7

7 NH Hoteles and suppliers Promoting responsibility in the value chain “Our policy is to maintain and put in practice the highest possible standards in business ethics, professional courtesy and skill in all our activities” – (Point 5.2.3.4. of the internal document “Corporate Buying Policy of the NH Hoteles Group”). Origin and typology of suppliers of the NH Hoteles Group The NH Hoteles Group worked with 28,000 suppliers last year. The degree of internationalization is high because only 34.1% of these are Spanish firms, although they account for a volume above 45% of the total. Some 80% of the purchasing volume is concentrated in 3 countries: Spain, the Netherlands and Germany. The degree of concentration among suppliers is high: only 4% of suppliers account for 80% of the purchasing volume. Central Europe 1,881 Mexico 1,920 Benelux 3,785 Other 455 Mercosur 2,037 Spain 8,286 Germany 5,126 Italy 798 Nº OF SUPPLIERS PER COUNTRY Central Europe 4% Mexico 4% Benelux 20% Other 1% Mercosur 2% Spain 46% Germany 18% Italy 5% BUYING VOLUME PER COUNTRY FOR NH HOTELES, SUPPLIERS ARE THE FIRST STEP IN OFFERING OUR SERVICES WITH GREATEST CARE AND ATTENTION TO DETAIL. THEY ARE VERY IMPORTANT TO US BECAUSE SATISFACTION AT THE START OF THE VALUE CHAIN WILL MEAN AN INCREASE IN THE QUALITY OF OUR SERVICES AND PRODUCTS. NH Corporate Responsibility 2006 51

NH Corporate Responsibility 2006 52 As regards the typology of the group’s suppliers, some 16% provide food products (food and beverages), accounting for nearly 23% of the purchasing volume. The bulk of our suppliers are in the category of operational expenses and services, which encompasses everything from cleaning products to the provision of services such as laundry. Strategic purchasing policies of NH Hoteles Implementation of a series of supply chain management policies and procedures since 2004 is resulting in the thorough standardization of our suppliers on the following premises: •  Strategic purchasing: at NH Hoteles we seek the best service and best quality in the most efficient way possible, while reducing economic and administrative costs. •  The Buying Department of NH Hoteles sets and updates the quality and service standards, working to keep them above market levels. •  NH Hoteles has an ongoing evaluation process to ensure compliance with the established standards. •  Ethical purchasing: NH Hoteles takes into account social and environmental standards when selecting suppliers. The suppliers of NH Hoteles are not only components of the value we offer in our products and services, but also collaborators in the continuous enhancement of our work, adding their effort to ours in innovating and developing our lines of business. In this joint effort to improve, NH Hoteles has as suppliers for work of industrial laundry Flisa and Icaria Iniciativa Social, companies which cover half of our hotels in Spain, while contributing to the workplace integration of underprivileged groups. TYPOLOGY OF SUPPLIERS BY FAMILY • 77% Operating expenses and Services • 16%  Food and Beverage • 7%   Furniture, Furbishing and Equipment 7% 77% 16% BUYING VOLUME BY FAMILY • 55% Operating expenses and Services • 23%  Food and Beverage • 22% Furniture, Furbishing and Equipment 55% 23% 22% Suppliers of NH Hoteles

NH Corporate Responsibility 2006 53 Relying on this trust and synergy with our suppliers, at NH Hoteles we view this relationship as follows: •  Equality of opportunities between all offers •  Transparency and documentation in all contracts awarded •  Stability in our business dealings, with a mean duration of contracts of between 1 and 3 years •  Cordial and courteous dealings, avoiding unnecessary problems so as to improve the smoothness of relations with suppliers •  Relations with “responsible suppliers” We select from all our potential suppliers those whose policies are in line with our own, and which are consistent with the strategy of NH Hoteles and whose product meets the high standards of quality we demand. When standardizing our suppliers, NH Hoteles takes into account human rights and compliance with the law and good environmental practices as defined internationally. Purchasing processes and systems As part of the process of continuously improving our procedures, a new system of supply chain management was designed and approved, and it was implemented throughout 2005 in a number of business units. In 2006, we have undertaken a revision and expansion of our supply systems, relying on external consulting to carry out the project. The objective of this project is to automate the supply cycle from the application phase all the way to payment of invoices. Development of an electronic billing module will allow for gradual elimination of paper in transactions with suppliers, thus resulting in reduced paper consumption and environmental and financial benefits. The calendar for implementation for 2007 involves a number of business units, including those with no processes implemented previously (e.g., Italy).   Moreover, a survey will be carried out allowing suppliers to give their opinions and suggestions on NH Hoteles. A system of electronic auctions will also be developed, maintaining equality of opportunities and transparency in contracting, but expediting the bureaucratic processes and reducing the consumption of paper and other resources.

