 Star hotel with 170 rooms, 20 junior suites and
forefront of high class tourist destination investment opportunities.
10 senior suites.
The new Donnafugata complex will also include a 43,000 square
SOTOGRANDE DONNAFUGATA
(SICILY - ITALY)
foot conference centre and an additional 21,500 square feet of
terrace bars and restaurants with capacity for up to 1200 people.
Sotogrande plans to build two 18 hole golf courses at
80
Sotogrande is also involved in the development of the
Donnafugata, benefiting from the vast experience gained over the
Donnafugata project in Sicily, Italy. This is to be situated on an
years with Sotogrande Golf Services as well as a spa featuring all
estate covering some 710 acres on the south eastern side of the
the services which characterise Elysium, NH Hoteles’ Spa.
Casa Club La Reserva de Sotogrande - San Roque - Cádiz (Spain)
Sotogrande seeks to turn Donnafugata into a prime tourist
Until this year, SGS had solely worked on projects related to the
destination within Italian society as well as reference point for the
parent company; this is now set to change with Sotogrande Golf
business conventions sector. Similarly, and in keeping with the
Services starting to undertake projects for third parties. SGS has set
traditions of the estate, Sotogrande hopes and expects that
itself the target of building at least one golf course of the highest
Donnafugata will also become equally renowned within the
standard per year.
international golfing world.
From the outset, the company has been involved with the building
of Spain’s finest courses, working with some of the world’s most
SOTOGRANDE GOLF SERVICES
prestigious course designers, including Robert Trent Jones, Dave
Thomas and Gary Player.
Sotogrande Golf Services is a division of Sotogrande S.A. dedicated
SGS is currently working on the course at Donnafugata in Sicily as
to the building, maintenance and management of high quality golf
well as designing the Santa Bárbara links in Castellón and the
courses. The company is the first Spanish concern to be admitted to
second course at La Reserva (Sotogrande) and renovating the
the GCBAA (Golf Course Builders American Association).
Retamares (Madrid) and Almenara (Sotogrande) courses.
81
Sotogrande
habits and health. The stated aim of SHE is that the guest enjoys
themself while at the same time discovering that it is possible to
SOTOGRANDE HEALTH
EXPERIENCE (SHE)
enjoy a healthy life by eating well and taking exercise.
SHE has been developed within the unbeatable framework of
In collaboration with some of Europe’s finest leisure and health
Sotogrande and is based in the Hotel Almenara, recently awarded
professionals, Sotogrande has created a unique combination of
the Condé Nast Johansens Prize for the
activities and workshops which allow our guests to learn how to take
Best Hotel & Spa in Europe, as well as
good care of their health whilst enjoying unforgettable holidays.
being selected as the Best Golf Resort in
With the help and guidance of professionals, our guests are able to
Spain at the
choose those activities which most interest them and best suit their
Annual World
objectives and physical condition. They will also help the guest to
Travel Awards.
adjust the level of intensity of these activities whilst never forgetting,
of course, that our customers are on holiday.
The Sotogrande Health Experience (SHE) is a ground breaking
concept within the range of holidays aimed at improving our living
82
SOTOGRANDE RESULTS
The EBITDA for the real estate side of the company stood at
€53.7M.
In 2005, the real estate side of the company showed sales of
€83.4M, in line with forecasts. The drop in income, which stood at
By year end in December 2005, commitments for real estate deals
€98.44M, with respect to 2004, is the result of a decrease in the
which had been signed although not entered into company
sale of plots of land as well as adjustment resulting from adaptation
accounts reached €80M, with an estimated margin of €35M which
to the new International Financial Information Regulations (IFIR),
will be included in accounts for 2006 and 2007. This represents an
which had a positive effect on 2004’s returns.
increase of 23.5% in comparison to 2004.
COMPARATIVE EVOLUTION OF THE SOTOGRANDE SHARE PRICE ON THE IBEX 35
83
12
Board of Directors and Management Committee
Board of Directors
President and Chief Executive Officer: GABRIELE BURGIO
Officers:
MATÍAS AMAT ROCA
RAMÓN BLANCO BALÍN
JOSÉ DE NADAL CAPARÁ
JULIO CÉSAR DÍAZ-FREIJO CERECEDO*
IGNACIO EZQUIAGA DOMÍNGUEZ
MANUEL HERRANDO Y PRAT DE LA RIBA
AURELIO IZQUIERDO GÓMEZ
BERNARD s’JACOB
ALFONSO MERRY DEL VAL GRACIE
MIGUEL RODRÍGUEZ DOMÍNGUEZ
LUIS F. ROMERO GARCÍA
Non-Executive Secretary to the Board: JOSÉ MARÍA MAS MILLET
Non-Executive Vice-Secretary: J. IGNACIO ARANGUREN GONZÁLEZ-TARRÍO
* Julio César Díaz-Freijo Cerecedo replaced Alfredo Fernández Durán on 22 February 2006.
Management Committee
84
Gabriele Burgio
Ignacio Aranguren
Roberto Chollet
Gustavo Gabarda
Juan Mora
Francisco Zinser
Chariman and CEO
Chief Strategy
Officer
Chief Financial
Officer
Managing Director
Sotogrande
Corporate Officer
Human Resources
Chief Operating
Officer
NH Central Convenciones - Seville (Spain)
85
10
Corporate Governance
CORPORATE GOVERNANCE
Annual Report
86
LISTED PUBLIC
LIMITED COMPANIES
ISSUING COMPANY’S IDENTIFYING DATA FINANCIAL
YEAR 2005
TAX IDENTIFICATION CODE: A28027944
CORPORATE NAME: NH HOTELES S.A.
REGISTERED OFFICE: SANTA ENGRACIA 120
MADRID
28003
SPAIN
87
Corporate Governance
MODEL OF CORPORATE GOVERNANCE
ANNUAL REPORT FOR LISTED PUBLIC
LIMITED COMPANIES
For a better understanding of the model and subsequent preparation
thereof, the instructions provided at the end of this report for completing the
form should be read.
Indicate the most significant movements in the shareholder structure during
the financial year:
Shareholder’s Name or
Corporate Name
Date of transaction
CAJA DE AHORROS Y MONTE DE
PIEDAD DE ZARAGOZA, ARAGÓN Y
RIOJA (IBERCAJA)
Description of
transaction
5% of corporate capital
exceeded
31-10-2005
A.3. Complete the following charts on the members of the company’s
board of directors who own shares in the company:
A. OWNERSHIP STRUCTURE
A.1. Complete the following chart on the company’s corporate capital:
Date of last modification
Corporate capital (€) Number of shares
15-09-2000
239,065,796.00
Number of shares
Date of last
appointment
Number of Number of
direct
indirect
shares
shares (*)
Total % of
corporate
capital
BANCAJA
27-06-2002
27-06-2002
7,319,698
0
6.124
BLANCO BALÍN
JOSÉ RAMÓN
15-01-1993
28-04-2003
23,800
13,400
0.031
HERRANDO PRAT
DE LA RIBA
MANUEL
13-07-1992
28-04-2003
3,027
0
0.003
RODRÍGUEZ
DOMÍNGUEZ,
MIGUEL
119,532,898
If there are different classes of share, this should be indicated in the
following chart:
Class
Director’s Name or Date of first
Corporate Name appointment
Unit face value
A.2. Give details of the direct and indirect shareholders of significant
stakes at the closing of the financial year, excluding board members:
29-04-2004
29-04-2004
3,000
0
0.003
Shareholder’s Name or
Corporate Name
Number of
direct shares
Number of
Total % of
indirect shares (*) corporate capital
HOTELES
PARTICIPADOS S.L. 29-04-2004
29-04-2004
6,275,477
0
5.250
ALAZAN INVERSIONES 2001
SIMCAV S.A.
6,071,794
0
5.080
ANGELINI FRANCESCO
0
6,263,343
5.240
MERRY DEL VAL
GRACIE,
ALFONSO
18-03-1997
28-04-2003
100
0
0.000
ROMERO
GARCÍA, LUIS F.
26-11-1996
28-04-2003
1,000
1,000
0.002
AMAT ROCA,
MATÍAS
23-07-2004
23-07-2004
50
0
0.000
BURGIO,
GABRIELE
13-01-1993
28-04-2003
1,317,770
0
1.102
CAJA DE AHORROS Y
MONTE DE PIEDAD DE
MADRID
5,976,644
5.000
CORPORACIÓN FINANCIERA
CAJA DE MADRID S.A.
5,976,644
0
5.000
GRUPO INVERSOR
HESPERIA S.A.
6,000,551
0
5.020
KEBLAR DE INVERSIONES
SIMCAV S.A.
6,201,791
0
5.188
ORTEGA GAONA AMANCIO 0
12,273,585
10.268
FINAF 92, S.A.
0
5.240
CAJA DE AHORROS Y
MONTE DE PIEDAD DE
ZARAGOZA, ARAGÓN Y
RIOJA (IBERCAJA)
0
(*) Through:
6,263,343
5,979,036
0
5.002
Name or Corporate Name of the direct
owner of the stake
Number of direct shares
VILLAR CANOVAS, AMPARO
6,400
BLANCO VILLAR, ELENA
3,500
BLANCO VILLAR, RAMÓN
3,500
CREFICA, S.A.
1,000
Total:
14,400
Total % of corporate capital in possession of the Board of Directors:
12.515
(*) Through:
Name or Corporate Name of the
direct owner of the stake
Number of
direct shares
% of corporate
capital
FINAF 92, S.A.
6,263,343
5.240
CORPORACIÓN FINANCIERA CAJA DE
MADRID, S.A.
5,976,644
5.000
KEBLAR DE INVERSIONES SIMCAV, S.A.
6,201,791
5.188
ALAZAN INVERSIONES 2001, SIMCAV, S.A.
6,071,794
5.080
Total:
24,513,572
Complete the following charts on those members of the company’s Board of
Directors who are in possession of rights over the company’s shares:
Director’s Name
or Corporate
Name
BURGIO, GABRIELE
88
Number of direct Number of
indirect option
option rights
rights
616,189
0
Number of
equivalent
shares
Total % of
corporate capital
616,189
0.515
A.4. Indicate, when applicable, any relations of a family, commercial,
contractual or company nature that may exist between the holders of
significant stakes, to the extent that they are known by the company,
except when they are of little importance or result from ordinary draft or
commercial trade:
(*) Through:
Name or Corporate Name
of the direct owner of the stake
Number of direct shares
DEUTSCHE BANK, A.G
Related names or corporate names
Type of relationship
Brief description
2,663,876
Total:
2,663,876
Provide details of significant variations, as per the provisions of Royal Decree
377/1991, made during the financial year:
A.5. Indicate, when applicable, any relations of a commercial, contractual
or company nature that may exist between the holders of significant stakes
and the company, except when they are of little importance or result from
ordinary draft or commercial trade:
Related names or corporate names
Type of relationship
Brief description
A.6. Indicate any para-company agreements reached between shareholders
that may have been notified to the company:
Intervening parties in the
para-company agreement
% of corporate capital affected
Brief description of the
agreement
Indicate, when applicable, agreed actions between shareholders of the
company and which are known by the company:
Intervening parties in
the agreed action
% of corporate capital affected
Brief description of the
agreed action
In the event that there has been a change in or severance of such
agreements or agreed actions during the financial year, this should be
expressly indicated.
A.7. Indicate whether or not a natural or corporate person exists which
exercises or may exercise control over the company, in accordance with
SECTION 4 of Spain’s Securities Market Law:
Date:
direct shares
Number of
indirect shares
Number of
corporate capital
Total % of
corporate capital
12-04-2005
838,043
0
0.701
07-07-2005
1,197,520
0
1.002
02-09-2005
67,914
0
0.057
02-12-2005
99,872
0
0.084
Results obtained in the financial year from treasury
stock transactions (in thousands of euros)
2,512
A.9. Provide details of the conditions and term(s) of the authorization(s) of
the general meeting of shareholders to the board of directors to carry out
the purchases or transfers of own shares described in SECTION A.8.
The General Meeting of Shareholders held on 28th April 2005 authorized the
Board of Directors, for a term of 18 months, to take as a pledge and/or to
purchase, directly or indirectly, its own shares, through their purchase on an
official secondary market and for a price that is neither below their nominal
value nor above their quoted value at the moment of the purchase, without
the face value of the purchased shares, together with that of those taken as a
pledge, being able to exceed 5 per cent of the total corporate capital at any
moment
The Board of Directors is expressly empowered to freely dispose of the
shares purchased by virtue of the aforementioned authorization, for the
purpose, as and when applicable, of complying with the commitments
acquired under “Remuneration systems with the handing over of stock
options” or “referenced to the stock’s quoted value”, the introduction of
which in the company has been the object of the mandatory approvals.
A.10. Indicate, when applicable, any legal or statutory limitations on the
exercising of voting rights and any legal limitations on the purchase or
transfer of stakes in the corporate capital:
Name or corporate name
In accordance with the provisions of Article 15 of the Articles of Association,
each share gives the right to one vote, there being no legal or statutory
limitations on the free transfer of shares.
Remarks
A.8. Complete the following charts on the company’s treasury stock:
As at the date of the closing of the financial year:
Number of direct shares
Number of indirect shares (*)
Total % of
corporate capital
25,000
2,663,876
2.249
Without prejudice to the foregoing and as established in the aforesaid
Article, no shareholder, regardless of the number of shares of which it is the
owner, may issue more votes than those corresponding to 10% of the issued
shares with a right to vote. This limitation shall not apply in those General
Meetings in which, in accordance with the list of attendants, a shareholder,
whether present or represented at the Meeting, is the owner of more than
75% of the issued shares with a right to vote.
For the purpose of the foregoing paragraph, companies belonging to the
same group, as per the provisions of article 42 of the Commercial Code, shall
have the consideration of a single shareholder.
Taking into account the fact that the corporate capital of NH Hoteles, S.A. is
made up of bearer shares, the provisions of sections 9 and following of
Spain’s Securities Market Law 24/1988, of 28th July, and similar legislation
shall apply for all matters relating to the transfer of shares. This is also
incorporated into the Articles of Association of NH Hoteles, S.A., which, in
89
Corporate Governance
Article 7, expressly states that “The transfer of shares and the constitution of
limited real rights or any other liens and encumbrances thereon, must be the
subject of an entry in the corresponding Accounting Register, as provided for
in Securities Market Law”.
