Corporate Governance Report
Telefonica SA
03 April 2007
PART 1
+----------------------------+ +--------------------------------------------------+
| APPENDIX I | | ANNUAL REPORT ON CORPORATE GOVERNANCE |
+----------------------------+ +--------------------------------------------------+
+----------------------------+
| LISTED COMPANIES |
+----------------------------+
+-----------------------------+----------------------+-------------+
|DATA IDENTIFYING ISSUER | FINANCIAL YEAR|2006 |
+-----------------------------+----------------------+-------------+
+-------------------------+
|TAX ID CODE: A-28015865 |
+-------------------------+
+-------------------------------------------------------------------+
|Registered name: |
| |
| TELEFONICA, S.A. |
+-------------------------------------------------------------------+
+-------------------------------------------------------------------+
|Registered offices: |
| |
|GRAN VIA, 28 |
|MADRID |
|MADRID |
|28013 |
|SPAIN |
+-------------------------------------------------------------------+
+------------------------------------------------------------------------------+
| MODEL OF ANNUAL CORPORATE GOVERNANCE REPORT FOR LISTED COMPANIES |
+------------------------------------------------------------------------------+
For a full understanding of this form and subsequent drafting of the report,
please read the instructions attached for this purpose at the end of this
report.
A SHAREHOLDING STRUCTURE
A.1. Fill in the following table on the company's share capital:
+-----------------------+-----------------------+----------------------+
| Latest date of any | Share Capital (€) | Number of shares |
| change | | |
+-----------------------+-----------------------+----------------------+
| 07-06-2005 | 4,921,130,397.00 | 4,921,130,397.00 |
+-----------------------+-----------------------+----------------------+
If there are different types of shares, indicate this in the following table:
+-----------------------+----------------------+-----------------------+
| Type | Number of shares | Nominal unit value |
+-----------------------+----------------------+-----------------------+
| ALL THE SHARES ARE OF | 4,921,130,397 | 1.00 |
| THE SAME TYPE | | |
+-----------------------+----------------------+-----------------------+
A.2. List the direct and indirect holders of significant shareholdings in your
organisation at the end of the financial year, excluding members of its Board of
Directors:
+------------------+------------------+------------------+-------------+
|Name or corporate | Number of shares | Number of shares | % of the |
| name | held directly | held indirectly | Total/share |
| of shareholder | | (*) | |
+------------------+------------------+------------------+-------------+
|CAJA DE AHORROS Y | 58,103,174| 191,878,573|5.080 |
|PENSIONES DE | | | |
|BARCELONA, 'LA | | | |
|CAIXA' | | | |
+------------------+------------------+------------------+-------------+
|BANCO BILBAO | 316,735,246| 28,943|6.437 |
|VIZCAYA | | | |
|ARGENTARIA | | | |
+------------------+------------------+------------------+-------------+
(*) Through:
+---------------------------+-----------------------+------------------+
| Name or corporate name of | Number of shares held |% Share capital |
| direct | directly | |
| Shareholder | | |
+---------------------------+-----------------------+------------------+
|CAIXA DE BARCELONA DE | 19,145,755 | 0.389|
|SEGUROS DE | | |
|VIDA, SOCIEDAD ANONIMA DE | | |
|SEGUROS | | |
|Y REASEGUROS, S.A. | | |
+---------------------------+-----------------------+------------------+
|CAIXA HOLDING, S.A., | 172,732,818 | 3.510|
|SOCIEDAD | | |
|UNIPERSONAL | | |
+---------------------------+-----------------------+------------------+
|CONSOLIDAR CIA. DE SEGUROS | 9,208 | 0.000|
|DE VIDA, | | |
|S.A. (ARGENTINA) | | |
+---------------------------+-----------------------+------------------+
|BBVA SEGUROS, S.A. (ESPANA)| 19,735 | 0.000|
+---------------------------+-----------------------+------------------+
| Total:| 191,907,516 | |
+---------------------------+-----------------------+------------------+
Indicate the most significant movements in the shareholding structure during the
financial year:
+---------------------------+-----------+-------------------------------+
| Name or corporate name of| Date of |Description of transaction |
| shareholder|transaction| |
+---------------------------+-----------+-------------------------------+
| | | |
+---------------------------+-----------+-------------------------------+
A.3. Fill in the following tables on company directors holding company shares:
+---------------+-----------+-----------+-----------+----------+---------+
| Name or |Date of |Date of |Number of |Number of |% of the |
|corporate name |first |last |shares held|shares |Total/ |
| of Company |appointment|appointment|directly |held |share |
| Director | | | |indirectly|capital |
| | | | |(*) | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. CESAR |29-01-1997 |12-04-2002 | 1,910,333| 78,000| 0.040|
|ALIERTA IZUEL | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. ISIDRO |26-01-1994 |21-06-2006 | 144,978| 0| 0.003|
|FAINE | | | | | |
|CASAS | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. GREGORIO |27-02-2002 |12-04-2002 | 55| 0| 0.000|
|VILLALABEITIA | | | | | |
|GALARRAGA | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. JOSE MARIA |26-07-2006 |26-07-2006 | 9,515| 1,036| 0.000|
|ALVAREZ-PALLETE| | | | | |
|LOPEZ | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. DAVID |25-01-2006 |21-06-2006 | 10,500| 0| 0.000|
|ARCULUS | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. MAXIMINO |29-01-1997 |12-04-2002 | 10,247| 494| 0.000|
|CARPIO GARCIA | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. CARLOS |28-03-2001 |21-06-2006 | 564| 22,450| 0.000|
|COLOMER | | | | | |
|CASELLAS | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. FERNANDO |26-02-2003 |11-04-2003 | 19,349| 0| 0.000|
|DE ALMANSA | | | | | |
|MORENO-BARREDA | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. PETER |25-01-2006 |21-06-2006 | 500| 0| 0.000|
|ERSKINE | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. ALFONSO |28-03-2001 |21-06-2006 | 1,883| 103,480| 0.002|
|FERRARI HERRERO| | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. GONZALO |12-04-2002 |12-04-2002 | 39,476| 390,000| 0.009|
|HINOJOSA | | | | | |
|FERNANDEZ DE | | | | | |
|ANGULO | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. PABLO ISLA |12-04-2002 |12-04-2002 | 401| 0| 0.000|
|ALVAREZ DE | | | | | |
|TEJERA | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. JULIO |21-12-2005 |21-06-2006 | 25,756| 2,207| 0.001|
|LINARES LOPEZ | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. AN TONIO |21-04-1995 |21-06-2006 | 2,274| 667| 0.000|
|MASSANELL | | | | | |
|LAVILLA | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. VITALINO |21-12-2005 |21-06-2006 | 300| 0| 0.000|
|MANUEL NAFRIA | | | | | |
|AZNAR | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. ENRIQUE |12-04-2002 |12-04-2002 | 20,228| 34,000| 0.001|
|USED AZNAR | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
|MR. ANTONIO |12-01-2000 |31-05-2005 | 103,567| 0| 0.002|
|VIANA-BAPTISTA | | | | | |
+---------------+-----------+-----------+-----------+----------+---------+
(*) Through:
+-----------------------------------------+----------------------------+
|Name or corporate name of direct | Number of shares held |
|shareholder | directly |
+-----------------------------------------+----------------------------+
|GRUPO ARCE DE INVERSIONES S.A., SICAV | 78,000|
+-----------------------------------------+----------------------------+
|MS. PURIFICACION SAMANIEGO LINARES | 302|
+-----------------------------------------+----------------------------+
|MR. ALVARO ALVAREZ-PALLETE SAMANIEGO | 302|
+-----------------------------------------+----------------------------+
|MR. JOSE MARIA ALVAREZ-PALLETE SAMANIEGO | 432|
+-----------------------------------------+----------------------------+
|MS. CARMEN SAN ROMAN RODRIGUEZ | 302|
+-----------------------------------------+----------------------------+
|MS. CARMEN CARPIO SAN ROMAN | 64|
+-----------------------------------------+----------------------------+
|MS. INES CARPIO SAN ROMAN | 64|
+-----------------------------------------+----------------------------+
|MR. JERONIMO CARPIO SAN ROMAN | 64|
+-----------------------------------------+----------------------------+
|AHORRO BURSATIL S.A. SICAV | 22,450|
+-----------------------------------------+----------------------------+
|FINALFESA, S.A. | 82,680|
+-----------------------------------------+----------------------------+
|INVERSIONES SINGLADURA, S.A. SICAV | 20,800|
+-----------------------------------------+----------------------------+
|ELETRES, S.L. | 390,000|
+-----------------------------------------+----------------------------+
|MS. MARIA JESUS ROMANA PESCADOR | 140|
+-----------------------------------------+----------------------------+
|MS. BEGONA LINARES ROMANA | 367|
+-----------------------------------------+----------------------------+
|JUDBEM DE INVERSIONES, S.A. SICAV | 1,700|
+-----------------------------------------+----------------------------+
|MS. GEMMA MASSANELL BOLET | 667|
+-----------------------------------------+----------------------------+
|REVIEW INVERSIONES S.A. SICAV | 34,000|
+-----------------------------------------+----------------------------+
|Total: | 632,334|
+-----------------------------------------+----------------------------+
+----------------------------------------------+-----------------------+
|% of total equity held by the Board of | 0.058|
|Directors | |
+----------------------------------------------+-----------------------+
Fill in the following tables on Company Directors holding company share options:
+------------------+-------------+-------------+-------------+---------+
|Name or corporate | Number of | Number of |Equivalent |% of the |
| name of Company |options held |options held |number of |Total/ |
| Director | directly | indirectly |shares |share |
| | | | |capital |
+------------------+-------------+-------------+-------------+---------+
| | | | | |
+------------------+-------------+-------------+-------------+---------+
A.4. Where applicable, indicate any family, contractual or corporate
relationships between owners of significant shareholdings, as far as the Company
is aware, unless of little relevance or ensuing from ordinary trading or
exchange:
+-----------------------+-----------------------+----------------------+
|Name or corporate name | Type of relationship | Brief description |
| of related party | | |
+-----------------------+-----------------------+----------------------+
| | | |
+-----------------------+-----------------------+----------------------+
A.5. Where applicable, indicate any commercial, contractual or corporate
relationships between owners of significant shareholdings and the company,
unless of little relevance or ensuing from ordinary trading or exchange:
+---------------------------+------------------+-----------------------+
|Name or corporate name of | Type of |Brief description |
|related party | relationship | |
+---------------------------+------------------+-----------------------+
|BANCO BILBAO VIZCAYA |Corporate |JOINT SHAREHOLDING WITH|
|ARGENTARIA | |TELEFONICA MOVILES |
| | |ESPANA, S.A.U. IN |
| | |MOBIPAY |
| | |ESPANA, S.A. AND WITH |
| | |TELEFONICA, S.A. IN |
| | |MOBIPAY |
| | |INTERNACIONAL, S.A. |
+---------------------------+------------------+-----------------------+
|BANCO BILBAO VIZCAYA |Corporate |JOINT SHAREHOLDING WITH|
|ARGENTARIA | |TELEFONICA DE |
| | |CONTENIDOS |
| | |S.A.U. IN HISPASAT, |
| | |S.A. |
+---------------------------+------------------+-----------------------+
|BANCO BILBAO VIZCAYA |Corporate |JOINT SHAREHOLDING WITH|
|ARGENTARIA | |TELEFONICA S.A. IN |
| | |ATENTO N.V. |
+---------------------------+------------------+-----------------------+
A.6. Indicate any shareholder agreements that have been reported to the company:
+-----------------------+----------------------+-----------------------+
| Parties to | % of share capital | Brief description of |
| paracorporate | affected | the agreement |
| agreements | | |
+-----------------------+----------------------+-----------------------+
| | | |
+-----------------------+----------------------+-----------------------+
Indicate any concerted actions among company shareholders of which the company
is aware:
+-----------------------+----------------------+-----------------------+
| Parties to concerted | % of share capital | Brief description of |
| actions | affected | the concerted action |
+-----------------------+----------------------+-----------------------+
| | | |
+-----------------------+----------------------+-----------------------+
Expressly indicate any change in or break-up of said concerted actions or
agreements that has taken place during the financial year.