Girl at Menudos Corazones Foundation Spain 8

8 NH Hoteles and society Social Action: our relations with the communities   in which we operate and non-profit entities The area of Corporate Responsibility is responsible for coordinating projects of social action. As a first step, a registry and assessment system was set up for all the actions and donations undertaken by NH Hoteles in 2006 in all its business units, some of them with a duration significantly longer than that year. We collaborated on a total of 165 actions internationally. NH Hoteles has quantified the investment involved in all these actions at 537,048   , and we are proudly aware that in some business units these actions cannot be quantified solely in financial terms but they have entailed actions of social involvement and education for employees. As a result of this inventory, we have reached a number of conclusions concerning our strategic objectives in social action, particularly: • The importance of comprehensive collaboration on the part of the company and its employees in the social projects in which it takes part, and avoiding mere financial support. Thus, the beneficiaries of our support will become partners in know-how, true collaborators and not only recipients of financial assistance. • We want to be involved by offering that what we do best: providing the best products and services, the best employment opportunities to disadvantaged groups and giving quality training to these groups (people at risk of social exclusion, physically and mentally disabled people and so on). •We seek to strengthen corporate volunteering, as we have discovered, to our great satisfaction, the willingness and enthusiasm our employees have placed in the social projects. FOR NH HOTELES, CORPORATE RESPONSIBILITY INCLUDES THE COMMITMENT OF COMPANIES TO BE AN ACTIVE PLAYER IN THE JUST DEVELOPMENT OF SOCIETY, CREATING WEALTH THROUGH THEIR OWN OPERATIONS WHERE THEY DO BUSINESS AND SHARING WITH SOCIETY PART OF THE PROFITS THEY MAKE. NH Corporate Responsibility 2006 55

NH Corporate Responsibility 2006 56 As a result of the lessons learned in these experiences and the conclusions we have drawn, and the inventory of actions on an international level, in 2006 we presented the Corporate Responsibility Master Plan for the years 2006-2009. The plan envisages investment by NH Hoteles in social action by identifying projects that most closely reflect the strategy of the company. To identify these projects, we have created the NH SOLIDARITY INDEX, the NH Social Action Management System, which enables us to weigh the most suitable initiatives according to their investment/effectiveness/impact. In any event, many of the projects we have started up have shown that effectiveness and some of those implemented in 2006 will continue into 2007, thus linking us to health, education and culture. The following are some of the actions performed last year: Menudos Corazones At NH Hoteles, we have supported for more than three years the Foundation Menudos Corazones, which assists families with children affected by congenital cardiopathies. Our collaboration involves providing, completely free of charge, 2 rooms in the NH Alcalá Hotel in Madrid at the permanent availability of families who need to travel AGE (10%) Details P 16-40 years 6 SCOPE (10%) Details P 30.000 8 Beneficiaries SEX (8%) Details P Men 8 Women COLLECTIVE (15%) Details P Population with   15 high rates of poverty and unemployment COUNTRY (2%) Details P Argentina. 1.5 González Catán, Buenos Aires and Ciudad de Santa Fe PROJECT “WE ALL FORM PART" Obra Padre Mario Foundation BU MERCOSUR EXAMPLE OF NH SOLIDARITY INDEX: PROJECT “WE ALL FORM PART”. OBRA PADRE MARIO FOUNDATION. Family supported by the Menudos Corazones Foundation and NH Hoteles

