NH INFORME ANUAL 2006 1-24 ing.QXD

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Página 1
2006
Annual Report
www.nh-hotels.com
Santa Engracia, 120
28003 • Madrid • Spain
T: +34 91 451 97 18
F: +34 91 451 97 69
Inks are based exclusively on vegetable oils with a minimum content in volatile organic compounds (VOCs).
Varnish is mainly based on natural and renewable raw
materials.
Annual Report 06
Due to its commitment to Environmental Conservation,
NH Hoteles has printed this Report on a paper manufactured with 50% pure cellulose (ECF), 40% pre-consumer selected recycled fibre and 10% post-consumer
uncoloured recycled fibre.
United Kingdom
Luxembourg
France
United States
Portugal
The Netherlands
Belgium
Germany
Switzerland
Hungary
Austria
Spain
Romania
Italy
Mexico
Cuba
Brazil
Chile
Uruguay
South Africa
Argentina
335 hotels in 21 countries in Europe, America and Africa
Hotel NH Constanza
Barcelona - Spain
Contents
1
Letter from the President
7
2
Hotel portfolio
11
3
Accelerating growth
15
4
2006 Results
25
5
Corporate operations
31
6
Strategic Plan
35
7
Italy: a tailor made market for NH Hoteles
(Jolly Hotels and Framon)
41
8
Resorts
49
9
New image
53
10
Concepts
57
Nhow
58
Nhube
60
Fast Good
62
Casino de Madrid
64
Elysium Spa
65
New products and services
67
Premium rooms
68
New NH breakfasts
69
Commercial Agreements
70
12
NH World
73
13
Brand awardness
77
14
Sotogrande
81
15
Board of Directors and Management Committee
89
16
Corporate Governance
93
11
1
NH Berlin City West
Berlin - Germany
1
Letter from the President
NH Annual Report 2006
7
Furthermore, NH Hoteles came to an agreement to acquire
Framon, the fifth largest hotel company in Italy by the number of
establishments, with a significant presence in Sicily. These two
agreements place NH Hoteles as the main hotel company in the
Italian market.
In accordance with the Italian acquisitions, we have initiated a
three-year strategic plan to double the results of the company and
reach 71,000 rooms. With the initiation of this strategic plan, we will
reinforce the leadership of the group in the average segment in
Europe, specifically the organic growth investments in the main
markets of the continent where we already have a significant
presence.
Gabriele Burgio
Chairman & CEO of NH Hoteles
Dear shareholders,
It is my pleasure to address all of you yet another year to give an
account of the main events that have occurred during 2006 and go
into great detail on the future strategy of the company.
In 2006 we took a further step in the development of growth mainly
in Európe, where NH Hoteles already has more than a significant
presence. Between last year and April 30, 2007, the number of
rooms of the chain has grown by 25%. 81 hotels and 12,242 rooms
have been added during that time, thanks in part to two important
operations performed in Italy.
During the past year we came to an agreement whereby NH
Hoteles would take control of the first Italian hotel chain, Jolly
Hotels, which has a wide presence in the main cities of the country.
The integration of Jolly Hotels into the Italian subsidiary of NH
Hoteles was noteworthy due to the geographical complementary
nature, the product and the existing strategy between both
companies. Likewise, Jolly Hotels provides NH Hoteles with the
entry into two new markets such as the United States and France,
through the hotels that the company has in New York and Paris.
8
The Strategic Plan, which involves an investment of € 1,300 M, will
be financed with the resources generated by the company's
activities, as well as by the Capital Increase at a value of € 250 M
that the company completed, with the unanimous support of its
shareholders, in March 2007.
After the latest additions to the chain, we are proud to say that as
of April 2007 the company is operating 335 hotels and 48,825
rooms in 21 countries in Europe, the Americas and Africa. In
addition, it has 35 portfolio projects that will mean more than 6,000
rooms, mainly in countries like Italy, The Netherlands, Spain and
Mexico.
In line with the European expansion carried out during the last 6
years by the chain to situate itself among the main urban hotel
chains, the visibility of the firm has not stopped growing until it has
become an indisputable reference in the hotel industry.
Regarding the 2006 results, it has been a very satisfactory year for
the group’s hotel activities, which recorded an important
improvement with 30.6% net profit increase in comparison to the
previous year. This result was obtained thanks to a 13.4% increase
in the hotel's income, up to € 1,021.57 M. The improvement of
occupancy and an increase in the ADR (average price) of 8.7%
contributed to the sales’ growth. The RevPar (income per available
room) rose by 9.7%. The EBITDA (operating profit) from the hotel
activities rose to € 161.80 M and showed an increase of 27.2% in
comparison to 2005. In 2006, not only has the company’s growth
drive been obvious, but also its special attention to containing
costs, which is reflected in the group's good results.
The company’s sales, including the division of the Sotogrande real
estate, increased to € 1,090 M, and the net profit of the
consolidated group remained stable, reaching 62.45 M. The
smaller contribution of the income from Sotogrande to the net
profits of NH Hoteles is explained by the sale of large plot of land
in 2005.
One of the most representative values of the group is the more
than 19,000 professionals who currently work at NH Hoteles. In the
previous period, the company continued making efforts in training
its employees. More than 16,000 professionals from the group
participated in 233 training programs that NH Hoteles offered in
2006. One year later, we have measured the satisfaction index of
the employees, since we know the repercussion this has on the
quality of the service we provide. The level of satisfaction increased
significantly over 2005, a characteristic of the commitment that the
company has in this regard.
A Corporate Responsibility Department was created last period,
which concentrates the Company’s contribution into sustainable
development, for facing social and environmental challenges
posed by the global economy. This year, we invite you to familiarise
yourself with the first Report on Corporate Responsibility of the
company, which you can find in the leaflet contained in this report.
We changed the company’s image in 2006 to reflect the current
reality of the group. NH Hoteles is becoming a company for
business and pleasure, and that is why we have defined a new
colour for a new market.
As far as pleasure, at NH Hoteles we have continued with the
expansion in the resorts segment, where during 2006 we added
vacation complexes in countries such as Cuba and Italy and
currently we have more than 2,000 rooms we are planing to reach
across the Dominican Republic, Mexico and Italy.
At NH Hoteles, we are convinced of the importance of continuing
to innovate, and with this task in mind, we opened in 2006 the first
hotel of a new and exclusive category of hotels called Nhow, based
on the new philosophy of living contemporaneously and creatively.
Other concepts already consolidated are the developments with
the collaboration of the consultant from the Ferran Adria Company.
Nhube has more than 20 open spaces distributed over Spain,
Germany, Austria, Holland and Mexico.
In addition, Fast Good, quality fast food offer, has already seven
opened restaurants and several projects in Spain. The positioning
of Fast Good as a quality brand has been supported over the past
year with the significant agreement that NH Hoteles signed with a
top spanish airline to serve its products on flights.
Another innovation has been the development of the Website,
which has incorporated novel functionalities, so that users may find
a more practical and useful environment when making their
reservations.
One of the successes of the past period is our NH World loyalty
program, which exceeds 450,000 members since its beginnings two
years ago. It is worth pointing out that more than half of its
members have remained active over the last twelve months.
Finally, with respect to Sotogrande I would like to highlight the
Take-Over Bid that the Group made for the shares in the real estate
company which it did not control, and which ended with an
increase in the shareholding in NH Hoteles of 98%. The operation
was carried out in order to proceed with a restructuring of assets to
concentrate the Group’s real estate-tourism activities in
Sotogrande.
In 2006 we built a solid base to continue growing in the coming
years. All of this would not have been possible without the trust of
our partners, shareholders, customers and especially our
employees who with their daily dedication have led to NH Hoteles
being what it is today, a great multinational company. A final thanks
to all of those who have contributed to achieving all these goals.
In 2007 we want to continue to have all of your support to continue
consolidating this profitable project - NH Hoteles.
Thank you very much
Gabriele Burgio
Chairman & CEO of NH Hoteles
9
Façade of NH Fuenlabrada
Madrid - Spain
2
2
Hotel portfolio
11
BREAKDOWN OF HOTEL PORTFOLIO
EUROPE
TOTAL
LEASED
MANAGED
FRANCHISE
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Hotels
125
14,006
82
9,478
17
2,504
26
2,024
0
0
58
10,075
58
10,075
0
0
0
0
0
0
Spain
Germany
Rooms
Italy
57
7,997
28
4,373
16
2,432
6
525
7
667
The Netherlands
32
5,964
12
1,669
19
4,215
1
80
0
0
Belgium
9
1,309
2
434
7
875
0
0
0
0
Austria
7
1,225
7
1,225
0
0
0
0
0
0
Switzerland
4
562
2
330
2
232
0
0
0
0
United Kingdom
3
596
1
121
1
275
1
200
0
0
Portugal
3
313
3
313
0
0
0
0
0
0
Romania
2
161
1
83
0
0
1
78
0
0
France
1
162
0
0
1
162
0
0
0
0
Hungary
1
160
1
160
0
0
0
0
0
0
Luxembourg
1
148
1
148
0
0
0
0
0
0
303
42,678
198
28,409
63
10,695
35
2,907
7
667
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
16
3,177
4
462
6
1,261
6
1,454
Argentina
8
1128
0
0
8
1,128
0
0
Cuba
2
967
0
0
0
0
2
967
TOTAL EUROPE
LATIN AMERICA
TOTAL
Mexico
LEASED
OWNED
MANAGED
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
29
5,665
4
462
17
2,782
8
2,421
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
United States
1
242
0
0
1
242
0
0
TOTAL UNITED STATES
1
242
0
0
1
242
0
0
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
South Africa
2
240
1
198
1
42
0
0
TOTAL OF OTHER COUNTRIES
2
240
1
198
1
42
0
0
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
Hotels
Rooms
335
48,825
203
29,069
82
13,761
43
5,328
7
667
TOTAL LATIN AMERICA
UNITED STATES
TOTAL
AFRICA
LEASED
TOTAL NH HOTELES
Note: NH Hoteles Portfolio, April 2007
OWNED
TOTAL
TOTAL
12
OWNED
LEASED
LEASED
MANAGED
OWNED
OWNED
MANAGED
MANAGED
FRANCHISE
Room of the NH Obradoiro
Santiago de Compostela - Spain
BREAKDOWN BY ROOMS (APRIL 2007)
BREAKDOWN OF ROOMS BY COUNTRIES (APRIL 2007)
11%
2%
51%
2%
6%
16%
7%
3%
3%
28%
1%
9%
• 51% Leased
• 28% Owned
• 11% Managed
Lease with a call
• 9%
option
• 1% Franchise
21%
28%
12%
• 28% Spain
• 21% Germany
• 16% Italy
• 12% The Netherlands
• 7% Mexico
• 3% Austria
• 3% Belgium
• 2% Argentina
• 2% Cuba
• 6% Other
13
NH Santa Fe
Mexico
3
3
Accelerating growth
15
Room of the NH München Deutscher Kaiser
Munich - Germany
OPENINGS
OPEN HOTELS DURING 2006
Germany
Spain
Italy
Cuba
Luxembourg
Portugal
United Kingdom
Romania
HOTELS
4
3
2
1
1
1
1
1
Argentina The Netherlands
0
1
Total
15
ROOMS
505
285
374
690
148
148
121
83
67
65
2,486
OPEN HOTELS (JANUARY-APRIL 2007)
Italy
Germany
Spain
The Netherlands
United Kingdom
Austria
United States
Belgium
France
Mexico
HOTELS
54
2
2
2
1
1
1
1
1
1
66
ROOMS
7,247
472
440
338
275
252
242
193
162
135
9,756
• NH Hoteles has opened 15 hotels and 2,486 rooms in 2006.
Total
OPENINGS AND ADDITIONS EVOLUTION
• In 2007 (up to April) the company has opened and added 66
hotels and 9,756 rooms.
9,756
10,000
NH HOTELES DRIVE FOR GROWTH IN ROOMS
Number of rooms
8,000
75%
25%
6,000
4,000
• Openings
1978 to 2005
2,329
2,486
2005
2006
2,000
• Openings
1,008
2006 to 2007*
0
* Until April 2007
2004
2007
(until April)
16
OPENED HOTELS IN 2006
LOCATION
ROOMS
CONTRACT
CATEGORY
BERLIN
140
LEASED
NH
NH BERLIN CITY WEST
BERLIN
136
LEASED
NH
NH HAMBURG NORGE
HAMBURG
130
LEASED
NH
BERLIN
99
LEASED
NH
GERMANY
NH BERLIN KURFÜRSTENDAMM
NH BERLIN-FRANKFURTER ALLEE
SPAIN
NH BALAGO
VALLADOLID
120
LEASED
NH
PAMPLONA (BERRIOPLANO)
60
MANAGED
NH
SALAMANCA
37
LEASED
COLLECTION
NHOW MILANO
MILAN
249
LEASED
NHOW
NH SANTO STEFANO
TURIN
125
MANAGED
COLLECTION
CAYO COCO
690
MANAGED
ALL INCLUDED
LUXEMBOURG
148
LEASED
NH
LISBON
148
LEASED
NH
LONDON
121
LEASED
NH
TIMISOARA
83
LEASED
NH
GRONINGA
65
LEASED
NH
LOCATION
ROOMS
CONTRACT
CATEGORY
BARCELONA
68
LEASED
NH
BUENOS AIRES
67
OWNED
NH
NH AGUSTINOS
NH PUERTA DE LA CATEDRAL
ITALY
CUBA
NH KRYSTAL LAGUNA VILLAS & RESORTS
LUXEMBOURG
NH LUXEMBOURG
PORTUGAL
NH PARQUE LISBOA
UNITED KINGDOM
NH KENSINGTON
ROMANIA
NH TIMISOARA
THE NETHERLANDS
NH HOTEL DE VILLE
EXTENSIONS IN 2006
SPAIN
NH NUMANCIA
ARGENTINA
NH CITY TOWER
TOTAL 2006
TOTAL OPEN HOTELS IN 2006
TOTAL EXTENSIONS IN 2006
TOTAL OPEN ROOMS IN 2006
TOTAL HOTELS
ROOMS
15
2,351
135
2,486
17
NH Den Haag
The Hague - The Netherlands
NH Hoteles is the European hotel company that grew most in 2006
RANKING OF EUROPEAN HOTEL GROUPS (December 31, 2006)
Rank 2006
Rank 2005
Groups
Hotels 2006
Hotels 2005
Rooms 2006
Rooms 2005
Change 06/05
1
1
ACCOR
2,205
2,197
241,046
239,279
0.7%
2
2
BEST WESTERN
1,215
1,195
80,318
78,140
2.8%
3
3
ICH GROUP
505
498
77,721
76,794
1.2%
4
5
HILTON CORP.
257
243
56,675
53,600
5.7%
5
4
LOUVRE HOTELS
823
851
56,339
59,475
-5.3%
6
7
TUI
190
170
48,843
41,508
17.7%
7
6
SOL MELIA
198
208
41,771
45,652
-8.5%
8
12
NH HOTELES *
270
217
38,466
30,553
25.9%
9
9
CARLSON / REZIDOR SAS
195
184
37,271
35,352
5.4%
10
10
STARWOOD HOTELS & RES.