A.7. Indicate whether any person or organisation exercises or may exercise
control over the company pursuant to Article 4 of the Securities Market Law:
+----------------------------------------------------------------------+
| Name or corporate name |
+----------------------------------------------------------------------+
| |
+----------------------------------------------------------------------+
+----------------------------------------------------------------------+
| Comments |
+----------------------------------------------------------------------+
| |
+----------------------------------------------------------------------+
A.8. Fill in the following tables on the company's treasury stock:
At year end:
+-----------------------+-----------------------+----------------------+
| Number of shares held | Number of shares held |% Total/Share capital |
| directly | indirectly (*) | |
+-----------------------+-----------------------+----------------------+
| 75,632,559 | 0 | 1.537 |
+-----------------------+-----------------------+----------------------+
(*) Through:
+-----------------------------------+----------------------------------+
| Name or corporate name of direct | Number of shares held directly |
| shareholder | |
+-----------------------------------+----------------------------------+
| | |
+-----------------------------------+----------------------------------+
|Total: | |
+-----------------------------------+----------------------------------+
List any significant variations that have occurred during the financial year,
according to Royal Decree 377/1991:
+------------------+------------------+------------------+-------------+
| Date | Number of direct |Number of indirect|% Total/share|
| | shares | Shares | capital |
+------------------+------------------+------------------+-------------+
| 08-03-2006 | 175,195,970|0 |3.560 |
+------------------+------------------+------------------+-------------+
| 04-04-2006 | 239,580,268|0 |4.868 |
+------------------+------------------+------------------+-------------+
| 22-09-2006 | 47,080,408|0 |0.957 |
+------------------+------------------+------------------+-------------+
+------------------------------------------------+---------------------+
| Revenue from treasury stock transactions | 46,850|
| throughout the year (in thousands of euros) | |
+------------------------------------------------+---------------------+
A.9. Detail the terms and conditions of any authorisation(s) conferred by the
General Shareholders' Meeting to the Board of Directors to purchase and/or
transfer the treasury stock described in section A.8 above.
The Ordinary General Shareholders' Meeting of Telefonica, at its session held
on June 21st 2006, resolved to renew the authorisation granted by the GSM of May
31st 2005 for the derivative acquisition of treasury stock, either directly or
through Group companies, in the terms literally transcribed as follows:
'To authorise, as set forth in Articles 75 and next of the current Spanish
Corporations Law (Ley de Sociedades Anonimas), the acquisition, at any moment
and as many times as considered necessary by Telefonica, S.A. - either directly
or through any of the subsidiary companies of which it is the dominant company
- of the Company's treasury stock, through a purchase-sale or by any other
legal onerous title.
The minimum acquisition price or compensation will be equivalent to the nominal
value of the treasury stock acquired and the maximum acquisition price or
compensation will be equal to the market value of the treasury stock on an
official secondary market at the time of the acquisition.
Said authorisation is granted for a period of 18 months, from the date of the
current Annual General Shareholders' Meeting, and is expressly subject to the
limitation that, at any time, the nominal value of the treasury stock acquired
under this authorisation, added to that already held by Telefonica, S.A. and any
of the controlled subsidiary companies, may exceed 5 percent of the share
capital at the time of the acquisition, respecting the limitations set for the
acquisition of treasury stock as imposed by the regulatory authorities of the
markets on which Telefonica, S.A. shares are quoted.
It is expressly noted that the authorisation granted for the acquisition of
treasury stock can be used wholly or partially for the acquisition of these
shares of Telefonica, S.A., and that the Company must deliver or transfer to its
directors or employees, or to those of the companies in its Group, directly or
as a consequence of these, having exercised their option rights, all within the
framework of the referenced remuneration systems as the market value of the
company shares approved in due form.
To empower the Board of Directors, in the broadest possible terms, to exercise
the authorization derived from this resolution and to execute the remaining
items included in this, enabling the Board of Directors to delegate to the
Executive Committee, the Executive Chairman of the Board or any other person
expressly empowered by the Board to this effect.
The unexecuted part of the resolution adopted by the Company's Annual General
Shareholders' Meeting of May 31st, 2005, in relation to point VI of the Agenda
of this same Meeting, shall remain null and void.'
A.10. Indicate any restrictions under law or the company articles of association
on exercising voting rights and any legal restrictions on the acquisition and/or
transfer of company stock:
(i) Restrictions on exercising voting rights:
In accordance with Article 21 of the Company Articles of Association, no
shareholder shall be allowed to cast a number of votes representing more than
ten percent of the overall share capital entitled to voting rights existing at
any time, regardless of the number of shares he/she actually holds. In
ascertaining the maximum number of votes which each shareholder may cast, only
those shares owned by each shareholder shall be taken into account, and the
shares belonging to other shareholders who have appointed such shareholder as
their proxy shall not be included, without prejudice to the aforementioned ten
percent limit, which shall apply equally to every represented shareholder.
The limit set out in the above paragraph shall likewise apply to the maximum
number of votes that may be cast - either jointly or individually - by two or
more shareholding companies belonging to the same group of companies, and to the
maximum number of votes which may be cast by an individual or a corporate body
holding shares in the Company which are directly or indirectly controlled by
that individual or corporate body.
(ii) Limits on the acquisition and/or transfer of company stock:
There are no provisions in the Articles of Association restricting or limiting
the free transfer of Telefonica stock.
Law 13/2006, of May 26, replaced the legal regime applicable to the disposal of
public shareholdings in certain companies to which certain corporate
transactions and agreements of Telefonica, S.A., Telefonica Moviles, S.A.,
Telefonica Moviles Espana, S.A.U. and Telefonica de Espana, S.A.U. are subject
pursuant to Royal Decree 8/1997, January 10.
This change means the definitive removal of the system of public controls that
until now were applicable to operations subject to Law 5/1995, March 23. This
Law also resulted in the early termination of the regime that for Telefonica was
to finish on 18th February 2007.
B STRUCTURE OF CORPORATE ADMINISTRATION
B.1. Board of Directors
B.1.1. Detail the maximum and minimum number of directorships established under
the articles of association:
+---------------------------+--------------------------+
|Maximum number of Directors| 20|
+---------------------------+--------------------------+
|Minimum number of Directors| 5|
+---------------------------+--------------------------+
B.1.2. Fill in the following table with the Board members and their details:
+---------------+-----------+--------+-----------+-----------+------------+
| Name or |Represented|Post |Date of |Date of | Election |
|corporate name | by: | |first |last | procedures |
| of Director | | |appointment|appointment| |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. CESAR | |CHAIRMAN|29-01-1997 |12-04-2002 |COOPTION |
|ALIERTA | | | | |WITH |
|IZUEL | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY THE |
| | | | | |GENERAL |
| | | | | |SHAREHOLDERS'
| | | | | | MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. JOSE MARIA | |DIRECTOR|26-07-2006 |26-07-2006 |COOPTION |
|ALVAREZ-PALLETE| | | | | |
|LOPEZ | | | | | |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. DAVID | |DIRECTOR|25-01-2006 |21-06-2006 |COOPTON WITH|
|ARCULUS | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY THE |
| | | | | |GENERAL |
| | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. MAXIMINO | |DIRECTOR|29-01-1997 |12-04-2002 |COOPTION |
|CARPIO GARCIA | | | | |WITH |
| | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY THE |
| | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. CARLOS | |DIRECTOR|28-03-2001 |21-06-2006 |COOPTION |
|COLOMER | | | | |WITH |
|CASELLAS | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY |
| | | | | |THE GENERAL |
| | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. FERNANDO DE| |DIRECTOR|26-02-2003 |11-04-2003 |COOPTION |
|ALMANSA MORENO | | | | |WITH |
|BARREDA | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY THE |
| | | | | |GENERAL |
| | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. PETER | |DIRECTOR|25-01-2006 |21-06-2006 |COOPTION |
|ERSKINE | | | | |WITH |
| | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY THE |
| | | | | |GENERAL |
| | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. ISIDRO | |VICE |26-01-1994 |21-06-2006 |COOPTION |
|FAINE | |CHAIRMAN| | |WITH |
|CASAS | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY THE |
| | | | | |GENERAL |
| | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. ALFONSO | |DIRECTOR|28-03-2001 |21-06-2006 |COOPTION |
|FERRARI HERRERO| | | | |WITH |
| | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY |
| | | | | |THE GENERAL |
| | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. GONZALO | |DIRECTOR|12-04-2002 |12-04-2002 |GENERAL |
|HINOJOSA | | | | |SHAREHOLDE |
|FERNANDEZ DE | | | | |RS' MEETING |
|ANGULO | | | | | |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. PABLO ISLA | |DIRECTOR|12-04-2002 |12-04-2002 |GENERAL |
|ALVAREZ DE | | | | |SHAREHOLDERS'
|TEJERA | | | | | |
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. JULIO | |DIRECTOR|21-12-2005 |21-06-2006 |COOPTION |
|LINARES | | | | |WITH |
|LOPEZ | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY |
| | | | | |THE GENERAL |
| | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. ANTONIO | |DIRECTOR|21-04-1995 |21-06-2006 |GENERAL |
|MASSANELL | | | | |SHAREHOLDERS'
|LAVILLA | | | | | |
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. VITALINO | |DIRECTOR|21-12-2005 |21-06-2006 |COOPTION |
|MANUEL NAFRIA | | | | |WITH |
|AZNAR | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY |
| | | | | |THE GENERAL |
| | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. ENRIQUE | |DIRECTOR|12-04-2002 |12-04-2002 |GENERAL |
|USED AZNAR | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. ANTONIO | |DIRECTOR|12-01-2000 |31-05-2005 |COOPTION |
|VIANA-BAPTISTA | | | | |WITH |
| | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY |
| | | | | |THE GENERAL |
| | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
|MR. GREGORIO | |VICE |27-02-2002 |12-04-2002 |COOPTION |
|VILLALABEITIA | |CHAIRMAN| | |WITH |
|GALARRAGA | | | | |SUBSEQUENT |
| | | | | |RATIFICATION|
| | | | | |BY THE |
| | | | | |GENERAL |
| | | | | |SHAREHOLDERS'
| | | | | |MEETING |
+---------------+-----------+--------+-----------+-----------+------------+
+-----------------------------------+----------------------------------+
|Total number of Directors | 17|
+-----------------------------------+----------------------------------+
Indicate any members leaving the Board during this period:
+-------------------------------------------------------+--------------+
|Name or corporate name of director |Date of |
| |leaving |
+-------------------------------------------------------+--------------+
|MR. MIGUEL HORTA E COSTA |29-03-2006 |
+-------------------------------------------------------+--------------+
|MR. LUIS LADA DIAZ |26-07-2006 |
+-------------------------------------------------------+--------------+
|MR. MARIO EDUARDO VAZQUEZ |21-06-2006 |
+-------------------------------------------------------+--------------+
B.1.3. Fill in the following table on the Board members and their different
directorships:
EXECUTIVE DIRECTORS
+----------------------+----------------------+-----------------------+
|Name or corporate name| Commission proposing |Post within the company|
| of Director | appointment | organisation |
+----------------------+----------------------+-----------------------+
|MR. CESAR ALIERTA |NOMINATING, |CHAIRMAN OF TELEFONICA |
|IZUEL |REMUNERATION | |
| |AND CORPORATE | |
| |GOVERNANCE COMMITTEE | |
+----------------------+----------------------+-----------------------+
|MR. JOSE MARIA |NOMINATING, |CEO OF TELEFONICA |
|ALVAREZ- |REMUNERATION |LATINOAMERICA |
|PALLETE LOPEZ |AND CORPORATE | |
| |GOVERNANCE COMMITTEE | |
+----------------------+----------------------+-----------------------+
|MR. PETER ERSKINE |NOMINATING, |CEO OF TELEFONICA O2 |
| |REMUNERATION |EUROPA |
| |AND CORPORATE | |
| |GOVERNANCE COMMITTEE | |
+----------------------+----------------------+-----------------------+
|MR. JULIO LINARES |NOMINATING, |GENERAL MANAGER OF |
|LOPEZ |REMUNERATION |COORDINATION, |
| |AND CORPORATE |DEVELOPMENT OF |
| |GOVERNANCE COMMITTEE |THE BUSINESS AND |
| | |SYNERGIES |
+----------------------+----------------------+-----------------------+
|MR. ANTONIO |NOMINATING, |CEO OF TELEFONICA |
|VIANA-BAPTISTA |REMUNERATION |ESPANA |
| |AND CORPORATE | |
| |GOVERNANCE COMMITTEE | |