Indicate the retirements/removals from the board of directors that have
occurred during the period:
Director’s Name or Corporate Name
Termination date
ECHENIQUE GORDILLO, RODRIGO
28-02-2005
B. THE COMPANY’S ADMINISTRATIVE STRUCTURE
B.1.3. Complete the following charts on the members of the board of
directors and their condition:
B.1. Board of Directors
EXECUTIVE DIRECTORS
B.1.1. Provide details of the maximum and minimum number of directors
provided for in the Articles of Association:
Director’s Name or
Corporate Name
Maximum number of directors
20
Minimum number of directors
5
B.1.2. Complete the following chart with the members of the board of
directors:
Director’s
Representative Office on
Name or
the Board
Corporate Name
Date of last
appointment
Election
procedure
Director’s Name or
Corporate Name
DIRECTOR
23-07-2004
23-07-2004
CO-OPTION
BLANCO BALÍN,
JOSÉ
RAMÓN
DIRECTOR
15-01-1993
28-04-2003
G. MEETING
OF SHARE
HOLDERS
BURGIO
GABRIELE
CHAIRMAN
FERNÁNDEZ
DURÁN,
ALFREDO
DIRECTOR
HERRANDO
PRAT DE LA
RIBA, MANUEL
DIRECTOR
13-07-1992
28-04-2003
G. MEETING
OF SHARE
HOLDERS
MERRY DEL
VAL GRACIE,
ALFONSO
DIRECTOR
18-03-1997
28-04-2003
G. MEETING
OF SHARE
HOLDERS
DE NADAL
CAPARÁ,
JOSÉ
DIRECTOR
08-05-1997
28-04-2003
G. MEETING
OF SHARE
HOLDERS
DIRECTOR
27-06-2002
27-06-2004
G. MEETING
OF SHARE
HOLDERS
RODRÍGUEZ
DOMÍNGUEZ,
MIGUEL
DIRECTOR
29-04-2004
29-04-2004
G. MEETING
OF SHARE
HOLDERS
ROMERO
GARCÍA,
LUIS FERNANDO
DIRECTOR
26-11-1996
28-04-2003
G. MEETING
OF SHARE
HOLDERS
s'JACOB,
BERNARD
DIRECTOR
30-06-2000
28-04-2003
G. MEETING
OF SHARE
HOLDERS
EZQUIAGA
DIRECTOR
DOMÍNGUEZ,
IGNACIO
29-04-2004
29-04-2004
G. MEETING
OF SHARE
HOLDERS
HOTELES
PARTICIPADOS
S.L.
IZQUIERDO
GÓMEZ,
AURELIO
Total Number of Directors:
13-01-1993
27-06-2002
28-04-2003
27-06-2002
Office on the company’s
organization chart
BOARD OF
CHAIRMAN-
DIRECTORS
MANAGING DIRECTOR
EXTERNAL DOMANIAL DIRECTORS
AMAT ROCA,
MATÍAS
BANCAJA
90
Date of first
appointment
BURGIO, GABRIELE
Committee that
proposed the appointment
G. MEETING
OF SHARE
HOLDERS
G. MEETING
OF SHARE
HOLDERS
12
Committee that
proposed the
appointment
Name or corporate name of the
significant shareholder
represented or who proposed the
appointment
DE NADAL CAPARÁ, JOSÉ
BOARD OF
DIRECTORS
FINAF 92, S.A.
AMAT ROCA, MATÍAS
NOMINATION AND
REMUNERATION
COMMITTEE
CORPORACIÓN
FINANCIERA CAJA DE
MADRID S.A.
HOTELES PARTICIPADOS S.L.
NOMINATION AND
REMUNERATION
COMMITTEE
HOTELES PARTICIPADOS S.L.
FERNÁNDEZ DURÁN,
ALFREDO
BOARD OF
DIRECTORS
ORTEGA GAONA,
AMANCIO
BANCAJA
BOARD OF
DIRECTORS
BANCAJA
EXTERNAL INDEPENDENT DIRECTORS
Director’s Name or Corporate Name
Director’s Name or
Corporate Name
Committee that proposed
the appointment
Profile
BLANCO BALÍN, RAMÓN
BOARD OF
DIRECTORS
BUSINESS &
ECONOMICS
DEGREE. TAX
INSPECTOR
WITH LEAVE
OF ABSENCE.
BOARD OF
DIRECTORS
ECONOMICS AND
COMMERCE
DEGREE FROM
BOCCONO UNIVERSITY
OF MILAN. DOCTORATE
FROM UNIVERSITY
OF PAVIA.
MERRY DEL VAL GRACIE,
ALFONSO
BURGIO, GABRIELE
BOARD OF
DIRECTORS
LAW DEGREE.
ROMERO GARCÍA, LUIS F.
BOARD OF
DIRECTORS
INDUSTRIAL
ENGINEERING DEGREE.
S'JACOB BERNARD
BOARD OF
DIRECTORS
LAW DEGREE.
RODRÍGUEZ DOMÍNGUEZ,
MIGUEL
NOMINATION AND
REMUNERATION
COMMITTEE
ENTREPRENEUR
OTHER EXTERNAL DIRECTORS
Director’s Name or
Corporate Name
Corporate name of the
group company
Office
HERRANDO PRAT DE LA RIBA,
MANUEL
SOTOGRANDE, S.A.
CHAIRMAN
BURGIO, GABRIELE
SOTOGRANDE, S.A.
DIRECTOR
FERNÁNDEZ DURÁN, ALFREDO
SOTOGRANDE, S.A.
DIRECTOR
HERRANDO PRAT DE LA RIBA,
MANUEL
LATINOAMERICANA DE .
GESTION HOTELERA, S.A
DIRECTOR
MERRY DEL VAL
GRACIE, ALFONSO
KRASNAPOLSKY HOTELS
& RESTAURANTS, BV
MEMBER OF
THE SUPERVISORY
BOARD
AMAT ROCA, MATÍAS
SOTOGRANDE, S.A.
NATURAL PERSON
REPRESENTATIVE OF
THE DIRECTOR
PROMOCIÓN Y
PARTICIPACIÓN
EMPRESA-RIAL
CAJA MADRID, S.A.
BURGIO, GABRIELE
GRUPO FINANCIERO
DE INTERMEDIACIÓN Y
ESTUDIOS, S.A.
NATURAL PERSON
REPRESENTATIVE OF
THE SOLE
ADMINISTRATOR,
NH HOTELES, S.A.
BURGIO, GABRIELE
NH PAMPLONA, S.A.
DIRECTOR
BURGIO, GABRIELE
LATINOAMERICANA DE
GESTIÓN HOTELERA, S.A.
DIRECTOR
BURGIO, GABRIELE
NACIONAL HISPANA
HOTELES SRL DE CV
DIRECTOR
BURGIO, GABRIELE
KRASNAPOLSKY HOTELS
& RESTAURANTS, BV
MEMBER OF THE
SUPERVISORY
BOARD
Committee that proposed
the appointment
Provide details of the reasons why they cannot be considered
domanial or independent directors:
Indicate any changes that, when applicable, have occurred during
the period in the type of each director:
Director’s Name or
Corporate Name
Date of the change
Previous status
ALL THE POWERS WHICH CORRESPOND TO
THE BOARD OF DIRECTORS, EXCEPT THOSE
THAT CANNOT BE DELEGATED BY LAW OR BY
VIRTUE OF THE ARTICLES OF ASSOCIATION
B.1.6. Identify, as and when applicable, the members of the board who
hold the office of administrator or director in other companies which form
part of the listed company’s group:
HERRANDO Y PRAT DE
LA RIBA, MANUEL
Director’s Name or Corporate Name
Brief description
Current
status
B.1.4. Indicate whether the classification of Directors made in the previous
point coincides with the distribution provided for in the regulations of the
board of directors:
The composition and classification of Directors made in the previous point is
respectful of and complies with the provisions of the Regulations of the
Board of Directors (article 9 of the Board of Directors’ Regulations).
B.1.5. Indicate, as and when applicable, the powers delegated to the
managing director(s):
91
Corporate Governance
b) Resulting from the company’s directors belonging to other boards of
directors and/or the top management of group companies:
B.1.7. Provide details, as and when applicable, of the company’s directors
who are members of the board of directors of other companies listed in
official securities markets in Spain other than its group, which have been
notified to the company:
Director’s Name or
Corporate Name
Listed company
Office
Remunerative item
In thousands of euros
0
BURGIO, GABRIELE
FERROVIAL, S.A.
DIRECTOR
Fixed remuneration
BANCAJA
BANCO DE VALENCIA,S.A.
CHAIRMAN
Variable remuneration
MERRY DEL VAL
GRACIE, ALFONSO
TELEFÓNICA MOVILES, S.A.U.
DIRECTOR
Per diem allowances
FERNÁNDEZ DURÁN,
ALFREDO
KEBLAR DE INVERSIONES
SIMCAV, S.A.
MANAGING
DIRECTOR
0
115
Statutory business
FERNÁNDEZ DURÁN,
ALFREDO
ALAZAN INVERSIONES
SIMCAV, S.A.
MANAGING
DIRECTOR
BANCAJA
ENAGAS, S.A.
DIRECTOR
BANCAJA
METROVACESA, S.A.
DIRECTOR
0
Stock options and/or other financial instruments
0
Others
0
Total:
115
Other Benefits
B.1.8. Complete the following charts relating to directors’ aggregate
remuneration accrued during the financial year:
a) In the company under study in this report:
Remunerative item
In thousands of euros
Fixed remuneration
694
Variable remuneration
262
Per diem allowances
587
Statutory business
0
Stock options and/or other financial instruments
0
Advances
0
Credits granted
0
Pension Funds or Plans: Contributions
0
Pension Funds or Plans: Obligations incurred
0
Life insurance premiums
0
Guarantees constituted by the company in favour of its directors
0
c) Total remuneration per type of director:
Type of director
Others
Total:
192
In thousands of euros
Per company
Per group
Executives
1,214
15
External domanial directors
246
15
External independent directors
275
85
0
0
1,735
Other external directors
Other Benefits
Advances
Credits granted
0
0
Pension Funds or Plans: Obligations incurred
0
Guarantees constituted by the company in favour of its directors
Total:
1,735
115
8,305
Pension Funds or Plans: Contributions
Life insurance premiums
92
In thousands of euros
22
d) In respect of the profit attributed to the holding company:
Total remuneration of directors
(in thousands of euros)
Total remuneration of directors
as a percentage of the profit
attributed to the holding company
1,850
2.970
0
B.1.9. Identify the members of top management who are not at the same
time executive directors and indicate the total remuneration accrued in their
favour during the financial year:
Name or corporate name
Office
ARANGUREN GONZÁLEZ-TARRÍO, IGNACIO
GENERAL CORPORATE AND
STRATEGIC INVESTMENTS DIRECTOR
CHOLLET IBARRA, ROBERTO
GENERAL FINANCIAL DIRECTOR
GABARDA DURÁN, GUSTAVO
GENERAL DIRECTOR-MANAGING
DIRECTOR SOTOGRANDE
ZINSER CIESLIK, FRANCISCO ALEJANDRO
GENERAL OPERATIONS DIRECTOR
CORTINA AURRECOECHEA, MARÍA
CORPORATE COMMUNICATIONS
DIRECTOR
MATOSES GARCÍA-VALDÉS, FERNANDA
CORPORATE LEGAL ADVISORY
SERVICE DIRECTOR
MORA NARVAEZ, JUAN
CORPORATE HUMAN
RESOURCES DIRECTOR
Total remuneration of top management (in thousands of euros)
B.1.12. Indicate, as and when applicable, the identity of the members of
the board who are at the same time members of the board of directors or
are directors of companies which hold significant shareholdings in the listed
company and/or companies within its group:
2,171
B.1.10. Identify in an aggregate way whether or not guarantee or
protection clauses exist, for cases of dismissal or changes of control in
favour of members of the top management, including the executive
directors, of the company or its group. Indicate whether or not these
contracts have to be notified to and/or approved by the administrative
bodies of the company or its group:
Number of beneficiaries
Director’s Name or
Corporate Name
Name or Corporate Name of
the significant shareholder
Office
DE NADAL CAPARA, JOSÉ
FINAF 92, S.A.
CHAIRMAN
FERNÁNDEZ DURÁN, ALFREDO
ALAZAN INVERSIONES 2001,
SIMCAV, S.A. Y KEBLAR DE
INVERSIONES, SIMCAV, S.A.
FINANCIAL
DIRECTOR
AMAT ROCA, MATÍAS
CAJA DE AHORROS
Y MONTE DE PIEDAD DE
MADRID
MANAGING
DIRECTOR
7
Board of Directors
Administrative body which authorizes the clauses
the foregoing paragraph, provisions exist for the establishment of
remuneration systems referenced to the quoted value of the shares or that
involve the awarding of shares or stock options to the Directors. For these
remuneration systems to be applied, a resolution must be adopted by the
General Meeting of Shareholders, which will establish the share value to be
taken as the reference, the number of options, the price at which the option
rights can be exercised, the term of this remuneration system and all other
conditions which it deems appropriate. Likewise, and subject to prior
compliance with the legal requirements, similar remuneration systems can be
established for the Company’s personnel, regardless of whether or not they
are directors. The remuneration as described in the foregoing sections, which
results from being a member of the Board of Directors, shall be compatible
with all other professional and occupational income which corresponds to the
Directors for whatsoever other executive or advisory functions which, as and
when applicable, they may perform for the Company other than those of
supervision and decision, acting as a body, corresponding to their capacity as
Directors, which functions shall be subjected to whichever legal regime may
be applicable.
General Meeting
of Shareholders
Provide details, as and when applicable, of any relevant relations other than
those contemplated in the foregoing section, of the members of the board
of directors which links them to significant shareholders in the company
and/or in group companies:
X
Director’s Name or
Corporate Name
YES
Is the General Meeting of Shareholders informed of these clauses?
Name or Corporate Name
of the significant shareholder
Description of the
relationship
NO
X
B.1.13. Indicate, as and when applicable, the amendments introduced in
the regulations of the board of directors during the financial year.
B.1.11. Indicate the process for establishing the remuneration of the
members of the board of directors and the relevant statutory clauses in this
respect.
Article 35 of the Regulations of the Board of Directors establishes that the
Director shall have the right to receive the remuneration established by the
Board of Directors in accordance with the legal and statutory provisions and
subject to the opinion of the Nomination and Remuneration Committee.
The Board of Directors shall endeavour to ensure that the Director’s
remuneration is commensurate to what is paid in the market in companies of
a similar size and activity.
The Regulations of the Board of Directors were not amended during financial
year 2005.
B.1.14. Indicate the procedures for the appointment, re-election, evaluation
and removal of directors. Provide details of the competent bodies, the
processes to be adopted and the criteria to be employed in each one of
the procedures.
1. Board Member Selection Procedures
Article 20 of the Articles of Association establishes that Directors’
remuneration shall consist of a specific annual allotment and per diem
allowances for attending the meetings of the Board of Directors and its
delegated and consultative Committees. The amount of the remuneration
which the Company may pay to all the Directors as a whole for both
concepts shall be equivalent to three per cent of the net profit obtained by
the Consolidated Group during the immediately previous financial year. The
establishment of the exact amount to be paid within this limit and its
distribution amongst the various Directors corresponds to the Board of
Directors. In addition, and irrespective of the remuneration contemplated in
Directors shall be designated by the General Meeting of Shareholders or, on
a provisional basis, by the Board of Directors, in accordance with the
provisions laid down in Spain’s Company Law and the Articles of Association.