TOTAL 10 Companies
Source: MKG Consulting
(* Without including the acquisitions of Jolly Hotels and Framon)
18
153
144
35,064
33,819
3.7%
6,011
5,907
713,514
694,172
2.8%
OPEN HOTELS AND ADDITIONS IN 2007
LOCATION
ROOMS
CONTRACT
CATEGORY
ROME
MILAN
MILAN
MILAN
ROME
PALERMO
NAPLES
BOLOGNA
ROME
ROME
TURIN
ISCHIA
TRIESTE
TURIN
BOLOGNA
FLORENCE
GENOVA
MILAN
GENOVA
MILAN
CATANIA
SIENA
CAGLIARI
CATANIA
AGRIGENTO
VICENZA
FLORENCE
LECCO
LA SPEZIA
CASERTA
SALERNO
MILAN
MESSINA
VALDERICE
AGRIGENTO
PISA
SIRACUSA
MILÁN
MESSINA
CALTAGIRONE
ANCONA
BERGAMO
BRESCIA
RAPALLO
RAVENNA
TAORMINA
TAORMINA
TRAPANI
PARMA
BRUCOLI
CATANIA
MESSINA
MARSALA
VENICE
344
284
256
255
253
237
231
209
201
201
199
194
172
169
156
152
143
143
140
134
130
129
129
123
120
115
115
112
110
107
104
103
102
102
102
100
100
100
96
91
88
88
87
86
84
83
78
70
62
59
56
51
48
44
LEASED
LEASED
LEASED
OWNED
LEASED
OWNED
LEASED
LEASED
OWNED
LEASED
OWNED
OWNED
OWNED
OWNED
LEASED
OWNED
OWNED
LEASED
LEASED
LEASED
OWNED
LEASED
FRANCHISE
LEASED
FRANCHISE
LEASED
LEASED
LEASED
OWNED
OWNED
FRANCHISE
LEASED
MANAGED
LEASED
LEASED
OWNED
FRANCHISE
LEASED
FRANCHISE
OWNED
OWNED
LEASED
LEASED
MANAGED
OWNED
MANAGED
MANAGED
LEASED
FRANCHISE
LEASED
FRANCHISE
MANAGED
LEASED
LEASED
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
FRAMON
JOLLY
JOLLY
FRAMON
JOLLY
JOLLY
JOLLY
JOLLY
JOLLY
FRAMON
FRAMON
FRAMON
JOLLY
JOLLY
FRAMON
JOLLY
FRAMON
JOLLY
JOLLY
JOLLY
FRAMON
JOLLY
FRAMON
FRAMON
FRAMON
JOLLY
FRAMON
JOLLY
FRAMON
FRAMON
FRAMON
ITALY
JOLLY HOTEL MIDAS
JOLLY HOTEL TOURING
JOLLY MILANO PRESIDENT
JOLLY HOTEL MILANO FIORI
JOLLY HOTEL LEONARDO DE VINCI
JOLLY HOTEL PALERMO
JOLLY HOTEL NAPOLI
JOLLY HOTEL VILLANOVA
JOLLY HOTEL VITTORIO VENETO
JOLLY HOTEL VILLA CARPEGNA
JOLLY HOTEL AMBASCIATORI
JOLLY HOTEL DELLE TERME
JOLLY TRIESTE
JOLLY HOTEL LIGURE
JOLLY HOTEL DE LA GARE
JOLLY HOTEL FIRENZE
JOLLY HOTEL PLAZA
JOLLY HOTEL MILANO 2
JOLLY HOTEL MARINA
JOLLY HOTEL MILANO RESIDENCE
JOLLY HOTEL BELLINI
JOLLY HOTEL SIENE
JOLLY HOTEL CAGLIARI
HOTEL PARCO DEGLI ARAGONESI
JOLLY HOTEL DELLA VALLE
JOLLY HOTEL TIEPOLO
ANGLO AMERICAN HOTEL
JOLLY HOTEL PONTEVECCHIO
JOLLY LA SPEZIA
JOLLY HOTEL CASERTA
JOLLY HOTEL SALERNO
JOLLY HOTEL MACHIAVELLI
ROYAL PALACE HOTEL
TONNARA DI BONAGIA
DIOSCURI BAY PALACE
JOLLY HOTEL CAVALIERI
JOLLY HOTEL SIRACUSA
GRAND HOTEL VERDI
JOLLY HOTEL MESSINA
GRAND HOTEL VILLA SAN MAURO
JOLLY HOTEL ANCONA
JOLLY HOTEL BERGAMO
JOLLY HOTEL IGEA
GRAND HOTEL BRISTOL
JOLLY HOTEL RAVENNA
GRAND HOTEL TIMEO
HOTEL VILLA SANT'ANDREA
CRYSTAL HOTEL
JOLLY HOTEL STENDHAL
HOTEL VENUS SEA GARDEN
JOLLY HOTEL OGNINA
GRAND HOTEL LIBERTY
RESORT BAGLIO ONETO
HOTEL MANIN
19
OPEN HOTELS AND ADDITIONS IN 2007
LOCATION
ROOMS
CONTRACT
CATEGORY
BERLIN
255
LEASED
JOLLY
COLONIA
217
LEASED
JOLLY
GERMANY
JOLLY HOTEL VIVALDI
JOLLY HOTEL MEDIAPARK
SPAIN
NH CONSTANZA
NH FUENLABRADA
BARCELONA
308
LEASED
CONVENTION
FUENLABRADA
132
LEASED
NH
AMSTERDAM
218
OWNED
JOLLY
WAALWIJK
120
LEASED
NH
LONDON
275
OWNED
JOLLY
VIENNA
252
LEASED
NH
NEW YORK
242
OWNED
JOLLY
BRUSSELS
193
LEASED
JOLLY
PARIS
162
OWNED
JOLLY
MEXICO DF
135
OWNED
NH
THE NETHERLANDS
JOLLY HOTEL CARLTON
NH WAALWIJK
UNITED KINGDOM
JOLLY HOTEL ST. ERMIN`S
AUSTRIA
NH DANUBE CITY
UNITED STATES
JOLLY HOTEL MADISON TOWERS
BELGIUM
JOLLY HOTEL DU GRAND SABLON
FRANCE
JOLLY HOTEL LOTTI
MEXICO
NH SANTA FE
TOTAL OPEN HOTELS AND ADDITIONS IN 2007 (Up to April)
HOTELS
ROOMS
66
9.756
BREAKDOWN OF OPENINGS BY COUNTRIES IN 2006 AND UP TO APRIL 2007
6%
2% 2% 2% 6%
5%
3%
8%
3%
63%
20
• 63% Italy
• 8% Germany
• 6% Cuba
• 6% Spain
• 3% The Netherlands
• 3% United Kingdom
• 2% Austria
• 2% Belgium
• 2% United States
• 5% Other
Pool of the NH Parque Central
Havana - Cuba
HOTEL SIGNED
• Organic Growth: in 2006, 3,911 rooms were signed, 40% more
than the previous year.
• The acquisition of Jolly Hotels and Framon involve 9,682 more.
• NH Hoteles signed 5,138 rooms at the end of 2006.
• Excluding the acquisition of the Jolly Hotels and Framon chains,
in 2006 NH Hoteles signed rooms equivalent to 10% of all
operating rooms.
• In April 2007, the Group has 32 hotels and 6,139 rooms signed.
HOTELS
ROOMS
TOTAL HOTELS SIGNED
32
5,664
TOTAL EXTENSIONS
3
475
ROOMS
TOTAL SIGNED AND EXTENSIONS (UP TO APRIL 2007)
6,139
SIGNED ROOMS AND EXTENSIONS TO APRIL 2007
5%
4%
12%
14%
25%
2%
4%
5%
2%
5%
22%
• 25% Italy
• 22% Mexico
• 14% Dominican Republic
• 12% Spain
• 5% Austria
• 5% Czech Republic
• 5% Senegal
• 4% Argentina
• 4% France
• 2% Cuba
• 2% Poland
21
SIGNED HOTELS UP TO APRIL 2007
LOCATION
ROOMS
CONTRACT
MILAN
250
LEASED
NH DONNAFUGATA GOLF RESORT & SPA
RAGUSA (SICILY)
217
OWNED
NH FRAMON GRAND HOTEL MANTEGNA
PADUA
190
LEASED
NH FRAMON GIUSTINIANO
ROME
161
LEASED
NH SEXTO SAN GIOVANNI
MILAN
155
LEASED
LEASED
ITALY
JOLLY MILANO FIERA 3*
JOLLY MILANO FIERA 4*
MILAN
148
BERGAMO
118
LEASED
NH SAVONA
SAVONA
92
OWNED
NH VITTORIO EMANUELE
PALERMO
88
MANAGED
NH FRAMON HOTEL QUATTRO CANTI
PALERMO
71
OWNED
AMALFI
53
LEASED
RIVIERA MAYA
550
MANAGED
MANAGED
NH ORIO AL SERIO
NH GRAND HOTEL CONVENTO DI AMALFI
MEXICO
NH RIVIERA MAYA
T2 MEXICO AIRPORT PROJECT
MEXICO
305
NH MONTERREY
MONTERREY
220
LEASED
NH QUERÉTARO
QUERETARO
140
OWNED
GUADALAJARA
130
MANAGED
NH GUADALAJARA
SPAIN
NH VIRGEN DEL PUERTO
MADRID
224
LEASED
BARCELONA
138
LEASED
NH PUERTO DE SAGUNTO
VALENCIA
100
LEASED
NH MÁLAGA
MALAGA
93
OWNED
NH PALACIO DE TEPA
MADRID
92
LEASED
TENERIFE
65
OWNED
C/ ÁLAVA PROJECT
NH CIUDAD DE TENERIFE
DOMINICAN REPUBLIC
NH PLAYA BÁVARO
BAVARO
660
MANAGED
CAP CANA
200
MANAGED
NH PRAGUE
PRAGUE
201
LEASED
NH RADLICKA
PRAGUE
135
LEASED
CAP CANA PROJECT
CZECH REPUBLIC
SENEGAL
NH BAOBAB CAP MANUEL
DAKAR
177
MANAGED
DAKAR-DIOFF
133
MANAGED
LANCASTER PROJECT
BUENOS AIRES
115
OWNED
9 DE JULIO PROJECT
BUENOS AIRES
106
OWNED
LYON
245
LEASED
POZNAN
92
MANAGED
NH BAOBAB LES MAMELLES
ARGENTINA
FRANCE
NH LYON
POLAND
NH POZNAN
22
EXTENSIONS SIGNED UP TO 2007
LOCATION
ROOMS
CONTRACT
VIENNA
300
LEASED
LA HAVANA
150
MANAGED
BERLIN
25
LEASED
AUSTRIA
NH CONVENTION CENTER VIENNA AIRPORT
CUBA
NH PARQUE CENTRAL
GERMANY
NH KURFURSTENDAMM
SIGNED ROOMS EVOLUTION
OPENINGS
12,000
10,000
9,160
9,682
8,000
6,000
3,911
4,000
8,000
By number of rooms
By number of rooms
10,000
6,000
4,000
3,041
2,621
1,852
2,000
2,000
1,536
664
245
0
0
2003
•
•
2004
Organic growth
M&A
2005
2006
2007
•
•
2008
2009
Organic growth
M&A
23
NH Belvedere
Vienna - Austria
4
4
2006 Results
25
The hotel activity of NH Hoteles showed significant improvement
in 2006, with a 30.6% increase in the net profit over the previous
year. This result was obtained thanks to a 13.4% increase in the
hotel's income, up to € 1,021 M. The improvement of occupancy
and an increase in the ADR (average price) of 8.7% contributed to
the sales growth. The RevPar (income per available room) rose by
9.7%. The EBITDA (operating profit) of the hotel activity rose to €
161 M and recorded a rise of 27.2% over 2005.
Sales for the chain increased up to € 1,090 M, including
Sotogrande, and the net profit of the consolidated group
remained stable at € 62 M. The net profit was diluted by a
smaller contribution from Sotogrande’s income, which is
explained by the sale of large plot of land in 2005.
In Germany, the EBITDA showed highly positive growth in
comparable hotels, reaching € 7 M against a loss of € 2 M the
prior period, due to increasing demand, management, a focus on
maximising ADR and lease cost control of 14 hotels. Income at
comparable hotels in Germany reached € 198 M, 12% more than
last year. During 2006, the RevPar improved by 12% in
comparable hotels in Germany.
In Spain stands out the significant recovery of the business, with
increased income in comparable hotels of 6.4% and 15% in the
EBITDA. The comparable RevPar in Spain grew 8.4% with an
average rise in price of 6.9%.
The RevPar in Benelux held positive growth in comparable hotels
and grew 10.2% over the last year. The ADR contributed to 95% of
that growth. The income reached in Benelux in comparable hotels
P y G Hotel Activity
Hotel Income
sits at € 237 M and the EBITDA, with an increase of 18.7%,
reaches € 78 M.
The business unit of Switzerland, Austria, Hungary and Romania
recorded a considerable increase in its income from 14.7% and an
EBITDA of € 2 M, which shows the solidness provided by the
recent additions of countries from the Eastern Europe to the
NH Hoteles portfolio. Regarding the Revpar, comparable hotels
recorded growth of 11.6%. It is worth noting a pronounced
increase in occupancy of 5.71%, until reaching an average
occupancy of 75.7% in comparable hotels.
The RevPar in Latin America maintained very favourable growth
the entire year, with an increase of 16.30% in comparable terms.
The positive growth of the business is highlighted by the rising
ADR, occupancy and RevPar in the entire business unit, which is
reflected in the 32.1% increase in the EBITDA, in comparable
hotels.
The real estate activities of Sotogrande recorded sales of € 69 M,
16.9% less than the previous year, and an EBITDA of € 27 M. The
lower contribution from the Sotogrande income is mainly due to
the sale in the past year of a large plot of land for a value of € 35
M and the growing sale of houses and apartments against the
plots of land. This should be taken into consideration when
comparing the data to that at this year. On December 31, 2006,
the confirmed pending sales to be posted amounted to € 74 M
with a margin of € 29 M.
The following tables show that hotel activity have evolved very
favourably from January to December, in comparison to 2005.
€M
2006
€M
2005
% Change
1,021.57
901.22
13.4%
EBITDA of Hotel Activity
161.80
127.19
27.2%
Net Profit of Hotel Activity
45.99
35.22
30.6%
(*) At a constant consolidation perimeter
Evolution to Dec 31/06
26
Increase in Sales
Increase in EBITDA
Total Comparable Hotel Activity
9.7%
26.4%
B.U. Spain
6.4%
15.0%
B.U. Benelux
8.1%
18.7%
B.U. Switzerland, Austria & Hungary
12.2%
605.7%
B.U. Germany
12.0%
428.8%
B.U. Latin America
21.8%
32.1%
Room of the NH Puerta de la Catedral
Salamanca – Spain
COMPARABLE REVPAR EVOLUTION AT 2005-2006 BY BUSINESS UNIT
80
+10.1%
RevPar in €
60
+8.3%
+11.6%
+16.3%
+12%
40
+10.4%
•
•
RevPar 2005
RevPar 2006
• RevPar Growth with 80% via
ADR
• ADR Growth of € 6.2
20
0
Spain
Benelux
Germany
Austria,
Switzerland,
Hungary
Latin
America
Total
COMPARABLE HOTELS EBITDA EVOLUTION AT 2005-2006 BY BUSINESS UNIT
+26.4%
170
•
•
140
EBITDA 2005
EBITDA 2006
€ million
110
80
+18%
+15%
50
20
+€9m
*
-10
• 26.4% increase in EBITDA
• Comparable Hotels
+32%
Spain
Benelux
Germany
+€3m
*
Austria,
Switzerland,
Hungary
Latin
America
Total
* The Business Units of Germany and Austria, Switzerland and Hungary showed a negative EBITDA in 2005
27
NH Plaza de Armas
Seville - Spain
PROFIT AND LOSS ACCOUNT AS A DECEMBER - NH HOTELES
As of December 31, 2006 (M Euros)
As of December 31, 2005 (M Euros)
06/05 Change
1,005.58
897.45
12.0%
Income from Real Estate Operations
69.37
83.44
(16.9%)
Other Non-Recurring Income
15.99
3.77
324.1%
1,090.94
984.66
10.8%
(32.26)
(16.89)
91.0%
Staff cost
(344.09)
(316.04)
8.9%
Other Operating Expenses
(332.41)
(299.29)
11.1%
Income from Hotel Operations
INCOME
Real Estate cost of sales
Other Non-Recurring Expenses
(9.10)
(2.10)
333.3%
GROSS OPERATING PROFIT
373.08
350.34
6.5%
Leases payments and property taxes
(184.19)
(169.49)
8.7%
EBITDA
188.89
180.85
4.4%
Depreciation
(75.00)
(68.82)
9.0%
EBIT
113.89
112.03
1.7%
Interest income (expense)
(29.79)
(23.13)
28.8%
1.28
(0.65)
(296.9%)
Income from minority equity interests
EBT
85.38
88.25
(3.3%)
Corporate Tax
(24.09)
(17.85)
35.0%
INCOME before minorities
61.29
70.41
(13.0%)
1.16
(8.17)
(114.2%)
62.45
62.24
0.3%
Minority Interests
NET INCOME
28
NH Hoteles is experiencing a positive RevPar trend
The RevPar growth experienced in 2006 confirms our expectations of a recovery at all Business Units
RevPar
RevPar
50 €
Germany and Austria
70 €
45 €
65 €
40 €
60 €
35 €
55 €
30 €
Benelux
50 €
2001
2002
2003
2004
2005
2006
RevPar
2001
2002
2003
2004
2005
2006
RevPar
65 €
Spain
45 €
60 €
40 €
55 €
35 €
50 €
Latin America
30 €
2001
2002
2003
2004
2005
2006
2001
2002
2003
2004
2005
2006
29
Terrace of the NH Alicante
Alicante – Spain
5
5
Corporate operations
31
Capital Increase
Framon Acquisition
In November 2006, the Board of Directors of NH Hoteles
announced the approval of a Capital Increase through issuing a
maximum of 16,371,971 new shares (€ 2 par value and an issue
premium of € 13.27), to reinforce the Company’s strategic plan.