+----------------------+----------------------+-----------------------+
EXTERNAL PROPRIETARY DIRECTORS
+----------------------+-----------------------+-----------------------+
|Name or corporate name| Commission proposing |Name or corporate name |
| of director | appointment | of the significant |
| | |shareholder represented|
| | | or who proposed the |
| | | appointment |
+----------------------+-----------------------+-----------------------+
|MR. ISIDRO FAINE CASAS|NOMINATING, |CAJA DE AHORROS Y |
| |REMUNERATION |PENSIONES |
| |AND CORPORATE |DE BARCELONA, 'LA |
| |GOVERNANCE COMMITTEE |CAIXA' |
+----------------------+-----------------------+-----------------------+
|MR. ANTONIO MASSANELL |NOMINATING, |CAJA DE AHORROS Y |
|LAVILLA |REMUNERATION |PENSIONES |
| |AND CORPORATE |DE BARCELONA, 'LA |
| |GOVERNANCE COMMITTEE |CAIXA' |
+----------------------+-----------------------+-----------------------+
|MR. VITALINO MANUEL |NOMINATING, |BANCO BILBAO VIZCAYA |
|NAFRIA |REMUNERATION |ARGENTARIA |
|AZNAR |AND CORPORATE | |
| |GOVERNANCE COMMITTEE | |
+----------------------+-----------------------+-----------------------+
|MR. GREGORIO |NOMINATING, |BANCO BILBAO VIZCAYA |
|VILLALABEITIA |REMUNERATION AND |ARGENTARIA |
|GALARRAGA |CORPORATE | |
| |GOVERNANCE COMMITTEE | |
+----------------------+-----------------------+-----------------------+
EXTERNAL INDEPENDENT DIRECTORS
+-----------------------+----------------------+-----------------------+
|Name or corporate name | Commission proposing | Profile |
| of Director | appointment | |
+-----------------------+----------------------+-----------------------+
|MR. DAVID ARCULUS |NOMINATING, |HOLDER OF DEGREES IN |
| |REMUNERATION AND |ENGINEERING AND |
| |CORPORATE |ECONOMICS. |
| |GOVERNANCE COMMITTEE |DIRECTOR OF TELEFONICA |
| | |O2 |
| | |EUROPE, PLC. AND OF |
| | |BARCLAYS, PLC. VICE |
| | |CHAIRMAN OF CBI AND |
| | |MEMBER |
| | |OF THE FINANCE |
| | |COMMITTEE |
| | |OF OXFORD UNIVERSITY |
| | |PRESS. |
+-----------------------+----------------------+-----------------------+
|MR. MAXIMINO CARPIO |NOMINATING, |DOCTOR IN ECONOMICS. |
|GARCIA |REMUNERATION |PROFESSOR OF APPLIED |
| |AND CORPORATE |ECONOMICS AT THE |
| |GOVERNANCE COMMITTEE |UNIVERSIDAD AUTONOMA DE|
| | |MAD RI D. |
+-----------------------+----------------------+-----------------------+
|MR. CARLOS COLOMER |NOMINATING, |HOLDER OF ECONOMICS |
|CASELLAS |REMUNERATION |DEGREE. CHAIRMAN OF THE|
| |AND CORPORATE |COLOMER GROUP. |
| |GOVERNANCE COMMITTEE | |
+-----------------------+----------------------+-----------------------+
|MR. FERNANDO DE ALMANSA|NOMINATING, |HOLDER OF LAW DEGREE. |
|MORENO-BARREDA |REMUNERATION AND |ON |
| |CORPORATE GOVERNANCE |LEAVE FROM THE |
| |COMMITTEE |DIPLOMATIC |
| | |CORPS. FORMERLY HEAD OF|
| | |STAFF AT THE HOME OF |
| | |HIS |
| | |MAJESTY KING JUAN |
| | |CARLOS I. |
+-----------------------+----------------------+-----------------------+
|MR. ALFONSO FERRARI |NOMINATING, |INDUSTRIAL ENGINEER. |
|HERRERO |REMUNERATION AND |FORMERLY |
| |CORPORATE GOVERNANCE |EXECUTIVE CHAIRMAN OF |
| |COMMITTEE |BETA |
| | |CAPITAL, S.A. AND |
| | |SENIOR |
| | |MANAGER AT BANCO |
| | |URQUIJO. |
+-----------------------+----------------------+-----------------------+
|MR. GONZALO HINOJOSA |NOMINATING, |INDUSTRIAL ENGINEER. |
|FERNANDEZ DE ANGULO |REMUNERATION AND |DIRECTOR OF ALTADIS, |
| |CORPORATE GOVERNANCE |S.A. |
| |COMMITTEE |FORMERLY CHAIRMAN AND |
| | |MANAGING DIRECTOR OF |
| | |CORTEFIEL GROUP. |
+-----------------------+----------------------+-----------------------+
|MR. PABLO ISLA ALVAREZ |NOMINATING, |HOLDER OF LAW DEGREE. |
|DE |REMUNERATION AND |STATE LAWYER. FIRST |
|TEJERA |CORPORATE GOVERNANCE |VICE |
| |COMMITTEE |CHAIRMAN AND CHAIRMAN |
| | |OF INDITEX, S.A. |
+-----------------------+----------------------+-----------------------+
|MR. ENRIQUE USED AZNAR |NOMINATING, |TELECOMMUNICATIONS |
| |REMUNERATION |ENGINEER. CHAIRMAN OF |
| |AND CORPORATE |AMPER S.A. |
| |GOVERNANCE COMMITTEE | |
+-----------------------+----------------------+-----------------------+
OTHER EXTERNAL DIRECTORS
+-----------------------------------+----------------------------------+
|Name or corporate name of Director |Commission proposing appointment |
+-----------------------------------+----------------------------------+
| | |
+-----------------------------------+----------------------------------+
List the reasons why they cannot be considered independent or proprietary:
Indicate any variations that have occurred in the type of each director for the
period:
+------------------+-----------------+----------------+----------------+
|Name of corporate | Date of change | Previous type | Current type |
|name of the | | | |
|Director | | | |
+------------------+-----------------+----------------+----------------+
| | | | |
+------------------+-----------------+----------------+----------------+
B.1.4. Indicate whether the types of Directors set out in the previous point
correspond to the distribution established in the Board Regulations:
When considering the present composition of the Board of Directors and the
principles governing the same, the current composition is in accordance with the
aforementioned Regulations and with the established guidelines of Corporate
Governance. The Board is comprised of a significant number of independent
Directors (eight), and the external Directors (including Proprietary and
Independents) are in majority over executive Directors (twelve vs. five).
Furthermore, there is a majority of independent Directors over proprietary
Directors (eight vs. four) on the Board.
B.1.5. Indicate, if they exist, any powers delegated to the Managing Director
(s):
+-----------------------------------------+----------------------------+
|Name or corporate name of Director |Brief description |
+-----------------------------------------+----------------------------+
|MR. CESAR ALIERTA IZUEL |AT THE DATE OF PREPARATION |
| |OF THE PRESENT REPORT, THE |
| |POSITION OF CEO DOES NOT |
| |EXIST. HOWEVER, THE |
| |EXECUTIVE CHAIRMAN HAS BEEN |
| |DELEGATED ALL THE POWERS OF |
| |THE BOARD OF DIRECTORS, |
| |EXCEPT THOSE WHICH MAY NOT |
| |BE DELEGATED BY LAW OR UNDER|
| |THE ARTICLES OF THE |
| |ASSOCIATION. |
+-----------------------------------------+----------------------------+
B.1.6. Identify any board members in senior management or directive posts in
other companies forming part of the listed company:
+-----------------------+----------------------+-----------------------+
|Name or corporate name |Corporate name of the | Post |
| of the directors | group company | |
+-----------------------+----------------------+-----------------------+
|MR. CESAR ALIERTA IZUEL|TELEFONICA O2 EUROPE, |DIRECTOR |
| |PLC (PREVIOUSLY O2, | |
| |PLC) | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|CHINA NETCOM |DI RECTOR |
|PALLETE LOPEZ |CORPORATION | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|TELEFONICA LARGA |DIRECTOR |
|PALLETE LOPEZ |DISTANCIA DE PUERTO | |
| |RICO INC. | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|TELEFONICA |CHAIRMAN |
|PALLETE LOPEZ |INTERNACIONAL CHILE, | |
| |S.A. | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|COLOMBIA |DIRECTOR |
|PALLETE LOPEZ |TELECOMUNICACIONES, | |
| |S.A. ESP. | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|TELEFONICA |CHAIRMAN |
|PALLETE LOPEZ |INTERNACIONAL, S.A.U. | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|TELEFONICA O2 EUROPE, |DIRECTOR |
|PALLETE LOPEZ |PLC (PREVIOUSLY O2, | |
| |PLC) | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|BRASILCEL, N.V. |MEMBER OF THE |
|PALLETE LOPEZ | |SUPERVISORY BOARD |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|TELEFONICA MUNDO, S.A.|DIRECTOR |
|PALLETE LOPEZ | | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|COMPANIA DE |DIRECTOR |
|PALLETE LOPEZ |TELECOMUNICACIONES DE | |
| |CHILE, S.A. | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|COMPANIA INTERNACIONAL|CHAIRMAN |
|PALLETE LOPEZ |DE TELECOMUNICACIONES,| |
| |S.A. | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|TELEFONICA DE |VICE CHAIRMAN |
|PALLETE LOPEZ |ARGENTINA, S.A. | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|TELECOMUNICACOES DE |VICE CHAIRMAN |
|PALLETE LOPEZ |SAO PAULO, S.A. | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|TELEFONICA DATA CORP, |DIRECTOR |
|PALLETE LOPEZ |S.A.U. | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|TELEFONICA HOLDING DE |CHAIRMAN |
|PALLETE LOPEZ |ARGENTINA, S.A. | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|TELEFONICA MOVILES |DIRECTOR |
|PALLETE LOPEZ |ESPANA, S.A.U. | |
+-----------------------+----------------------+-----------------------+
|MR. JOSE MARIA ALVAREZ-|TELEFONICA DE ESPANA, |DIRECTOR |
|PALLETE LOPEZ |S.A.U | |
+-----------------------+----------------------+-----------------------+
|MR. DAVID ARCULUS |TELEFONICA O2 EUROPE, |DIRECTOR |
| |PLC (PREVIOUSLY O2, | |
| |PLC) | |
+-----------------------+----------------------+-----------------------+
|MR. FERNANDO DE ALMANSA|TELEFONICA DE |DI RECTOR |
|MORENO-BARREDA |ARGENTINA, S.A. | |
+-----------------------+----------------------+-----------------------+
|MR. FERNANDO DE ALMANSA|TELECOMUNICACOES DE |DIRECTOR |
|MORENO-BARREDA |SAO PAULO, S.A. | |
+-----------------------+----------------------+-----------------------+
|MR. FERNANDO DE ALMANSA|TELEFONICA DE PERU, |DIRECTOR |
|MORENO-BARREDA |S.A.A. | |
+-----------------------+----------------------+-----------------------+
|MR. PETER ERSKINE |TELEFONICA O2 EUROPE, |CHAIRMAN |
| |PLC | |
| |(PREVIOUSLY O2, PLC) | |
+-----------------------+----------------------+-----------------------+
|MR. PETER ERSKINE |TELEFONICA O2 CZECH |CHAIRMAN OF THE |
| |REPUBLIC, A.S. |SUPERVISORY BOARD |
+-----------------------+----------------------+-----------------------+
|MR. ALFONSO FERRARI |COMPANIA DE |DIRECTOR |
|HERRERO |TELECOMUNICACIONES DE | |
| |CHILE, S.A. | |
+-----------------------+----------------------+-----------------------+
|MR. ALFONSO FERRARI |TELEFONICA DE PERU, |DIRECTOR |
|HERRERO |S.A.A. | |
+-----------------------+----------------------+-----------------------+
|MR. JULIO LINARES LOPEZ|TELEFONICA O2 EUROPE, |DIRECTOR |
| |PLC | |
| |(PREVIOUSLY O2, PLC) | |
+-----------------------+----------------------+-----------------------+
|MR. JULIO LINARES LOPEZ|TELEFONICA DE ESPANA, |DIRECTOR |
| |S.A.U | |
+-----------------------+----------------------+-----------------------+
|MR. JULIO LINARES LOPEZ|TELEFONICA DATA CORP, |DIRECTOR |
| |S.A.U. | |
+-----------------------+----------------------+-----------------------+
|MR. JULIO LINARES LOPEZ|TELEFONICA O2 CZECH |VICE CHAIRMAN OF THE |
| |REPUBLIC, A.S. |SUPERVISORY BOARD |
+-----------------------+----------------------+-----------------------+
|MR. ENRIQUE USED AZNAR |TELECOMUNICACOES DE |DIRECTOR |
| |SAO | |
| |PAULO, S.A. | |
+-----------------------+----------------------+-----------------------+
|MR. ENRIQUE USED AZNAR |TELEFONICA DE PERU, |DIRECTOR |
| |S.A.A. | |
+-----------------------+----------------------+-----------------------+
|MR. ANTONIO |TELEFONICA O2 EUROPE, |DIRECTOR |
|VIANA-BAPTISTA |PLC | |
| |(PREVIOUSLY O2, PLC) | |
+-----------------------+----------------------+-----------------------+
|MR. ANTONIO |TELEFONICA DE ESPANA, |CHAI RMAN |
|VIANA-BAPTISTA |S.A.U | |
+-----------------------+----------------------+-----------------------+
|MR. ANTONIO |TELEFONICA MOVILES |CHAIRMAN |
|VIANA-BAPTISTA |ESPANA, | |
| |S.A.U. | |
+-----------------------+----------------------+-----------------------+
B.1.7. List any company board members who are also members of the board(s) of
directors in other companies listed on official securities markets in Spain,
other than your own group, that have been reported to the company:
+-----------------------+-----------------------+----------------------+
|Name or corporate name | Listed company | Post |
| of director | | |
+-----------------------+-----------------------+----------------------+
|MR. CESAR ALIERTA IZUEL|ALTADIS, S.A. |DIRECTOR |
+-----------------------+-----------------------+----------------------+
|MR. CARLOS COLOMER |INDO INTERNACIONAL, S.A|VICE CHAIRMAN |
|CASELLAS | | |
+-----------------------+-----------------------+----------------------+
|MR. CARLOS COLOMER |ALTADIS, S.A. |DIRECTOR |
|CASELLAS | | |
+-----------------------+-----------------------+----------------------+
|MR. CARLOS COLOMER |INVERSIONES MOBILIARIAS|CHAIRMAN |
|CASELLAS |URQUIOLA, S.A. SICAV | |
+-----------------------+-----------------------+----------------------+
|MR. CARLOS COLOMER |AHORRO BURSATIL S.A. |CHAIRMAN |
|CASELLAS |SICAV | |
+-----------------------+-----------------------+----------------------+
|MR. ISIDRO FAINE CASAS |ABERTIS |CHAIRMAN |
| |INFRAESTRUCTURAS, S.A. | |
+-----------------------+-----------------------+----------------------+
|MR. GONZALO HINOJOSA |ALTADIS, S.A. |DIRECTOR |
|FERNANDEZ DE ANGULO | | |
+-----------------------+-----------------------+----------------------+
|MR. GONZALO HINOJOSA |DINAMIA CAPITAL |DIRECTOR |
|FERNANDEZ DE ANGULO |PRIVADO, S.A., SCR | |
+-----------------------+-----------------------+----------------------+
|MR. PABLO ISLA ALVAREZ |INDITEX, S.A. |VICE CHAIRMAN-CEO |
|DE TEJERA | | |
+-----------------------+-----------------------+----------------------+
|MR. JULIO LINARES LOPEZ|SOGECABLE S.A. |DIRECTOR |
+-----------------------+-----------------------+----------------------+
|MR. ENRIQUE USED AZNAR |AMPER S.A. |CHAI RMAN |
+-----------------------+-----------------------+----------------------+
|MR. GREGORIO |IBERIA LINEAS AEREAS DE|DIRECTOR |
|VILLALABEITIA GALARRAGA|ESPANA, S.A. | |
+-----------------------+-----------------------+----------------------+
B.1.8. Fill in the following tables regarding the accrued aggregate remuneration
of Directors during the year:
a) In the company subject to this report:
+-----------------------------------------+----------------------------+
| Remuneration from | Thousand euros |