Proposals for the appointment of Directors submitted by the Board of
Directors to the consideration of the General Meeting of Shareholders and
the appointment resolutions adopted by such body by virtue of the cooption powers legally attributed to it must be in compliance with the
provisions of the Board of Directors’ Regulations and must be preceded by
93
Corporate Governance
the corresponding opinion of the Nomination and Remuneration Committee,
which shall not be binding.
purpose to that of the Company or that of any of the Companies which
form its Group.
2. Designation of External Directors
The Board of Directors, if it considers it appropriate, may release the
outgoing Director from this obligation or shorten the period of its duration.
The Board of Directors’ Regulations make a special reference to the
designation and appointment of external Directors, given their particularity
with respect to executive Directors, as a consequence of which it is
appropriate to briefly explain the basic characteristics of the designation of
the aforesaid External Directors:
2.1 Domanial Directors
As far as Domanial Directors are concerned, their appointment must fall on
the persons proposed by the respective owners of significant stable
shareholdings, with all other Directors having the obligation of propitiating
with their vote that such appointments or proposed appointments are
approved by the Board of Directors.
2.2 Independent Directors
The Board of Directors and the Nomination and Remuneration Committee
shall endeavour to ensure, within the scope of their respective competences,
that the election of candidates to occupy the office of independent Directors
falls on reputable persons of well-known competence and experience, who
are willing to devote a sufficient part of their time to the Company.
The Board of Directors may not propose or designate persons to the office
of independent Director who have or have had during the last two years a
stable relationship of certain relevance with the Company’s management or
who are linked by family, professional or commercial reasons with any of the
executive Directors or with other members of the Company’s Top
Management; likewise, they must not have a stable relationship with the
domanial Directors or with the corporations or business groups they
represent.
In particular, the following may not be proposed or designated as
independent Directors:
5. Removal of Directors
Directors shall cease to hold office when the term for which they were
appointed has elapsed or when the General Meeting of Shareholders
adopts the corresponding resolution, making use of the attributions legally
granted to it.
Members of the Board of Directors must tender their resignation to the
Board of Directors and shall formalize the corresponding resignation in the
following cases:
a.) When they reach 70 years of age. Directors in executive office shall
cease to fulfil their duties when they reach 65 years of age although they
can continue as Directors if so decided by the Board of Directors itself.
In these cases, removal from office shall be implemented in the first
meeting of the Board of Directors to take place after the General Meeting
of Shareholders at which the financial statements of the year in which the
Director has reached the age limit are approved.
b.) When they are removed from the executive posts to which their
appointment as Director was associated or when the reasons for their
appointment have disappeared, it being understood that such
circumstance exists in a domanial Director when the corporation or
business group which it represents ceases to hold a significant stake in the
Company’s corporate capital or when, in the case of an independent
Director, it joins the executive area of the Company or of any of its
subsidiary companies.
c.) When they are involved in any of the cases of incompatibility or
prohibition legally provided for.
a) Those persons who hold or have held in the last two years executive posts
of the highest level within the Company;
d.) Whenever they receive a serious warning by the Nomination and
Remuneration Committee on the grounds of having failed to comply with
any of their obligations as Directors.
b) The relations, up to the fourth degree of kinship, of whoever is or has
been in the last two years an executive Director or member of the
Company’s Top Management;
e.) Whenever their permanence on the Board of Directors can negatively
affect the credit or reputation enjoyed by the Company in the market or in
any other manner can place its interests at risk.
c) Persons who, directly or indirectly, have made or received relevant
payments to or from the Company which could compromise their
independence;
B.1.15. Indicate those cases in which directors have the obligation of
resigning.
d) Persons who have or have had other relations with the Company which, in
the opinion of the Nomination and Remuneration Committee, could
undermine their independence.
3. Re-election of Directors
Proposals for the re-election of Directors which the Board of Directors
decides to submit to the General Meeting must be subject to a formal
preparation process, of which a report issued by the Nomination and
Remuneration Committee in which the quality of work and devotion to duty
of the proposed Directors during their term of office must necessarily form
a part.
Directors shall cease to hold office when the term for which they were
appointed has elapsed or when the General Meeting of Shareholders
adopts the corresponding resolution, making use of the attributions legally
granted to it.
Members of the Board of Directors must tender their resignation to the
Board of Directors and shall formalize the corresponding resignation in the
following cases:
a.) When they reach 70 years of age. Directors in executive office shall
cease to fulfil their duties when they reach 65 years of age although they
can continue as Directors if so decided by the Board of Directors itself.
4. Duration of Office
Directors shall hold office for a term of three years.
However, Directors designated by co-option shall hold office until the date
of the first meeting of the General Meeting of Shareholders.
During a period of two years the Director who terminates his term of office
or who for whatsoever other reason ceases to hold office may not render
his services in another company with a similar or analogous corporate
94
In these cases, removal from office shall be implemented in the first
meeting of the Board of Directors to take place after the General Meeting
of Shareholders at which the financial statements of the year in which the
Director has reached the age limit are approved.
b.) When they are removed from the executive posts to which their
appointment as Director was associated or when the reasons for their
appointment have disappeared, it being understood that such
circumstance exists in a domanial Director when the corporation or
business group which it represents ceases to hold a significant stake in the
Company’s corporate capital or when, in the case of an independent Director,
it joins the executive area of the Company or of any of its subsidiary
companies.
c.) When they are involved in any of the cases of incompatibility or prohibition
legally provided for.
d.) Whenever they receive a serious warning by the Nomination and
Remuneration Committee on the grounds of having failed to comply with any
of their obligations as Directors.
e.) Whenever their permanence on the Board of Directors can negatively affect
the credit or reputation enjoyed by the Company in the market or in any other
manner can place its interests at risk.
B.1.16. Explain whether or not the function of top executive of the company
falls on the office of chairman of the board of directors. When applicable,
indicate the measures which have been taken to limit the risks of
accumulation of powers in a single person:
YES X
B.1.19. Indicate whether or note the chairman has the casting vote:
YES X
NO
Subjects for which a casting vote exists
Article 23 of the Articles of Association establishes that resolutions shall be
adopted by an absolute majority of the Directors present at the meeting, with the
vote of the Chairman or the Vice-Chairman who stands in for him being decisive.
B.1.20. Indicate whether or not the articles of association or the regulations of
the board of directors establish some type of limit on the age of directors:
YES X
NO
Age limit of chairman
65
Age limit of managing director
65
Age limit of directors
70
NO
B.1.21.Indicate whether or not the articles of association or the regulations of the
board of directors establish a limited term of office for independent directors:
Measures to limit risks
YES
Article 17 of the Board of Directors’ Regulations establishes that the Executive
Chairman shall have the condition of First Executive of the Company […], with
the effective direction of the Company’s business corresponding to it, always in
accordance with the criteria and decisions of the Board of Directors and the
General Meeting of Shareholders. Consequently, the Chairman’s decisions in all
cases shall be put to and supervised by the General Meeting of Shareholders
and the Board of Directors. Likewise, all resolutions and decisions of special
relevance for the Company must first be submitted to the Board of Directors or
corresponding control Committee, for its approval. Moreover, the adoption of
certain resolutions requires the proposals and opinions of the Board’s various
Committees.
B.1.17. Are reinforced majorities, other than the legal majorities, required for
certain types of decision?:
YES
NO X
Indicate how resolutions are adopted in the board of directors, explaining, at
least, the minimum quorum of attendance and the type of majorities for
adopting resolutions:
NO X
Maximum number of years of office
0
B.1.22. Indicate whether or not formal processes exist for the delegation of
votes in the meetings of the board of directors. If so, briefly explain.
Article 22 of the Board’s Regulations establishes that Directors must personally
attend Board meetings and, whenever due to exceptional circumstances they
are unable to do so, they must endeavour to ensure that the representation
they confer on another member of the Board shall include, as far as is possible,
the appropriate instructions. These delegations can be granted by letter or by
any other means which, in the Chairman’s opinion, guarantees the delegation’s
certainty and validity. Likewise, the Board of Directors may authorize the
attendance of Directors via telephone or audiovisual systems, always provided
that such systems enable real time interaction and intercommunication
between all the attendants.
B.1.23. Indicate the number of meetings held by the board of directors
during the financial year. Similarly, indicate, as and when applicable, the
number of times the board met without the attendance of its Chairman:
ADOPTION OF RESOLUTIONS
Description of the resolution
Quorum
Type of Majority
For any type of resolution
Half plus one of the
members of the Board
of Directors
Absolute majority of
the attendants
B.1.18. Explain whether or not specific requirements exist, other than those
relating to directors, for being appointed to the office of chairman.
YES
NO X
Number of board meetings
8
Number of board meetings without the Chairman attending
0
Indicate the number of meetings held in the financial year by the various board
committees:
Number of executive or delegated committee meetings
10
Number of Audit Committee meetings
6
Number of Nomination and Remuneration Committee meetings
4
Number of strategy and investment committee meetings
0
Number of committee meetings
0
Description of the requirements
95
Corporate Governance
B.1.24. Indicate whether or not the individual and consolidated annual accounts
which are submitted to the board of directors for its approval are certified
beforehand:
YES
NO X
Identify, as and when applicable, the person(s) who has or have certified the
company’s individual and consolidated annual accounts, for their formulation by
the board of directors:
Name
Additionally, all relevant information of interest to the Securities Markets is
centralized in the Financial Department which, through its Director, sends it on
a regular basis as Relevant Facts to the Securities Markets.
Office
B.1.25. Explain the mechanisms established by the board of directors, as
and when they exist, for ensuring that the individual and consolidated
accounts formulated by it are not presented to the General Meeting of
Shareholders with qualifications in the audit report.
Article 40.2 of the Board’s Regulations establishes that the Board of Directors
must endeavour to formulate the accounts in such a way that they do not give
rise to qualifications on the part of the Auditors. Nevertheless, when the
Board of Directors considers that it must maintain its criterion, it shall publicly
explain the content and scope of the discrepancies.
B.1.26. Provide details of the measures adopted so that the information
disclosed to the securities markets is transmitted in a fair and symmetrical
manner.
Article 39 of the Regulations of the Board of Directors of NH Hoteles, S.A.
includes all aspects relating to the listed company’s relationship with the
Securities Markets. In this connection, it states that “The Board of Directors
shall carry out all those functions that are imposed by virtue of the fact that it
is a listed securities issuing company. In particular, the Board of Directors shall
carry out, in the manner provided for in these Regulations, the following
specific functions relating to the Securities Market:
a) Supervision of regular public information of a financial nature.
b) The performance of as many acts and the adoption of as many measures as
may be necessary to guarantee the Company’s transparency before the
financial markets, in particular informing them of all the facts, decisions and
circumstances that may be relevant for the shares’ quotation.
B.1.27. Is the secretary of the board of directors a director?:
YES
NO X
B.1.28. Indicate the mechanisms established by the company, when they
exist, for safeguarding the independence of the auditors, financial analysts,
investment banks and classification agencies.
The Board of Directors has established, through the Audit and Control
Committee, a stable and professional relationship with the Company’s firm of
financial Auditors, with strict respect for that company’s independence, for the
purpose of complying with the recommendations on this subject laid down in
the Olivencia Code. Accordingly, the Audit and Control Committee watches
over situations which could represent a risk for the independence of the
Company’s external auditors and, in particular, supervises what percentage the
fees paid by the Company represent over the total of the auditing company’s
income. In this connection, Article 25.3 SECTION e) of the Articles of
Association establishes that the Audit and Control Committee has the power,
inter alia, “to maintain relations with the financial Auditors in order to receive
information on those questions which may endanger the latter’s
independence and any others relating to the accounts auditing process, as
well as receiving information and maintaining with the Auditors the
communications provided for in the legislation on the auditing of accounts as
well as in the technical auditing standards.
Lastly, in accordance with the prevailing legal requirements, the fees paid to
the Company’s external auditors, including those relating to services other
than audit services, are reported in the Company’s annual report.
B.1.29. Indicate whether or not the firm of financial auditors performs other
tasks for the company and/or its group apart from auditing activities and, if
so, indicate the amount of the fees received for such tasks and the
percentage they represent of the fees invoiced to the company and/or its
group.
YES X
NO
Company
c) The performance of as many acts and the adoption of as many measures as
may be necessary to promote the correct formation of the prices of the
Company’s shares and, when applicable, those of its affiliates, particularly
avoiding manipulations and the abuse of insider information”.
Lastly, the aforesaid Article establishes that the Board of Directors shall adopt
the necessary measures to guarantee that the quarterly, half-yearly and any
other financial information which it is deemed prudent to make available to
the markets shall be prepared in accordance with the same principles, criteria
and professional practices as those with which the Annual Accounts are
prepared and shall enjoy the same reliability as the latter. To this end, such
information shall be reviewed by the Audit and Control Committee.
In addition, the Board of Directors shall at all times enforce the due
safeguarding of the data and information relating to the issued shares, without
prejudice to its duty of notification and collaboration with the legal and
administrative authorities, preventing such data and information from being
the object of abusive or unfair use, reporting those cases in which this has
occurred and immediately adopting the necessary measures within their scope
to prevent, avoid and, when applicable, correct any consequences that may
result therefrom.
96
Amount of work other than
auditing work
(in thousands of euros)
42
Amount of work other than auditing 21.780
work as a percentage of the total
amount invoiced by the firm of
auditors
Group
407
29.930
Total
449
26.540
B.1.30. Indicate the number of years the current firm of financial auditors
has been carrying out the audit of the annual accounts of the company
and/or its group uninterruptedly. Likewise, indicate the number of years the
company has been audited by its current firm of financial auditors as a
percentage of the total number of years in which the annual accounts have
been audited:
Company
Number of uninterrupted years
4
Group
4
Number of years audited by the current firm
of financial auditors as a percentage of the total
Company
Group
21.050
21.050
and directly provide the information or facilitate contacts with the
appropriate interlocutors within the appropriate sphere of the organization.
B.1.34. Indicate whether or not a liability insurance policy exists in favour of
the company’s directors.
number of years the company has been audited
YES X
B.1.31. Indicate the stakes of the members of the board of directors in the
capital of companies which have the same, an analogous or complementary
type of activity to that which constitutes the corporate purpose of both the
company and its group and which have been notified to the company.