During 2006, NH Hoteles signed an agreement to take control of
the fifth largest hotel company in Italy. Framon has a strong
presence in Siciliy, in addition to strategic positioning in the main
cities of the Italian peninsula. Framon provided NH Hoteles with
1,254 rooms.
After the subscription period, in March 2007, NH Hoteles received
mass support from its shareholders in the Capital Increase and the
16,371,971 new shares were subscribed in their entirety during the
Preferred Subscription Period (1st round) and the Additional Award
Period (2nd round).
The success of the Capital Increase is reflected in the excess
demand for securities, which would have allowed an expansion 2
times greater than that proposed by NH Hoteles to be performed.
Taking into consideration that the Capital Increase was done with a
preferred subscription right and that demand much higher than the
offer for shares took place, we must point out the great support
from the shareholders, both for recent acquisitions performed in
Italy (Jolly Hotels and Framon) and its strategic development plan.
Public Tender Offer on the minority
Shareholders of Jolly Hotels
Grande Jolly, with a majority stake held by NH Hoteles, submitted
the prospectus for the Public Tender Offer on the minority
shareholders of Jolly Hotels before the CONSOB (Regulating Body
of the Italian Stock Market) in line with what is provided for in the
operations for acquisition of the Jolly Hotels Italian chain.
NH Hoteles submitted the prospectus of the Public Tender Offer
on the entirety of the shares in the possession of minority
shareholders (5,104,578 shares that equal 25.6% of Jolly Hotels).
The price for each share under the Offer was € 25, which in
compliance with the European Regulations, coincides with the
price paid to the partners of Grande Jolly, such that equal
treatment was guaranteed for all shareholders.
After completing the Public Tender Offer on March 18, 2007, NH
Hoteles, through Grande Jolly held 83.11% control of Jolly Hotels.
32
Public Tender Offer for 100% of Sotogrande
In the last period, NH Hoteles launched a Public Tender Offer to
purchase shares for 20.939% of the capital of Sotogrande that it did
not control, through the swapping of securities at a ratio of one
new share of NH Hoteles for each share of Sotogrande.
After reaching a share swap agreement with Caja Madrid, which
held 17.2% of the real estate company, and extending a swap offer
to the rest of the shareholders, NH Hoteles took over 97.72% of
Sotogrande.
PERCENTAGE REVALUATION OF NH HOTELES AND IBEX 35
200
Source: Bloomberg
180
Securities expressed in %
NH Hoteles
IBEX 35
160
140
120
100
-120
2005
2006
2007
(until April)
SHAREHOLDER COMPOSITION AT NH HOTELES (15/04/2007)
6.7%
5.6%
3%
10%
5%
5%
64.7%
• 10% C.F. Caja Madrid
• 6.7% GSS III Hurricane (Morgan Stanley)
• 5.6% Bancaja
• 5% Hoteles Participados
• 5% Ponte Gadea
• 3% NH Management Team and Employees
• 64.7% Rest of the capital
Those shareholders that are represented at the Board of Directors have
been considered to be stable shareholders of NH Hoteles.
33
Façade of the NH Jousten
Buenos Aires – Argentina
6
6
Strategic Growth Plan
35
In January 2007, NH Hoteles submitted a three-year strategic
plan to double the results of the company with a total investment
of € 1,300M. With the launching of this ambitious development
plan, NH Hoteles plans to double its operating profits (EBITDA)
for hotel activities, until exceeding € 300 M in the 2009 period.
The company plans to double the number of open and signed
rooms over the next three years. The goal that is set out by
NH Hoteles, to be sitting with more than 70,000 rooms at the end
of 2009, will consolidate its leadership position in the European
hotel segment.
The expansion plan considers the integration of the recent
additions to the company from the Jolly Hotels and Framon chains,
at their Italy Business Unit, which will mean a disbursement of more
than € 700 M, between investing and assuming debt. In addition,
the company is planning an additional investment of € 100 M for
changes to adapt the Italian chains to the standards of NH Hoteles.
The goal planned by the company at its Italy Business Unit involves
doubling the current results at the end of 2009, taking advantage
of the opportunity to improve the operating efficiency of the
acquired hotels. Jolly Hotels and Framon stand out due to their
existing complementary nature with NH Hoteles, as far as the
customer profile, services offered, strategic urban locations and full
geographic coverage.
The strategic plan considers a major investment in countries such as
Germany or Italy, where very positive growth is anticipated, which
are now being consolidated as target markets in the coming years.
25-30 % of the investment from the expansion plan will be set aside
for the Business Units of Germany, Switzerland and Austria, giving
special attention to projects with a product quality that is
homogeneous to NH Hoteles in the eight main cities of Germany.
Around 20-25% of the investment from the expansion plan will be
concentrated on Italy, thus consolidating the company’s leadership
in the transalpine country.
Focused on Europe
36
Growth in Belgium, The Netherlands and Luxembourg goes
through an increase of 3,000 rooms, based upon an increased
presence of the chain in secondary cities (as far as number of
inhabitants), in The Netherlands and especially in Amsterdam.
In Belgium and Luxembourg the expansion will be focused on
strategic cities such as Amberes or Luxembourg itself.
NH Hoteles plans to strengthen its leadership in the mid segment
in Europe by concentrating its organic growth investments in the
main markets of the continent where it already has a notable
presence. The group plans to invest € 500 M in Europe, based
upon the aforementioned positioning of the company in the main
countries where it operates and taking advantage of the good
economic outlook for the coming years. The middle hotel segment
presents great growth potential in Europe, where only 25% of the
hotels are operated by hotel brands. In this regard, NH Hoteles
plans to take advantage of the growth opportunities of this
fragmented market and consolidate its leadership in the 3 to 4 star
segment. In this manner, the company will concentrate its
investments on attractive real estate markets, such as Germany, and
will use low risk formulas in the remaining markets where it
operates, as in the case of Spain.
NH Hoteles plans to accelerate its position in Poland and in the
most important cities of the Eastern Europe countries. For this
purpose it will set aside around 10-15% of the investment from its
strategic plan.
NH Hoteles is placed in a unique position to obtain high
profitability for its development plan. The company has increased
brand recognition in countries such as Germany, Austria, The
Netherlands and Belgium, and holds a high index in Spain,
according to the last study conducted by the consultancy Ikerfel in
2006.
In the vacation segment, where currently NH Hoteles has several
projects under development in Bavaria and Cap Cana (Dominican
Republic) and Riviera Maya (Mexico), the company plans to
reinforce its growth with a very limited investment that will not
exceed 3% of the total investment of the plan to 2009.
In Spain and Portugal, NH Hoteles plans a growth of 2,000 rooms
until 2009, maintaining its market share in the main cities where it
already had a presence and seeking out opportunities in those
cities that are not yet covered by the chain, through lease or
management formulas.
The growth plan in Latin America sets its main goal on raising the
number of rooms in the capital of Argentina and in the main cities
of Mexico, in addition to continue studying other markets of
interest such as Chile, Colombia and Peru.
Room of the NH Amistad de Córdoba
Córdoba – Spain
Financing of the Strategic Plan
For the financing of the plan, in addition to the cash flow
generated, the company announced a capital expansion for the
value of € 250 M, where NH Hoteles has received the unanimous
support of its shareholders, once the preferred subscription period
has ended.
The following graph shows the breakdown of the growth
objective for rooms set out by NH Hoteles from last September
to 2009:
NH HOTELES GROWTH PLAN 2006-2009 (No. of Rooms)
18,000
71,387
Average annual composite growth = 22%
5,138
9,259
38,990
•
•
•
•
Dic ’06
Today
Jolly Hotels & Framon
Signed in December 2006
Goal
2009
37
Room of the NH Numancia
Barcelona – Spain
Goal: 18,000 additional rooms
The expansion include the addition of 32,000 rooms, between new
openings and signings, which will be added to the 38,990 rooms that
the company was operating on December 31, 2006. NH Hoteles plans
an organic growth of 18,000 new rooms until 2009. In addition, to reach
the goal of 32,000 rooms, NH Hoteles had 5,138 signed rooms
and 9,259 recently added rooms at the beginning of 2007, thanks to
the agreements reached with the Jolly Hotels and Framon chains.
The following graph reflects the geographic diversification of the
presence of NH Hoteles today and after completing the growth
plan in 2009:
DECEMBER 2006
DECEMBER 2009
6%
8%
10%
Spain and
• 35%
Portugal
29%
35%
1%
19%
1%
8%
22%
21%
Germany, Austria
• 29%
and Switzerland
Germany, Austria
• 21%
and Switzerland
• 19% Benelux (1)
• 8% Latin America
• 6% Resorts
• 1% Eastern Europe
• 1% Italy
• 20% Italy (2)
• 15% Benelux (1)
• 10% Resorts
• 8% Latin America
• 4% Eastern Europe
4%
15%
(1) South Africa and United Kingdom included
(2) Recent acquisitions of Framon and Jolly Hotels included
38
Spain and
• 22%
Portugal
20%
Jolly Hotel Mediapark
Cologne – Germany
CONSOLIDATING OUR POSITION IN EUROPE
38,990 ROOMS - DECEMBER 2006
Germany, Austria and Switzerland
11,047 rooms
Benelux
7,451 rooms
71,387 ROOMS - DECEMBER 2009
Germany, Austria and Switzerland
14,663 rooms +3,616
Eastern Europe
321 rooms
Eastern Europe
2,913 rooms +2,592
Benelux
10,506 rooms +3,055
Spain and Portugal
13,890 rooms
Latin America
3,022 rooms
Italy
750 rooms
Resorts
2,509 rooms
Spain and Portugal
15,950 rooms +2,060
Latin America
6,199 rooms
+3,177
Italy
14,087 rooms
+13,337
Resorts
7,069 rooms
+4,560
39
7
Hotel Manin
Venice – Italy
7
Italy: a tailor made market for NH Hoteles
41
During 2006, NH Hoteles signed an agreement whereby it would
take control of the Jolly Hotels and Framon Italian chains,
becoming the leading hotel chain in Italy. With these two
operations, the Company adds 67 hotels to its portfolio with
9,682 rooms, including open and signed.
in Europe and Latin America, which allows it to rapidly integrate
Jolly Hotels into the NH Hoteles portfolio.
Framon
Jolly Hotels
In November 2006, NH Hoteles came to an agreement whereby it
would take control of the first Italian chain, Jolly Hotels. The
integration of Jolly Hotels into the Italian subsidiary of NH Hoteles
stands out due to the existing complementary nature between
both companies, as far as the customer profile, services offered,
strategic urban locations and full geographic coverage. For
NH Hoteles, the agreement has meant the consolidation of its
leadership in the business segment in Europe and being the
company of reference in the Italian market.
Jolly is present in 7 countries with 46 hotels and 7,555 rooms, of
which 3,238 are owned. It Italy it owns 39 hotels with 5,993 rooms in
the main cities of the country (Rome, Milan, Turin, etc.),which due
to their tourist attraction provide a stable addition for completing
the business segment. In addition, Jolly Hotels has a presence in
the most important European capitals, such as: London (275
rooms), Berlin (255), Cologne (217 rooms), Amsterdam (218 rooms),
Brussels (193) and Paris (162). Jolly Hotels also has a 242-room
hotel in the middle of the financial and tourist district of New York.
The experience and strategy of development and expansion of
Jolly Hotels, a company listed in the Italian stock market, have
consolidated the hotel chain as the main hotel company over the
last years for the business segment of the country, with a growing
development of the convention segment.
In order to perform the operation, the new company "Grande
Jolly" was created, with NH Hoteles holding a majority stake with
51%, and in which the company Joker Partecipazione initially also
holds a stake of 42% (which held 50.1% of Jolly Hotels), and Banca
Intesa Sanpaolo with 7%. Later, “Grande Jolly” launched a Public
Tender Offer at € 25 per share on the 25% in hands of minority
shareholders. Since January 2007, majority control of Jolly Hotels is
held by NH Hoteles and its results have been moved to be
consolidated with those of the Spanish Company on February 1st.
NH Hoteles has broad experience in the acquisition of hotel chains
42
Over the past period, NH Hoteles came to an agreement to
acquire Framon, the fifth largest hotel company in Italy by the
number of establishments. Framon, with 15 hotels and 1,254
rooms, has a significant presence in Sicily, one of the main tourist
destinations with the greatest potential in the Mediterranean, in
addition to the strategic locations in cities of the Italian Peninsula,
such as Milan, Rome, Florence and Venice, among others.
The Framon chain hotels are recognised for their leadership in the
market segment of the areas where they are found. Many of them
occupy excellent historical buildings located in strategic locations.
In addition, the Italian chain has six magnificent resorts, among
which is the outstanding Gran Hotel Timeo de Taormina (Sicily), a
historical hotel from 1873 that enjoys wonderful views of the sea
and an exceptional Greek theatre.
Leadership in Italy
For NH Hoteles, these operations have meant reaching a position
that allows it to lead the anticipated process of concentrating the
fragmented Italian hotel market, in addition to reinforcing its
presence in the main European capital cities and entering into two
new markets, such as New York and Paris.
Aerial View of the
Gran Hotel Timeo
Jolly Hotel Villanova
Bologna – Italy
Taormina – Italy
Lobby of the Hotel Parco degli Aragonesi
Catania – Italy
Gran Hotel Verdi
Milan – Italy
Hotel Crystal
Trapani – Italy
Pool of the Dioscuri Bay Palace
Agrigento – Italy
43
CONTRIBUTION OF ROOMS FROM JOLLY HOTELS AND FRAMON IN ITALY: 7,247 ROOMS
Jolly: 1,175
Framon: 100
Jolly: 87
Jolly: 88
Jolly: 115
Jolly: 112
Jolly: 172
Jolly: 368
Bergamo
Brescia
Lecco
Milan
Jolly: 283
Trieste
Vicenza
Framon: 44
Venice
Turin
Jolly: 62
Parma
Genoa
Framon: 86
Jolly: 110
Jolly: 365
Bologna
Rapallo
Ravenna
La Spezia
Pisa
Jolly: 100
Jolly: 84
Jolly: 152
Framon: 115
Florence
Ancona
Siena
Jolly: 88
Jolly: 129
Jolly: 107
Rome
Jolly: 999
Jolly: 104
Caserta
Naples
Salerno
Jolly: 231
Ischia
Jolly: 194
Jolly: 129
Cagliari
Jolly: 237
Framon: 102
Jolly: 96
Framon: 153
Framon: 161
Framon: 70
Trapani
Framon: 48
Jolly: 120
Framon: 102
Messina
Palermo
Taormina
Valderice
Marsala
Catania
Agrigento
Brucoli
Caltagirone
Syracuse
Jolly: 186
Framon: 123
Framon: 59
Framon: 91
Jolly: 100
NH HOTELES IN ITALY
Hotels
From January 1st, 2007
TOTAL ITALY (March 2007)
44
Open Rooms
Internal Development
3
750
Jolly
39
5,993
Framon
15
1,254
NH Italy
57
7,997
Projects
11 Hotels; 1,543 Rooms
11 Hotels; 1,543 Rooms
Jolly Hotel Ligure
Turin – Italy
Pool of the Hotel Tonnara Di Bonagia
Valderice – Italy
Gran Hotel Bristol
Rapallo – Italy
Lobby of the Anglo American Hotel
Florence – Italy
Jolly Hotel President
Milan- Italy
Terrace of the Venus Sea Garden Resort
Brucoli – Italy
45
Façade of the Jolly Hotel Lotti
Paris – France
46
CONTRIBUTION OF ROOMS FROM JOLLY HOTELS IN EUROPE (EXCLUDING ITALY): 1,320 ROOMS
Jolly: 193
Jolly: 275
Jolly: 218
Jolly: 472
United Kingdom
Jolly: 162
The Netherlands
Belgium
Germany
France
CONTRIBUTION OF ROOMS FROM JOLLY HOTELS NORTH AMERICA: 242 ROOMS
Jolly: 242
United States
CONTRIBUTION OF ASSETS FROM JOLLY HOTELS AND FRAMON
HOTELS
ROOMS
TOTAL CONTRIBUTION OF OPEN HOTELS - JOLLY HOTELS
46
7,555
TOTAL CONTRIBUTION OF OPEN HOTELS - FRAMON
15
1,254
TOTAL CONTRIBUTION OF OPEN HOTELS - JOLLY HOTELS AND FRAMON
61
8,809
TOTAL SIGNED HOTELS - JOLLY HOTELS AND FRAMON
6
873
TOTAL CONTRIBUTION OF OPEN AND SIGNED HOTELS FROM JOLLY HOTELS AND FRAMON
67
9,682
47
NH Krystal Laguna Villas & Resort
Cayo Coco – Cuba
8
8
Resorts
49
NH Krystal Puerto Vallarta
Mexico
NH Hoteles continues with its expansion in the resorts segment,
where during 2006 and 2007 (up to April) it has incorporated 7
more hotels into its vacation hotel portfolio.