+-----------------------------------------+----------------------------+
|Fixed remuneration | 6,848|
+-----------------------------------------+----------------------------+
|Variable remuneration | 3,547|
+-----------------------------------------+----------------------------+
|Allowances | 197|
+-----------------------------------------+----------------------------+
|Token payments | 0|
+-----------------------------------------+----------------------------+
|Share options and/or other financial | 0|
|instruments | |
+-----------------------------------------+----------------------------+
|Others | 28|
+-----------------------------------------+----------------------------+
|Total: | 10,620|
+-----------------------------------------+----------------------------+
+-----------------------------------------+----------------------------+
| Other benefits | Thousand euros |
+-----------------------------------------+----------------------------+
|Advances | 0|
+-----------------------------------------+----------------------------+
|Loans granted | 0|
+-----------------------------------------+----------------------------+
|Pension Plans and Funds: Contributions | 51|
+-----------------------------------------+----------------------------+
|Pension Plans and Funds: Obligations | 0|
|contracted | |
+-----------------------------------------+----------------------------+
|Life insurance premiums | 96|
+-----------------------------------------+----------------------------+
|Guarantees contributed by the company in | 0|
|favour of directors | |
+-----------------------------------------+----------------------------+
b) For directors belonging to other boards of directors and/or senior management
of group companies:
+-----------------------------------------+----------------------------+
| Remuneration from | Thousands of euros |
+-----------------------------------------+----------------------------+
|Fixed remuneration | 2,656|
+-----------------------------------------+----------------------------+
|Variable remuneration | 1,861|
+-----------------------------------------+----------------------------+
|Allowances | 9|
+-----------------------------------------+----------------------------+
|Token payments | 0|
+-----------------------------------------+----------------------------+
|Share options and/or other financial | 291|
|instruments | |
+-----------------------------------------+----------------------------+
|Others | 6|
+-----------------------------------------+----------------------------+
| Total: | 4,823|
+-----------------------------------------+----------------------------+
+-----------------------------------------+----------------------------+
| Other benefits | Thousand euros |
+-----------------------------------------+----------------------------+
|Advances | 0|
+-----------------------------------------+----------------------------+
|Loans granted | 0|
+-----------------------------------------+----------------------------+
|Pension Plans and Funds: Contributions | 8|
+-----------------------------------------+----------------------------+
|Pension Plans and Funds: Obligations | 0|
|contracted | |
+-----------------------------------------+----------------------------+
|Life insurance premiums | 12|
+-----------------------------------------+----------------------------+
|Guarantees constituted by the company in | 0|
|favour of directors | |
+-----------------------------------------+----------------------------+
c) Total remuneration by type of directorship:
+--------------------------------+------------------+------------------+
| Type of director | By company| By group|
+--------------------------------+------------------+------------------+
|Executives | 8,189| 4,238|
+--------------------------------+------------------+------------------+
|External proprietary | 918| 70|
+--------------------------------+------------------+------------------+
|External independent | 1,513| 515|
+--------------------------------+------------------+------------------+
|Other external | 0| 0|
+--------------------------------+------------------+------------------+
| Total: | 10,620| 4,823|
+--------------------------------+------------------+------------------+
d) Regarding the attributable profit of the controlling company:
+------------------------------------------------+---------------------+
| Total director's remuneration (thousands of | 15,443|
| euros) | |
+------------------------------------------------+---------------------+
| Total directors' remuneration / attributable | 0.186|
| profit of the controlling company (in %) | |
+------------------------------------------------+---------------------+
B.1.9. Identify the members of senior management who are not executive directors
and indicate total remuneration accruing to them during the year:
+-----------------------------------------+----------------------------+
| Name or corporate name | Post |
+-----------------------------------------+----------------------------+
|MR. LUIS ABRIL PEREZ |General Manager of Corporate|
| |Communication |
+-----------------------------------------+----------------------------+
|MR. SANTIAGO FERNANDEZ VALBUENA |General Manager of Finance |
| |and SharedResources |
+-----------------------------------------+----------------------------+
|MR. CALIXTO RIOS PEREZ |General Manager of Auditing |
| |and Management Resources |
+-----------------------------------------+----------------------------+
|MR. RAMIRO SANCHEZ DE LERIN GARCIA-OVIES |General Counsel and |
| |Secretary to the Board of |
| |Directors |
+-----------------------------------------+----------------------------+
+-----------------------------------+----------------------------------+
|Total remuneration of senior | 5,698|
|management (thousand euros) | |
+-----------------------------------+----------------------------------+
B.1.10. Identify in aggregate terms any guarantees or 'golden parachute' clauses
benefiting senior managers (including executive directors) of the company or its
group. Indicate whether these contracts must be reported to and/or approved by
the governing bodies of the company or its group:
+--------------------+-------------------+
|Number of | 9|
|beneficiaries | |
+--------------------+-------------------+
+--------------------+-------------------+--------------------+
| |Board of Directors |General Shareholders'
| | | Meeting |
+--------------------+-------------------+--------------------+
|Body authorising the| X | |
|clauses | | |
+--------------------+-------------------+--------------------+
+-----------------------------------------+-----------+--------+
| | YES | NO |
+-----------------------------------------+-----------+--------+
|Is the General Shareholders' Meeting | X | |
|informed of these clauses | | |
+-----------------------------------------+-----------+--------+
B.1.11. Indicate the process for establishing board members' remuneration and
any relevant clauses in the Articles of Association regarding such payment.
In accordance with Article 28 of the Articles of Association, Directors'
remuneration shall be comprised of a fixed monthly allowance plus expenses for
attending meetings of the Board of Directors and its management or consultative
Committees. Any remuneration the Company may pay its Directors collectively
under either of the foregoing headings shall be that set for that purpose by the
General Shareholders' Meeting, and shall remain in force until this body
resolves that it be changed. The Board of Directors shall determine the exact
amount to be paid within that ceiling and how it is divided amongst the various
Directors. To this effect, the General Shareholders' Meeting held on April 11th
2003 fixed the maximum gross annual sum for remuneration to the Board of
Directors at 6 million euros.
Additionally, apart from the remuneration detailed in the previous section and
applicable for all directors, other remuneration systems may be created that may
either be indexed to the list value of the shares, or consist of stock or of
stock options for the Directors. The application of said remuneration systems
must be authorised by the General Shareholders' Meeting, which shall fix the
stock value that is to be taken as the term of reference thereof, the number of
shares to be given to each Director, the exercise price of the stock options,
the term of such remuneration system and other terms and conditions as deemed
appropriate.
The remuneration systems set out in the preceding paragraphs, arising from
membership in the Board of Directors, shall be deemed compatible with any and
all other professional or work-based compensations to which the Directors may be
entitled in consideration for whatever executive or advisory services they may
provide for the Company other than supervisory and supervisory duties as may
pertain to their posts as Directors, which shall be subject to the applicable
legal provisions.
Pursuant to Article 38 of the Regulations of the Board of Directors, Directors
shall be entitled to obtain the remuneration set by the Board of Directors
according to statutory provisions and following a report issued by the
Nominating, Compensation and Corporate Governance Committee. In this regard, and
in accordance with the above-mentioned Article 38, with respect to Article 25 of
the same regulations, it is incumbent upon the Nominating, Compensation and
Corporate Governance Committee of the Board of Directors to report and propose
to the Board the compensation system for Directors and to review such
compensation from time to time to ensure that it is suitable (the Board shall
endeavour to ensure that the remuneration of Directors is in keeping with that
paid in the market at companies of similar size and activity) with the services
rendered by them. In addition, and pursuant to Article 28.4 of the Articles of
Association of Telefonica, S.A., the Annual Report sets out the individual
remuneration paid for each post and position on the Board and its Committees
(Chairman, Vice Chairman and Member).
The remuneration paid to executive Directors for their executive functions at
the Company is set out in aggregate form, broken down into the various
remunerative items or concepts.
B.1.12. Indicate the identity of any board members who sit on board(s) of
directors or hold senior management posts in companies having significant
shareholdings in the listed company and/or its group companies:
+------------------------------+--------------------+------------------+
| Name or corporate name of | Name or corporate | Post |
| Director | name of the | |
| | significant | |
| | shareholder | |
+------------------------------+--------------------+------------------+
|MR. FERNANDO DE ALMANSA |BANCO BILBAO VIZCAYA|MANAGING DIRECTOR |
|MORENO-BARREDA |ARGENTARIA |OF EXTERNAL |
| | |SERVICES AT APOYO |
| | |EMPRESARIAL, S.A. |
+------------------------------+--------------------+------------------+
|MR. FERNANDO DE ALMANSA |BANCO BILBAO VIZCAYA|DIRECTOR OF BBVA |
|MORENO-BARREDA |ARGENTARIA |BANCOMER MEXICO, |
| | |S.A. DE C.V. |
+------------------------------+--------------------+------------------+
|MR. ISIDRO FAINE CASAS |HODEFI, S.A.S |CHAIRMAN |
+------------------------------+--------------------+------------------+
|MR. ISIDRO FAINE CASAS |PORT AVENTURA, S.A. |DIRECTOR |
+------------------------------+--------------------+------------------+
|MR. ISIDRO FAINE CASAS |CAIXA HOLDING, S.A.,|DIRECTOR |
| |SOCIEDAD UNIPERSONAL| |
+------------------------------+--------------------+------------------+
|MR. ISIDRO FAINE CASAS |CAJA DE AHORROS Y |GENERAL MANAGER |
| |PENSIONES DE | |
| |BARCELONA, 'LA | |
| |CAIXA' | |
+------------------------------+--------------------+------------------+
|MR. ANTONIO MASSANELL LAVILLA |CAJA DE AHORROS Y |DEPUTY EXECUTIVE |
| |PENSIONES DE |DIRECTOR GENERAL |
| |BARCELONA, 'LA | |
| |CAIXA' | |
+------------------------------+--------------------+------------------+
|MR. ANTONIO MASSANELL LAVILLA |E-LA CAIXA, S.A. |EXECUTIVE CHAIRMAN|
+------------------------------+--------------------+------------------+
|MR. ANTONIO MASSANELL LAVILLA |CAIXA CAPITAL RISC, |DIRECTOR |
| |S.G.E.C.R., S.A. | |
+------------------------------+--------------------+------------------+
|MR. ANTONIO MASSANELL LAVILLA |PORT AVENTURA, S.A. |DIRECTOR |
+------------------------------+--------------------+------------------+
|MR. ANTONIO MASSANELL LAVILLA |C3 CAIXA CENTER, |JOINT |
| |S.A. |ADMINISTRATOR |
+------------------------------+--------------------+------------------+
|MR. ANTONIO MASSANELL LAVILLA |CAIXA CAPITAL |DIRECTOR |
| |DESARROLLO, S.C.R., | |
| |S.A. | |
+------------------------------+--------------------+------------------+
|MR. GREGORIO VILLALABEITIA |BBVA PROVIDA AFP |CHAIRMAN |
|GALARRAGA | | |
+------------------------------+--------------------+------------------+
|MR. GREGORIO VILLALABEITIA |BANCO BILBAO VIZCAYA|MEMBER OF THE |
|GALARRAGA |ARGENTARIA CHILE |BOARD |
+------------------------------+--------------------+------------------+
Detail, if appropriate, any relevant relations other than those indicated in
the previous section that link members of the board of directors with
significant shareholders and/or their group companies:
+---------------------------+-----------------------+------------------+
| Name or corporate name of |Name or corporate name |Relationship |
| Director | of significant | |
| | shareholder | |
+---------------------------+-----------------------+------------------+
|MR. VITALINO MANUEL NAFRIA |BANCO BILBAO VIZCAYA |RETAIL BANKS |
|AZNAR |ARGENTARIA |DIRECTOR |
| | |FOR SPAIN AND |
| | |PORTUGAL IN EARLY |
| | |RETIREMENT |
+---------------------------+-----------------------+------------------+
|MR. GREGORIO VILLALABEITIA |BANCO BILBAO VIZCAYA |GENERAL MANAGER IN|
|GALARRAGA |ARGENTARIA |EARLY RETIREMENT |
+---------------------------+-----------------------+------------------+
B.1.13. Indicate, if applicable, any changes made in the Board Regulations
during this year.