Likewise, indicate the offices or functions which they hold or exercise in
these companies:
Director’s Name
or Corporate Name
BANCAJA
NO
B.2. Board Committees
B.2.1. List the administrative bodies:
Name of the
investee company
% stake
Office or
functions
Name of the body
No. of members
Functions
HOTEL ALAMEDA
90.000
NONE
DELEGATED COMMITTEE
5
COMMITTEE WITH DECISIONTAKING CAPACITY OF A
GENERAL NATURE AND,
CONSEQUENTLY, WITH
EXPRESS DELEGATION OF ALL
THE POWERS WHICH
CORRESPOND TO THE BOARD
OF DIRECTORS, WITH THE
EXCEPTION OF THOSE WHICH
CANNOT BE DELEGATED BY
VIRTUE OF THE LAW OR THE
ARTICLES OF ASSOCIATION.
AUDIT AND CONTROL COMMITTEE
3
TO PROPOSE THE
DESIGNATION OF T
HE FIRM OF FINANCIAL
AUDITORS AND
THE CONDITIONS
OF ITS HIRE; TO SUPERVISE THE
INTERNAL AUDIT SERVICES;
TO KNOW THE FINANCIAL
INFORMATION
AND INTERNAL CONTROL
SYSTEM PROCESSES.
NOMINATION AND REMUNERATION 3
COMMITTEE
TO REPORT ON THE
PROPOSALS FOR THE
APPOINTMENT OF
DIRECTORS AND TOP
MANAGERS; TO
APPROVE THE REMUNERATION
SCALES OF THE COMPANY’S
TOP MANAGERS;
TO APPROVE STANDARD
CONTRACTS FOR
HIRING TOP MANAGERS; TO
ESTABLISH THE
REMUNERATION
REGIME OF THE
CHAIRMAN AND, WHEN
PPLICABLE, THE
MANAGING DIRECTOR; TO
PROPOSE TO THE BOARD
OF DIRECTORS THE
REMUNERATION REGIME
OF DIRECTORS; TO
REPORT ON
INCENTIVE PLANS;
VALENCIA, S.L.
B.1.32. Indicate whether or not a procedure exists whereby directors can
receive external advice and, if so, provide details:
YES X
NO
Details of the procedure
Article 28 of the Board of Directors’ Regulations expressly establishes that,
for the purpose of being aided in the performance of their functions, external
Directors voted in by a majority or any of the Board of Directors Committees,
by virtue of a majority resolution of its members, can request the hiring of
legal, accounting and financial advisers or other experts, with all costs for the
Company’s account. The remit must necessarily relate to specific problems of
certain importance and complexity which may arise during the course of their
activities. The decision to hire such services must be notified to the
Company’s Chairman and shall be formalized through the Secretary of the
Board of Directors, except when the Board of Directors considers that such
hiring is neither necessary nor advisable.
B.1.33. Indicate whether or not a procedure exists whereby directors can
count on the necessary information in order to prepare the meetings of the
administrative bodies in sufficient time and, if so, provide details:
YES X
NO
Details of the procedure
Article 27 of the Board of Directors’ Regulations reflects the right and duty of
the members of the Board of Directors to information. In this regard, it
establishes that all Directors have the power and duty to request and obtain
as much information as they may deem necessary or advisable at any given
moment for the good discharge of their duties.
To this end, the Director is invested with the widest powers to be informed of
any aspect of the Company, to examine its books, records, documents and
the background history of corporate transactions to the extent that this may
be necessary or advisable for the diligent discharge of its office.
This right to information also extends to the various subsidiary companies
which comprise the consolidated Group, and must always be exercised in
accordance with the demands of good faith.
Likewise, and following the Olivencia and Aldama recommendations, so as
not to perturb the ordinary course of the Company’s business, the exercising
of the right to information shall be channelled through the Chairman or the
Secretary of the Board of Directors, who shall receive the Directors’ requests
97
Corporate Governance
B.2.2. Provide details of all the board committees and their members:
EXECUTIVE OR DELEGATED COMMITTEE
Name
Office
BURGIO, GABRIELE
CHAIRMAN
DE NADAL CAPARÁ, JOSÉ
MEMBER
FERNÁNDEZ DURÁN, ALFREDO
MEMBER
HERRANDO Y PRAT DE LA RIBA, MANUEL
MEMBER
BANCAJA
MEMBER
MAS MILLET, JOSÉ MARÍA
SECRETARY NON-MEMBER
b) How it works
The Delegated Committee shall meet as many times as it is called by its
Chairman. The Delegated Committee’s Chairman and Secretary shall be the
persons who hold the same offices on the Board of Directors, it also being
possible to appoint one or several Vice-Chairmen and one Vice-Secretary.
The Delegated Committee shall be validly constituted when half plus one of
its members are present or represented at the meeting.
The resolutions shall be adopted by the majority vote of the Directors
present or represented at the meeting, with the Chairman having the casting
vote in the event of a tie.
c) Relationship with the Board of Directors.
The Delegated Committee shall punctually inform the Board of Directors of
the items discussed and the decisions adopted in its meetings.
2. Audit and Control Committee
a) How it is formed.
AUDIT COMMITTEE
Name
Office
BLANCO BALÍN, RAMÓN
CHAIRMAN
s´JACOB, BERNARD
MEMBER
HOTELES PARTICIPADOS, S.L.
MEMBER
CHOLLET IBARRA, ROBERTO
SECRETARY NON-MEMBER
The Audit and Control Committee shall be made up of a minimum of three
and a maximum of five Directors designated by the Board of Directors. The
majority of this Committee’s members must be non-executive Directors.
The Chairman of the Audit and Control Committee shall be nominated from
amongst their non-executive Directors and must be replaced every four
years, it being possible for the Chairman to be re-elected once a one-year
period has elapsed since their removal.
b) Powers.
NOMINATION AND REMUNERATION COMMITTEE
Name
Office
HERRANDO Y PRAT DE LA RIBA, MANUEL
CHAIRMAN
BLANCO BALÍN, RAMÓN
MEMBER
AMAT ROCA, MATÍAS
MEMBER
MAS MILLET, JOSÉ MARÍA
SECRETARY NON-MEMBER
STRATEGY AND INVESTMENT COMMITTEE
Name
Office
B.2.3. Provide a description of the organization and working rules and of
the responsibilities attributed to each one of the board committees.
1. Delegated Committee
a) How it is formed
The Delegated Committee shall be made up of the Chairman of the Board
of Directors and a number of members of not less than three or more than
nine Directors, designated by the Board of Directors.
In the Delegated Committee’s qualitative composition, the Board of
Directors shall endeavour to ensure that the external or non-executive
Directors represent a majority over the executive Directors.
At any event, for the appointment or renewal of the Delegated Committee’s
members to be valid the vote in favour of at least two-thirds of the members
of the Board of Directors shall be required.
98
Notwithstanding any other tasks that may be assigned to it by the Board of
Directors, the Audit and Control Committee’s main function shall be that of
supporting the Board of Directors in its supervisory functions and, in
particular and as a minimum, it shall have the following powers:
1) To report at the General Meeting of Shareholders, through its Chairman,
on the questions raised by the shareholders on the subjects that fall within
the Committee’s authority;
2) To propose to the Board of Directors, for submission to the General
Meeting of Shareholders, the designation of the firm of financial Auditors to
which SECTION 204 of Spain’s Company Law refers, and, when applicable,
the conditions of their hire, the scope of their professional remit and the
revocation or renewal of their appointment;
3) To supervise the internal audit services;
4) To know the financial information process and internal control systems;
5) To maintain relations with the firm of financial Auditors in order to receive
information on those questions which may endanger the latter’s
independence and any others relating to the audit process, in addition to
receiving information and maintaining with the Auditors the communications
provided for in the corresponding legislation and in the technical audit
standards; and5) To maintain relations with the firm of financial Auditors in
order to receive information on those questions which may endanger the
latter’s independence and any others relating to the audit process, in
addition to receiving information and maintaining with the Auditors the
communications provided for in the corresponding legislation and in the
technical audit standards; and
6) To exercise all other powers assigned to this Committee in these
Regulations or that may be assigned to it by the Board of Directors.
c) How it works.
The Audit and Control Committee shall meet at least once every quarter and
as many times as it may be appropriate, after the prior call by its Chairman,
at its own decision or in response to the request of two of its members or of
the Board of Directors.
The Audit and Control Committee may require the Company’s firm of
financial Auditors and the person/department responsible for the internal
audit to be present at its meetings.
3. Nomination and Remuneration Committee
a) How it is formed.
The Nomination and Remuneration Committee shall be made up of a
minimum of three and a maximum of five Directors. All the members of this
Committee must be non-executive Directors.
B.2.4. Indicate, as and when applicable, the advisory and consultation
powers and, when applicable, those of delegation of each one of the
committees:
Name of committee
Brief description
DELEGATED COMMITTEE
DECISION-TAKING CAPACITY OF A GENERAL SCOPE
AND, CONSEQUENTLY, WITH EXPRESS DELEGATION
OF ALL THE POWERS WHICH CORRESPOND TO THE
BOARD OF DIRECTORS, WITH THE EXCEPTION OF
THOSE WHICH BY VIRTUE OF THE LAW OR THE
ARTICLES OF ASSOCIATION CANNOT BE
DELEGATED. IN ADDITION, THE BOARD OF
DIRECTORS MAY ENTRUST OTHER FUNCTIONS TO
The Chairman of the Nomination and Remuneration Committee shall be
appointed by the Committee itself from amongst its members.
b) Powers.
Without prejudice to any other tasks which may be assigned to it by the
Board of Directors, the Nomination and Remuneration Committee shall have
the following powers:
1. To report on the proposals for the appointment of Directors and Top
Managers of the Company and of its subsidiary companies;
THE DELEGATED COMMITTEE.
AUDIT COMMITTEE
TO ACT AS SUPPORT FOR THE BOARD OF
DIRECTORS IN ITS SUPERVISORY FUNCTIONS,
HAVING FOR THE PURPOSE ALL THE GRANTED
POWERS BOTH BY VIRTUE OF SPAIN’S COMPANY
LAW (LSA) AND THE ARTICLES OF
ASSOCIATION ON THE SUBJECT OF AUDIT AND
CONTROL.
NOMINATION AND
REMUNERATION COMMITTEE
TO REPORT ON THE PROPOSALS FOR THE
APPOINTMENT OF DIRECTORS AND TOP
MANAGERS OF THE COMPANY AND OF ITS
SUBSIDIARY COMPANIES; TO PROPOSE TO THE
BOARD OF DIRECTORS THE REMUNERATION
REGIME OF DIRECTORS AND TO
REVIEW IT ON A REGULAR BASIS SO AS TO
GUARANTEE ITS ADAPTATION TO THE DUTIES
DISCHARGED BY SUCH DIRECTORS;
TO REPORT ON INCENTIVE PLANS; TO
REPORT ON THE PROPOSALS FOR THE
NOMINATION OF MEMBERS OF
THE DELEGATED COMMITTEE AND
OF ALL THE OTHER BOARD
COMMITTEES.
2. To approve the remuneration scales of the Company’s Top Managers;
3. To approve standard contracts for Top Managers;
4. To establish the remuneration regime of the Chairman and, when
applicable, the Managing Director.
5. To propose to the Board of Directors the remuneration regime of the
Directors and to review it on a regular basis in order to guarantee its
adaptation to the duties discharged by such Directors, in accordance with
the provisions of article 35 of these Regulations;
6. To report on incentive plans;
7. To carry out an annual examination of the remuneration policy of Directors
and Top Managers;
8. To report on the appointment proposals of the members of the Delegated
Committee and of all the other Board Committees;
9. To draw up and keep a record of situations of the Company’s Directors and
Top Managers; and
10. To exercise all other powers assigned to this Committee in these
Regulations.
Of all the duties discharged by the Nomination and Remuneration
Committee, it must inform the Board of Directors accordingly at the first
meeting held by the latter, at any event making available to such Board of
Directors the corresponding documentation so that it has knowledge of such
activities for the exercising of its powers.
B.2.5. Indicate, as and when applicable, the existence of regulations of the
board committees, the place where they are available for consultation and
any amendments introduced during the financial year. At the same time, an
indication should be given as to whether or not an annual report has
voluntarily been drawn up on the activities of each committee.
The composition, working and powers of each one of the Committees are set
down in the Regulations of the Board of Directors, it having been considered
neither appropriate nor necessary to develop them in greater detail in
additional regulations.
c) How it works
The Nomination and Remuneration Committee shall meet as many times as
may be deemed appropriate by the Chairman or when so requested by two
of its members or the Board of Directors.
At any event, the working rules of each and every one of the Committees are
available on the Company’s web page.
The aforesaid Regulations of the Board of Directors are available for
consultation on the web page of NH Hoteles, S.A.
The Audit and Control Committee draws up Annual Reports on its activities,
which are published in the Report.
B.2.6. In the event of the existence of an executive committee, explain the
degree of delegation and the autonomy it enjoys in the discharge of its
duties, for the adoption of resolutions on the company’s management and
administration.
All the powers which correspond to the Board of Directors have been
delegated to the Delegated Committee, with the exception of those which,
by virtue of the law or the Articles of Association, cannot be delegated.
B.2.7. Indicate whether or not the executive committee’s composition
reflects the participation in the board of directors of the different directors
on the basis of their condition:
YES
NO X
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Corporate Governance
C.4. Identify, as and when applicable, any situations of conflict of interest in
which the company’s directors may find themselves, as provided for in
SECTION 127 of Spain’s Company Law (LSA).
If negative, explain the executive committee’s composition
1 Executive Director (Chairman of the Committee)
3 Domanial Directors (Members of the Committee)
1 Independent Director (Members of the Committee)
1 Secretary non-Director (Secretary non-member of the Committee)
C.5. Provide details of the mechanisms established to detect, establish and
solve possible conflicts of interest between the company and/or its group
and its directors, managers or significant shareholders.
B.2.8. In the event of the existence of a nomination committee, indicate
whether or not all its members are external directors:
YES X
Article 32 of the Board of Directors’ Regulations lays down the mechanisms
for detecting, establishing and solving possible conflicts of interest between
the company and/or its group and the Directors. This article literally states
that Directors when discharging their duties shall act with absolute loyalty to
the Company’s corporate interests.
NO
C. LINKED TRANSACTIONS
C.1. Provide details of any relevant transactions which represent a transfer
of resources or debentures between the company or a company in its
group and the company’s significant shareholders:
Name or
Corporate Name
of the significant
shareholder
Name or corporate
name of the
company or a
company in its
group
Nature of the
transaction
Type of
relationship
Amount (in
thousands
of euros)
CORPORACIÓN
FINANCIERA CAJA
MADRID
NH HOTELES, S.A.
Contractual
SYNDICATED
LOAN
35,000
BANCAJA
NH HOTELES, S.A.
Contractual
SYNDICATED
LOAN
19,348
ORTEGA GAONA,
AMANCIO
NH PAMPLONA, S.A
Contractual
LEASING
2,270
ORTEGA GAONA,
AMANCIO
NH HOTELES, S.A.