With the opening of the 690-room NH Krystal Laguna Villas &
Resort hotel in Cuba, and the integration of 6 hotels from the
Italian company Framon, located mainly in Sicily, NH Hoteles has
doubled its resort portfolio in 2007, reaching 2,866 rooms.
The company also has another 6 projects more under construction
that would mean more than 2,000 new rooms in this segment.
During 2006/07 (up to April), 3 new projects located in the
Dominican Republic and Italy have been incorporated.
Signed projects in 2006/07
Dominican Republic
In the Dominican Republic two hotels have been signed, which
means more than 1,000 new rooms. The complexes will be located
on the well-known Bavaro beach, situated in the middle of an
excellent mangrove forest that is rated as one of the best sites on
the world for its crystalline water and the white sand of its beach.
One of the hotels will have 660 “all inclusive” superior rooms, and
the second will be a hotel with 375 exclusive 5-star rooms, both
situated on a 350 m beach front across 35 hectares of land.
Amalfi (Italy)
The Gran Hotel Convento of Amalfi will open in 2008 in the Gulf of
Salerno. The establishment, which is a 5-star hotel, will have 53
rooms and will become one of the most exclusive tourist resorts in
the area.
NEW RESORTS PROJECTS
Continent
Country
Location
Rooms
Contract
AMERICA
Dominican Republic
Bávaro
660
5% Owned
375
5% Owned
Cap Cana
200
25% Owned
Mexico
Riviera Maya
550
20% Owned
Italy
Sicily-Ragusa
217
51% Owned
Amalfi
53
Leased
Hotels
Rooms
6
1,740
EUROPE
TOTAL NEW RESORTS
50
OPENED RESORTS
Continent
Country
AMERICA
EUROPE
Location
Hotel
Rooms
Contract
Cuba
Cayo Coco
NH Krystal Laguna Villas and Resort
690
Managed
Mexico
Puerto Vallarta
NH Krystal Puerto Vallarta
533
Managed
Cancun
NH Krystal Cancún
325
Managed
Ixtapa
NH Krystal Ixtapa
255
Managed
Veracruz
NH Krystal Veracruz
108
Leased
Marbella
NH Alanda
199
Leased
Spain
Italy (Framon)
Germany
TOTAL OPEN RESORTS
TOTAL OPEN AND SIGNED RESORTS
Sotogrande
Almenara
148
Owned
Rapallo
Grand Hotel Bristol
148
Managed
Valderice
Tonnara Di Bonaggia
102
Leased
Taormina
Grand Hotel Timeo
83
Managed
Villa Sant´Andrea
78
Managed
Brucoli
Hotel Venus Sea Garden
59
Leased
Marsala
Resort Baglio Oneto
48
Leased
Baden-Baden
Schlosshotel Buhlerhohe
90
Leased
Hotels
Rooms
14
2,866
Hotels
Rooms
20
4,921
GROWTH IN THE RESORT SEGMENT OF NH HOTELES
2,866
Rooms
14 Hotels
3,000
2,500
2,000
1,658
Rooms
7 Hotels
1,500
1,000
500
0
•
•
2005
2006/07*
* Until April 2007
51
9
9
New image
53
New directory
of NH Hoteles
NH Hoteles introduced a new image at the beginning of this year.
The chain is showing a new corporate colour, sky blue, which
attempts to give the brand a tone that is more in line with the
company's strategy to also reach out to the leisure customer
without giving up its corporate customers. Since January 2007,
NH Hoteles has begun to implement the new image in practically
all of the hotels, which will be finalized in an estimated period of
only 6 months.
The main elements are, accompanying the already classic NH
initials that define its logo, the new light blue colour, the renewal of
the set of all the graphic parts that make up the group’s corporate
image and the creation of new communication formats within the
hotels.
The new group image is based on hand-drawn lines, which are
superimposed over real images, and symbolise the personal labour
and closeness that characterises the company, beyond
management capability and professionalism.
Thus, each part contributes personally to describing a new tone of
communication between the company and its customers, which
after all is communication between people. It is a new letter of
introduction that brings together the company’s corporate values.
This brand evolution goes beyond the simple renewal of the
company’s graphic representation and fully commits itself to the
management of the “customer experience” within the hotels.
54
As a new evolution of communication formats with the customer,
NH Hoteles has developed a set of different messages intended to
improve the customer’s stay. New and small details, “messages”
that in some way make up an authentic quiet conversation between
the hotel and the customer and that contribute to creating a new
NH environment within the hotels.
Improving the classic uses of the hotel sector with regards to the
objects and daily actions, television, check in, menus from its
restaurants and cafeterias, welcome and information messages,
everything, including the very keys of the rooms or the coasters,
are now elements that seek out closeness with the people and
transmit an authentic desire to please the customers and to make
their stay a unique experience.
The NH brand image has maintained a path of success that has led
it to a place of leadership within the business hotel industry.
Without giving up its identity and solid nature, now is the time to
grow and to expand its horizons to the development of other
segments such as leisure and vacations. It is also the moment to
change the register and tone of communication with customers.
With this new image, the brand becomes more flexible, close,
leaving sobriety behind to evolve into more cheerful, personal and
most of all, closer colours.
New Website of NH Hoteles
New Webpage
The customers' stay at NH Hoteles often begins by visiting our
Webpage. For this reason, the company has incorporated new
functionalities that make the new Website a more friendly and
useful environment, where the user can enjoy the best experience,
thanks to new developments such as: different search types
through an innovative system (by proximity to the address,
proximity to a point of interest, services, price chart), interactive
maps, personalised "à la carte" sections, or subscribing to the
NH Hoteles bulletin, amongst others. Reserving through the
www.nh-hotels.com Webpage is now easier and more practical
than ever.
55
10
Nhow
Milan – Italy
10
Concepts
57
Last September 2006, the first Nhow hotel of NH Hoteles opened
in Milan. The Company has developed a new and exclusive
category of contemporary hotels, a laboratory of trends that
incorporates the new philosophy of modern living: technological,
creative and luxurious.
Nhow reinterprets spaces, times and services in such a way that
they surround the customers as soon they enter in the hotel, from
the hallway to the rooms.
Choosing Nhow means becoming part of a community, a way of
living in comfort and up to the minute. As a synthesis of a new
concept of living, Nhow offers quality never seen in hotel service.
This concept attempts to become the reference for the most
innovative cultural, social and artistic movements of the large
globalized urban centres that are in constant transformation.
Milan
The first Nhow hotel is born in Milan, the capital of fashion and
design. The city represents the engine and pulse of the country, a
city that is erected as a meeting point of trends. The city hosts
some of the most representative artistic and cultural events of the
international scene. All this makes Milan the emblem of
contradictions, between classic and modern, between trends and
the most “retro” style, a city where everything lives together, from
the most avant-garde to the most underground.
The hotel
Nhow Milan is located on Via Tortona 35, a strategic location
between main internal and external arteries of the city. The hotel
represents one of the most important projects of Milan’s industrial
renewal.
The “Tortona & Navigli” area has become, in very few years, the
fashion district of the city with a lively and fervent atmosphere,
both in the day and night time, full of charming restaurants, bars,
showrooms as well as design and photography studios. The hotel is
located just 12 km from the Linate airport, 2 km from the neuralgic
centre of the city and from the Milan Trade Fair.
58
The famous designer Matteo Thun and the architect Daniele
Beretta have united their efforts and talents to create a hotel where
the guest is left everything but indifferent.
Nhow changes the architectural and space distribution in order to
make their socially model. The hotel represents an authentic
container of experiences that is ready to surprise you at every
glance, movement or thought, exceeding any expectation. Nhow
integrates the individual into the most avant-garde movements of
current society, a meeting point of the most dynamic travellers.
The 249 rooms of the hotel, divided into 4 floors, are conceived as
vital autonomous and modular spaces, providing solutions never
seen before for the maximum enjoyment of the stay.
Spaces in movement
From the time they enter the hotel, customers are surprised upon
finding a space that joins trends and awakens the senses. Due to
the special relationship of Nhow with the world of art and fashion,
the common areas of the hotel such as reception, the lobby or the
exit from the elevators, among others, become environmental
spaces in constant transformation due to original design objects
and pieces of art.
Nhow's Art Management renews the artistic and cultural offer every
3 months, creating an environment that is always new concealing
new discoveries around every corner. These spaces are intended
for housing the works of art from established artists and new
designers, who allow their works to be displayed thanks to
agreements with the main design houses and international art
galleries.
The hotel becomes a showroom for the most daring and avantgarde creations, where all displayed elements are for sale.
Nhow - Milan – Italy
Events
Given the configuration and design of the building, the hotel can
host all types of events such as fashion shows, company
presentations, publishing events, film shootings, photography
sessions or private parties.
Nhow has invested in innovative cuisine based on Mediterranean
culture, rich in flavours, with surprising presentations and without
neglecting the health of the customers. Its cuisine is based on the
most advanced culinary techniques, mixed with the most traditional
flavours, is a conjunction that will not cease to surprise the customer
on each new occasion.
Flavours
The Nhow restaurant is a space with its own philosophy, which
attempts to go beyond the boundaries of taste, a true workshop of
high creative cuisine.
59
“nhube” of the NH Stuttgart Airport
Germany
NH Hoteles has 20 “nhube” establishments open in Spain,
Germany, Austria, The Netherlands and recently in Mexico. Since
2006, the company has incorporated 5 "nhube" spaces to the
chain, investing in environments that bring together the restaurant,
leisure and relaxation service of the hotels. The new “nhube” areas
are located in Spain (Valladolid and Barcelona), in Germany
(Stuttgart) and in Mexico (Santa Fe).
“Nhube” comfortably combines a lounge, dining room,
bar-cafeteria and even a library, a multifunctional space where you
can enjoy while watching television, browse the Internet, play and
listen to music, eat, drink and relax at the same time.
60
The gastronomic offer of “nhube”, designed by the prestigious
chef Ferran Adria, is based on simple food prepared with the
highest quality ingredients, which are combined with a decorative
surrounding that stands out for its neutral colours, natural fabrics
and careful lighting in its different environments.
Currently, after the success of the “nhube” concept, NH Hoteles
has signed four projects to incorporate new spaces in Spain, Cuba
and Mexico.
NHUBE
TOTAL OPEN NHUBE SPACES
20
TOTAL NHUBE SPACES PLANNED (UNTIL APRIL 2007)
OPEN
ABIERTOS
4
Location
Opening Date
Open in Spain
NH BALBOA
NH CARTAGENA
NH SAN SEBASTIÁN DE LOS REYES
NH PACÍFICO
NH CENTRAL CONVENCIONES
NH ALCORCÓN
NH SANT BOI LLOBREGAT
NH PLAZA MAYOR
NH PARLA
NH ALICANTE
NH MERCADER
NH BALAGO
NH NUMANCIA
NH CONSTANZA
Total nhubes open in Spain
MADRID
CARTAGENA
MADRID
MADRID
SEVILLE
MADRID
BARCELONA
LEÓN
MADRID
ALICANTE
MADRID
VALLADOLID
BARCELONA
BARCELONA
March-03
February-04
April-04
January-05
January-05
March-05
July-05
July-05
September-05
September-05
October-05
January-06
May-06
February-07
14
Open in Germany
NH FRANKFURT AIRPORT
NH NÜRNBERG CITY
NH STUTTGART AIRPORT
Total nhubes open in Germany
FRANKFURT
NUREMBERG
STUTTGART
December-04
October-05
March-07
3
Open in Austria
NH VIENNA AIRPORT
Total nhubes open in Austria
VIENNA
December-05
1
Open in The Netherlands
NH DEN HAAG
Total nhubes open in Holland
THE HAGUE
July-05
1
Open in Mexico
NH SANTA FE
Total nhubes open in Mexico
SANTA FE
February-07
1
Location
Location
Planned
Planned Opening
Opening
SANTA CRUZ DE TENERIFE
MADRID
2007
2008
2
HAVANA
2007
1
GUADALAJARA
2008
1
SIGNED
Firmados en España
Signed in Spain
NH SANTA CRUZ TENERIFE
NH VIRGEN DEL PUERTO
Total nhubes signed in Spain
Signed in Cuba
NH PARQUE CENTRAL
Total nhubes signed in Cuba
Signed in Mexico
NH GUADALAJARA
Total nhubes signed in Mexico
61
FAST GOOD
The food already well-known as the new restaurant culture created
by NH Hoteles with the collaboration of Ferran Adrià, is
consolidating as a gastronomic phenomenon that began in 2004.
Currently, the company has 7 "Fast Good" establishments open,
five in Madrid, one in Las Palmas de Gran Canaria and one in
Santiago de Chile. The company is also planning to open a further
3 restaurants in Madrid, Valencia and Barcelona (Spain).
The unprecedented success of the “Fast Good” phenomenon is
reflected in the wide spread acceptance of the concept by
consumers at all the restaurants open in 2006.
In addition, during the second quarter of 2006, "Fast Good" has
reached agreements with prestigious brands with whom it shares
the same target market, which have helped with the positioning of
"Fast Good" as a quality brand, as well as greater knowledge of
the brand in different channels.
Fast Good takes off
“Fast Good” currently designs two sandwiches from the paid menu
on IBERIA planes for mid-range flights (flights up to four hours).
“Fast Good” has a significant brand presence of this menu, which
has promoted the knowledge of "Fast Good" among international
customers of the airline company.
FAST GOOD OPEN ESTABLISHMENTS
Country
Spain
Location
Address
Madrid
C/ Padre Damián
Fast GO Store
Madrid
C/ Juan Bravo
YES
Madrid
C/ Orense
YES
Madrid
C/ Fuencarral*
Alcobendas (Madrid)
C/ Anabel Segura
YES
Las Palmas de Gran Canaria
C/ Simón Bolívar
YES
Santiago de Chile
C/ Isidora Goyenechea
Chile
*Cold food point of sale only
FAST GOOD SIGNED ESTABLISHMENTS (up to April 2007)
Country
Spain
62
Location
Address
Madrid
C/ Tetuán
Fast GO Store
YES
Valencia
Gran Vía Marqués del Turia
YES
Barcelona
C/ Balmes
YES
Fast Good, C/ Juan Bravo
Madrid - Spain
63
Casino de Madrid
Madrid – Spain
CASINO DE MADRID
During 2006, the Casino de Madrid has continued to reap rewards
with the help of the popular chef Paco Roncero. Among the awards
that have been given to the Casino de Madrid or its personnel are
the following:
• “Best Madrid Restaurant 2006" in the 4th edition of the Luna de
Metrópoli Awards (El Mundo Newspaper).
• Sánchez Cotán Award 2005 to the Terrace of the Casino for the
“Best Restaurant Menu Design".
• Paco Roncero: Award to the “Best Future Chef” by the
International Gastronomy Academy, and National Gastronomy
Award to the "Best Kitchen Manager", granted by the Spanish
Gastronomy Academy and the Cofradía de la Buena Mesa.
64
• Award to the “Best Future Sommelier” by the International
Gastronomy Academy to Maria José Huertas (Sommelier of the
Casino de Madrid).
Among the most relevant events in the past financial year, the
Casino de Madrid has inaugurated the Taller InNHova, which
attempts to research and develop new gastronomic projects.
From the hand of Ferran Adria, the gastronomic consultant of the
Casino, “La Terraza” has become one of the most emblematic
restaurants in Madrid (Spain) over the last years. The recognition of
the high quality and service of this exceptional location is currently
reflected in the classification of the most prestigious gastronomic
guides: Michelin Guide: 1 star; Gourmetour Guide: 9; Campsa
Guide: 2 suns.