No changes were made in fiscal year 2006 to the Regulations of the Board of
Directors of Telefonica, S.A. approved by its Board of Directors on March 31,
2004 and registered with the Commercial Registry of Madrid on April 22, 2004,
pursuant to the provisions of Law 26/2003 of July 17 (Transparency Law).
B.1.14. Indicate any procedures for appointment, re-election, assessment and
removal of Directors. List the competent bodies, the steps to be followed and
the criteria to be applied in each of the procedures.
APPOINTMENT
Telefonica's Articles of Association establish that the Board of Directors
shall be composed of a minimum of five and a maximum of twenty members, who
shall be appointed by the General Shareholders' Meeting. The Board of Directors
may, in accordance with the provisions set out in the Spanish Corporations Law
and in the Company Articles of Association, fill vacant positions temporarily by
cooption.
To this effect, it is important to note that the appointment of Board members in
Telefonica is, as a general rule, submitted for approval by the General
Shareholders' Meeting. It is only on certain occasions, when such a measure is
essential due to vacancies on the Board arising after the last GSM, that the
Board appoints members by cooption, in keeping with the provisions of the
Corporations Law, subject to later ratification by the first subsequent GSM
held.
In all other cases, the proposed appointments must follow the procedure set out
in the Regulations of the Board of Directors, and must be preceded by the
relevant favourable report from the Nomination, Remuneration and Corporate
Governance Committee, although such report is not binding.
Thus, and in line with the provisions of the Regulations, when exercising its
rights of cooption and proposal of appointments to the General Shareholders'
Meeting, the Board of Directors shall endeavour to ensure that external or
non-executive Directors are in the majority over executive Directors. Likewise,
the Board shall ensure that within such majority group of external Directors,
there are, on the one hand, Directors proposed by holders of significant, stable
stakes in the company share capital (proprietary Directors) and, on the other,
professionals of acknowledged prestige who are not linked to the management team
nor to the significant shareholders (independent Directors). Similarly, the
Board shall endeavour to ensure that the independent Directors comprise a
majority over the proprietary Directors.
With respect to the selection of external or non-executive Directors, the choice
of candidates should fall upon persons of recognised solvency, competency and
experience, who are willing to dedicate a sufficient amount of their time to the
Company, and extreme care must be taken as to the choice of the persons called
to cover posts as independent Directors.
In reference to the election of the aforementioned independent Directors, the
Regulations of the Board of Directors establishes that the Board shall propose
or assign persons who fulfil the conditions that ensure their impartiality and
objective criteria to cover independent Director posts. The criteria applied,
for the purpose of illustration, include the following:
A. Not to have, or to have recently had, any direct or indirect labour or
commercial contractual relation of a significant nature with the Company, its
management, the proprietary Directors or companies in the Group whose
shareholding interests they represent, banking institutions with an outstanding
position in the Company financing, or organisations that receive significant
subsidies from it;
B. Not to be a Director of another listed company that has proprietary
Directors in the Company;
C. Not to be a close relative of the executive or proprietary Directors or
of the Company's executive officers.
RE-ELECTION
Directors are appointed for a term of five years and may be re-elected one or
more times for periods of the same duration.
Like proposals for appointment, proposals for the re-election of Directors must
be preceded by the relevant favourable report issued by the Nomination,
Remuneration and Corporate Governance Committee, although such report is not
binding.
ASSESSMENT
In accordance with the Regulations of the Board of Directors, this body
evaluates its operation and the quality of its work annually, when the Annual
Corporate Governance Report is approved.
REMOVAL
Directors shall cease to hold office when the term for which they were appointed
elapses, or when such removal is resolved by the General Shareholders' Meeting,
in the exercise of the powers granted this body by law.
B.1.15. Indicate under what circumstances directors are obliged to resign.
In accordance with Article 15 of the Regulations of the Board, Directors must
place their offices at the disposal of the Board of Directors and formalise the
relevant resignation in the following cases:
a. When they reach the age of 70. Directors with executive duties shall
cease to serve in such capacity when they reach the age of 65, although they may
continue as Directors if the Board so decides.
b. When they cease to hold the executive positions to which their
appointment as Directors is linked, or when the reasons for which they were
appointed disappear.
c. When they incur in any of the cases of incompatibility or barring
envisaged by law.
d. When severely admonished by the Nomination, Remuneration and Corporate
Governance Committee for having failed to fulfil any of their obligations as
Directors.
e. When their continued presence on the Board may affect the credibility
or reputation of the Company in the market, or places the Company's interests
at risk in any other way.
B.1.16. Explain whether the duties of the chief executive officer fall upon the
Chairman of the Board. If so, indicate the measures taken to limit the risk of
the accumulation of powers in a single person:
+---------+-----+
| YES | NO |
+---------+-----+
| X | |
+---------+-----+
- Pursuant to the provisions of the Regulations of the Board of Directors, the
actions of the Chairman must follow the criteria established by the General
Shareholders' Meeting, the Board of Directors and the Board Committees at all
times.
- Likewise, all agreements or decisions of particular significance for the
Company must be previously submitted for the approval of the Board of Directors
or the relevant Board Committee, as the case may be.
- Moreover, reports and proposals from the different Board Committees are
required for the adoption of certain resolutions.
It is important to emphasise that the Chairman does not hold the casting vote
within the Board of Directors.
B.1.17. Are qualified majorities other than those established by law required
for certain decisions?
+---------+-----+
| YES | NO |
+---------+-----+
| | X |
+---------+-----+
Indicate how the Board of Directors adopts resolutions, including at least the
minimum quorum of attendees and the types of majorities required to pass
resolutions:
Adoption of resolutions
+--------------------------------+------------------+------------------+
| Description of resolution | Quorum | Type of majority |
+--------------------------------+------------------+------------------+
| All resolutions |Personal or proxy |Majority of votes |
| |attendance of one | present or |
| | half plus one of | represented, |
| |all the Directors | except in the |
| | |cases in which the|
| | | law requires the |
| | |favourable vote of|
| | |a larger number of|
| | | Directors. |
| | | Resolutions are |
| | | adopted by the |
| | |majority of votes |
| | | of Directors |
| | | present or |
| | |represented at the|
| | | session , except |
| | | in those cases |
| | | where the law |
| | | requires the |
| | |favourable vote of|
| | |a higher number of|
| | | Directors for |
| | | specific |
| | |resolutions and in|
| | | specifically for |
| | | (i) the |
| | | appointment of |
| | | Directors not |
| | |holding a minimum |
| | | of shares |
| | | representing a |
| | | nominal value of |
| | | 300 euros, (art. |
| | |25 of the Articles|
| | | of Association) |
| | | and (ii) for the |
| | | appointment of |
| | |Chairman, which is|
| | | explained in the |
| | |following section.|
+--------------------------------+------------------+------------------+
B.1.18. Explain if there are other requirements, other than those for Directors,
for being appointed Chairman.
+---------+-----+
| YES | NO |
+---------+-----+
| X | |
+---------+-----+
+-------------------------------------------------------------------+
| Description of requirements |
+-------------------------------------------------------------------+
|In order for a Director to be appointed as Chairman, he/she must |
|have been a member of the Board for at least three years prior to |
|such appointment. However, this is not required when the |
|appointment is made with the favourable vote of at least 85 percent|
|of the members of the Board of Directors. |
+-------------------------------------------------------------------+
B.1.19. Indicate whether the Chairman has the casting vote:
+---------+-----+
| YES | NO |
+---------+-----+
| | X |
+---------+-----+
+-------------------------------------------------------------------+
| Subject for which there is a casting vote |
+-------------------------------------------------------------------+
| |
+-------------------------------------------------------------------+
B.1.20. Indicate whether the Articles of Association or the Regulations of the
Board establish an age limit for Directors:
+---------+-----+
| YES | NO |
+---------+-----+
| X | |
+---------+-----+
+------------------------------+-----------------------------+
|Age limit for Chairman | 65 |
+------------------------------+-----------------------------+
|Age limit for CEO | 65 |
+------------------------------+-----------------------------+
|Age limit for Directors | 70 |
+------------------------------+-----------------------------+
B.1.21. Indicate whether the Articles of Association or the Regulations of the
Board establish a limit on the term of office of independent Directors:
+---------+-----+
| YES | NO |
+---------+-----+
| | X |
+---------+-----+
+-----------------------------------------------------+------+
|Maximum number of years in office | 0 |
+-----------------------------------------------------+------+
B.1.22. Indicate whether formal processes exist for proxy voting in the Board of
Directors. If so, describe briefly.
In accordance with article 21 of the Regulations of the Board of Directors, when
Directors cannot attend the Board sessions personally, they shall endeavour that
the representation granted in favour of another member of the Board includes, as
far as is possible, the relevant instructions. Such proxies may be granted by
letter or any other medium that, in the opinion of the Chairman, offers
sufficient certainty and validity.
B.1.23. Indicate the number of sessions held by the Board of Directors during
the year. Likewise, indicate the number of times, if any, the Board has met in
the absence of its Chairman:
+---------------------------------------------+---------+
|Number of Board meetings |12 |
+---------------------------------------------+---------+
|Number of Board meetings held in the absence |0 |
|of its chairman | |
+---------------------------------------------+---------+
Indicate the number of Board Committee meetings held during the year:
+--------------------------------------------------+-------------------+
|Number of Executive Committee or Executive | 19|
|Commission meetings | |
+--------------------------------------------------+-------------------+
|Number of Audit and Control Committee meetings | 11|
+--------------------------------------------------+-------------------+
|Number of Nomination Compensation and Corporate | 11|
|Governance Committee meetings | |
+--------------------------------------------------+-------------------+
|Number of Strategy and Investment Committee | 0|
|meetings | |
+--------------------------------------------------+-------------------+
|Number of Regulatory Committee meetings | 11|
+--------------------------------------------------+-------------------+
|Number of Human Resources and Corporate | 5|
|ResponsibilityCommittee meetings | |
+--------------------------------------------------+-------------------+
|Number of Service Quality and Customer Service | 4|
|Committee meetings | |
+--------------------------------------------------+-------------------+
|Number of International Affairs Committee meetings| 3|
+--------------------------------------------------+-------------------+
B.1.24. Indicate whether the individual and consolidated accounts are certified
prior to their presentation to the Board of Directors:
+---------+-----+
| YES | NO |
+---------+-----+
| | X |
+---------+-----+
Identify, if appropriate, the person(s) certifying the individual and
consolidated accounts for their formulation by the Board:
+------------------------------+------------------------------+
| Name | Post |
+------------------------------+------------------------------+
| | |
+------------------------------+------------------------------+
B.1.25. Explain the mechanisms, if any, established by the Board of
Directors to avoid presenting the individual and consolidated accounts
to the General Shareholders' Meeting with exceptions in the auditor's
report.
Through the Audit and Control Committee, the Board of Directors plays an
essential role supervising the preparation of the Company financial
information, controlling and coordinating the various players that
participate in this process. In order to achieve this objective, the
Audit and Control Committee's work addresses four basic questions:
(i) to be thoroughly aware of the financial information process and to
evaluate the Company's internal accounting control systems;
(ii) to ensure the independence of the external Accounts Auditor,
supervising its work and acting as a channel of communication between
the Board of Directors and such external Accounts Auditors, as well as
between the external Accounts Auditors and the Company management team;
(iii) to supervise the internal audit services; and
(iv) to oversee the suitability and integrity of the internal financial
information control systems.