Contractual
LEASING
4,772
C.2. Provide details of any relevant transactions which represent a transfer
of resources or debentures between the company or a company in its
group and the company’s administrators or managers:
Name or
corporate name
of the
administrators or
managers
Name or
corporate name
of the company
or a company in
its group
BLANCO BALÍN,
RAMÓN
NH HOTELES, S.A.
Nature of the
transaction
Type of
relationship
Amount (in
thousands
of euros)
ADVICE
72
BURGIO, GABRIELE NH HOTELES, S.A.
LOAN
8,305
ARANGUREN
NH HOTELES, S.A.
GONZÁLEZ-TARRÍO,
IGNACIO
LOAN
3,437
CHOLLET IBARRA,
ROBERTO
LOAN
NH HOTELES, S.A.
2,578
C.3. Provide details of any relevant transactions carried out by the
company with other companies belonging to the same group, always
provided that they are not eliminated in the process of drawing up
consolidated financial statements and do not form part of the company’s
normal trade as regards their object and conditions:
Corporate name of the
group company
Brief description
of transaction
Amount (in
thousands of euros)
To this end, Directors must comply with the following obligations and
prohibitions:
a) Directors may not use the Company’s name or invoke their condition as
Administrators in order to carry out transactions for their own account or
on behalf of persons with whom they have ties.
b) No Director may make investments or carry out transactions linked to
the Company’s property of which they may have obtained knowledge
during the course of the discharge of their duties, either for their own
benefit or that of persons with whom they have ties, when such
transactions have been offered to the Company or it has interest in them,
except when the Company has rejected them without the Director exerting
any influence.
c) Directors may not make use of the Company’s assets or take advantage
of their position within it in order to obtain patrimonial advantages, unless
they have paid an adequate consideration.
If the advantage is received in their capacity as a partner, it shall only be
deemed to be proper if the principle of equal treatment of shareholders is
respected.
d) Directors must notify the Board of Directors of all situations of direct or
indirect conflict which they may have with the Company’s interests. In the
event of conflict, the affected Director shall abstain from taking part in the
transaction to which the conflict refers.
e) Directors must abstain from taking part in votes which affect matters in
which they or persons with whom they have ties are directly or indirectly
interested.
f) No Director can carry out direct or indirect professional or commercial
operations or transactions with the Company or any of its Group
companies, when such transactions do not form part of the Company’s
normal trade or are not carried out in market conditions, unless it informs
the Board of Directors of them in advance and the latter, subject to the
opinion of the Nomination and Remuneration Committee, approves the
transactions with the vote in favour of at least 80% of the Directors present
or represented at the meeting.
g) Directors must communicate any stakes which they or persons with
whom they have ties may hold in the capital of a company with the same, a
similar or complementary type of activity to that which constitutes the
corporate purpose, the offices they hold or functions they discharge in
such company and the conducting for their own account or on behalf of
others of the same, a similar or complementary type of activity to that
which constitutes the corporate purpose.
The Board of Directors, at the proposal of the Nomination and
Remuneration Committee, shall prohibit the holding by Directors of
relevant offices in companies that are competitors of the Company or of
any of its Group companies.
For the purpose of the provisions established in the foregoing section,
persons with whom a Director has ties shall be deemed to be those
persons to which SECTION 127 third 5 of Spain’s Company Law refers.
Similarly, the Internal Code of Conduct establishes the duties and general
100
loyalty obligations which the Company’s Directors and top management
undertake to fulfil and which, in broad terms, refer to conflicts of interest,
rules of conduct in connection with insider information, the circulation of
relevant information and transactions involving securities.
D. SYSTEMS FOR CONTROLLING RISKS
D.1. General description of the risk policy of the company and/or its group,
providing details of and evaluating the risks covered by the system,
together with a justification of the adaptation of such systems to the profile
of each type of risk.
Systems for controlling the business risks of the NH Hoteles, S.A. Group
activities can be classified as follows:
1. Control of financial type risks
2. Control of strategic development risks
3. Control of operational and environmental business risks
4. Other procedures of a preventive nature
D.2. Indicate the control systems which have been established in order to
evaluate, mitigate or reduce the main risks of the company or its group.
1. Systems for Controlling Financial Risks
The Group controls its financial risks through the following mechanisms:
1.1 Procedures Manual: The transactions carried out by the NH Hotel
Group are standardized through an internal procedures manual, which
covers sales and procurement circuits, asset management, cash flow,
processes for the monthly closing of accounts, etc. In addition, the rules
applicable to accounting matters for all the Group’s national and foreign
companies have been regulated.
1.2 Internal Audit: The work of the internal audit department is on-going
and to a large extent is focussed on the identification of risk situations and
the evaluation of their management. Thus, it has defined an annual audit
plan, the object of which, inter alia, is to check the correct application of
the established rules and procedures, not only at the level of corporate
departments but also in the various hotels.
1.3 Audit Committee: Reporting directly to the Board of Directors, the
Audit Committee is in charge of supervising the correct working of all the
Group’s Internal Control Systems. Moreover, it analyses the main business
risks and the systems which have been established for their management
and control and is the body which is responsible for relations with the
Group’s external auditors.
1.4 Centralised Management: Through its Economic-Financial General
Management, the Group implements single and centralised management
of its financing, interest rate and exchange rate policies based on nonspeculative criteria.
2. Systems for Controlling Strategic Risks
2.1 The NH Hotel Group has a team of professionals devoted to the
analysis of strategic opportunities of all types. This team selects the
alternatives that are most in line with the Group’s global strategy and
submits them to the Management Committee and, subsequently, to the
Delegated Committee and Board of Directors.
2.2 The Group has identified a series of employees who, in each
acquisition, constitute an Integration Committee, for the purpose of
homogenising policies and procedures in the main critical areas (human
resources, information systems, commercial and marketing management,
etc.).
each one of the areas for the purpose of analysing each and every one of
the business opportunities and their risks presented to the Group.
3. Systems for Controlling Business Risks and Operational and
Environmental Control
3.1 The Management Committee meets weekly for the purpose, on the one
hand, of analysing the information contained in the control charts prepared
by the Corporate Management Control Department for evaluating the
development of operations and, on the other, for carrying out a better
follow-up of the aspects of commercial evaluation obtained via the
information system.
At the same time it establishes the policy to be followed in all departments
of the Company and monitors the application of the market policy for the
Committee.
3.2 The Group in general, and its golf activities in particular, has adopted a
policy orientated towards maximum respect for the environment and for
this reason it has hired the services of an environmental consultancy
company for providing diagnosis and advisory services in respect of the
Group’s activities.
4. Other Preventive Procedures
4.1 In the field of occupational safety
The occupational health and safety plans involve the planning of those
processes which are liable to cause risks and the establishment of the
appropriate safety measures.
The Company provides numerous training courses, for both its direct
employees and those of its subcontractors.
4.2 Insurance
The NH Hotel Group follows a policy of wide coverage through the signing
of insurance policies relating to all the risks which may affect the Group. In
addition, a policy of continuous review of coverages has been adopted.
4.3 Risk Map
Through its Audit Committee the NH Hotel Group has drawn up a risk
map, which includes a wide range of up to 15 types of risk, which vary from
future income commitments to the status of the hotels’ operating licences,
passing through the commitment of financial covenants in loans.
This plan is updated annually so as to identify possible threats to the Group
which can affect its operations.
D.3. In the event that some of the risks facing the company and/or its
group have materialised, indicate the circumstances which have brought
this about and whether or not the established control systems have
worked.
The risks which affect the Company and/or its Group are those that are
proper of the activity conducted by the Company, and the risk control
systems explained in detail in the foregoing sections have worked at all
times.
D.4. Indicate whether or not a committee or other governing body exists
which is responsible for establishing and supervising these control devices
and provide details of their functions.
The Audit and Control Committee is responsible for establishing and
supervising the risk control systems. In this connection, the internal Audit
Department carries out a continuous activity which, to a large extent, is
focussed on the identification of risk situations and the evaluation of their
management. This department has defined an Annual Audit Plan the
purpose of which, inter alia, is to check the correct application of the
established rules and procedures, not only at the level of corporate
departments but also at that of the various hotels. This department reports
directly to the Audit and Control Committee.
2.3 Reporting to the Managing Committee, the Expansion Committee
analyses the proposed operations. It is made up of members taken from
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Corporate Governance
D.5. Identify and describe the processes for complying with the different
regulations that affect the company and/or its group.
The Company has implemented a series of internal rules and procedures for
safeguarding at all times complete compliance with the different regulations
which affect the Company.
The internal Audit Department has defined an Annual Audit Plan, the
purpose of which, inter alia, is to check the correct application of the
established rules and procedures, not only at the level of corporate
departments but also in the various hotels. This department reports directly
to the Audit and Control Committee.
In addition, and without prejudice to the fact that each one of the
internal Departments of NH Hoteles, S.A. (Legal, Occupational Hazard
Prevention, Financial, etc.) safeguards compliance with the regulations
affecting its specific area, the Company at all times receives the external
advice of legal, accounting and financial advisers and other experts, who
guarantee fulfilment of the different regulations relating to the activity of
NH Hoteles, S.A.
General Meeting, in addition to the legally enforceable documents and
information, the Company shall incorporate into its web page, to the extent
that they are available, all data which the Company deems suitable for the
aforesaid purposes and, in particular, merely as an example, the following:
a) The full text of all the proposed resolutions that are going to be submitted
to the General Meeting and at that moment have been approved by the
Board of Directors, without prejudice to the fact that they may be modified
by such body up until the date on which the General Meeting is to be held,
whenever this is legally possible.
b) Information on the place where the General Meeting is to be held,
describing, as and when applicable, how to get to the room.
c) Procedure for obtaining attendance cards or certificate issued by the
bodies legally authorized to do so.
d) Means and procedures for granting representation at the General
Meeting.
e) If so established, means and procedures for exercising the right to vote
from a distance.
E. GENERAL MEETING OF SHAREHOLDERS
E.1. Indicate the quorum for the general meeting’s constitution as
established in the articles of association. Describe how this differs from the
regime of minimums provided for in Spain’s Company Law (LSA).
For the calling of and the quorum for the constitution of both ordinary and
extraordinary General Meetings of Shareholders, Article 11 of the Articles of
Association of NH Hoteles, S.A. refers to the regulations established in
Spain’s Company Law.
E.2. Explain the regime for the adoption of corporate resolutions. Describe
how it differs from the regime provided for in the LSA.
Article 15 of the Articles of Association establishes that the resolutions of
General Meetings of Shareholders shall be adopted by the majority of the
votes of the shares present or represented. Each share grants the right to
one vote. No shareholder, regardless of the number of shares held, can issue
more votes than those which correspond to 10% of the issued shares with
the right to vote. This limitation shall not apply to those General Meetings at
which, in accordance with the list of attendants, a shareholder present or
represented at the Meeting is the owner of more than 75% of the issued
shares with the right to vote. The Meeting’s Chairman shall inform of this
circumstance when declaring the Meeting open.
With the exception of the rule referred to above (majority of votes present or
represented), Article 15 also indicates that “for the amendment of this
Article, the vote in favour of at least 75% of the corporate capital shall be
necessary.”
E.3. Describe any rights of shareholders in connection with general
meetings that differ from those established in the LSA.
- Right to Information:
Article 9 of the Regulations of the General Meetings of Shareholders
indicates that as from the publication date of the notice of the General
Meeting, the Company shall place at the disposal of its shareholders the
documents and information that by virtue of the law or the Articles of
Association must be made available to them in connection with the various
points included on the agenda, including such documents and information in
the Company’s web page as from the aforesaid date. The foregoing
notwithstanding, shareholders can obtain these documents and information,
immediately and free of charge, at the Company’s registered office or they
can request their free delivery or shipment, in the cases and in the terms and
conditions as established by Law.
Likewise, as from the publication date of the notice of the General Meeting
and in order to facilitate shareholders’ attendance at and participation in the
102
f) All other aspects of interest for following the meeting, such as the
existence or otherwise of simultaneous translation facilities, the possible
audiovisual broadcasting of the General Meeting or information in other
languages.
All this information may be subject to change at any moment, in which case
the pertinent modifications and clarifications shall be published on the
Company’s web page.
The Company shall make available, sufficiently in advance, all the information
and documentation referred to in SECTION 1 and point a) of SECTION 2 of
this Article to the Comisión Nacional del Mercado de Valores (CNMV Spain’s National Securities Market Commission) and all other applicable
securities market governing bodies.
Article 10 of the aforementioned Regulations also establishes all aspects
relating to shareholders’ right to information and states that as from the
moment at which the announcement calling the General Meeting of
Shareholders is published and up to the seventh day prior to the date set for
holding the Meeting at the first call, any shareholder can request in writing to
the Company’s Board of Directors all the information and clarifications that
they may deem necessary or can formulate in writing all the questions they
deem pertinent on the items included on the Meeting’s Agenda published
together with the notice or in connection with the information accessible to
the public which the Company may have made available to the Comisión
Nacional del Mercado de Valores after the holding of the immediately
previous General Meeting of Shareholders.
The Board of Directors shall have the obligation of providing in writing up
until the day on which the General Meeting is held all the requested
information and clarifications and of replying in writing to the questions
raised. The replies to questions raised and to the requests for information
shall be transmitted through the Secretary of the Board of Directors, by any of
the Board-Members or by any person expressly authorized to do so by the
Board of Directors for the purpose.
During the holding of the General Meeting, the Company’s shareholders
may verbally request all the information and clarifications that they deem
appropriate on the items included on the Agenda and, whenever it is not
possible to satisfy the shareholder’s right at that moment, the Administrators
shall have the obligation of providing such information in writing within the
seven days following the General Meeting’s termination.
The Administrators shall have the obligation of providing the information
requested under the foregoing two paragraphs, except in those cases in
which, in the Chairman’s opinion, public knowledge of the requested
information would harm the Company’s interests.
Refusal to provide information when the request is backed by shareholders
who represent at least one-quarter of the corporate capital is improper.
- Suggestions by the Shareholders.
Without prejudice to the right of shareholders to request the inclusion of
certain subjects on the agenda of the General Meeting which they are
requesting, in those cases, terms and conditions legally provided for,
shareholders may make suggestions in respect of the organization, working and
powers of the General Meeting of Shareholders at any moment and subject to
proof of their identity as such.
- Right of Attendance.
