ACS
Actividades de Construcción y Servicios

Title one. The Board of Directors

Article 3.- Composition and appointments

Within the limits laid down by Article 13 of the Company Bylaws in effect and notwithstanding the powers of proposal which, under the legislation in force, may correspond to the shareholders, the Board of Directors shall be responsible for proposing to the General Shareholders’ Meeting both the number of Board Members and the persons, natural or legal, to be appointed. The appointment proposal must specify the proposed Members’ condition of executive, representing substantial shareholders, independent or external.

Furthermore, in the event that vacancies were to arise, the Board of Directors may provisionally fill them among the shareholders until the next General Shareholders’ Meeting where the definitive choice would be made.


Article 4.- Functions

In accordance with the terms of Article 18 of the Company Bylaws in effect, the Board of Directors is responsible for representing the Company and administering its business and for carrying out whatever operations may be involved in its purpose or may be related to it.

In carrying out its functions, the Board of Directors shall act in accordance with company interests and safeguarding the interests of the shareholders.

Particularly, the Board of Directors shall have the following responsibilities, which cannot be delegated:

• Accepting the resignation of Board Members.
• Appointing, discharging and accepting the resignation of the positions of Chairman, Vice-Chairman and Secretary to the Board.
• Appointing, discharging and accepting the resignation of Board Members who must form part of the Committees described herein.
• Delegating to any of their members, wholly or partly, the powers corresponding to the Board, except those which cannot be delegated.
• Preparing the individual and consolidated financial statements and directors' reports and submitting them for approval by the General Shareholders’ Meeting. Also, drawing up an annual consultative report on the Board Member's remuneration policy, which shall be submitted to the Company's General Shareholders' Meeting as a separate item on the agenda. 
• Drawing up the reports, including the Annual Report on Corporate Governance, and the proposals which, in accordance with the legislation in force and the Company Bylaws, the Board of Directors is responsible for adopting.
• Approving the yearly budget.
• Approving the merger, acquisition, division or concentration operations in which the main subsidiary companies of the Group where the Company is dominant.
• Approving the block issue of debentures, notes, bonds or similar security by the main companies of the Group where the Company is dominant.
• Approving the assignation of rights over the trademark, brands and other intellectual and industrial property rights that belong to the Company or the companies of its Group, whenever they are of financial relevance.
• Annually assessing: the quality and efficiency of its operation; the Chairman and, if appropriate, CEO's performance of their functions, following the issuance of a report by the Appointment and Remuneration Committee; and the operation of the Board of Director's Committees, following the issuance of a report by these Committees
• Amending these Rules.
• In general, to carry out all the functions which by law, by regulation or in accordance with these Rules, it is responsible for, and to carry out other functions which have been delegated to it by the General Shareholders’ Meeting, and empowered, in turn, to delegate only those which have been expressly permitted in the delegation agreement with the General Shareholders’ Meeting. 

 

Additionally, the Board of Directors shall be responsible for and may not delegate the responsibility of defining the company’s strategy and the exact organization required for its performance, as well as the supervision and control of Management in order to assure the fulfilment of the approved objectives. For this purpose, the Board of Directors shall be responsible for approving the following:

1) The company’s general policies and strategies, and specifically:

• The strategic or business plan, as well as the annual management objectives. 
• The investment and financing policy. 
• The structure of the group of companies. 
• Corporate governance and social responsibility policies. 
• Senior executive management evaluation and remuneration policies.
• The risk control and management policy and the periodic monitoring of internal information and control systems. 
• The policy on dividends and on treasury stock and its limits. 
• Related party transactions, following a report prepared by the Audit Committee, unless such transactions meet the following three conditions
  a) They are performed in accordance with standard contract conditions;
  b) They are performed at the general prices or rates set by the supplier of the good or service at issue: and
  c) The transaction amount does not exceed 1% of the company’s annual revenues.

2) The following decisions:    

• The appointment, at the proposal of the Chairman, of senior executives, as well as their compensation clauses. 
• The distribution among the board members, of the overall remuneration agreed by the General Shareholders’ Meeting, and if appropriate, the establishment of supplementary remuneration and other supplementary pay corresponding to executive directors in relation to their functions.
• The financial information to be periodically made public by the Company given that it is listed on the stock exchange.
• Investments or transactions of a strategic nature or of relative importance, except where these are to be approved by the General Shareholders’ Meeting.
• The creation or acquisition of special purpose entities or entities residing in territories considered to be tax havens, as well as any other operation or transaction which might diminish the transparency of the company or group.
• The establishment and supervision of a mechanism enabling employees to confidentially report any regularities they know of, and particularly financial and accounting regularities of special significance, to the Audit Committee, through its Secretary.
  