The Audit and Control Committee verifies both the periodical financial
information and the Annual Company Accounts, ensuring that all financial
information is drawn up according to the same professional principles
and practises. To this effect, the Audit and Control Committee meets
whenever appropriate, and held eleven (11) meetings in the course of
2006.
Furthermore, the external Accounts Auditor participates regularly in the
Audit and Control Committee meetings, when called to do so by the
Committee, to explain and clarify different facets of the audit reports
and other aspects of its work. Additionally, and on request from the
Committee, other members of the Company management team and that of its
subsidiary companies are also called to Committee meetings to explain
specific matters that are directly within their scope of competence. In
particular, officers in the areas of finance, planning and controlling,
as well as those in charge of internal audits, often participate in
these meetings. The members of the Committee have held separate meetings
with each of these persons when it has deemed such a measure necessary
in closely monitoring the preparation of the Company financial
information.
Notwithstanding the above,, Article 43 of the Regulations of the Board
of Directors establishes that the Board of Directors shall ensure it
definitively formulates the accounts in such a manner that no exceptions
are raised by the Accounts Auditor. However, when the Board considers it
must maintain its criteria, it shall publicly explain the content and
scope of the discrepancies.
B.1.26. List the measures adopted to ensure that information disclosed
to the securities markets is transmitted equitably and symmetrically.
The Company has a specific regulation governing the basic principles of
operation in the processes and control systems for the disclosure of
information, called 'Regulations for Reporting Information to the
Markets', adopted on March 26th 2003. This regulation encompasses the
legal requirements applicable to Telefonica, both in Spanish and certain
foreign legislation due to the Company's listing on other markets.
As established in these Regulations and in keeping with the provisions
of Article 82.2 of the Securities Market Law, the Company reports all
relevant information immediately to the markets, through reports to the
National Securities Market Commission. Likewise, the Company sends each
and every communication registered with the National Securities Market
Commission to all the markets where its securities are listed. In
accordance with the express provisions of these Regulations, all
relevant information is reported to the National Securities Market
Commission prior to its disclosure to any other media, thus guaranteeing
the generalised and symmetrical circulation of such information.
Reports of relevant information are issued in accordance with the terms
and form required by each of the regulations governing the markets where
its securities are listed, which includes the use of electronic systems
for the registration of information when necessary.
Likewise, the Company posts all the reports on relevant information
filed with the National Securities Market Commission on its website, in
keeping with the applicable regulations to this effect.
Furthermore, Telefonica files all relevant information that may be
contained in specific presentations prepared by the Company for
registration with the National Securities Market Commission, and even
files the complete content of such presentations when deemed
appropriate.
In addition, through the Investor Relations Department, the Company
posts all the presentations made at fixed or variable income sector
forums and conferences, and those drawn up for certain financial
institutions, on its website in the section on information for
shareholders and investors. On certain occasions, such as when reporting
Company results or in the case of relevant strategic transactions or
decisions, it organises conference calls that may be followed either by
telephone or through the Internet (webcast), thus ensuring universal
access to the information in real time. Prior to this, the Company sends
a communication announcing the date and time of the aforementioned
conference call to the National Securities Market Commission.
B.1.27. Is the Secretary to the Board also a Director?
+----+------+
|YES | NO |
+----+------+
| | X |
+----+------+
B.1.28. Indicate the mechanism, if any, established by the company to
preserve the independence of the auditor, of financial analysts,
investment banks and rating agencies.
With regards to the independence of the external Company Accounts
Auditor, Article 43 of the Regulations of the Board of Directors
establishes that the Board shall establish, through the Audit and
Control Committee, a stable, professional relationship with the Company
Accounts Auditor, strictly respecting its independence. Thus, one of the
fundamental competencies of the Audit and Control Committee is to
'maintain relations with the Company Accounts Auditor to receive
information on those matters that may jeopardise the independence of
this figure'.
Moreover, and in accordance with Article 24 of the Regulations of the
Board of Directors, it is the Audit and Control Committee that proposes
to the Board of Directors, for submission to the General Shareholders'
Meeting, the appointment of the Accounts Auditor as well as, when
appropriate, the terms of engagement, the scope of the professional
mandate and revocation or renewal of the appointment.
Likewise, the external Accounts Auditor has direct access to the Audit
and Control Committee and participates regularly in its meetings, in the
absence of the Company management team when this is deemed necessary. To
this effect, and in keeping with United States legislation on this
matter, the external Accounts Auditor must inform the Audit and Control
Committee at least once annually on the most relevant generally accepted
auditing policies and practises followed in the preparation of the
Company's financial and accounting information that affect relevant
elements in the financial statements which may have been discussed with
the management team, and of all relevant communications between the
Accounts Auditor and the Company management team.
In accordance with internal Company regulations and in line with the
requirements imposed by legislation in the United States, the engagement
of any service from the external Company Accounts Auditor must always
have the prior approval of the Audit and Control Committee. Moreover,
the engagement of non-audit services must be done in strict compliance
with the Accounts Audit Law (in its latest version established in Law 44
/2002 of 22 November, on Financial System Reform Measures) and the
SarbanesOxley Act published in the United States and subsequent
regulations. For this purpose, and prior to the engagement of the
Accounts Auditor, the Audit and Control Committee studies the content of
the work to be done, weighing the situations that may jeopardise
independence of the Company Accounts Auditor and specifically supervises
the percentage the fees paid for such services represent in the total
revenue of the auditing firm. Thus, the Company reports the fees paid to
the external Company Accounts Auditor, including those paid for
non-audit services, in its Annual Report, in accordance with the
legislation in effect.
B.1.29. Indicate whether the auditing firm does non-audit work for the
company and/or its group. If so, declare the fees it receives for such
work and the percentage represented by such fees of the total fees
invoices by the company and/or its group.
+----+------+
|YES | NO |
+----+------+
| X | |
+----+------+
+------------------------+---------+-----------+-----------------------+
| | Company | Group | Total |
+------------------------+---------+-----------+-----------------------+
| Amount from non-audit | 6 | 505 | 511 |
| work (thousand euros) | | | |
+------------------------+---------+-----------+-----------------------+
| Amount from non-audit | 0.200 | 2.500 | 2.203 |
| work / total amount | | | |
|invoiced by the auditing| | | |
| firm (in %) | | | |
+------------------------+---------+-----------+-----------------------+
B.1.30. Indicate how many consecutive years the current auditing firm
has been auditing the annual accounts of the company and/or its group.
Likewise, indicate how many years the current auditing firm has been
auditing the accounts as a percentage of the total number of years over
which the annual accounts have been audited:
+-----------------------------+-----------------+----------------------+
| | Company | Group |
+-----------------------------+-----------------+----------------------+
| Number of consecutive years | 2 | 2 |
+-----------------------------+-----------------+----------------------+
+----------------------------+-----------------+-----------------------+
| | Company | Group |
+----------------------------+-----------------+-----------------------+
| Number of years audited by | 8.333 | 12.500 |
| the current audit firm / | | |
|number of years the company | | |
| accounts have been audited | | |
| (%) | | |
+----------------------------+-----------------+-----------------------+
B.1.31. List the stock holdings of the members of the company's Board
of Directors in other countries with the same, similar or complementary
types of activities of the company and/or its group, and which have been
reported to the company. Likewise, list the posts or duties they hold in
such companies:
+----------------------+------------------+--------------+-------------+
|Name or corporate name|Corporate name of | % |Post or |
|of Director |the company |participation |Duties |
+----------------------+------------------+--------------+-------------+
|MR. DAVID ARCULUS |BRITISH SKY | 0.000|- |
| |BROADCASTING GROUP| | |
| |PLC | | |
+----------------------+------------------+--------------+-------------+
|MR. DAVID ARCULUS |VODAFONE GROUP PLC| 0.000|- |
+----------------------+------------------+--------------+-------------+
|MR. DAVID ARCULUS |BT GROUP PLC | 0.000|- |
+----------------------+------------------+--------------+-------------+
|MR. ISIDRO FAINE CASAS|ABERTIS | 0.002|CHAIRMAN |
| |INFRAESTRUCTURAS, | | |
| |S.A. | | |
+----------------------+------------------+--------------+-------------+
|MR. ENRIQUE USED AZNAR|AMPER S.A. | 0.390|CHAIRMAN |
+----------------------+------------------+--------------+-------------+
|MR. ANTONIO |PORTUGAL TELECOM, | 0.000|DIRECTOR |
|VIANA-BAPTISTA |SGPS, S.A. | | |
+----------------------+------------------+--------------+-------------+
|MR. ANTONIO |PT MULTIMEDIA | 0.000|- |
|VIANA-BAPTISTA |SERVICIOS DE | | |
| |TELECOMUNICACOES E| | |
| |MULTIMEDIA, SGPS, | | |
| |S.A. | | |
+----------------------+------------------+--------------+-------------+
B.1.32. Indicate and, where appropriate, explain whether there are
procedures for Directors to receive external advice:
+----+------+
|YES | NO |
+----+------+
| X | |
+----+------+
+----------------------------------------------------------------------+
| Details of the procedure |
+----------------------------------------------------------------------+
|Article 31 of the Regulations of the Board of Directors establishes |
|that in order to be aided in the performance of their duties, the |
|external Directors in majority, or any of the Board Committees by |
|majority resolution of its members, may request that legal, |
|accounting, financial or other experts may be engaged at the expense |
|of the Company. Such engagement must necessarily be related to |
|specific problems of certain importance and complexity that arise in |
|the performance of their office. |
| |
|The Chairman of the Company must be informed of the decision to |
|commission such services, which shall be engaged by the Secretary of |
|the Board, except when the Board of Directors does not consider the |
|engagement of such services to be necessary or appropriate. |
+----------------------------------------------------------------------+
B.1.33. Indicate and, where appropriate, explain whether there are
procedures for Directors to receive the information they need in
sufficient time to prepare for the meetings of the governing bodies:
+----+------+
|YES | NO |
+----+------+
| X | |
+----+------+
+------------------------------------------------------------------+
| Details of the procedure |
+------------------------------------------------------------------+
|The Company adopts the measures necessary to ensure that the |
|Directors receive the necessary information, specially drawn up |
|and addressed at preparing the sessions of the Board and its |
|Committees, with sufficient time. Under no circumstances shall |
|such requirement not be fulfilled on the grounds of the importance|
|or the confidential nature of the information - except in |
|absolutely exceptional cases. |
| |
|For this purpose, all the meetings of the Board and the Board |
|Committees have a pre-established Agenda, which is communicated at|
|least three days prior to the date scheduled for the meeting |
|together with the call for the session. For the same purpose, the |
|Directors are sent the documentation related to the Agenda of the |
|meetings with sufficient time. Such information is subsequently |
|completed by the written documentation and presentations furnished|
|the Directors during the session itself. |
| |
|To facilitate all the information and clarifications necessary in |
|relation to certain points deliberated, the senior management of |
|the Group attends nearly all the meetings of the Board to explain |
|the matters within their competencies. |
| |
|Furthermore, and as a general rule, the Regulations of the Board |
|of Directors expressly establish that Directors are attributed |
|with the broadest powers to obtain information about all aspects |
|of the Company, to examine its books, records, documents and other|
|data regarding corporate transactions. The exercise of this right |
|to information is channelled through the Chairman or Secretary to |
|the Board of Directors, who shall respond to all requests from |
|Directors, furnishing them with the information directly or by |
|establishing suitable channels within the organisation for this |
|purpose. |
+------------------------------------------------------------------+
B.1.34. Indicate whether there is liability insurance for the company
Directors.