Article 12 of the Regulations lays down all aspects relating to the right of
attendance. In this connection, it establishes that shareholders who are the
holders of the minimum number of shares as required by the Articles of
Association (2 shares) registered in their name in the corresponding
shareholders register five days prior to the date set for the holding of the
General Meeting of Shareholders have the right to attend such Meeting, always
provided that they prove this through the appropriate attendance card or
certificate issued in their name by one of the participating entities in the body
which manages such accounting record or directly by the Company itself, or in
any other manner that is acceptable by virtue of the prevailing legislation. This
card or certificate may be used by shareholders as a document for the granting
of their representation at the General Meeting in question. Those shareholders
who are not the holders of the minimum number of shares required in order to
be able to attend may delegate their representation, as indicated in the next
Article, to a shareholder with the right to attend the General Meeting or they
may group together with other shareholders in the same situation, until they
complete the necessary number of shares, having the obligation of granting
their representation to one of them. The grouping together must be carried out
specifically for each General Meeting and must be placed on record in
whatsoever written format.
The Chairman may authorize the attendance of any person it may consider
suitable, although the General Meeting shall be able to revoke such
authorization.
- Right of Delegation and Representation.
Article 13 of the Regulations of the General Meeting of Shareholders
establishes that all shareholders with the right to attend the General Meeting
can be represented at the Meeting by another person even when such person
is not a shareholder. The representation must be accepted by the
representative and must be conferred specifically for each General Meeting,
either using the printed delegation formula on the attendance card or in any
other manner accepted by Law, with the exception of what is established in
SECTION 108 of Spain’s Company Law for cases of family representation and
the granting of general powers.
Representation may also be conferred through electronic or remote telematic
means of communication provided they duly guarantee the representation
attributed and the represented party’s identity. Representation granted by
these means shall be accepted when the electronic document by virtue of
which it is conferred includes the recognized electronic signature used by the
represented party or other class of signature with adequate guarantees of
authenticity and identification of the shareholder who is granting his/her
representation and it complies with all other requirements established in the
legal regulations in force at any given moment.
The documents placing on record the delegations or representations for the
General Meeting of Shareholders shall also indicate instructions on the
direction of the vote, it being understood that, should no express instructions
be given, the representative shall vote in favour of the proposed resolutions
formulated by the Board of Directors on the items included on the Agenda.
Should there be no voting instructions because the General Meeting of
Shareholders is going to decide on matters that, not appearing on the agenda
and, therefore, being unknown on the date of delegation, may be put to the
vote at the General Meeting, the representative must issue the vote in the
direction which it considers most appropriate, in fulfilment of the interests of
the Company and of the represented party. This same rule shall apply when the
corresponding proposal or proposals put to the decision of the General
Meeting have not been formulated by the Board of Directors.
If the representation or delegation document fails to indicate the specific
person to whom the shareholder is granting its representation, such
representation shall be deemed to have been granted in favour of the
Chairman of the Company’s Board of Directors or the person designated by the
latter or whoever stands in for the Chairman in the chairmanship of the General
Meeting of Shareholders.
In those cases in which, pursuant to the provisions of SECTION 107 of Spain’s
Company Law, a public request for representation is made, the restriction on
the exercising of the right to vote as established in SECTION 114 of Spain’s
Securities Market Law for cases of conflict of interests shall be applied to the
Administrator who obtains such representation.
Representation is always revocable. The represented party’s personal
attendance at the General Meeting of Shareholders shall have the value of
revocation.
- Right to Vote.
Shareholders present or represented at the General Meeting of Shareholders
may exercise their right to vote on the proposed resolutions put to the General
Meeting. The resolutions of General Meetings shall be adopted with the legally
established majorities, with one vote being recognised for every share.
Shareholders who are physical persons without full capacity to act and
shareholders which are corporate persons shall be represented by whoever,
pursuant to the Law, may exercise such representation, duly accredited.
At any event, for cases not only of voluntary representation but also of legal
representation, shareholders may not have more than one representative at the
General Meeting of Shareholders.
The Chairman of the General Meeting of Shareholders or, by its delegation, the
Secretary thereof shall settle any doubts which may arise in respect of the
validity and value of the documents from which the right of attendance of
whatsoever shareholder at the General Meeting may derive either individually
or from the grouping together of its shares with other shareholders, as well as
the delegation or representation in favour of another person, endeavouring to
consider as invalid or valueless only those documents which lack the minimum
legal and statutory essential requirements and always provided that such
defects have not been remedied.
E.4. Indicate, as and when applicable, the measures adopted to foster the
participation of shareholders in the general meetings.
So as to foster the participation of shareholders in the General Meetings of
Shareholders, the Company places at the disposal of its shareholders the
documents and information which must be made available to them in relation
to the different points included on the Agenda, including such documents and
information in the Company’s web page as from the mentioned date. The
foregoing notwithstanding, shareholders can obtain these documents and
information, immediately and free of charge, at the Company’s registered office
or they can request their free delivery or shipment, in the cases and in the
terms and conditions established by Law.
Likewise, as from the publication date of the notice of the General Meeting and
in order to facilitate shareholders’ attendance at and participation in the
General Meeting, in addition to the legally enforceable documents and
information, the Company shall incorporate into its web page, to the extent
that they are available, all data which the Company deems suitable for the
aforesaid purposes and, in particular, merely as an example, the following:
a) The full text of all the proposed resolutions that are going to be submitted
to the General Meeting and at that moment have been approved by the
Board of Directors, without prejudice to the fact that they may be modified
by such body up until the date on which the General Meeting is to be held,
whenever this is legally possible.
b) Information on the place where the General Meeting is to be held,
describing, as and when applicable, how to get to the room.
c) Procedure for obtaining attendance cards or certificate issued by the
bodies legally authorized to do so.
d) Means and procedures for granting representation at the General Meeting.
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Corporate Governance
e) If so established, means and procedures for exercising the right to vote
from a distance.
f) All other aspects of interest for following the meeting, such as the
existence or otherwise of simultaneous translation facilities, the possible
audiovisual broadcasting of the General Meeting or information in other
languages.
As from the moment at which the announcement calling the General
Meeting of Shareholders is published and up to the seventh day prior to the
date set for holding the Meeting at the first call, any shareholder can request
in writing to the Company’s Board of Directors all the information and
clarifications that they may deem necessary or can formulate in writing all the
questions they deem pertinent on the items included on the Meeting’s
Agenda published together with the notice or in connection with the
information accessible to the public which the Company may have made
available to the Comisión Nacional del Mercado de Valores after the holding
of the immediately previous General Meeting of Shareholders.
The Board of Directors shall have the obligation of providing in writing up
until the day on which the General Meeting is held all the requested
information and clarifications and of replying in writing to the questions
raised. The replies to questions raised and to the requests for information
shall be transmitted through the Secretary of the Board of Directors, by any
of the Board-Members or by any person expressly authorized to do so by the
Board of Directors for the purpose.
During the holding of the General Meeting, the Company’s shareholders
may verbally request all the information and clarifications that they deem
appropriate on the items included on the Agenda and, whenever it is not
possible to satisfy the shareholder’s right at that moment, the Administrators
shall have the obligation of providing such information in writing within the
seven days following the General Meeting’s termination.
At any event, and in order to facilitate communication between the
Company and its shareholders, a Department for Relations with Investors and
Shareholders has been placed at the disposal of the shareholders, who can
address themselves to the department via e-mail or telephone in order to
solve any doubts they may have in connection with the Company’s corporate
governance.
Apart from the foregoing, NH Hoteles, S.A. maintains a web page in which it
informs shareholders and investors in general of the most important
highlights occurring in connection with the Company. The corporate web
page includes significant documents and information on corporate
governance and its purpose is to be the communications channel with
shareholders, providing them with current information on all the aspects that
may be relevant.
The Administrators shall have the obligation of providing the information
requested under the foregoing two paragraphs, except in those cases in
which, in the Chairman’s opinion, public knowledge of the requested
information would harm the Company’s interests, except when the request is
backed by shareholders who represent at least one quarter of the corporate
capital.
E.5. Indicate whether or not the office of chairman of the general meeting
of shareholders coincides with the office of chairman of the board of
directors. As and when applicable, provide details of the measures
adopted to guarantee the independence and good working of the general
meeting of shareholders:
YES X
NO
Details of the measures
The Regulations of the General Meeting of Shareholders, which regulate all
aspects relating to the calling, preparation and holding of the General
Meeting, in addition to the rights which correspond to the shareholders,
guarantee the General Meeting’s correct working.
In addition, the presence of a Commissioner for Oaths is requested in order
to draw up the minutes of the Meeting and discharge the duties relating to
104
the preparation thereof, such as participation in the organization of the order
in which attendants can take the floor as provided for in the Meeting and to
take note of or safeguard the literal interventions which shareholders may
wish to make.
E.6. Indicate, as and when applicable, any modifications made during the
financial year to the regulations of the general meeting of shareholders.
Since being approved by the Board of Directors on 31st March 2004, the
Regulations of the General Meeting of Shareholders have not undergone any
modifications.
E.7. Provide details of attendance at the general meetings of shareholders
held in the financial year to which this report refers:
DETAILS OF ATTENDANCE
E.8. Briefly indicate the resolutions adopted at the general meetings of
shareholders held in the financial year to which this report refers and the
percentage of votes with which each resolution was adopted.
Date of General
Meeting
% physical
presence
% in
representation
% remote
voting
28-04-2005
46.430
10.270
0.000
Total %
57
One: Examination and approval of the Annual Accounts, Management Report,
the proposed application of profit corresponding to fiscal 2003, both of the
Company and of its consolidated Group, and of the Board of Directors’
administration during such financial year.
Percentage of votes with which the resolution was adopted: 99.56%
Two: Distribution of dividends charged to voluntary reserves.
Percentage of votes with which the resolution was adopted: 99.78%
Three: Renewal and, where applicable, appointment of Directors
Percentage of votes with which the resolution was adopted: 99.77%
Four: Acquisition of own shares.
Percentage of votes with which the resolution was adopted: 99.78%
Five: Appointment of financial Auditor of the Company and of its consolidated
Group.
Percentage of votes with which the resolution was adopted: 99.78%
Six: Amendment of articles 11, 12, 13 and 14 of the Articles of Association
relating to the General Meeting of Shareholders (Rights of attendance,
representation and information) in order to adapt the text to the new legal
framework.
Percentage of votes with which the resolution was adopted: 99.05%
Seven: Delegation of powers to formalise, interpret, rectify and execute the
resolutions adopted by the General Meeting of Shareholders
Percentage of votes with which the resolution was adopted: 99.78%
E.9. Indicate, as and when applicable, the number of shares which are
necessary in order to be able to attend the General Meeting of Shareholders
and whether or not there are any statutory limitations in this respect.
Article 12 of the Articles of Association states that all shareholders in
possession of two or more shares, which were registered in the corresponding
Register five days prior to the holding of the General Meeting of Shareholders,
shall have the right to attend such General Meeting.
Votes on proposals regarding points of any nature contained in the agenda of
the General Meeting can be delegated or exercised by the shareholder via
post, e-mail or any other form of remote communication, provided that the
identity of the person exercising their right to vote is duly proven, in
accordance with the terms established in the Regulations of the General
Meeting. Shareholders who vote remotely shall be considered as present at
the Meeting for the purposes of representation.
E.10. Indicate and justify the policies followed by the company in relation
to the delegation of votes in the general meeting.
All shareholders with the right to attend the General Meeting can be
represented at the Meeting by another person even when that person is not
a shareholder. The representation must be conferred in the terms and with
the scope established in Spain’s Company Law, in writing and especially for
each Meeting. This restriction shall not apply when the representative is the
represented party’s spouse, ancestor or descendant, nor when the latter
holds a power of attorney granted in a public document to administer all of
the shareholder’s equity within national territory.
The representation may also be conferred through the remote means of
communication that, duly proving the represented party’s and
representative’s identity, has been established.
In accordance with the Regulations of the General Meeting of Shareholders,
and whenever this is possible as per the Articles of Association,
representation may also be conferred through electronic or remote telematic
means of communication provided they duly guarantee the representation
attributed and the represented party’s identity. Representation granted by
these means shall be accepted when the electronic document by virtue of
which it is conferred includes the recognised electronic signature used by the
represented party or other class of signature with adequate guarantees of
authenticity and identification of the shareholder who is granting his/her
representation and it complies with all other requirements established in the
legal regulations in force at any given moment.
The documents placing on record the delegations or representations for the
General Meeting of Shareholders shall also indicate instructions on the
direction of the vote, it being understood that, should no express instructions
be given, the representative shall vote in favour of the proposed resolutions
formulated by the Board of Directors on the items included on the Agenda.
The Chairman of the General Meeting of Shareholders or, by its delegation,
the Secretary thereof shall settle any doubts which may arise in respect of the
validity and value of the documents from which the right of attendance of
whatsoever shareholder at the General Meeting may derive either
individually or from the grouping together of its shares with other
shareholders, as well as the delegation or representation in favour of another
person, endeavouring to consider as invalid or valueless only those
documents which lack the minimum legal and statutory essential
requirements and always provided that such defects have not been
remedied.
In any case, article 13 of the Articles of Association expressly state that the
represented party’s personal attendance at the Meeting shall have the value
of revocation.
E.11. Indicate whether or not the company has knowledge of the policy of
its institutional investors of participating or otherwise in the company’s
decisions:
YES
NO X
Describe the policy
E.12. Indicate the address of the company’s web page and how to access
the content on corporate governance.
All information of interest to shareholders, including the Corporate
Governance Reports, which have been approved annually, is available at all
times in the web site of NH Hoteles, S.A. at www.nh-hoteles.com, under the
SECTION “información corporativa/información para el accionista”
[corporate information/ information for shareholders].
F. DEGREE OF FOLLOW-UP OF CORPORATE
GOVERNANCE RECOMMENDATIONS
Indicate the company’s degree of compliance with existing corporate
governance recommendations or, when applicable, the non-acceptance of
such recommendations.
In the event of not complying with any of them, explain the rules,
recommendations, practices and criteria applied by the company.
Until such time as the single document referred to in ORDER
ECO/3722/2003 of 26th December is drawn up, the recommendations of
the Olivencia and Aldama Reports should be taken as a reference for
completing this section.
Since the year 2000, NH HOTELES, S.A. has been including in its Annual
Report a chapter devoted to Corporate Governance, with full information on
the Company’s Board of Directors and Management.
As regards the good Corporate Governance recommendations contained in
the Olivencia and Aldama Reports, the Company takes them into
consideration. The degree of compliance with the various recommendations
contained in these Reports is analysed below.
FUNCTIONS OF THE BOARD OF DIRECTORS
With the exception of the matters reserved for the General Meeting of
Shareholders, the Board of Directors is the Company’s main decision-taking
body, with the Company’s representation and administration being entrusted
to it by virtue of the law and the Articles of Association and accepting
responsibility for the general supervisory function, as recommended in the
Olivencia Report.