Article 5.- Duty to Inform Shareholders

In order that the General Shareholders’ Meeting may appropriately perform the functions it is responsible for, the Company’s Board of Directors must make available to shareholders, prior to each Meeting being held, all information that may be legally required or which, without being so, must reasonably be provided in accordance with the interests of the company and of the shareholders, in order for them to lay down criteria. Along these lines, the Board of Directors shall be obliged to attend with maximum diligence to requests which, for the purposes of the General Meeting, either previously or subsequently, shareholders may request provided that this does not prejudice company interests.

So as to enable transparency and maximum distribution of the corresponding information and to facilitate immediate access to it by shareholders, and investors in general, the Board of Directors shall provide for the Company Web Page to insert all those documents deemed as subject to general distribution and, especially, the Company Bylaws, the Rules of Procedure of the Board of Directors, the reports which, pursuant to the legislation in force, must be delivered to the Stock Market, dates when the General Shareholders’ Meetings are convened and the proposals that they submit to discussion and approval, and the agreements adopted by the General Shareholders’ Meetings which have been held recently.

Additionally, the Web Page shall include the composition of the Board of Directors, and in relation to each board member: his professional profile; the other Board of Directors of which he is a member: whether he is an executive and proprietary director, and the shareholder which he represents; or whether he is independent or external; the date on which he was appointed, and if applicable, re-elected; and the company shares or share options to which he holds title.

Article 6.- Preparation of Accounts

The Board of Directors, in view of the report issued by the Audit Committee, shall prepare the Annual Accounts and Management Reports, both individual and consolidated, in such terms that, in addition to complying with the legislation in force, make them easy for shareholders and for the general public to understand.

The Minutes of the Board Meeting where these Annual Reports are prepared shall specify the observations that may be made by the different Board Members individually, especially those that may affect the availability of the necessary information for forming an opinion and casting a vote.


Article 7.- Duties arising from its condition as a listed company

The Board of Directors shall be obliged to adopt or promote the adoption of whatever measures necessary or expedient in order to safeguard transparency in the Company’s activities on the financial markets and carry out any function that may arise from its condition as a company listed on the Stock Market.


Article 8.- Sessions and notice

The Board shall meet whenever required to do so by the Company’s interests, prior notice from the Chairman or, in his or her absence, by a Vice-Chairman, either on his or her own initiative or on the request of, at least, two Board Members. In any event, the Board shall meet at least six times a year to periodically examine the Group’s progress compared to the budgets and previous accounting period.

Notice shall be given by means of letter, telex, telegram, telefax or any other means of written communication that permits verification that it has been received by the different Board Members, including the agenda.

Except in cases of emergency, to be freely judged by the Chairman, notice must be given at least three days in advance of the date of convening the Board Meeting.

The Board of Directors shall meet in the Company offices or in any other place the Chairman may decide and specify in the notice of meeting.

The Board of Directors shall empower one of the independent Non-Executive Directors to do the following:

1. Request the calling of meetings of the Board of Directors.
2. Request that new items be added to the agenda of the Board of Director's meeting.
3.- State and coordinate the voicing of concerns by independent, proprietary and non-executive Board Members.
4.- Direct the evaluation by the Board of Directors of its Chairman.

Article 9.- Quorum of attendance

The Board shall be deemed to be constituted when a majority of shareholders are either present or represented at the meeting.

Without prejudice to attendance obligations, Directors who are unable to attend a meeting in person may be represented and cast a vote through another Director. This proxy must be in writing and must be delivered to the Chairman in the form of a letter, telegram, telex or fax or any other written means that allows its reception by this addressee to be verified.

Nevertheless, the Board may meet without having called a meeting if all its members are present or represented and they unanimously agree to holding a meeting of the Board and to the meeting agenda.

Article 10.- Adopting agreements

Unless otherwise stipulated in the legislation in force, in the Company Bylaws or in these Rules, the Board of Directors’ agreements shall be adopted by absolute majority of the Board Members attending the meeting, whether present or represented.

The adoption of agreements in writing and without meeting, shall only be admissible when no Board Member is in disagreement and the other requisites laid down by the legislation in force are complied with.