+----+------+
|YES | NO |
+----+------+
| X | |
+----+------+
B.2. Board of Directors Committees
B.2.1. List the governing bodies:
+---------------------+---------------------+----------------------+
| Name of body | Number of members | Duties |
+---------------------+---------------------+----------------------+
|BOARD OF DIRECTORS | 17| THE HIGHEST BODY OF |
| | | THE |
| | |COMPANY ADMINISTRATION|
| | | AND REPRESENTATION, |
| | | THUS BEING EMPOWERED |
| | | TO UNDERTAKE, |
| | |WITHINTHE SCOPE OF THE|
| | | CORPORATE PURPOSE |
| | | DEFINED WITHIN |
| | | THEARTICLES OF |
| | | ASSOCIATION, ALL |
| | | ACTSAND/OR LEGAL |
| | | TRANSACTIONS OF |
| | | ADMINISTRATION AND |
| | | DISPOSAL,BY |
| | | ANY LEGAL TITLE, |
| | | EXCEPT FOR THOSE |
| | |RESERVED BY LAW OR THE|
| | | ARTICLES OF |
| | |ASSOCIATION TO BE THE |
| | | EXCLUSIVE COMPETENCE |
| | | OF THE GENERAL |
| | | SHAREHOLDERS' |
| | | MEETING. |
| | | NOTWITHSTANDING THE |
| | | ABOVE, THE BOARD OF |
| | |DIRECTORS IS BASICALLY|
| | | CONFIGURED AS A BODY |
| | | FOR SUPERVISION AND |
| | | CONTROL, AND THE |
| | |ORDINARY MANAGEMENT OF|
| | | THE COMPANY BUSINESS |
| | | IS ENTRUSTED TO THE |
| | | EXECUTIVE BODIES AND |
| | | THE MANAGEMENT TEAM. |
| | | |
| | | |
+---------------------+---------------------+----------------------+
|EXECUTIVE COMMISSION | 8| THE POWERS AND |
| | | ATTRIBUTES |
| | |INHERENT IN THE BOARD |
| | | OF DIRECTORS, EXCEPT |
| | |FOR THOSE THAT MAY NOT|
| | |BE DELEGATED BY LAW OR|
| | |UNDER THE ARTICLES OF |
| | | ASSOCIATION |
+---------------------+---------------------+----------------------+
B.2.2. List the Board Committees and their members:
EXECUTIVE COMMITTEE
+---------------------------------------+--------------------------+
| Name | Post |
+---------------------------------------+--------------------------+
|MR. CESAR ALIERTA IZUEL |CHAIRMAN |
+---------------------------------------+--------------------------+
|MR. ISIDRO FAINE CASAS |MEMBER |
+---------------------------------------+--------------------------+
|MR. GREGORIO VILLALABEITIA GALARRAGA |MEMBER |
+---------------------------------------+--------------------------+
|MR. MAXIMINO CARPIO GARCIA |MEMBER |
+---------------------------------------+--------------------------+
|MR. CARLOS COLOMER CASELLAS |MEMBER |
+---------------------------------------+--------------------------+
|MR. PETER ERSKINE |MEMBER |
+---------------------------------------+--------------------------+
|MR. JULIO LINARES LOPEZ |MEMBER |
+---------------------------------------+--------------------------+
|MR. ANTONIO VIANA-BAPTISTA |MEMBER |
+---------------------------------------+--------------------------+
|MR RAMIRO SANCHEZ DE LERIN GARCIA-OVIES|SECRETARY, NON MEMBER |
+---------------------------------------+--------------------------+
AUDIT AND CONTROL COMMITTEE
+---------------------------------------+--------------------------+
| Name | Post |
+---------------------------------------+--------------------------+
|MR. MAXIMINO CARPIO GARCIA |CHAIRMAN |
+---------------------------------------+--------------------------+
|MR. GONZALO HINOJOSA FERNANDEZ DE |MEMBER |
|ANGULO | |
+---------------------------------------+--------------------------+
|MR. ANTONIO MASSANELL LAVILLA |MEMBER |
+---------------------------------------+--------------------------+
|MR. GREGORIO VILLALABEITIA GALARRAGA |MEMBER |
+---------------------------------------+--------------------------+
|MR. RAMIRO SANCHEZ DE LERIN |SECRETARY, NON MEMBER |
|GARCIA-OVIES | |
+---------------------------------------+--------------------------+
NOMINATING AND COMPENSATION COMMITTEE
+---------------------------------------+--------------------------+
| Name | Post |
+---------------------------------------+--------------------------+
|MR. ALFONSO FERRARI HERRERO |CHAIRMAN |
+---------------------------------------+--------------------------+
|MR. MAXIMINO CARPIO GARCIA |MEMBER |
+---------------------------------------+--------------------------+
|MR. GONZALO HINOJOSA FERNANDEZ DE |MEMBER |
|ANGULO | |
+---------------------------------------+--------------------------+
|MR. PABLO ISLA ALVAREZ DE TEJERA |MEMBER |
+---------------------------------------+--------------------------+
|MR. RAMIRO SANCHEZ DE LERIN |SECRETARY, NON MEMBER |
|GARCIA-OVIES | |
+---------------------------------------+--------------------------+
STRATEGY AND INVESTMENT COMMITTEE
+--------------------------------+--------------------------------+
| Name | Post |
+--------------------------------+--------------------------------+
| | |
+--------------------------------+--------------------------------+
HUMAN RESOURCES AND CORPORATE REPUTATION COMMITTEE
+---------------------------------------+--------------------------+
| Name | Post |
+---------------------------------------+--------------------------+
|MR. PABLO ISLA ALVAREZ DE TEJERA |CHAIRMAN |
+---------------------------------------+--------------------------+
|MR. ALFONSO FERRARI HERRERO |MEMBER |
+---------------------------------------+--------------------------+
|MR. ANTONIO MASSANELL LAVILLA |MEMBER |
+---------------------------------------+--------------------------+
|MR. ENRIQUE USED AZNAR |MEMBER |
+---------------------------------------+--------------------------+
|MR. ANTONIO HORNEDO MUGUIRO |SECRETARY, NON MEMBER |
+---------------------------------------+--------------------------+
REGULATION COMMITTEE
+---------------------------------------+--------------------------+
| Name | Post |
+---------------------------------------+--------------------------+
|MR. ENRIQUE USED AZNAR |CHAIRMAN |
+---------------------------------------+--------------------------+
|MR. FERNANDO DE ALMANSA MORENO-BARREDA |MEMBER |
+---------------------------------------+--------------------------+
|MR. JULIO LINARES LOPEZ |MEMBER |
+---------------------------------------+--------------------------+
|MR. GREGORIO VILLALABEITIA GALARRAGA |MEMBER |
+---------------------------------------+--------------------------+
|MR. RAMIRO SANCHEZ DE LERIN |SECRETARY, NON MEMBER |
|GARCIA-OVIES | |
+---------------------------------------+--------------------------+
SERVICE QUALITY AND CUSTOMER SERVICE COMMITTEE
+---------------------------------------+--------------------------+
| Name | Post |
+---------------------------------------+--------------------------+
|MR. GONZALO HINOJOSA FERNANDEZ DE |CHAIRMAN |
|ANGULO | |
+---------------------------------------+--------------------------+
|MR. CARLOS COLOMER CASELLAS |MEMBER |
+---------------------------------------+--------------------------+
|MR. ANTONIO MASSANELL LAVILLA |MEMBER |
+---------------------------------------+--------------------------+
|MR. ANTONIO HORNEDO MUGUIRO |SECRETARY, NON MEMBER |
+---------------------------------------+--------------------------+
INTERNATIONAL AFFAIRS COMMITTEE
+---------------------------------------+--------------------------+
| Name | Post |
+---------------------------------------+--------------------------+
|MR. FERNANDO DE ALMANSA MORENO-BARREDA |CHAIRMAN |
+---------------------------------------+--------------------------+
|MR. ALFONSO FERRARI HERRERO |MEMBER |
+---------------------------------------+--------------------------+
|MR. GONZALO HINOJOSA FERNANDEZ DE |MEMBER |
|ANGULO | |
+---------------------------------------+--------------------------+
|MR. ENRIQUE USED AZNAR |MEMBER |
+---------------------------------------+--------------------------+
|MR. GREGORIO VILLALABEITIA GALARRAGA |MEMBER |
+---------------------------------------+--------------------------+
|MR. ANTONIO HORNEDO MUGUIRO |SECRETARY, NON MEMBER |
+---------------------------------------+--------------------------+
B.2.3. Describe the organisational and operational rules and
responsibilities attributed to each of the Board Committees.
THE EXECUTIVE COMMISSION
a) Composition
The Executive Commission is comprised of the Chairman of the Board of
Directors and by six Directors appointed by the Board of Directors.
In the qualitative composition of the Executive Commission, the Board of
Directors has endeavoured to ensure that the non-executive or the
external Directors form a majority in relation to the executive
Directors.
In all cases, the favourable vote of at least two thirds of the members
of the Board of Directors shall be required for the appointment and/or
renewal of the members of the Executive Commission to be valid.
b) Operation.
The Executive Commission shall meet as often as called by the Chairman,
usually holding its meetings every fifteen days.
The Chairman and the Secretary to the Executive Commission shall be
those persons who hold the same offices on the Board of Directors, and
one or more Vice Chairmen and a Vice Secretary may also be appointed.
The Executive Commission shall be validly constituted when the meeting
is attended by one half plus one of its members, either present or
represented.
Resolutions shall be passed by majority of the Directors attending the
meeting (present or represented), and the Chairman holds the casting
vote in the event of a draw.
c) Relations with the Board of Directors.
The Executive Commission shall report regularly to the Board of
Directors on all matters deliberated and the resolutions passed in its
sessions.
THE AUDIT AND CONTROL COMMITTEE
Pursuant to the provisions set out in Article 31 bis of the Articles of
Association of Telefonica, S.A., Article 24 of the Regulations of the
Board of Directors regulates the Audit and Control Committee in the
following terms:
a) Composition.
The Audit and Control Committee shall be comprised of four Directors
appointed by the Board of Directors. All the members of the said
Committee shall be non-executive Directors.
The Chairman of the Audit and Control Committee shall be appointed from
among its members, must be replaced every four years, and may be
reelected when the term of one year has elapsed from ceasing to hold
this office.
b) Duties.
Notwithstanding other duties entrusted it by the Board of Directors, the
Audit and Control Committee shall primarily serve to support to the
Board of Directors in its supervisory capacity and specifically shall
have the following competencies:
1) to report, through its Chairman, to the General Shareholders'
Meeting on matters raised by the shareholders on issues within the
competency of the Committee;
2) to propose to the Board of Directors, for subsequent submission to
the General Shareholders' Meeting, the appointment of the Accounts
Auditors referred to in Article 204 of the Corporations Law, as well as,
when appropriate, the terms of engagement, the scope of professional
mandate and revocation or renewal of such appointment;
3) to supervise the internal audit services;
4) to examine the financial information processes and the internal
control systems; and
5) to maintain the necessary relations with the Accounts Auditor to
receive information on all matters that may jeopardise its independence,
and any others related to the process of auditing the accounts, as well
as to receive any information and maintain the communications with the
Accounts Auditor that are established by legislation governing accounts
auditing and the related technical regulations.
c) Operation.
The Audit and Control Committee shall meet at least once each quarter
and as often as appropriate at the discretion of its Chairman, or on
request from two of its members, or by the Executive Commission.
The Audit and Control Committee may require the Company Accounts Auditor
and the internal auditing officer to attend its meetings.
THE NOMINATION, REMUNERATION AND CORPORATE GOVERNANCE COMMITTEE
a) Composition.
The Nomination, Remuneration and Corporate Governance Committee shall be
comprised of four Directors. All the members of the committee shall be
non-executive directors.
The Chairman of the Nomination, Remuneration and Corporate Governance
Committee shall be appointed from amongst its members.
b) Duties.
Notwithstanding other duties entrusted it by the Board of Directors, the
Nomination, Remuneration and Corporate Governance Committee shall have
the following duties:
(i) To report on the proposals to appoint Directors and senior
management of the Company and its subsidiaries.
(ii) To approve the remuneration scales for senior Company management.
(iii) To approve the standard contracts for senior management.
(iv) To determine the remuneration scheme for the Chairman.
(v) To report and propose the remuneration scheme for Directors to the
Board of Directors and to review such scheme periodically to ensure that
it suits the duties performed by the Directors pursuant to Article 36 of
the Regulations of the Board.
(vi) To report on incentive plans.
(vii) To examine the remuneration policy for Directors and senior
management annually.
(viii) To report on the proposals for appointment of the members of the
Executive Commission and the other Board Committees.
(ix) To prepare and keep a record of the status of the Directors and
senior Company management.
(x) To prepare the Annual Report on Corporate Governance.
(xi) To exercise all other competencies assigned to the Committee under
the Regulations of the Board of Directors.
All the activities undertaken by the Nomination, Remuneration and
Corporate Governance Committee shall be reported to the Board of
Directors at the first subsequent meeting held and, in all cases, the
relevant documentation shall be made available so that the Board may be
informed of the Committee's activities and thus suitably perform its
supervisory duties.
c) Operations.
The Nomination, Remuneration and Corporate Governance Committee shall
meet whenever the Board of the Directors or its Chairman requests the
issue of a report or the approval of proposals within the scope of its
competencies and when, in the opinion of the Chairman of the Committee,
it is appropriate for the proper performance of its duties.
THE REGULATION COMMITTEE
a) Composition.
The Regulation Committee comprises four Directors appointed by the Board
of Directors, with a majority of non-executive Directors.
The Chairman of the Regulation Committee shall be appointed from amongst
its members.
b) Duties.
Notwithstanding other duties entrusted to it by the Board of Directors,
the Regulation Committee shall have at least the following functions:
(i) To undertake, through study, analysis and discussion, the continual
monitoring of the main topics and matters of a regulatory nature that
affect the Telefonica Group at all times.
(ii) To provide a channel for communication and information between the
Management Team and the Board of Directors in regulatory matters and,
when appropriate, to inform the Board of Directors on matters that are
important or relevant for the Company or any of the companies within its
Group and for which it may be necessary or appropriate to adopt a
decision or establish a particular strategy.