To be specific, and as already indicated, the Board accepts the undertaking
of exercising the following responsibilities, which cannot be delegated:
a) Approval of the Company’s general strategies;
b) Hiring and, when applicable, firing of the top managers of the Company
and the other entities which make up the consolidated group;
c) Appointment and, when applicable, removal of Administrators in the
various subsidiary companies;
d) Identification of the Company’s main risks and implantation and
monitoring of adequate information and internal control systems;
e) Establishment of policies for information to and communication with
shareholders, the markets and public opinion;
f) Fixing of the treasury stock policy within the framework that may be
established by the General Meeting of Shareholders;
g) Authorization of transactions between the Company and its Directors
and significant shareholders which may present conflicts of interest; and
h) In general, decision on business and financial transactions of particular
importance for the Company.
COMPOSITION AND INDEPENDENCE OF THE BOARD OF
DIRECTORS
Following the recommendations of the Olivencia and Aldama Reports, a
characteristic of the Board of Directors of NH HOTELES, S.A. is that it has an
ample majority of external Directors and, amongst these, a significant
participation of independent Directors, always taking into account the
shareholder structure and the capital represented on the Board of Directors.
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Corporate Governance
Likewise, the Regulations of the Board of Directors contain an article which
establishes that:
BOARD COMMITTEES
- Delegated Committee
“The Board of Directors, in the exercising of its rights of co-option and
proposal of appointments to the General Meeting of Shareholders, shall
endeavour to ensure that in the Body’s composition external or nonexecutive Directors represent an ample majority over executive Directors.
To this end, executive Directors shall be understood to be the Managing
Director and all other Directors who, by virtue of whatsoever other title,
discharge management duties within the Company or any of its subsidiary
companies.
Likewise, the Board of Directors shall endeavour to ensure that the majority
group of external Directors includes, on the one hand, the proposals made
by the holders of significant stable shareholdings in the Company’s capital
(domanial Directors) and, on the other, professionals of recognised prestige
who have no ties with the executive team or with the significant shareholders
(independent Directors).
So as to establish a reasonable balance between both classes of external
Director and in view of the Company’s current shareholder structure, the
Board of Directors shall endeavour to ensure that there is a majority of
independent Directors with respect to domanial Directors, given the
Company’s current shareholder configuration, in which the portion of floating
capital is considerably greater than the sum of the significant stable
shareholdings represented by the domanial Directors.
It shall be understood that the provisions of this article are without prejudice
to the shareholders’ legally recognised right of proportional representation.”
During fiscal 2005 the Company’s Board of Directors was made up of 12
Directors, of whom one Director was executive and eleven Directors were
external (five were domanial Directors and six were independent Directors).
DIMENSION OF THE BOARD OF DIRECTORS
When following the recommendation suggesting that the number of BoardMembers should be that which is reasonable to guarantee its functioning
and the work of each Director, the Regulations of the Board of Directors
indicate that the Board shall propose to the General Meeting of
Shareholders the number of Directors which, in accordance with the
circumstances governing the Company at any given moment, is most
adequate for guaranteeing the body’s due representativeness and efficient
working, without under any circumstances the proposed number exceeding
twenty.
DECONCENTRATION OF POWER
The Board of Director’s Chairman is the Company’s top Executive although,
in accordance with the provisions of the Regulations of the Board of
Directors, his or her actions must at all times comply with the guidelines and
criteria established by the General Meeting of Shareholders, the Board of
Directors and the Committees which report thereto. Similarly, all decisions or
resolutions of special relevance for the Company must first be submitted to
the Board of Directors or the corresponding control Committee for its
approval. Moreover, the opinions and proposals of the various Board
Committees are necessary for the adoption of certain resolutions.
REGULATORY GUARANTEE
The Olivencia Report stresses the need to give greater importance to the
figure of the Secretary of the Board of Directors, reinforcing his/her
independence and stability and highlighting the function of safeguarding the
formal and material legality of the Board of Directors’ activities.
In this connection, the functions of Secretary of the Board of Directors are
being discharged in the Company by a Lawyer of recognized prestige who
enjoys the full backing of the Board of Directors for carrying out his functions
with complete independence, thereby facilitating successful Board meetings.
106
In accordance with the provisions of article 24 of the Board of Directors’
Regulations, the Delegated Committee shall be made up of the Chairman of
the Board and a number of members which shall be no less than three and
no greater than nine Directors, designated by the Board of Directors.
The Delegated Committee has decision-taking powers of a general scope
and, consequently, has delegated to it all the powers which correspond to
the Board of Directors, with the exception of those which by virtue of the law
or the Articles of Association cannot be delegated. In addition, the Board of
Directors may entrust other functions to the Delegated Committee.
The Delegated or Executive Committee of NH Hoteles, S.A. was constituted
on 29th June, 2004 and is currently made up of 6 members.
- Other Committees
NH HOTELES S.A. has the following sub-committees:
Audit and Control Committee
Nomination and Remuneration Committee
Both Committees are made up of a minimum of three and a maximum of five
external Directors and their working rules have been included as separate
headings in the Board of Directors’ Regulations.
INFORMATION FOR THE BOARD OF DIRECTORS
The Directors have available to them specific and punctual information on all
the points to be discussed in the Board Meetings. Depending on its content,
this information is provided as far in advance as possible so that the
Directors can prepare their interventions on the different matters. All other
information which, by virtue of being insider information or for reasons of
keeping it updated right up to the last moment, cannot be made available in
advance is handed out at the beginning of the meeting.
FREQUENCY AND WORKING OF BOARD MEETINGS
In accordance with the content of the Regulations of the Board of Directors,
the Board of Directors ordinarily meets once every two months and, at the
initiative of the Chairman, as many times as the latter may deem necessary
for the Company’s good working; with the Board having held in 2005 six
ordinary meetings and two extraordinary meetings.
In these meetings the Chairman organizes the debates, endeavouring to
obtain and encouraging the participation of all the Directors in the
discussions.
APPOINTMENT OF DIRECTORS
Following the recommendations of the Olivencia committee, the Nomination
and Remuneration Committee’s duties are to report on proposals for the
appointment of Directors, to establish the Directors’ remuneration regime
and to review their remuneration on a regular basis so as to ensure that it is
commensurate to the tasks discharged, working in a strictly transparent way.
Similarly, the proposals for re-electing Directors which the Board of Directors
decides to submit to the General Meeting of Shareholders must follow a
formal preparation process, of which a report issued by the Nomination and
Remuneration Committee, in which the quality of work and dedication to the
office during the mandate of the Directors proposed for re-election must
necessarily form a part.
IRREMOVABILITY OF EXTERNAL DIRECTORS
Directors hold office for a term of three years, being removed from office
once the term for which they were appointed has elapsed or when so
decided by the General Meeting of Shareholders, making use of the powers
legally granted to it.
Other than in exceptional circumstances, the Board does not propose to the
General Meeting the early removal of external Directors, as recommended by
all good governance practices.
RESIGNATION FROM OFFICE
As laid down in the Regulations of the Board of Directors, Directors must
tender their resignation to the Board of Directors and formalise the
corresponding resignation whenever they are involved in any of the cases of
incompatibility or prohibition legally provided for, whenever they receive a
serious warning from the Audit and Control Committee on the grounds of
failing to fulfil any of their obligations as Directors and, in particular, when the
fact of their remaining on the Board can negatively affect the credit or
reputation enjoyed by the Company in the market or in any other way
endanger its interests.
DIRECTORS’ AGE
As proposed in the Olivencia Report, the Regulations of the Board of
Directors clearly establish the age limits for Directors which consist of the
obligation of Directors to tender their resignation and formalise the
corresponding resignation when they reach 70 years of age. Directors who
hold executive offices shall cease to discharge such functions once they
reach 65 years of age although they can continue as Directors if so
established by the Board of Directors itself.
During fiscal 2005 no Directors reached the age limit referred to above.
INFORMATION FOR DIRECTORS
It is the right and obligation of all Directors to obtain as much information as
they may deem necessary or advisable at any given moment for the good
fulfilment of their duties.
To this end, the widest powers are granted to the Director to enable it to
acquire information on any aspect of the Company and to examine the
books, records, documents and all background details of corporate
transactions to the extent that this is necessary or advisable for the due
discharge of office.
This right to information also extends to the various subsidiary companies
which comprise the consolidated Group, and must always be exercised in
accordance with the demands of good faith.
Likewise, and following the Olivencia and Aldama recommendations, so as
not to perturb the ordinary course of the Company’s business, the exercising
of the right to information shall be channelled through the Chairman or the
Secretary of the Board of Directors, who shall receive the Directors’ requests
and directly provide the information or facilitate contacts with the
appropriate interlocutors within the appropriate sphere of the organization.
DIRECTORS’ REMUNERATION
As established in the Regulations of the Board of Directors, it is the
Nomination and Remuneration Committee which proposes, evaluates and
reviews Directors’ remuneration, for which it shall endeavour to ensure that
the remuneration is commensurate to what is paid in the market in
companies of a similar size and activity.
In respect of remuneration consisting of shares, stock options or referenced
to the share’s value, the Company complies with the Aldama
recommendations, as this applies exclusively to the executive Director.
At the same time, the remuneration received by each member of the Board
of Directors is published annually in the Report, broken down into all its
concepts.
Lastly, the annual Report also includes the remuneration and total cost of top
management, with the necessary breakdowns.
DIRECTORS’ DUTY OF LOYALTY
The Board of Directors’ Regulations specifically devote a SECTION to an
extensive description of the main rights and obligations of the Directors,
regulating in detail situations of conflict of interests, the use of corporate
assets, the use of insider information and the exploitation, for personal
benefit, of the business opportunities to which the Director has access as a
consequence of its position.
None of the cases referred to above have occurred during fiscal 2005.
DUTY OF LOYALTY OF SIGNIFICANT SHAREHOLDERS AND TOP
MANAGEMENT
The Regulations of the Board of Directors extend to significant shareholders
the duties of loyalty to the Company, officially allotting to the knowledge and
authorization of the Board of Directors whatsoever transaction between the
Company and any of its significant shareholders, always subject to the prior
report of the Nomination and Remuneration Committee, in which the latter
must analyse and evaluate the transaction from the point of view of equal
treatment of shareholders and the transaction’s market conditions.
Similarly, the Internal Code of Conduct establishes the duties and general
loyalty obligations which the Company’s Directors and top management
undertake to fulfil and which, in broad terms, refer to conflicts of interest,
rules of conduct in connection with insider information, the circulation of
relevant information and transactions involving securities.
GENERAL MEETING OF SHAREHOLDERS
So as to facilitate and make possible the exercise by any shareholder of its
right to information, the proposed resolutions which are put to the Board of
Directors for its approval and the mandatory documents and reports relating
thereto are make available to the shareholders, in the terms and conditions
established in Spain’s Company Law, from the very moment at which the
announcement of the calling of a Board meeting is published.
Similarly, the Company, to the extent that it is possible, responds to the
requests for information which, in connection with the items included on the
Agenda of the General Meeting of Shareholders, are made by any of the
shareholders either during the days immediately prior to the holding of the
Meeting or during the Meeting itself, the Agenda of which expressly includes
shareholders’ interventions, during which any of the shareholders present at
the Meeting who so wish can intervene and whose interventions are always
the object of a reply by the Company’s Chairman.
As regards attendance and voting rights at the General Meeting of
Shareholders, the Company, always within the framework established by the
applicable prevailing legislation and the Articles of Association, does
everything possible to facilitate the exercising of such rights, particularly that
of shareholders’ representation at the General Meeting of Shareholders,
which can be granted in favour of any person, even when that person is not a
shareholder.
In accordance with the requirements of Spain’s mercantile legislation, the
documentation relating to the items on the Agenda is made available to all
shareholders at the Company’s registered office, although shareholders also
have the possibility of requesting that such information be sent to them free
of charge. In addition, this same information is made available to all
shareholders via the Company’s web page.
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Corporate Governance
INFORMATIVE TRANSPARENCY
The Regulations of the Board of Directors devote several of its articles to
regulating the channels through which relations between the Board of
Directors and the Company’s shareholders are established so as to
guarantee the greatest possible transparency in these relations.
The Board of Directors of NH HOTELES, S.A., going beyond the demands of
the prevailing legislation, is responsible for supplying to the markets fast,
accurate and reliable information. In particular, the regular financial
information on the Company, as expressly set down in the Board of
Directors’ Regulations, is drawn up on the basis of the same professional
principles and practices as the Annual Accounts and, prior to being
circulated, is analysed by the Audit and Control Committee, in accordance
with the functions attributed to that Committee.
Moreover, in line with the recommendations of the Aldama Report, the
Company transmits to the market all the information that may be considered
relevant for investors, in a fair and symmetrical manner. Pursuant to the
obligations established by the new Financial Law, the Company will
communicate relevant information to the Comisión Nacional del Mercado de
Valores prior to it being circulated by any other means and as soon as the
fact is known or as soon as the decision has been adopted or the agreement
or contract with third parties has been signed, as applicable. The Company
supervises its communications of relevant information to ensure that they are
at all times true, clear and complete.
INFORMATION ON THE SUBJECT OF GOOD GOVERNANCE
Every year NH HOTELES, S.A. has been publishing a good governance
report, which is incorporated into the Report for each financial year and is
included in the Company’s web page, thereby ensuring that it is general
knowledge for all shareholders and investors.
REGULAR FINANCIAL INFORMATION
All the regular financial information which, in addition to the annual
information, is offered to the markets is drawn up on the basis of the same
principles and practices as the Annual Accounts, being analysed by the Audit
and Control Committee prior to being circulated.
INFORMATION VIA INTERNET
Apart from the foregoing, NH Hoteles, S.A. maintains a web page in which it
informs shareholders and investors in general of the most important
highlights occurring in connection with the Company. The corporate web
page includes significant documents and information on corporate
governance and its purpose is to be the communications channel with
shareholders, providing them with current information on all the aspects that
may be relevant.
Anybody accessing the corporate web page can display, amongst other
information, the daily and historic quotation, financial information, the
Regulations of the General Meeting of Shareholders and the Board of
Directors, the Company’s Articles of Association, the resolutions adopted at
the last General Meeting to be held and all other contents that may be of
interest to shareholders and investors.
INDEPENDENCE OF THE EXTERNAL FIRM OF AUDITORS
Through the Audit and Control Committee the Board of Directors has
established a stable and professional relationship with the Company’s firm of
Auditors, with strict respect for its independence, with a view to complying
with the recommendations of the Olivencia Code in this respect.
Accordingly, the Audit and Control Committee monitors those situations
which may represent a risk for the independence of the Company’s external
Auditors and, in particular, supervises the percentage which the fees paid by
the Company represent over the total of the Auditors’ income.
108
Lastly, in accordance with the prevailing legal requirements, the fees paid to
the Company’s external auditors, including those relating to services other
than audit services, are reported in the Company’s annual report.
ACCOUNTING QUALITY
As far as is possible, the Board of Directors of NH HOTELES, S.A.
endeavours to avoid the Annual Accounts formulated by the Board being
presented to the General Meeting of Shareholders with reservations and
qualifications in the audit report.