Elysium Travel Spa at the airport of Madrid
Madrid – Spain
Elysium Travel & Beauty Spa
Elysium Spa, the wellness line of the NH Hoteles, has opened two
new centres in 2006 within Terminal 4 of the Airport of Barajas in
Madrid (Spain). The new Elysium Travel Spa and Elysium Beauty
Spa centres are pioneer establishments for these kinds of traits in
airports throughout Europe.
These establishments try to reconcile personal well-being with the
long waiting times and tiredness brought on by going through
airports. Under a unique and innovative wellness model, Elysium
Travel & Beauty Spa meets the personal health needs of the
travellers. On the other hand, Elysium Travel & Beauty Spa seeks to
reposition “travelling habits”, by making the passing through the
airport a part of the trip enjoyment.
hand, the Elysium Travel Spa is located at the T4 “Satellite”
terminal, just next to the Iberia VIP room. The two centres are
made up of an esthetic area where a wide range of services are
offered and a boutique area selling high-quality cosmetics with the
most exclusive brands on the market.
Elysium, Quality Guarantee
The quality and exclusivity of the Elysium Spa is backed
internationally by the “Conde Nast Johansens” award for
excellence, granted to the first Elysium centre located at the Hotel
Almenara de Sotogrande (Spain), recognised as “The Most
Exclusive Hotel Spa of Europe”. In addition, NH Hoteles has
another two complete Elysium Spa Centres in Madrid and Marbella
(Spain).
Elysium Beauty Spa is located in the billing area of the new
Terminal 4 of the Airport of Barajas, in Madrid (Spain). On the other
65
Lobby of the NH Agustinos
Pamplona – Spain
11
11
New products and services
67
Suite del NH Abascal
Madrid – Spain
Premium Rooms
NH Hoteles has selected the best rooms from the chain in Spain
and has put them under a new category: Premium Rooms.
Designed for the customer who is looking for something different
when staying at a hotel, the more than one hundred stays chosen
for this new offer from the company stand out for having their own
added value that makes them special. A unique view, different
décor, their own history or having been used previously by
someone famous are some of the seasons that make them the
true stars of NH Hoteles.
The Premium Rooms are spread out among 18 of the best hotels
of the chain throughout the geography of Spain. The
establishments are part of the NH Collection Hotels, which stand
out for being unique buildings. Included among these buildings
are monuments that have been restored and recovered by NH
Hoteles, to newly built facilities, where the most avant-garde
design and innovative and advanced services for the guest make
them stand out.
In addition to choosing the hotel, customers can select a specific
room in which the experience of their stay will be completely
different and unique. Among the rooms chosen by the chain, NH
Hoteles has highlighted one per establishment, being singled out
in the special catalogue edited by the company.
These rooms represent the best sample of the variety of different
destinations and experiences available to the traveller at the
hotels of the Spanish multinational company.
68
Rooms with their own charm
The Premium Rooms offer the customer a wide range of
sensations. In some cases, the unequalled view that is enjoyed
from their windows or balconies is their main attraction. For
example, room 340 of the NH Obradoiro enjoys an exclusive view
of the city of Santiago de Compostela.
The uniqueness of the architectural environment is the virtue of a
good part of the Premium Rooms. That is the case with room 401
of the NH Palacio de la Merced in Burgos, where the building’s
gargoyles are just a few metres away from the room’s windows, or
room number 204 of the NH Amistad Córdoba, just in front of the
Arab mural in an architectural set that has been masterfully
restored.
In some cases, having been used by historic personality or
celebrities from the world of culture provides special interest in
some of the Premium Rooms of NH Hoteles.
The offer that the Premium Rooms represent for NH Hoteles
provides the customer with a new way of travelling, where
lodging becomes the true highlight.
Premium Views
In 2006, NH Hoteles has edited the Miradas book, with the
collaboration of the prestigious writer Espido Freire, winner of the
Planet Award, and the well-known photographer Daniel Riera. The
intent of the book is to show his personal interpretation of the
Premium Rooms and to also tell unique stories.
New NH breakfasts
NH Hoteles has ascertained that Spaniards tend to follow
European trends as far as working lunches. Thus, more and more
professionals are including working breakfasts in their agendas.
These kinds of meeting offer innumerable advantages and it is
already a general practice in a good part of Europe in the USA.
This trend has been verified already by the increased demand for
this service by the customers of NH Hoteles. Thus, the
corresponding sales from breakfasts have increased by 7.4% on
average in all of the chain’s hotels, and the company breakfasts
alone have increased by 17%. In light of the new trends, and
continuing with restaurant service support as one of the pillars of
the company, NH Hoteles has designed its new and complete
breakfast in 2006.
Breakfast – important nutritional value
The new breakfast of NH Hoteles has been developed with the
assistance of nutritionists and under the guidance of chef Enrique
Martinez, a gastronomic consultant for NH Hoteles and the head of
the prestigious Maher restaurant in Cintruénigo (Navarra). The new
breakfast can now be enjoyed at a wide range of hotels from the
chain and will be implemented at all of their spaces gradually.
Regarding the new breakfast, Enrique Martinez has increased the
offer of juices and fruits, with new cuts and presentations. We have
worked jointly with suppliers to ensure that they prepare
handmade buns and bread following our recipes on a daily basis.
other foods, such as: meat products (low fat cold meats,
sausages), fats (olive oil, butter), stimulants (coffee, tea,
chocolate) etc.
The development of a wide variety of recipes has been included
among the main new dishes for the NH breakfasts, which will be
updated throughout the year, so that our customers may enjoy the
latest of the current Spanish cuisine. In addition, the offer of breads
has been promoted (rye, German, seeds, nuts, raisins, wholewheat),
baked at the hotels.
Some of the main parts to the NH Hoteles breakfast are:
• Fruit is always served freshly cut and is carefully selected.
• Juices are prepared on the day they are consumed, in order to
avoid loss of vitamins.
• New selection of handmade butters and jams prepared by our
staff, which are served alongside the traditional ones.
• Hot products are prepared when served according to the
customer's specifications.
Support from NH Hoteles for gastronomy is one of the main
characteristics of the company, which has numerous agreements
with food experts, such as Ferran Adrià, Enrique Martínez and Paco
Roncero.
A nutritionally balanced breakfast must contain milk products
(provide calcium), cereals (provide carbohydrates and proteins) as
well as fruits and vegetables (which contain fibre and vitamins).
The NH Hoteles breakfast includes a wide and varied supply of
these three main food groups. In addition, it has a selection of
69
Commercial Agreements
During 2006 NH Hoteles signed numerous commercial agreements
that provide access to new communication paths, a considerable
increase in the market share and strengthen the presence of
NH Hoteles as an international company. These associations are
laid out within the strategic plans, who is seeking new alliances in
its main target markets and on the other hand, allowing to
strengthen the relationship with frequent customers.
Airlines
Among the most prominent agreements is the “AAdvantage”
loyalty program of American Airlines, whereby customers who stay
at the NH hotels will earn "miles" that can be exchanged for airline
tickets, stays at hotels and promotions designed exclusively for the
members of the program. “AAdvantage” is the frequent flyer
program of American Airlines, one of the oldest and most
influential on the international stage.
Since July 2006, NH Hoteles has become part of the “Spanair
Plus+” loyalty program. The “Spanair Plus+” loyalty program,
created in 1996, currently has more than 500,000 members and
offers a large number of partners, for both frequent leisure and
business flyers. It is slowly positioning itself as one of the programs
of choice for flyers in Europe.
In addition, the chain has become part of the “Club Premier”
loyalty program of Aeromexico. “Club Premier”, created in 1991,
currently has more than 2 million affiliates.
Finally, one year after the entry of NH Hoteles as an international
partner in the "Flying Blue" program of KLM and Air France, the
hotel chain is renewing its agreement by incorporating new
advantages and promotions for the program members. “Flying
Blue” program currently has more than 10 million members and is
attempting to become the leading frequent flyer program in
Europe.
70
On-line Agencies
NH Hoteles announced in February 2006 the new implementation
of XML interface with Bookings, one of the leading European
companies for online hotel reservations. The interface will allow
NH Hoteles to send information automatically on rates and
availability to Bookings, without the need for manual intervention.
This way, Bookings generates reservations for the hotels through
its extensive affiliate network and search facilities. The agreement
reinforces the global exposure of NH Hoteles both inside and
outside Europe.
Rumbo.es, a leading on-line agency in Spain, since July 20006 has
been offering the same rates that the hotel chain has available in
its own direct distribution channels. This association has been
possible through the development of an interface by both
companies.
SAVIA Amadeus, a leader in the distribution of tourist reservations
and in providing technology for the Spanish travel industry, has
reached an agreement with NH Hoteles whereby the hotel chain
will offer its best rates on the reservation system, after adhering to
its Best Available Rate program. The hotel chain thus pledges to
provide the travel agencies, through the Amadeus reservation
system, rates that are equal to those available through its own
distribution channels.
Thanks to the agreements signed with Grupo Transhotel, travel
agents around the world can book a room at any NH establishment
through the networks of Transhotel - Global Provider of Tourist
Services.
Pool of the NH Constanza
Barcelona – Spain
71
Hotel NH Cornellá
Spain
12
12
NH World
73
NH City & Tower
Buenos Aires – Argentina
At the moment, 12% of the NH Hoteles customers already belong
to the NHW customer program, representing more than 20% of the
business from individual customers from the chain. The repeating
ratio of the NHW members, i.e. the number of times that a
customer goes to a NH Hoteles establishment, is 2.5 times that of
the average customer of the company. In addition, the average
billing of a NHW customer is 30% higher than that of the average
customer.
More than half of the NHW members have remained active over
the last year, especially in the Internet environment.
Furthermore, the NHW program includes by customers of nearly 30
different nationalities, with higher percentages of Spanish, German
and Dutch customers, with mainly customers in the first years of
their professional life (20-40 years).
74
Currently the successful customer program of NH World (NHW)
exceeds 450,000 members, two and a half years after its launch in
September 2004.
The launching of the Club de Privilegios was launched during 2006,
a new on-line environment that brings together advantages for
NHW members, with alliances with top brands that offer them
exclusive benefits, prize draws, invitations to events or exclusive
promotions.
The most relevant customer segmenting programs already
available are: customers, NH Hoteles shareholders, public officers,
journalists and sport clubs, not to mention the NH Hoteles
program for employees, who make up 10,000 people.
Nearly 300 companies and associations are members of the NHW
program, associated with its corporate agreements with NH
Hoteles, which generate significant billing increases, both in the
professional and leisure categories.
75
NH Santo Stefano
Turin – Italy
13
13
Brand awardness
77
NH Hoteles is already one of the most recognised brands in
Europe. In line with the European expansion carried out during the
last 5 years by the chain to position itself among the main urban
hotel chains, the visibility of the firm has not stopped growing until
it has become an indisputable reference company within the hotel
industry.
A reference company in the European hotel sector
The data collected by Ikerfel analyses the movement of main
indicators regarding brand recognition over the last three years. In
this period, the growth of NH Hoteles has been spectacular in
every sense, reflecting not only the growing presence of the firm in
the European market, but also its notoriety, vivacity and dynamic
nature, which have made it into one of the most recognized
national companies outside of Spain.
According to a full study carried out by the Ikerfel market research
and strategic marketing institute, in which the brand position has
been analysed in the European countries where it was present
during the year 2003 (Spain, Germany, Austria, The Netherlands
and Belgium), the users demonstrated a clear knowledge of the
firm. For Germany, The Netherlands, Belgium and Austria, Spain is
the first answer when the respondents are asked for other countries
where they believe NH Hoteles is present, which shows the brand’s
identification with its market of origin.
Despite the fact that the European expansion of NH Hoteles began
just six years ago, at this time the visibility of the firm has increased
remarkably. The suggested recognition of the brand, which
measures its ability to be identified amongst a broad list of hotel
market companies, reflects this situation. All through in Spain and
in Germany, Austria, Belgium and The Netherlands, this indicator is
above 50% of the population. If in Spain it is already 97%, in
Holland it has gone from 44% to 70% in just three years, and in
Germany it reaches 68%, while at the end of 2003 it was only 26%.
On the other hand, a large majority of those consulted are capable
of recognising the company from among the rest of the hotel
sector competitors, placing it among the first ones mentioned
when asked about a hotel company located in their country.
Total brand recognition (list of suggested brands)
Country
Percentage
Spain
Germany
Austria
Belgium
The Netherlands
2003
2006
2003
2006
2003
2006
2003
2006
2003
2006
93%
97%
26%
68%
33%
53%
26%
54%
44%
70%
As far as the spontaneous preference of the brand, i.e. the
percentage of the population that names NH Hoteles as the first
company when asked to list hotel sector companies in their
country, the Group is among the first three options in all countries
analysed. NH is the leader in Spain (43%) and in Germany (10%),
and is the third most named option in Austria (5%), Belgium (6%)
and The Netherlands (10%). It is worth noting the increase
experienced in Germany and Belgium, where this indicator was only
3% and 2%, respectively, at the end of 2003. The results from this
section show the current status of the company and its ability to be
present in the minds of the users. For them, its visibility is above that
of local companies and international chains with a long tradition.
First top of mind mentioned
Country
Percentage
78
Spain
Germany
Austria
Belgium
The Netherlands
2003
2006
2003
2006
2003
2006
2003
2006
2003
2006
39%
43%
3%
10%
3%
5%
2%
6%
7%
10%
The results regarding the brand awareness, which indicates the
percentage of respondents who name NH Hoteles spontaneously
among their first options, are also very positive for the company. In
Spain, NH Hoteles is the first option in the mind of the consumers
(70%), way above Sol Meliá (56%) and AC Hoteles (26%), which hold
the following places in this section. In The Netherlands, NH
Hoteles is already holds the third place with 22%, only exceeded by
large brands such as the Hilton and the local Golden Tulip,
although it beats the percentage of chains such as Novotel,
Mercure or Holiday Inn. The growth experienced in Belgium, where
it has gone from 13% to 29% is also noteworthy, as well as the
brand growth in Germany, where it is recognised spontaneously by
25% of the market.
Brand awareness (spontaneous mention of the NH Hoteles brand among others)
Country
Percentage
Spain
Germany
Austria
Belgium
The Netherlands
2003
2006
2003
2006
2003
2006
2003
2006
2003
2006
72%
70%
7%
25%
6%
14%
13%
29%
16%
22%
The loyalty index, which measures the percentage of people that
by preference stay at the establishments of a hotel chain that they
have used previously - and choose that option before any other illustrates the ability of NH Hoteles to satisfy its customers and
retain them against the offers from the competition. The chain
holds the first place in this ranking in Spain (43%). NH Hoteles is
also the leader in The Netherlands (58%) and Germany (32%) where
the market is very fragmented. In Belgium it is second, with 50%
and holds the fifth place in Austria with a significant 31%.
Brand loyalty
Country
Percentage
Spain
Germany
Austria
Belgium
The Netherlands
43%
32%
31%
50%
58%
PAN-EUROPEAN INDEX OF BRAND SELECTION
PREFERENCE (SEGMENT: BUSINESS)
30
25
20
•
•
•
•
•
•
26% Hilton
15% Marriot
15% Sheraton/Arabella
10% NH Hoteles
9% Holiday Inn
7% Le Meridien
15
10
5
0
Davis Cup: the best platform for our brand
In 2006, the International
Tennis Federation and NH
Hoteles signed the
extension of the sponsorship
agreement between the
international hotel chain
and the Davis Cup until 2009.
NH Hoteles has been the
sponsor of the Davis
Cup since 2004 and since
then the annual competition
has been an excellent
presentation of our company
to more than 130 countries.
Pan-European*: Belgium, Germany, The Netherlands, United Kingdom, Italy, Spain and France
Source: Business Development Research Counsuelors, Pan-European Guest Survey, 2006
79
Hotel Almenara
Sotogrande - San Roque - Cadiz – Spain
14
14
Sotogrande
81
La Marina de Sotogrande
San Roque - Cadiz – Spain
2006 has been fundamental for the consolidation of the tourist
residential project of Sotogrande for several reasons:
• In November the approval of the Urban Development
Agreement was given by the Municipality of San Roque
(Cadiz – Spain), which regulates the organisation of all
Sotogrande’s urban development, from which the company
holds its name and includes the most substantial part of its
assets to this day. The approval of this agreement has been a
fundamental milestone for the company, since it consolidates the
quality residential development model that defines Sotogrande.
URBAN DEVELOPMENT AGREEMENT
La Reserva
Sotogrande Beach
Almenara
TOTAL
82
Area moved (m2)
Building area (m2)
Properties
1,440,662
504,873
2,083
84,480
39,465
160
342,144
136,444
762
1,867,286
680,782
3,005
Los Alcornoques Project
Almenara Golf Course
83
Los Alcornoques Project
• A significant restructuring of assets was carried out,
underscoring the tourist/residential focus of the company.