THE HUMAN RESOURCES AND CORPORATE RESPONSIBILITY COMMITTEE
a) Composition.
The Human Resources and Corporate Responsibility Committee is comprised
of four Directors, all of whom must be non-executive Directors.
The Chairman of the Human Resources and Corporate Responsibility
Committee shall be appointed from amongst its members.
b) Duties.
Notwithstanding other duties entrusted to it by the Board of Directors,
the Human Resources and Corporate Reputation Committee shall have at
least the following functions:
(i) To analyse, inform and propose to the Board of Directors the
adoption of the appropriate resolutions with regards to personnel
policy.
(ii) To encourage the development of the Telefonica Group's Corporate
Responsibility Project and the implementation of the core values of the
Group.
THE SERVICE QUALITY AND CUSTOMER SERVICE COMMITTEE
a) Composition.
The Service Quality and Customer Service Committee is comprised, at the
date of this report, of three Directors. All of the members of this
Committee must be non-executive Directors.
The Chairman of the Service Quality and Customer Service Committee shall
be appointed from amongst its members.
b) Duties.
Notwithstanding other duties entrusted to it by the Board of Directors,
the Service Quality and Customer Service Committee has the following
functions:
(i) To examine, analyse and periodically monitor the quality rates of
the main services provided by the Telefonica Group companies.
(ii) To evaluate the level of customer service provided by the said
companies to its customers.
THE INTERNATIONAL AFFAIRS COMMITTEE
a) Composition.
The International Affairs Committee is comprised of five Directors, all
of whom must be non-executive directors.
The Chairman of the International Affairs Committee shall be appointed
from among its members.
b) Duties.
Notwithstanding other duties entrusted to it by the Board of Directors,
the International Affairs Committee's primary mission is to reinforce
and bring international matters that are relevant to the development of
Telefonica to the attention of the Board of Directors. For this purpose,
the Committee has the following functions, amongst others:
(i) To pay particular attention to institutional relations in the
countries in which the Telefonica Group companies operate.
(ii) To analyse those matters of importance that affect the Group in
international bodies or forums, as well as those relating to economic
integration.
(iii) To review regulatory matters, issues concerning competition and
alliances.
(iv) To evaluate the programmes and activities of the various Company
Foundations and the resources that are used in benefit of the Company's
image and its international social presence.
B.2.4. Indicate any advisory and consulting powers and, where
applicable, the powers delegated to each of the committees:
+----------------------------------+-------------------------------+
| Name of committee | Brief description |
+----------------------------------+-------------------------------+
|EXECUTIVE COMMISSION |CORPORATE BODY WITH GENERAL |
| |DECISION-MAKING POWERS AND |
| |EXPRESS DELEGATION OF ALL THE |
| |POWERS ATTRIBUTED TO THE BOARD |
| |OF DIRECTORS, EXCEPT THOSE THAT|
| |MAY NOT BE DELEGATED BY LAW OR |
| |UNDER THE COMPANY ARTICLES OF |
| |ASSOCIATION |
+----------------------------------+-------------------------------+
|AUDIT AND CONTROL COMMITTEE |CONSULTATIVE AND CONTROL |
| |COMMITTEE |
+----------------------------------+-------------------------------+
|NOMINATING, COMPENSATION AND |CONSULTATIVE AND CONTROL |
|CORPORATE GOVERNANCE COMMITTEE |COMMITTEE |
+----------------------------------+-------------------------------+
|HUMAN RESOURCES AND CORPORATE |CONSULTATIVE AND CONTROL |
|RESPONSIBILILY COMMITTEE |COMMITTEE |
+----------------------------------+-------------------------------+
|REGULATION COMMITTEE |CONSULTATIVE AND CONTROL |
| |COMMITTEE |
+----------------------------------+-------------------------------+
|SERVICE QUALITY AND CUSTOMER |CONSULTATIVE AND CONTROL |
|SERVICE COMMITTEE |COMMITTEE |
+----------------------------------+-------------------------------+
|INTERNATIONAL AFFAIRS COMMITTEE |CONSULTATIVE AND CONTROL |
| |COMMITTEE |
+----------------------------------+-------------------------------+
B.2.5. Indicate, if applicable, any regulations governing the Board
committees, where they are made available for consultation and any
amendments to the same made during the financial year. Indicate whether
any annual report has been voluntarily drawn up on the activities of
each committee.
The organisation and operation of the Board of Directors Committees are
governed by specific regulations contained in the Regulations of the
Board of Directors. Besides this, the Audit and Control Committee is
also specifically regulated in article 31 bis of the Articles of
Association. Both documents are available for consultation of the
company website.
B.2.6. If there is an Executive Commission, explain the degree of powers
and the independence it has to adopt resolutions on the company
administration and management in the performance of its duties.
Within the limits of the legislation in effect, the Board of Directors
has expressly delegated all of its powers and attributes, except for
those that may not be delegated by law or under the Company Articles of
Association, to the Executive Commission, which has general
decision-making powers.
The relationship between the Board of Directors and the Executive
Commission is based on the principle of transparency, so that the Board
is always aware of the decisions made by the Commission. Thus, the Board
of Directors is informed at each of its meetings of all the resolutions
adopted by the Executive Commission. To this effect, a summary of the
Minutes of the Commission sessions is distributed to all the members of
the Board, the Board then ratifies the aforementioned resolutions.
B.2.7. Indicate whether the composition of the Executive Commission
reflects the participation within the Board of the different types of
Directors:
+----+------+
|YES | NO |
+----+------+
| X | |
+----+------+
+-------------------------------------------+
| If not, describe the composition of the |
| Executive Committee |
+-------------------------------------------+
| |
+-------------------------------------------+
B.2.8. If there is a nominating Committee, indicate whether all its
members are external Directors:
+----+------+
|YES | NO |
+----+------+
| X | |
+----+------+
C. ASSOCIATED TRANSACTIONS
C.1. List any relevant transactions entailing a transfer of resources or
obligations between the company or its group companies and the significant
shareholders in the company:
+-------------+-------------------+------------+------------+------------+
|Name or | Name or corporate |Type of |Nature of |Value |
|corporate |name of the company|transaction |the |(thousand |
|name of | or its group | |relationship|euros) |
|significant | company | | | |
|shareholder | | | | |
+-------------+-------------------+------------+------------+------------+
|CAJA DE |TELEFONICA S.A. |Contractual |Loans and | 355,587|
|AHORROS Y | | |other | |
|PENSIONES | | |financing | |
|DEBARCELONA, | | |transactions| |
|'LACAIXA' | | | | |
+-------------+-------------------+------------+------------+------------+
|CAJA DE |GRUPOTELEFONICA |Contractual |Others | 1,233|
|AHORROS Y | | | | |
|PENSIONES | | | | |
|DEBARCELONA, | | | | |
|'LACAIXA' | | | | |
+-------------+-------------------+------------+------------+------------+
|BANCO BILBAO |TELEFONICA S.A. |Contractual |Loans and | 364,330|
|VIZCAYA | | |other | |
|ARGENTARIA | | |financing | |
| | | | | |
| | | |transactions| |
+-------------+-------------------+------------+------------+------------+
|BANCO BILBAO |TELEFONICA DE |Contractual |Loans and | 7,243|
|VIZCAYA |ESPANA, S.A.U | |other | |
|ARGENTARIA | | |financing | |
| | | |transactions| |
+-------------+-------------------+------------+------------+------------+
|BANCO BILBAO |COMPANIA DE |Contractual |Loans and | 38,724|
|VIZCAYA |TELECOMUNICACIONES | |other | |
|ARGENTARIA |DE CHILE, S.A. | |financing | |
| | | |transactions| |
+-------------+-------------------+------------+------------+------------+
|BANCO BILBAO |TELEFONICA MOVILES |Contractual |Loans and | 24,094|
|VIZCAYA |ARGENTINA, S.A. | |other | |
|ARGENTARIA | | |financing | |
| | | |transactions| |
+-------------+-------------------+------------+------------+------------+
|BANCO BILBAO |COLOMBIA |Contractual |Loans and | 47,264|
|VIZCAYA |TELECOMUNICACIONES,| |other | |
|ARGENTARIA |S.A. ESP. | |financing | |
| | | |transactions| |
+-------------+-------------------+------------+------------+------------+
|BANCO BILBAO |TELEFONICA MOVILES |Contractual |Loans and | 7,955|
|VIZCAYA |COLOMBIA, S.A. | |other | |
|ARGENTARIA | | |financing | |
| | | |transactions| |
+-------------+-------------------+------------+------------+------------+
|BANCO BILBAO |GRUPO TELEFONICA |Contractual |Guarantees, | 18,082|
|VIZCAYA | | |securities | |
|ARGENTARIA | | |and bonds | |
+-------------+-------------------+------------+------------+------------+
|BANCO BILBAO |GRUPO TELEFONICA |Contractual |Others | 215,825|
|VIZCAYA | | | | |
|ARGENTARIA | | | | |
+-------------+-------------------+------------+------------+------------+
|BANCO BILBAO |TELEFONICA S.A. |Contractual |Others | 3,299,961|
|VIZCAYA | | | | |
|ARGENTARIA | | | | |
+-------------+-------------------+------------+------------+------------+
|BANCO BILBAO |TELEFONICA S.A. |Contractual |Others | 111,375|
|VIZCAYA | | | | |
|ARGENTARIA | | | | |
+-------------+-------------------+------------+------------+------------+
C.2. List any relevant transactions entailing a transfer of resources or
obligations between the Company or its group companies and the Company's
managers or Directors:
+-------------+--------------+-------------+-------------+-------------+
| Name or | Name or |Type of |Nature of the| Value |
| corporate |corporate name|transaction |relationship | (thousand |
| name of |of the Company| | | euros) |
| significant | or its group | | | |
| shareholder | company | | | |
+-------------+--------------+-------------+-------------+-------------+
| | | | | |
+-------------+--------------+-------------+-------------+-------------+
C.3. List any relevant transaction undertaken by the Company with other
companies in its group that are not eliminated in the process of drawing up
the consolidated financial statements and whose object and conditions set
them apart from the Company's habitual trading:
+-----------------------+-----------------------+----------------------+
|Corporate name of the |Brief description of |Value (thousand euros)|
|group company |the transaction | |
+-----------------------+-----------------------+----------------------+
| | | |
+-----------------------+-----------------------+----------------------+
C.4. Identify, where appropriate, any conflicts of interest affecting
company Directors pursuant to Article 127 of the Corporations Law.
The Board of Directors has not been informed of any conflicts of interest to
the effects set out in article 127 of the Corporations Law.
C.5. List the mechanisms established to detect, determine and resolve any
possible conflicts of interest between the Company and/or its group, and its
Directors, management or significant shareholders.
The Company policy has established the following principles governing
possible conflicts of interest that may affect Directors, management or
significant company shareholders:
* With respect to the Company Directors, Article 35 of the Regulations of
the Board of Directors establishes that Directors shall inform the Board of
Directors of any situation of direct or indirect conflict they may have with
the Company's interest. In the event of conflict, the affected Director
shall abstain from intervening in the deliberation to which the conflict
refers.
Moreover, and in accordance with the provisions set out in the Regulations
of the Board, Directors shall abstain from participating in voting that
affects matters in which they or persons related to them have a direct or
indirect interest.
Likewise, the aforementioned Regulations establish that Directors shall not
directly or indirectly undertake professional or commercial operations or
transactions with the Company or with any of the companies in its Group,
when such transactions are unrelated to the ordinary business of the Company
or not performed under market conditions, unless the Board of Directors is
informed of said transaction and, after prior favourable report from the
Nominating, Compensation and Corporate Governance Committee, approves them
with the favourable vote of at least 90% of the Directors present at the
meeting.
* With regards to significant shareholders, Article 41 of the Regulations of
the Board of Directors establishes that the Board of Directors formally
reserves knowledge and authorisation of any transaction between the Company
and any of its significant shareholders.
Under no circumstances shall the Board of Directors authorise the
transaction without prior report issued by the Nomination, Remuneration and
Corporate Governance Committee appraising the transaction from the point of
view of the principle of parity treatment of shareholders and the market
conditions of the same. For ordinary transactions, a generic authorisation
for the type of transaction and its general conditions shall be sufficient.
* With respect to Management, the Internal Code of Conduct for Securities
Markets Issues sets out the general principles of conduct for the persons
subject to the said regulations who are involved in a conflict of interest.
The aforementioned Code includes all the Company Management Personnel within
the concept of affected persons.
In accordance with the provisions of this Code, Management Personnel are
obliged to (a) act at all times with loyalty to the Group and its
shareholders, regardless of their own or other interests; (b) abstain from
intervening or influencing decision-making that may affect the persons or
companies with which the conflict of interest exists; and (c) abstain from
accessing information deemed confidential related to such conflict.
Furthermore, these persons are obliged to inform the Company Regulatory
Compliance Unit of all transactions that may potentially give rise to
conflicts of interest.
This information is provided by RNS
The company news service from the London Stock Exchange
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