G. OTHER INFORMATION OF INTEREST
If it is considered that other relevant principles or aspects relating to
corporate governance practices are applied by the company which have
not been covered in this report, they should be mentioned below with and
explanation of their content.
Any other information, clarification or nuance relating to the foregoing
sections of the report, to the extent that it is relevant and not repetitive,
can be included in this section.
In particular, indicate whether or not the company is subject to legislation
other than Spanish legislation on the subject of corporate governance and,
when applicable, include any information which it has the obligation of
supplying and which differs from that required in this report.
ADDITIONAL NOTES TO CERTAIN SECTIONS OF THE REPORT
INFORME:
SECTION A.3. The information stated in this Section A.3. reflects the number
of shares, owned by the members of the Board, during the fiscal year 2005.
For information purposes only, it is stated that as from 27 February 2006, the
participation of HOTELES PARTICIPADOS, S.L. in the capital of NH Hoteles,
S.A. has increased up to 5.554%.
SECTION A.8: The shares to which the previous point refer are affected by
the Equity-Swap transaction to cover the Stock Option Programs for
employees of the NH Hoteles, S.A., approved by the General Meetings of
6th June 2001 and 28th April 2003.
SECTION B.: This report reflects the Company’s composition during fiscal
2005.
Without prejudice to the foregoing, and for merely informative purposes, the
Company wishes to place on record that at the beginning of 2006 there has
been a change in the composition of the Board of Directors, as a result of Mr.
Fernández Durán resignation, accepted by the Board on 22th February 2006,
and the nomination of Mr. Julio C. Díaz Freijo Cerecedo, as a new member of
the Board of Directores This has resulted in the Board of Directors currently
being made up of 12 members.
SECTION B.1.8.: The individual amount of per diem allowances during fiscal
2005 for attendance at the meetings of the Board of Directors, Delegated
Committee, Nomination and Remuneration Committee and the Audit and
Control Committee is given below. This table is shown each year in the
company’s Annual Report.
Chairman of the Board and of the Delegated Committee:
Mr. Gabriele Burgio:
- Per diem allowance as member of the Board in 2005: €36,060.60
- Per diem allowance for attending the Delegated Committee: €30,000.00
- Total per diem allowances: €66,060.60
Directors:
Mr. Manuel Herrando Prat y de la Riba (Chairman of the Nomination
Committee):
- Per diem allowance as member of the Board in 2005: €36,060.60
- Per diem allowance for attending the Delegated Committee: €30,000.00
- Per diem allowance for attending the Remuneration and Nomination
Committee: €3,698.52
- Total per diem allowances: €69,759.12
Mr. José de Nadal
- Per diem allowance as member of the Board in 2005: €36,060.60
- Per diem allowance for attending the Delegated Committee:€30,000.00
- Per diem allowance for attending the Audit and Control Committee:
€7,397.04
- Total per diem allowances: €73,457.64
Mr. Alfredo Fernández Durán:
- Per diem allowance as member of the Board in 2005: €36,060.60
- Per diem allowance for attending the Delegated Committee: €30,000.00
- Total per diem allowances: €66,060.60
BANCAJA (Mr. Aurelio Izquierdo Gómez):
- Per diem allowance as member of the Board in 2005: €36,060.60
- Per diem allowance for attending the Delegated Committee: €30,000.00
- Total per diem allowances: €66,060.60
Mr. Bernard s´Jacob:
- Per diem allowance as member of the Board in 2005: €36,060.60
- Per diem allowance for attending the Audit and Control Committee:
€9,616.14
- Total per diem allowances: €45,676.74
HOTELES PARTICIPADOS, S.L. (Mr. Ignacio Ezquiaga Domínguez):
- Per diem allowance as member of the Board in 2005: €36,060.60
- Per diem allowance for attending the Audit and Control Committee:
€4,760.48
- Total per diem allowances: €40,821.08
Mr. Ramón Blanco Balín (Chairman of Audit and Control Committee):
- Per diem allowance as member of the Board in 2005: €36,060.60
- Per diem allowance for attending the Audit and Control Committee:
€5,547.78
- Per diem allowance for attending the Remuneration and Nomination
Committee: €3,698.52
- Total per diem allowances: €45,306.90
Mr. Matías Amat Roca:
- Total per diem allowances: €0
Mr. Rodrigo Echenique Gordillo:
- Per diem allowance as member of the Board in 2005: €5,813.05
- Total per diem allowances: €5,813.05
Mr. Alfonso Merry del Val Gracie:
- Per diem allowance as member of the Board in 2005: €36,060.60
- Total per diem allowances: €36,060.60
Mr. Luis Fernando Romero García:
- Per diem allowance as member of the Board in 2005: €36,060.60
- Total per diem allowances: €36,060.60
Mr. Miguel Rodríguez Domínguez:
- Per diem allowance as member of the Board in 2005: €36,060.60
- Total per diem allowances: €36,060.60
TOTAL:
- Per diem allowance as member of the Board in 2005: €402,479.65
- Per diem allowance for attending the Delegated Committee: €150,000.00
- Per diem allowance for attending the Audit and Control Committee:
27,321.44
- Per diem allowance for attending the Remuneration and Nomination
Committee: €7,397.04
- TOTAL PER DIEM ALLOWANCES 2005: €587.198,13
SECTION B.1.9.: The total remuneration received by Top Management in
fiscal 2005 is broken down into the different concepts, as follows:
- Fixed remuneration: €1,512,973.27
- Variable remuneration: €518,805.92
- Remuneration in kind: €139,230.12
- Total: €2,171,009.31
The persons taken into account for the calculation of these amounts are
those indicated in SECTION B.1.9.
B.1.30.: The Company would like to place on record that virtually all of the
fees received by the firm of Auditors for activities other than audit work
correspond to the introduction of the International Accounting Standards.
This annual corporate governance report has been approved by the
Company’s Board of Directors in its meeting held on (date) 30-03-2006
Indicate those Directors who voted against or abstained from voting in
connection with the approval of this Report.
NONE
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Corporate Governance
ANNUAL REPORT OF THE AUDIT COMMITTEE
2) Members of the Audit Committee
1) Duties, competence and working of the Audit Committee
In July 2005, Mr. Ramón Blanco Balín, replaced Mr. José de Nadal Capará
who tendered his resignation for personal reasons. Consequently, the
Auditing and Control Committee has the following Members:
The main duties of Auditing and Control Committee is to support the Board
of Directors in its surveillance and control duties. The most important of
these duties is to ensure that generally accepted accounting principles are
properly applied and to check that the internal control systems used when
drawing up the individual and Consolidated Accounts are adequate and
complete.
As a result of the enactment of the new rules on corporate transparency and
governance, the rules governing the Committee are now to be included in
the Bylaws. Thus, Article 25 of the Bylaws, which was included in the Bylaws
as a result of a decision taken by the General Meeting of Shareholders held
on 28 April 2003, is now worded as follows:
1. “Inside the Board of Directors, an Auditing and Control Committee shall
be set up - in accordance with the requirements laid down by Section 141
of the Companies Act - made up of at least three and at most five
Directors appointed by the Board of Directors. The majority of the
members of this Committee must be non-executive Directors.
2. The Chairman of the Auditing and Control Committee shall be appointed
by the Committee itself from among its non-executive director members,
and must be replaced every four years. He may be reelected once again
after a year has elapsed since the end of his last term.
3. The Auditing and Control Committee shall have at least the following
competencies:
a) to report, through its Chairman, to the General Meeting of
Shareholders on the issues that are put to it by the shareholders
regarding matters that fall within the Committee's remit;
b) to propose to the Board of Directors, for submission to the General
Meeting of Shareholders, the appointment of the Auditor referred to in
Section 204 of the Companies Act, as well as, whenever appropriate,
the terms under which the Auditor is to be contracted, the scope of his
professional mandate and the revocation or renewal of his
appointment;
c) to supervise the internal auditing services;
d) to be informed about the financial information process and the internal
control systems; and
e) to handle relations with the Auditor for receiving information regarding
any issues that may put the Auditor's independence at risk, and any
other issues relating to the process of performing the audit of the
accounts, as well as to receive information and keep up the
communications with the Auditor provided for under audit legislation
and in technical auditing rules.
4. The Committee shall meet at least once a quarter and whenever it is
deemed appropriate, after been called by the Chairman, on his own
decision or in response to a request made by two of the members of the
Committee or of the Board of Directors.
5. The Audit and Control Committee shall have a quorum whenever at least
half of its members are either present or represented; and it shall take its
decisions by a majority vote of those present or represented. The
Chairman shall have a casting vote.
6. The Board of Directors may develop and complete the above rules in its
Regulations, in accordance with the terms of the Bylaws and the Act.”
Chairman:
Member:
Member:
Ramón Blanco Balín
Bernard s’Jacob
Ignacio Ezquiaga Domínguez
- Independent
- Independent
- Shareholder Director
3) Relations with the Outside Auditors
The Parent company of the Group NH Hoteles has been audited since 1986.
The main auditors, since that year, are listed below:
Year
Auditor
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Peat Marwick
Peat Marwick
Peat Marwick
Peat Marwick
Peat Marwick
Peat Marwick
Peat Marwick
Arhur Andersen
Arthur Andersen
Arthur Andersen
Arthur Andersen
Arthur Andersen
Arthur Andersen
Arthur Andersen
Andersen
Andersen
Deloitte & Touche
Deloitte & Touche
Deloitte & Touche
Deloitte & Touche
The Consolidated Annual Accounts for 2005 have been audited by two
reputed, independent firms:
• Deloitte & Touche is the main auditor. As such, it issues the audit opinion
for the Consolidated Annual Accounts. It has checked the accounts of the
Companies in the Spain/Portugal, Mexico, MERCOSUR and Sotogrande
Business Units, which account for 60% of the assets, 51% of revenues and
76% of consolidated net profit.
• PriceWaterhouse Coopers has audited the Netherlands/Belgium, Germany
and Austria/Switzerland Business Units, which account for 40% of assets,
49% of total revenues and 24% of consolidated net profit.
Deloitte & Touche (D&T) was appointed for a one-year term, as the Group's
main auditor at the General Meeting of Shareholders of NH Hoteles held on
28 April 2005 and as auditor of the different Business Units listed above at
their respective General Meetings of Shareholders held during the first half
of 2005. This firms has been the Group's main auditor since 2002, although
the partner in charge of the audit changed in 2003 and 2005. The fees
received by the firm for its auditing services for 2005 totalled 0.59 millions
euros (0.55 millions in 2004).
Said firm has also been paid fees for professional services for brinding the
NH Hoteles Group into line with the International Financial Reporting
Standards (IFRS) totaling 0.15 millions euros (0.33 millions in 2004)
PriceWaterhouse Coopers (PWC) was appointed, also for a one-year term, as
auditor of the Business Unites listed above at the respective General
Meetings of Shareholders held during the first half of 2005. PWC has been
the auditor of the Dutch, Belgian and Swiss Companies since 1998 and of the
German and Austrian Companies since 2005. Fees for audit services for 2005
totalled 0.65 millions euros (0.58 millions in 2004).
110
In the same way as the main auditor and under the same heading regarding
the implementation of IFRS, Price Waterhouse Coopers has been paid 0.30
million euros in fees (0.37 million euros in 2004).
j) Analysis of the reports prepared by the Auditor and the Independent
Expert on the valuations used to determine the ratios of exchange in the
capital increases proposed by NH Hoteles, S.A. for exchanging shares in
Sotogrande, S.A. and Latinoamericana de Gestión Hotelera, S.A. held by
minority shareholders.
4) Content and results of the work of the Audit Committee
The Audit Committee met 6 times during 2005 and dealt with the following
matters:
a) Analysing and assessing, together with the outside auditors, of the
Financial Statements and the Notes to the Financial Statements for 2004
and 2005, checking that their audit opinion has been issued under
conditions of complete independence.
b) Reviewing the regular public financial information prior to its being
analysed and approved by the Board of Directors in order that it be
reliable, transparent and prepared applying consistent accounting
principles and criteria.
c) Monitoring the Internal Audit Plan for 2005, examining its conclusions and
the implementation, whenever applicable, of any corrective measures
needed.
d) Updating the different types of risk to which the activities of NH Hoteles
are exposed. The work for cataloguing these risks and on designing
different procedures for reducing their scope or minimising their effects
had been completed. In broad terms, the risks have been divided into five
categories:
k) Detailed study of the different operations carried out to refinance rents for
hotels in Germany an Austria, as well as their effects on the Financial
Statements of the NH Group.
5) Priorities for 2006
The Committee's priorities for this year, apart from those relating to drawing
up and issuing public information, focus on:
1. Monitoring the effects of implementation of the IAS, and their transfer to
the market
2. Updating the risk map drawn up by Group Management
3. Follow-up of the Internal Audit Plan
To conclude this report, it should be pointed out that in order to carry out all
the work mentioned above, this Committee has had access, whenever it has
deemed this useful, to any outside professionals (auditors, appraisers or
consultants) or members of the economic and financial management, internal
auditors or management control it has deemed necessary.
• Strategic
• Operational
• Financial
• Environmental
• Regulatory
e) Monitoring the project for introducing a new common information system
for all the business units which has enabled:
• The customer data base to be integrated
• The management of the human resources of the Group to be unified
• Single budgeting and regular management information models to be
introduced
• Set up common front-office and back-office programs for all the hotels
and business units
• Common buying platforms to be set up
• The Group's financial management to be centralised
f) Monitoring and completing the work that has continued, in collaboration
with the Company's external auditors, aimed at determining the final
impact that implementing the new International Accounting Standards
(IAS) has had on the Financial Statements of NH Hoteles, S.A. and its
Consolidated Group.
The main effect of the change in the accounting rules will relate to the
stating of assets and how they are therefore reflected in the Own
Resources of the Group and the increase in the level of financial
information provided to the markets.
g) Assessing, at regular intervals, compliance with the savings and efficiency
improvement plan designed by management and the effects on the
results of NH Hoteles.
h) Examining the Annual Report on Corporate Governance before it is sent
to the Board of Directors for study and approval, emphasising in particular
the analysis of the record of situations of Directors and Top Managers
i) Detailed study of the procedures gone through and the internal controls
applied:
• In the revenue cycle of the hotel business, placing particular stress on
completeness and accuracy controls
• In the contracting of suppliers at different stages of construction of
property products to be sold by Sotogrande, S.A. and
• In the control used in all the payroll systems used by the Group
111
Design: Grupo Sörensen
Translation: Mc Lehm
Printing: NOVATESA
D. L.: B-23670-2006
Santa Engracia, 120
28003 Madrid - Spain
tel.: +34 91 451 97 18
fax: +34 91 451 97 69
www.nh-hotels.com