Only hotel assets were transferred to the head organisation,
specifically the two Marbella hotels and the Casino de Madrid.
75% of the Retamares golf course was sold and significant shares
of two residential/tourist projects were incorporated into Cap
Cana (Dominican Republic) and the Isla Blanca (Mexico).
• Ponte Gadea increased its collaboration by becoming a partner
of Sotogrande in the development of Los Alcornoques, an
ambitious residential project of 23 hectares, which will include
the concepts of health promotion that are promoted by
Sotogrande Health Experience.
• As far as the operations are concerned, the sales have resisted
the toughening of the market conditions at Costa del Sol and
Sotogrande has finally displaced Marbella as the leader of
residential tourism in the area.
In addition, the opening of the Airport of Gibraltar to national
and international traffic, located 20 minutes from the urban
development, has introduced a new dynamic element into the
area.
The 6 remaining units from the Ribera del Obispo project were
sold, with an average-price of € 1.1 M and the sales of the plots at
La Reserva, Ribera del Marlin and Los Cortijos de la Reserva did
well, with sales of 80 units and with an average price-raise of 12%
throughout the year.
84
• The organisation continued its growth until adapting its vocation
as a provider of specialized services in residential/tourist projects
at different locations and with partners. In this line and following
the launching of Sotogrande Golf Services in 2005, as a unit
specialising in engineering, construction and maintenance of
golf courses, during 2006 Sotogrande Marketing Services was
born, specialising in the design and execution of marketing
concepts in the residential/tourist high-end segment.
The idea of these divisions is to facilitate the transfer of
knowledge and experience from Sotogrande in its areas of
specialisation to the new projects developed with partners, and
on occasions to prestigious projects of third parties.
We must point out the success of the activities carried out by
Sotogrande Golf Services during 2006, in the Almenara and
Retamares golf courses. In Almenara it carried out an in-depth
remodelling of the drainage system, which allowed the finals of
the Peugeot Professional Spanish Circuit to be held successfully
last November, despite the strong rains. At Retamares, a
complete water management system was designed and
executed, which will allow the European Circuit tournament to
be held during May 2007.
• Finally, it is worth mentioning out the Takeover Bid that
NH Hoteles made on the Sotogrande shares, which ended in
December, and allowed NH Hoteles to increase its stake from
77% to 98%.
Cap Cana
Dominican Republic
85
Isla Blanca Project
Riviera Maya – Mexico
PROJECTS:
Cap Cana (Dominican Republic)
The Cap Cana complex is the most important tourist real estate
project in the Caribbean, located at Punta Cana, Dominican
Republic, only 10 minutes from the International Airport. It has an
exclusive beach club and will be completed with six 18-hole golf
courses, with one currently in use, another under construction, and
three of them designed by Jack Nicklaus. Cap Cana has already
inaugurated the first phase of the marina, which in the near future
will have capacity for more than 500 vessels, surrounded by luxury
stores and high cuisine restaurants.
The following will be built at this urban development:
• A luxury boutique hotel with 88 rooms and an exclusive
restaurant.
86
• 408 luxury beach front apartments, which will be put on sale
during 2007, some of which will enjoy hotel services, through a
"Rental Program" (the owners allowing the hotel to manage
their apartments while they are not using them).
Isla Blanca (Riviera Maya, Mexico)
The project is located to the north of Cancun, 20 minutes from the
International Airport. It is a peninsula with nearly 400 hectares,
where there is an important natural area. Next to it, a low-density
residential project will be developed with approximately 2,000
exclusive apartments and hotel spaces. The “island” counts with
over 10 kilometres of Caribbean Sea beach front.
La Reserva de Sotogrande
San Roque - Cadiz – Spain
SOTOGRANDE SHARE PRICE EVOLUTION
22
SOTOGRANDE
20
18
16
14
12
2006
2007
(until April)
87
15
15
Board of Directors and Management Committee
89
BOARD OF DIRECTORS (April 16, 2007)
Chairman & CEO: GABRIELE BURGIO
Non-executive Vice-Chairman: MANUEL HERRANDO Y PRAT DE LA RIBA*
Members: MATÍAS AMAT ROCA
RAMÓN BLANCO BALÍN
JOSÉ DE NADAL CAPARÁ
JULIO C. DÍAZ-FREIJO CERECEDO**
IGNACIO EZQUIAGA DOMÍNGUEZ
AURELIO IZQUIERDO GÓMEZ
ANDRÉ MARTINEZ***
ALFONSO MERRY DEL VAL GRACIE
MIGUEL RODRÍGUEZ DOMÍNGUEZ
Non-Board Member Secretary: JOSÉ MARÍA MAS MILLET
Non-Board Member Vice-Secretary: IGNACIO ARANGUREN GONZÁLEZ-TARRÍO
*
Manuel Herrando y Prat de la Riba was appointed Non-Executive Vice-Chairman of the Board of Directors on April 16, 2007.
**
Julio C. Díaz-Freijo Cerecedo replaced Alfredo Fernández Durán on February 22, 2006.
*** On April 16, 2007, André Martínez was appointed by the Board as a new Board Member, representing GSS III Hurricane (Morgan Stanley), to cover the vacancy
left by Gary R. Garrabrant.
EXECUTIVE COMMITTEE
Chairman:
GABRIELE BURGIO
Members:
MATÍAS AMAT ROCA
JULIO C. DÍAZ-FREIJO CERECEDO
AURELIO IZQUIERDO GÓMEZ (REPRESENTING CAJA DE AHORROS DE VALENCIA, CASTELLÓN Y ALICANTE - BANCAJA)
MANUEL HERRANDO Y PRAT DE LA RIBA
Secretary:
JOSÉ MARÍA MAS MILLET
AUDIT AND CONTROL COMMITTEE
90
Chairman:
D. RAMÓN BLANCO BALÍN
Members:
IGNACIO EZQUIAGA DOMÍNGUEZ (REPRESENTING HOTELES PARTICIPADOS, S.L.)
Secretary:
ROBERTO CHOLLET IBARRA
NOMINATION AND REMUNERATION COMMITTEE
Chairman:
Members:
MATÍAS AMAT ROCA
Secretary:
MANAGEMENT COMMITTEE
Gabriele Burgio
Chairman and CEO
Ignacio Aranguren
Chief Strategy and Investments
Officer
Roberto Chollet
Chief Financial Officer
Gustavo Gabarda
Managing Director Sotogrande
Juan Mª de Mora
Corporate Officer Human
Resources and Corporate
Responsibility
Francisco Zinser
Chief Operating Officer
Secretary of the Management Committee: Fernanda Matoses
91
Nhube of the NH Numancia
Barcelona - Spain
16
16
Corporate Governance
NH Informe Anual 2006
93
(*) Through:
LISTED PUBLIC LIMITED COMPANIES
ISSUING COMPANY’S IDENTIFYING DATA
FINANCIAL YEAR 2006
Tax Identification Code: A28027944
Corporate Name: NH HOTELES S.A.
Registered Office:
SANTA ENGRACIA 120
MADRID
28003
SPAIN
Name or Corporate Name of the direct
owner of the stake
Number of direct
shares
% of corporate
capital
CORPORACIÓN FINANCIERA
CAJA DE MADRID, S.A.
5,976,645
4.542
GRUPO INVERSOR HESPERIA, S.A.
29,201,056
22.190
PONTEGADEA INVERSIONES, S.L.
12,273,585
9.327
SOCIEDAD DE PROMOCIÓN Y
PARTICIPACIÓN EMPRESARIAL
CAJA MADRID
7,232,265
5.496
Total:
54,683,551
Indicate the most significant movements in the shareholder structure during
the financial year:
MODEL CORPORATE GOVERNANCE ANNUAL
REPORT OF 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.
Shareholder’s Name or
Corporate Name
Date of transaction
Description of
transaction
GRUPO INVERSOR HESPERIA, S.A.
16-06-2006
20% of corporate
capital exceeded
SOCIEDAD DE PROMOCIÓN Y
PARTICIPACIÓN EMPRESARIAL
CAJA MADRID
26-12-2006
5% of corporate
capital exceeded
A.3. Complete the following charts on the members of the company’s board
A. OWNERSHIP STRUCTURE
of directors who own shares in the company:
A.1. Complete the following chart on the company’s corporate capital:
Date of last modification
Corporate capital (€)
Number of shares
26-12-2006
263,196,974.00
131,598,487
If there are different classes of shares, this should be indicated in the
following chart:
Class
Number of shares
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:
94
Director’s Name Date of first
or Corporate
appointment
Name
Date of last
appointment
Number
of direct
shares
Number of
indirect
shares (*)
Total % of
corporate
capital
MATÍAS AMAT
ROCA
23-07-2004
28-04-2005
50
0
0.000
RAMÓN
15-01-1993
BLANCO BALÍN
05-05-2006
23,800
13,400
0.028
GABRIELE
BURGIO
13-01-1993
05-05-2006
1,317,770
0
1.001
CAJA DE
AHORROS DE
VALENCIA,
CASTELLÓN Y
ALICANTE
(BANCAJA)
17-06-2002
27-06-2004
7,319,698
0
5.562
JOSÉ DE
08-05-1997
NADAL CAPARÁ
05-05-2006
10,000
0
0.008
JULIO C.
DÍAZ-FREIJO
CERECEDO
22-02-2006
05-05-2006
100
0
0.000
MANUEL
HERRANDO Y
PRAT DE LA
RIBA
13-07-1992
05-05-2006
4,027
0
0.003
HOTELES
PARTICIPADOS,
S.L.
29-04-2004
29-04-2004
6,639,194
0
5.045
18-03-1997
ALFONSO
MERRY DEL VAL
GRACIE
05-05-2006
100
0
0.000
29-04-2004
29-04-2004
3,000
0
0.002
Shareholder’s Name or
Corporate Name
Number of direct
shares
Number of indirect Total % of
shares (*)
corporate capital
CAJA DE AHORROS Y
MONTE DE PIEDAD DE
GIPUZKOA Y
SAN SEBASTIÁN
6,700,000
0
CAJA DE AHORROS Y
MONTE DE PIEDAD DE
MADRID
0
13,208,910
10.037
CAJA DE AHORROS Y
MONTE DE PIEDAD DE
ZARAGOZA, ARAGÓN Y
RIOJA (IBERCAJA)
5,978,782
0
4.543
JOSÉ ANTONIO CASTRO
SOUSA
0
29,201,056
22.190
CORPORACIÓN
FINANCIERA CAJA DE
MADRID, S.A.
5,976,645
0
4.542
GRUPO INVERSOR
HESPERIA, S.A.
29,201,056
0
22.190
AMANCIO ORTEGA
GAONA
0
12,273,585
9.327
PONTEGADEA
INVERSIONES, S.L.
12,273,585
0
9.327
Name or Corporate Name of the direct owner
of the stake
SOCIEDAD DE
PROMOCIÓN Y
PARTICIPACIÓN
EMPRESARIAL
CAJA MADRID
7,232,265
0
5.496
ELENA BLANCO VILLAR
3,500
RAMÓN BLANCO VILLAR
3,500
5.091
MIGUEL
RODRÍGUEZ
DOMÍNGUEZ
(*) Through:
Number of direct shares
AMPARO VILLAR CANOVAS
6,400
Total:
13,400
Total % of corporate capital in possession of the Board of Directors:
11,649
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:
(*) Through:
Name or Corporate Name of the direct
owner of the stake
Director’s Name
or Corporate
Name
Number of
direct option
rights
GABRIELE BURGIO 528,971
Number of
indirect option
rights
Number of
equivalent
shares
Total % of
corporate
capital
0
528,971
0.402
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:
Related names or
corporate names
Type of relationship
Total:
Provide details of significant variations, as per the provisions of Royal Decree
377/1991, made during the financial year:
Date
Number of direct
shares
Number of
indirect shares
Total % of
corporate capital
Brief description
Results obtained in the financial year from treasury stock
transactions (in thousands of euros)
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 shareholders’ agreements reached between shareholders
that may have been notified to the company:
Intervening parties in the
shareholders’ 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
article 4 of Spain’s Securities Market Law:
Name or corporate name
Comments
4
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 5th May 2006 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 bylaw limitations on the
exercising of voting rights and any legal limitations on the purchase or
transfer of stakes in the corporate capital:
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 bylaw limitations
on the free transfer of shares.
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 attendees, 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.
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 indirect shares (*)
Total % of corporate capital
230,543
0
0.175
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
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”.
95
B.1.3. Complete the following charts on the members of the board of
directors and their condition:
B. THE COMPANY’S ADMINISTRATIVE STRUCTURE
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:
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 Name Representative Office on
or Corporate
the Board
Name
Date of
first
appointment
Date of
last
appointment
Election
procedure
Director’s Name or
Corporate Name
Committee that proposed
the appointment
Office on the company’s
organization chart
GABRIELE BURGIO
BOARD OF DIRECTORS
CHAIRMAN-MANAGING
DIRECTOR
EXTERNAL PROPRIETARY DIRECTORS
Corporate Name
the appointment
of the significant
shareholder represented
or who proposed the
appointment
MATÍAS AMAT
ROCA
DIRECTOR 23-07-2004 28-04-2005 GENERAL
MEETING OF
SHAREHOLDERS
MATÍAS AMAT ROCA
NOMINATION AND
REMUNERATION
COMMITTEE
CORPORACIÓN
FINANCIERA CAJA DE
MADRID, S.A.
RAMÓN BLANCO
BALÍN
DIRECTOR 15-01-1993 05-05-2006 G. MEETING OF
SHAREHOLDERS
CAJA DE AHORROS DE
VALENCIA, CASTELLÓN Y
ALICANTE (BANCAJA)
BOARD OF DIRECTORS
CAJA DE AHORROS DE
ALICANTE (BANCAJA)
GABRIELE
BURGIO
CHAIRMAN 13-01-1993 05-05-2006 G. MEETING OF
SHAREHOLDERS
JULIO C. DÍAZ-FREIJO
CERECEDO
BOARD OF DIRECTORS
PONTEGADEA
INVERSIONES, S.L.
HOTELES PARTICIPADOS,
S.L.
NOMINATION AND
REMUNERATION
COMMITTEE
HOTELES PARTICIPADOS,
S.L.
CAJA DE
AHORROS DE
VALENCIA,
CASTELLÓN Y
ALICANTE
(BANCAJA)
AURELIO
IZQUIERDO
GÓMEZ
SHAREHOLDERS
EXTERNAL INDEPENDENT DIRECTORS
JOSÉ DE
NADAL CAPARÁ
SHAREHOLDERS
JULIO C.
DÍAZ-FREIJO
CERECEDO
SHAREHOLDERS
GARY
GARRABRANT
SHAREHOLDERS
MANUEL
HERRANDO Y
PRAT DE LA RIBA
SHAREHOLDERS
HOTELES
IGNACIO
PARTICIPADOS, EZQUIAGA
S.L.
DOMÍNGUEZ
SHAREHOLDERS
ALFONSO MERRY
DEL VAL GRACIE
SHAREHOLDERS
MIGUEL
RODRÍGUEZ
DOMÍNGUEZ
SHAREHOLDERS
Total Number of Directors:
11
Indicate the retirements/removals from the board of directors that have
occurred during the period:
Director’s Name or Corporate Name
Termination date
ALFREDO FERNÁNDEZ DURÁN
22-02-2006
LUIS FERNANDO ROMERO GARCÍA
05-05-2006
BERNARD s´JACOB
05-05-2006
Corporate Name
the appointment
Profile
BOARD OF DIRECTORS
BUSINESS & ECONOMICS
DEGREE. TAX INSPECTOR
WITH LEAVE OF ABSENCE
GARY GARRABRANT
BOARD OF DIRECTORS
GRADUATE IN FINANCE
FROM UNIVERSITY OF
NOTRE DAME
MANUEL HERRANDO Y
PRAT DE LA RIBA
BOARD OF DIRECTORS
LAW DEGREE
ALFONSO MERRY DEL VAL
GRACIE
BOARD OF DIRECTORS
ECONOMICS AND
COMMERCE DEGREE
FROM BOCCONI
UNIVERSITY OF MILAN.
DOCTORATE FROM
UNIVERSITY OF PAVIA.
MIGUEL RODRÍGUEZ
DOMÍNGUEZ
NOMINATION AND
REMUNERATION
COMMITTEE
ENTREPRENEUR
OTHER EXTERNAL DIRECTORS
Corporate Name
Committee that proposed the
appointment
BOARD OF DIRECTORS
Provide details of the reasons why they cannot be considered proprietary or
independent directors:
HE CANNOT BE CONSIDERED AS A PROPRIETARY DIRECTOR SINCE HE NO
LONGER REPRESENTS A SIGNIFICANT SHAREHOLDER
Indicate any changes that, when applicable, have occurred during the period
in the type of each director:
96
Corporate Name
Date of the change
Previous status
Current status
JOSÉ DE NADAL
CAPARÁ
25-05-2006
EXTERNAL
PROPRIETARY
DIRECTOR
OTHER
EXTERNAL
DIRECTOR
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:
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:
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):
Corporate Name
Brief description
GABRIELE BURGIO
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
Remunerative item
In thousands of euros
Fixed remuneration
719
Variable remuneration
984
Per diem allowances
627
Bylaw-mandated business
0
Stock options and/or other financial instruments
262
Others
230
Total:
2,822
Other Benefits
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:
Corporate Name
Corporate name of the
group company
Office
MATÍAS AMAT ROCA
SOTOGRANDE, S.A.
NATURAL PERSON
REPRESENTATIVE OF THE
DIRECTOR PROMOCIÓN Y
PARTICIPACIÓN
EMPRESARIAL CAJA
MADRID, S.A.
Payments on Account
0
Credits granted
8,305
Pension Funds or Plans: Contributions
0
Pension Funds or Plans: Obligations incurred
0
Life insurance premiums
24
Guarantees constituted by the company in favour of its directors
0
b) Resulting from the company’s directors belonging to other boards of
directors and/or the top management of group companies:
GABRIELE BURGIO
NH ITALIA
DIRECTOR
Remunerative item
GABRIELE BURGIO
GRANDE JOLLY
DIRECTOR
Fixed remuneration
0
GABRIELE BURGIO
NH PARTICIPATIES N.V.
PRESIDENT AND DIRECTOR
Variable remuneration
0
GABRIELE BURGIO
NH DOMO, DISEÑO Y
DECORACIÓN, S.L.
JOINT ADMINISTRATOR
Per diem allowances
GABRIELE BURGIO
JOLLY HOTELS SPA
DIRECTOR
GABRIELE BURGIO
115
Bylaw-mandated business
0
Stock options and/or other financial instruments
0
Others
0
GRUPO FINANCIERO DE
INTERMEDIACIÓN Y
ESTUDIOS, S.A.
NATURAL PERSON
REPRESENTATIVE OF THE
SOLE ADMINISTRATOR,
NH HOTELES, S.A.
GABRIELE BURGIO
SOTOGRANDE, S.A.
DIRECTOR
GABRIELE BURGIO
NACIONAL HISPANA
HOTELES SRL DE CV
DIRECTOR
Payments on Account
0
GABRIELE BURGIO
KRASNAPOLSKY HOTELS
& RESTAURANTS, BV
MEMBER OF THE
SUPERVISORY BOARD
Credits granted
0
MANUEL HERRANDO Y
PRAT DE LA RIBA
SOTOGRANDE, S.A.
CHAIRMAN
Pension Funds or Plans: Contributions
0
Pension Funds or Plans: Obligations incurred
0
ALFONSO MERRY DEL VAL
GRACIE
KRASNAPOLSKY HOTELS
& RESTAURANTS, BV
Life insurance premiums
0
Guarantees constituted by the company in favour of its directors
0
MEMBER OF THE
SUPERVISORY BOARD
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:
Office
Total:
115
Other Benefits
c) Total remuneration per type of director:
Type of director
Per company
Executives
Per group
2,268
15
External proprietary directors
193
15
External independent directors
287
85
Corporate Name
Listed company
GABRIELE BURGIO
GRUPO FERROVIAL, S.A.
DIRECTOR
Other external directors
CAJA DE AHORROS DE
ALICANTE (BANCAJA)
BANCO DE VALENCIA, S.A.
CHAIRMAN
Total:
CAJA DE AHORROS DE
ALICANTE (BANCAJA)
ENAGAS, S.A.
DEPUTY-CHAIRMAN
74
0
2,822
115
d) In respect of the profit attributed to the holding company:
Total remuneration of directors (in thousands of euros)
2,937
Total remuneration of directors as a percentage of the profit
attributed to the holding company
4,170
97
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:
Office
JESÚS IGNACIO ARANGUREN
GONZÁLEZ-TARRÍO
CHIEF STRATEGIC AND
INVESTMENTS OFFICER
CHIEF FINANCIAL OFFICER
JUAN DE MORA NARVAEZ
CORPORATE OFFICER HUMAN
RESOURCES
GUSTAVO GABARDA DURÁN
MANAGING DIRECTOR
SOTOGRANDE
FERNANDA MATOSES
GARCÍA-VALDÉS
CORPORATE LEGAL COUNSEL
FRANCISCO ALEJANDRO
ZINSER CIESLIK
CHIEF OPERATING OFFICER
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:
Total remuneration of top management (in thousands of euros)
3,075
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
Administrative body which authorizes the clauses
X
YES
Is the General Meeting of Shareholders informed of these clauses?
NO
Name or Corporate
Name of the significant
shareholder
Office
MATÍAS AMAT ROCA
CAJA DE AHORROS Y
MONTE DE PIEDAD DE
MADRID
GENERAL FINANCIAL
MANAGER
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:
Corporate Name
Name or Corporate
Name of the significant
shareholder
Description of the
relationship
B.1.13. Indicate, as and when applicable, the amendments introduced in the
regulations of the board of directors during the financial year.
The Regulations of the Board of Directors were not amended during financial
year 2006.
X
B.1.11. Indicate the process for establishing the remuneration of the members
of the board of directors and the relevant bylaw 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 bylaw 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.
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 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
Corporate Name
7
Board of Directors General Meeting of Shareholders
98
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.
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
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
the corresponding opinion of the Nomination and Remuneration
Committee, which shall not be binding.
2. Designation of External Directors
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 Proprietary Directors
As far as Proprietary 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.
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.
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
Proprietary Directors or with the corporations or business groups they
represent.
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 Proprietary 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.
In particular, the following may not be proposed or appointed as
independent Directors:
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;
c) Persons who, directly or indirectly, have made or received relevant
payments to or from the Company which could compromise their
independence;
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.
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.1.15. Indicate those cases in which directors have the obligation of
resigning.
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
purpose to that of the Company or that of any of the Companies which
form its Group.
The Board of Directors, if it considers it appropriate, may release the
outgoing Director from this obligation or shorten the period of its duration.
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.
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 Proprietary 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.
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:
99
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
NO
B.1.17. Are reinforced majorities, other than the legal majorities, required for
certain types of decision?:
NO
YES
NO
X
Maximum number of years of office
Article 17 of the Board of Directors’ Regulations establishes that the Executive
Chairperson 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
reports of the Board’s various Committees.
YES
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:
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:
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 Regulation of the Board of Directors 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 Chairperson’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 attendees.
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 Chairperson:
Number of Board meetings
10
Number of Board meetings without the Chairperson attending
ADOPTION OF RESOLUTIONS
Indicate the number of meetings held in the financial year by the various board
committees:
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 attendees
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 Executive or Delegated Committee meetings
Number of Audit Committee meetings
7
Number of Nomination and Remuneration Committee meetings
4
Number of Strategy and Investment Committee meetings
0
Number of Committee meetings
0
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:
B.1.19. Indicate whether or not the chairman has the casting vote:
X
10
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:
Description of the requirements
YES
0
NO
Name
Office
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
Chairperson or the Vice-Chairperson who stands in for him/her 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 Chairperson
100
65
Age limit of Managing Director
65
Age limit of Directors
70
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
authorized by it are not presented to the General Meeting of Shareholders
with qualifications in the audit report.
Article 40.2 of the Board of Directors’ Regulations establishes that the Board
of Directors must endeavour to authorize 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 discharge as many functions as may be imposed on it by virtue of the
Company’s category as a company that issues listed securities. In particular,
the Board of Directors shall discharge, in the manner laid down in this
Regulation, the following specific functions in relation to the Securities
Market:
a) Supervision of regular financial information made available to the public.
b) The performance of all the activities and the adoption of all the measures
that may be necessary to guarantee the Company’s transparency before the
financial markets, reporting to them, in particular, on all events, decisions and
circumstances that may be of importance to the share price.
c) The performance of all the activities and the adoption of all the measures
that may be necessary for the correct formation of the Company’s share prices
and, when applicable, those of its subsidiaries, 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.
Additionally, all relevant information of interest to the Securities Markets is
centralized in the Financial Department which, through its Manager, sends it
on a regular basis as a Significant Event to the Securities Markets.
Finally it should be pointed out that article 25.b. 4 of the Board of Directors
Regulation includes the following as one of the powers attributed to this
Committee: “to know the financial information process and internal control
systems”.
jeopardise the Auditor’s independence and any others relating to the
process of carrying out the audit, and to receive information and maintain
with the Auditors the communications provided for in the audit legislation
and technical audit 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
Group
Total
31
70
101
Amount of work other than auditing work as a percentage
of the total amount invoiced by the firm of auditors
17.270
9.210
10.750
Amount of work other than auditing work
(in thousands of euros)
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
Group
5
5
Company
Group
Number of uninterrupted years
Number of years audited by the current firm of financial auditors as a
percentage of the total number of years the company has been audited
25,000
25,000
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:
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 rating agencies.
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. In this regard,
article 25.3, point e.) of the Article of Associations states that one of the
powers of the Audit and Control Committee is “to maintain relations with the
Auditors in order to receive information on any questions that may
Corporate Name
Name of the
investee company
% stake
Office or functions
CAJA DE AHORROS DE
VALENCIA, CASTELLÓN
Y ALICANTE (BANCAJA)
HOTEL ALAMEDA
VALENCIA, S.L.
90.000
NONE
CAJA DE AHORROS DE
PLAYA HOTELS
&RESORTS, S.L.
6.870
NONE
CAJA DE AHORROS DE
PROHORESA
29.930
NONE
CAJA DE AHORROS DE
IBERDROLA
INMOBILIARIA, S.A.
1.000
THE INDIVIDUAL
REPRESENTING
BANCAJA IS ALSO
A MEMBER OF
IBERDROLA
INMOBILIARIA, S.A.
101
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.2. Board Committees
B.2.1. List the administrative bodies:
Name of
the body
No. of
members
Functions
DELEGATED
COMMITTEE
5
COMMITTEE WITH DECISION-MAKING 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 THE 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 3
AND
REMUNERATION
COMMITTEE
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
TO REPORT ON THE PROPOSALS FOR THE PPOINTMENT
OF DIRECTORS AND TOP MANAGERS; TO APPROVE THE
REMUNERATION RANGES OF THE COMPANY’S TOP
MANAGERS; TO APPROVE STANDARD CONTRACTS FOR
HIRING TOP MANAGERS; TO ESTABLISH THE
REMUNERATION REGIME OF THE CHAIRMAN AND,
WHEN APPLICABLE, THE MANAGING DIRECTOR; TO
PROPOSE TO THE BOARD OF DIRECTORS THE
REMUNERATION REGIME OF DIRECTORS; TO REPORT ON
INCENTIVE PLANS;
NO
DETAILS OF THE PROCEDURE
B.2.2. Provide details of all the board committees and their members:
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.
EXECUTIVE OR DELEGATED COMMITTEE
Name
Office
GABRIELE BURGIO
CHAIRMAN
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.
CAJA DE AHORROS DE VALENCIA,
CASTELLÓN Y ALICANTE (BANCAJA)
MEMBER
MEMBER
JULIO C. DÍAZ-FREIJO CERECEDO
MEMBER
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.
MEMBER
SECRETARY NON-MEMBER
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.
B.1.34. Indicate whether or not a liability insurance policy exists in favour of
the company’s directors.
YES
X
NO
AUDIT COMMITTEE
Name
Office
CHAIRMAN
HOTELES PARTICIPADOS, S.L.
MEMBER
MEMBER
NOMINATION AND REMUNERATION COMMITTEE
Name
Office
MATÍAS AMAT ROCA
MEMBER
CHAIRMAN
MEMBER
STRATEGY AND INVESTMENT COMMITTEE
Name
102
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.
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 ViceSecretary. The Delegated Committee shall be validly constituted when half
plus one of its members are present or represented at the meeting.
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; 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
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.
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.
c) Relationship with the Board of Directors.
The Chairman of the Nomination and Remuneration Committee shall be
appointed by the Committee itself from amongst its members.
The Delegated Committee shall accurately inform the Board of Directors
of the items discussed and the decisions adopted in its meetings.
2. Audit and Control Committee
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:
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.
1. To report on the proposals for the appointment of Directors and Top
Managers of the Company and of its subsidiary companies;
2. To approve the remuneration ranges of the Company’s Top Managers;
3. To approve standard contracts for Top Managers;
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 oneyear period has elapsed since their removal.
b) Powers.
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 article 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;
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.
3) To supervise the internal audit services;
103
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.2.7. 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
X
NO
c) How it works
If negative, explain the executive committee’s composition
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 site.
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-MAKING 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 DELEGATED COMMITTEE.
AUDIT COMMITTEE
NOMINATION AND
REMUNERATION
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.
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.
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.
The aforesaid Regulations of the Board of Directors are available for
consultation in the web site 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.
104
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
NO
C. RELATED-PARTY 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
Nature of the Type of
name of the
relationship
operation
company or a
company in its group
Amount
(in
thousands
of euros)
CAJA DE AHORROS
DE VALENCIA,
CASTELLÓN Y
ALICANTE
(BANCAJA)
NH HOTELES, S.A.
Contractual
Guarantees
9,000
CAJA DE AHORROS
DE VALENCIA,
CASTELLÓN Y
ALICANTE
(BANCAJA)
NH HOTELES, S.A.
Contractual
Financial
agreements:
other
500
CAJA DE AHORROS
DE VALENCIA,
CASTELLÓN Y
ALICANTE
(BANCAJA)
NH HOTELES, S.A.
Contractual
Financial
agreements:
loans
17,219
CAJA DE AHORROS
DE VALENCIA,
CASTELLÓN Y
ALICANTE
(BANCAJA)
NH HOTELES, S.A.
Contractual
Financial
6,000
agreements:
Miscellaneous
CORPORACIÓN
FINANCIERA CAJA
DE MADRID, S.A.
NH HOTELES, S.A.
Contractual
Financial
23,500
agreements:
Miscellaneous
CORPORACIÓN
FINANCIERA CAJA
DE MADRID, S.A.
NH HOTELES, S.A.
Contractual
Financial
agreements:
loans
30,144
CORPORACIÓN
FINANCIERA CAJA
DE MADRID, S.A.
NH HOTELES, S.A.
Contractual
Financial
agreements:
loans
31,150
CORPORACIÓN
FINANCIERA CAJA
DE MADRID, S.A.
SOTOGRANDE, S.A.
Contractual
6,000
Financial
agreements:
Miscellaneous
CORPORACIÓN
FINANCIERA CAJA
DE MADRID, S.A.
NH HOTELES, S.A.
Contractual
Financial
agreements:
loans
4,465
DON AMANCIO
ORTEGA GAONA
NH HOTELES, S.A.
Contractual
Operating
lease
agreements
4,948
DON AMANCIO
ORTEGA GAONA
NH PAMPLONA, S.A. Contractual
Operating
lease
agreements
2,354
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:
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.
Name or
corporate name
of the
administrators
or managers
Name or corporate
name of the
company or a
company in its group
Nature of the
transaction
Type of
operation
Amount
(in
thousands
of euros)
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.
JESÚS IGNACIO
ARANGUREN
GONZÁLEZTARRÍO
NH HOTELES, S.A.
CONTRACTUAL
Financial
agreements:
loans
3,437
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.
GABRIELE
BURGIO
NH HOTELES, S.A.
CONTRACTUAL
Financial
agreements:
loans
8,305
ROBERTO
NH HOTELES, S.A.
CHOLLET IBARRA
CONTRACTUAL
Financial
agreements:
loans
2,578
MANUEL
HERRANDO Y
PRAT DE LA RIBA
SOTOGRANDE, S.A.
CONTRACTUAL
Operating
lease
agreements
20
FRANCISCO
ALEJANDRO
ZINSER CIESLIK
NH HOTELES, S.A.
CONTRACTUAL
Financial
agreements:
loans
400
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)
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 article
127 ter of Spain’s Company Law (LSA).
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
article 127 ter.5 of Spain’s Company Law refers.
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.
D. SYSTEMS FOR CONTROLLING RISKS
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.
Article 32 of the Regulations of the Board of Directors 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.
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.
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 Preventive Procedures
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 Procedure 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.
105
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.).
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 14 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
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.
D.5. Identify and describe the processes for complying with the different
regulations that affect the company and/or its group.
3. Systems for Controlling Business Risks and Operational and Environmental
Control
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.
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 IT 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.
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.
4. Other Preventive Procedures
E. GENERAL MEETING OF SHAREHOLDERS
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 coverage has been
adopted.
106
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 attendees, 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 site
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
General Meeting, in addition to the legally enforceable documents and
information, the Company shall incorporate into its web site, 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.
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 site.
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 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 demonstrate 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.
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- 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 article 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.
legal and bylaw 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 site 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 site, 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.
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 article 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 article 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
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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 site in which it
informs shareholders and investors in general of the most important highlights
occurring in connection with the Company. The corporate web site 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 the
preparation thereof, such as participation in the organization of the order in which
attendees 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
Date of General
Meeting
% physical
presence
% in
representation
% remote
voting
Total %
05-05-2006
40.282
18.574
0.000
58.856
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.
One: Examination and approval of the Annual Accounts, Management Report,
and Proposed application of profit corresponding to fiscal 2005.
Percentage of votes with which the resolution was adopted: 94.962%
Two: Distribution of dividends charged to voluntary reserves.
Three: Renewal and, where applicable, appointment of Directors.
Five: Appointment of financial Auditor of the Company and of its consolidated
Group.
Six: Delegation to the Board of Directors of the power to agree on a share
capital increase in one or several stages under the terms and with the
limitations established in art. 153 of Spain’s Company Law.
Seven: Authorisation for the Board of Directors to issue securities, bonds or
similar that cannot be converted into shares.
Eight: Share capital increase by a nominal amount of 8,500,000 Euros, through
issuing and circulating 4,250,000 new ordinary shares with a nominal value of
two Euros each, with an issue premium of 11.50 Euros per shares, which will be
fully subscribed and paid out in full through a non-monetary contribution
consisting of 1,162,439 shares from Latinoamericana de Gestión Hotelera, S.A.
in order to meet the consideration established for the purchase of these shares
by NH Hoteles, S.A. Total elimination of the preferential subscription right.
Amendment of article 5 of the Articles of Association. Delegation to the Board
of Directors of the power to substitute to the Delegated Committee or any
Directors the necessary powers to establish the increase conditions not
envisaged in the Meeting of Shareholders agreement, take the necessary
actions to enforce it and request acceptance for the quotation of new shares
on the various Securities Markets.
Nine: Share capital increase by a nominal amount of 17,540,260 Euros, by
issuing and circulating, with the possibility of incomplete subscription, of
8,770,130 new ordinary shares with a nominal value of two Euros each, with an
issue premium of 11 Euros per share, which will be fully subscribed and paid
up through a non-monetary contribution consisting of 8,770,130 shares from
Sotogrande, S.A. (where Sotogrande, S.A. holds a share for every share owned
by NH Hoteles, S.A. issued as a result of this agreement) in order to meet the
consideration established for the purchase by NH Hoteles, S.A. of these shares
through a Tender Offer. Total elimination of the preferential subscription right.
Amendment of article 5 of the Articles of Association. Delegation to the Board
of Directors of the power to substitute to the Delegated Committee or any
Directors the necessary powers to establish the increase conditions not
envisaged in the Meeting of Shareholders agreement, take the necessary
actions to enforce it and request acceptance for the quotation of new shares
on the various Securities Markets. Efficacy of the agreement conditional on
authorisation from the Comisión Nacional del Mercado de Valores of a Tender
Offer made by NH Hoteles, S.A. regarding the aforementioned shares owned
by Sotogrande, S.A.
Ten: Delegation of powers to formalise, interpret, rectify and execute the
resolutions adopted by the General Meeting of Shareholders.
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 bylaw 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.
Four: Acquisition of own shares.
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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 bylaw 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.
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.
The Company would like to place on record that although on 19th May
2006 the Unified Code of Good Governance (the so-called “Conthe Code”)
was approved, which contains 58 Recommendations, the level of
compliance with said Recommendations will be analysed in the “Corporate
Governance Report” for fiscal 2007 to be submitted in 2008. Until then, the
level of compliance by NH HOTELES, S.A. with the recommendations for
good Corporate Governance will be briefly explained in the Olivencia and
Aldama reports.
- 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-making
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;
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:
d) Identification of the Company’s main risks and implantation and monitoring
of adequate information and internal control systems;
YES
e) Establishment of policies for information to and communication with
shareholders, the markets and public opinion;
NO
X
Describe the policy
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
E.12. Indicate the address of the company’s web site 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 para el accionista” [information for shareholders].
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.
Likewise, the Regulations of the Board of Directors contain an article which
establishes that:
110
“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 non-executive
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
(Proprietary 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 proprietary 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 proprietary Directors.
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 a general decision-making power, and
consequently all the powers which correspond to the Board of Directors have
been delegated to the former, with the exception of those which, by virtue
of the law or the Articles of Association, cannot be delegated. The Board of
Directors may also entrust other powers 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 5 members plus the
Secretary.
- 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
It shall be understood that the provisions of this article are without prejudice
to the shareholders’ legally recognised right of proportional representation.”
During fiscal 2006 the Company’s Board of Directors was made up of 11
Directors, of whom one Director was executive and eleven Directors were
external (four were proprietary Directors and six were independent Directors).
- Dimension of the Board of Directors
The Directors have available to them specific and accurate 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.
When following the recommendation suggesting that the number of Board
Members 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 representativity and efficient working, without under any
circumstances the proposed number exceeding twenty.
- Frequency and working of Board Meetings
- Deconcentration of power
In these meetings the Chairman organizes the debates, endeavouring to
obtain and encouraging the participation of all the Directors in the discussions.
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 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 2006 eight
ordinary meetings and one extraordinary meeting and one non-session
meeting.
- 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.
- Non-removability of external Directors
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.
- Board Committees
- Delegated Committee
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.
In accordance with the provisions of article 24 of the Regulations of the
Board of Directors, the Delegated Committee shall be made up of the
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- Resignation from office
- Duty of loyalty of significant shareholders and top management
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.
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.
- 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 2006 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 Regulations of the Board of Directors 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 occurred during fiscal 2006.
112
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 site.
- 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 Regulations of
the Board of Directors, 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 corporate 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 site, 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 site in which
it informs shareholders and investors in general of the most important
highlights occurring in connection with the Company. The corporate web
site 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 site 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.
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.
113
ADDITIONAL NOTES TO CERTAIN SECTIONS OF THE
REPORT:
SECTION A.3.: The table in this section A.3. shows, inter alia, the number of
shares and shareholding that the members of the Board of Directors of NH
Hoteles, S.A. held during fiscal 2006.
Mr. Gary Garrabrant:
- Per diem allowance as member of the Board in 2006: €27,616.44
- Total per diem allowances: €27,616.44
The Company would like to state that the “direct option rights” to which the
present section refers, which Mr. Gabriele Burgio holds and which amount to
528,971 are not option rights in the strict sense of the word since only "cash for
stocks" can be exercised.
Mr. Alfonso Merry del Val i Gracie:
- Per diem allowance as member of the Board in 2006: €42,000
- Total per diem allowances: €42,000
POINT B: The present Report reflects the composition of the company’s Board
of Directors during fiscal 2006.
Mr. Luis Fernando Romero García:
SECTION B.1.8.: The individual amount of per diem allowances during fiscal
2006 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.
Mr. Miguel Rodríguez Domínguez:
- Per diem allowance for attending the Audit and Control Committee: €3,205.38
Chairman of the Board and of the Delegated Committee:
Mr. Gabriele Burgio:
- Per diem allowance for attending the Delegated Committee: €30,000.00
- Total per diem allowances: €72,000
Directors:
TOTAL:
- Per diem allowance for attending the Delegated Committee: €147.000
- Per diem allowance for attending the Audit and Control Committee: €29,289,11
- Per diem allowance for attending the Remuneration and Nomination
Committee: €15,984.20
- TOTAL PER DIEM ALLOWANCES 2006: €626,656.87
Mr. Manuel Herrando Prat y de la Riba:
SECTION B.1.8.: The Company would like to place on record that the amount
relating to the “Executive Director” includes both the amount that he/she has
received as member of the Board of Directors and as Executive of the
company NH Hoteles, S.A. Therefore, the total remuneration received by all of
the Directors as Board Members represents 1.003% of the profit that the
consolidated group has gained during the fiscal year.
Mr. José de Nadal Capará:
SECTION B.1.9.: The total remuneration accrued by Top Management in fiscal
2006 is broken down into the different concepts, as follows:
Mr. Alfredo Fernández Durán:
BANCAJA (Mr. Aurelio Izquierdo Gómez):
Mr. Julio César Díaz-Freijo Cerecedo:
- Per diem allowance for attending the Delegated Committee: €27,000
Mr. Bernard s´Jacob:
HOTELES PARTICIPADOS, S.L. (Mr. Ignacio Ezquiaga Domínguez):
Mr. Ramón Blanco Balín (Chairman of Audit and Control Committee):
114
Mr. Matías Amat Roca:
- Total per diem allowances: €0
- Fixed remuneration: €1,738,505
- Variable remuneration: €1,169,794
- Remuneration in kind: €166,655
- Total: €3,074,954
The persons taken into account for the calculation of these amounts are those
indicated in SECTION B.1.9.
B.1.13: Although during fiscal 2006 no amendments were made to the
NH HOTELES, S.A. Board of Directors Regulation, the Company would like
to place on record that at the start of 2007, the Board of Directors of
NH HOTELES, S.A. introduced both amendments to the aforementioned
Regulation in order to adapt it to the new Unified Code of Good
Governance, approved last 19th May 2006.
B.1.30.: 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.
E.6.: With regard to the Meeting of Shareholders Regulation, at NH Hoteles,
S.A.’s Extraordinary Meeting held past 5th March 2007, the amendment of
said Regulation was approved in order to bring it into line with the
recommendations of the Unified Code of Good Governance.
This annual corporate governance report was approved by the Company’s
Board of Directors in its meeting held on 16-04-2007.
Annual Report of the Audit Committee
115
ANNUAL REPORT OF THE AUDIT COMMITTEE
1) Duties, competence and working of the Audit Committee
The main duties of the Audit and Control Committee are 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 Annual 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:
2) Members of the Audit Committee
In the Audit Committee’s meeting in May 2006, Bernard s’Jacob ended his
term as a result of the termination of his mandate as a Director. Miguel
Rodríguez Domínguez was appointed to replace him. As a result, the Audit
and Control Committee now comprises the following Directors:
Chairman:
Member:
Member:
2. The Chairperson of the Audit 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/she may be re-elected once again
after a year has elapsed since the end of his last term.
3. The Audit and Control Committee shall have at least the following
competences:
a) to report, through its Chairperson, to the General Meeting of
Shareholders on the issues that are raised 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/her
professional mandate and the revocation or renewal of his/her
appointment;
- Independent
- Independent
- Shareholder
3) Relations with external Auditors
The Parent company of the NH Hoteles Group has been audited since 1986.
The main auditors since then are listed below:
Year
1. “Inside the Board of Directors, an Audit 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.
Ramón Blanco Balín
Miguel Rodríguez Domínguez
Ignacio Ezquiaga Dominguez
Auditor
1986 Peat Marwick
1987 Peat Marwick
1988 Peat Marwick
1989 Peat Marwick
1990 Peat Marwick
1991 Peat Marwick
1992 Peat Marwick
1993 Arthur Andersen
2000 Andersen
2001 Andersen
2002 Deloitte & Touche
The 2006 Consolidated Annual Accounts were audited by two renown
independent firms:
c) o 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 auditing the accounts, as well as to
receive information and keep up the communications with the Auditor
provided for under audit legislation and in the technical audit standards.
4. The Committee shall meet at least once a quarter and whenever it is
deemed appropriate, after being convened by the Chairperson, on his/her
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 make its
decisions by a majority vote of those present or represented. The
Chairperson shall have a casting vote.
6. 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.”
• Deloitte & Touche is the main auditor. As such, it issues the audit opinion on
the Consolidated Annual Accounts. It checked the accounts of the
companies in the Spain/Portugal, Mexico, MERCOSUR and Sotogrande
Business Units, which account for 67% of the assets, 51% of revenues and
58% of consolidated net profit.
• PriceWaterhouse Coopers audited the Netherlands/Belgium, Germany and
Austria/Switzerland Business Units, which account for 32% of assets, 48% of
total revenues and 41% 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 5
May 2006 and as auditor of the various Business Units listed above at their
respective General Meetings of Shareholders held during the first half of 2006.
That firm has been the Group's main auditor since 2002, although the partner
in charge of the audit changed in 2003 and 2005. The total fees received by
the firm for its auditing services for 2006 totalled 0.66 million euros (0.59 million
euros in 2005).
That firm was also paid fees for providing other professional services to the NH
Hoteles Group totalling 0.10 million euros (0.15 million euros in 2005).
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 2006. PWC has been the auditor of
the Dutch, Belgian and Swiss Companies since 1998 and of the German and
Austrian Companies since 2004. Fees for audit services for 2006 totalled 0.53
million euros (0.65 million euros in 2005).
In the same way as the main auditor, Price Waterhouse Coopers was paid 0.24
million euros in fees for other professional services (0.30 million euros in 2005).
116
4) Content and results of the work of the Audit Committee
The Audit Committee held 6 meetings in 2006 and dealt with the following
issues:
a) Analysing and assessing, together with the external auditors, the Financial
Statements and the Notes to the Financial Statements for 2005 and 2006,
checking that their audit opinion was 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 so that it is reliable,
transparent and drafted by applying standard accounting principles and
criteria.
c) Monitoring the Internal Audit Plan for 2006, examining its conclusions and
the implementation, whenever applicable, of any corrective measures that
are needed.
d) Starting the draft of the Manual on administrative/operational processes for
the hotels. One of the objectives for 2007 is to draft a Manual that includes
the basic administrative and operational processes for each area within the
hotels. The first phase of the Manual will be developed jointly for Spain, the
Netherlands and Germany.
e) Updating the different types of risk to which the activities of NH Hoteles are
exposed. Designing the Group’s definitive Risk Map by hiring an external
consultancy to provide support to the project.
f) Monitoring and completing the work which, in collaboration with the
Company’s external auditors, was carried out in order to determine the final
impact of the implementation of the new International Financial Reporting
Standards (IFRS) on the Financial Statements of NH Hoteles, S.A. and its
Consolidated Group.
The main effect of the change in the accounting standards refers to asset
valuations and their consequent reflection on the Group’s Equity and to the
increase in financial and accounting information supplied to the market.
g) Examining the Annual Corporate Governance Report, before submitting it
to the Board of Directors for study and approval, with a special emphasis on
the analysis of the record of situations of Directors and Managers.
h) Analysing the Reports drafted by the Auditor and Independent Expert
regarding the valuations used for determining the share exchange in the
capital increases proposed by NH Hoteles, S.A. for the exchange of shares
of Sotogrande, S.A. and Latinoamericana de Gestión Hotelera, S.A. owned
by minority shareholders.
5) Priorities for 2007
The priorities of this Committee for 2007, apart from those related to the
drafting and issuing of public financial information, focus on:
1. Drafting the Manual on administrative/operational processes for all the
hotels.
2. Updating the risk map drafted by Group Management jointly with external
advisers.
3. Analysing and monitoring the performance of the new acquisitions in Italy:
Jolly Hotels and the Framon Hotel Group.
4. Monitoring 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 all the outside professionals (auditors, appraisers and
consultants) and members of the economic and financial departments,
internal auditors and management control it has deemed necessary.
117
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Página 1
2006
Annual Report
www.nh-hotels.com
Santa Engracia, 120
28003 • Madrid • Spain
T: +34 91 451 97 18
F: +34 91 451 97 69
Inks are based exclusively on vegetable oils with a minimum content in volatile organic compounds (VOCs).
Varnish is mainly based on natural and renewable raw
materials.
Annual Report 06
Due to its commitment to Environmental Conservation,
NH Hoteles has printed this Report on a paper manufactured with 50% pure cellulose (ECF), 40% pre-consumer selected recycled fibre and 10% post-consumer
uncoloured recycled fibre.

NH INFORME ANUAL 2006 1-24 ing.QXD

Transcription

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