NH Corporate Responsibility 2006 57 GLOBAL VALUATION 87.5 IMPACT OF THE ACTION (10%) Details P • High employee   7 involvement • High commitment to the Sponsorship Programme • Circulation in local media • Support from public institutions and improvement in NH Hoteles’ reputation among local clients STRATEGIC PARTNER (15%) Details P Foundation   12 declared to be of National Interest (ARG) INVESTMENT (15%) Details P • Training 15 Hours for personnel of NH Hoteles • Student scholarships • Donation of computers and books • Culinary School scholarships • Sponsorship Programme DURATION (5%) Details P >3 years 5 SCOPE OF ACTION (15%) Details P • Offer training in F&B, 10 Floors, Administration • Sign agreements for scholarships with the Trade School of the Obra Padre Mario Foundation EXAMPLE OF NH SOLIDARITY INDEX: PROJECT “WE ALL FORM PART”. OBRA PADRE MARIO FOUNDATION. Voucher Amigos NH Solidarity

NH Corporate Responsibility 2006 58 to Madrid for operations and treatment of children. The minimum stay is 15 days, and upon the family's departure, the rooms are once again occupied, thus maintaining a continuous turnover. In 2006, NH Hoteles provided at total of 585 double rooms with breakfast. “You shared part of the financial profits of 2006 with families facing the pressure of difficult circumstances (…). Thanks to the cleaning lady who asked about our child every day. He's doing wonderfully." Excerpt from a letter of thanks from a father for the support of NH Hoteles. Obra Padre Mario Foundation The Obra Padre Mario Foundation aims at the social, employment and educational development of the inhabitants of González Catán, an area of the Buenos Aires province with high rates of poverty and unemployment. NH Hoteles began to offer residents of the area training programs in restaurant work, scholarships with grants, workshops and seminars, an employment center where participants in the courses have priority in hiring in our hotels, donations of computers and books and more, where we have taken a role n education in the area to ensure better possibilities in employment and achieving a dignified job future so as to help economically revitalize the area. In 2006, courses were given on pastry making and fruit cutting, with the participation of 13 young people from the Obra Padre Mario Foundation. “I can sincerely say that my life has taken a completely new turn after my participation in the scholarship program. I would like to emphasize the humaneness of the people on the staff of NH Hoteles." Excerpt from a letter by Anahí Salas, a young beneficiary of a training scholarship in gastronomy given by NH Hoteles through the Obra Padre Mario Foundation. Niños de la Calle For three years, NH Hoteles has supported the Codespa Foundation in giving opportunities to young people in economically and socially developing areas of Mexico. NH Hoteles provides technology training at school level in the field of tourism in private institutions, with the possibility, once they have completed their studies, of gaining employment in one of our hotels. This year, the company has celebrated the workplace integration of one of these boys in our chain and another three boys will have the same opportunity to complete his studies in June 2007. NH Pirineos and the “INTEGRA 21” Award The Education Department of the Government of Catalonia, the School of the Hotel and Restaurant Trade and Tourism of Lleida and the Down Association of Lleida, created 3 years ago the “Integra 21” Young people at the Obra Padre Mario Foundation at a training of NH Hoteles “Niños de la Calle” at a training of NH Hoteles

NH Corporate Responsibility 2006 59 Awards to recognize companies that support and collaborate in the workplace integration of persons with Down's Syndrome. In this time, NH Hoteles, through its NH Pirineos hotel, has supported the project and received this award for the involvement of our personnel and for internships to young people In the Down Syndrome Association of Lleida in the hotel. “At the NH Hotel everyone was equal. I will always remember this experience and I'm proud of having done it. I have participated in many competitions and won many medals, but the most valuable trophy I have is the one I received in an NH Hotel. It was the affection of my co-workers. Thank you for giving me a chance." Excerpt from a letter sent by Jordi Bacells, a young man with Down syndrome who completed an internship In the NH Pirineos hotel in Lleida, Spain. Casa Hogar Máximo Cornejo Quiroz de México - Maranata Mission This is a shelter for 60 children aged between 6 and 13 from poor or broken families In Mexico. The NH Hotel Krystal in Puerto Vallarta has been making donations for ten years in cash and food once a week, deepening involvement and raising awareness among customers through charitable raffles to collect funds for the support and education of these children. Turtle Camp in Mexico The employees of our hotel in Puerto Vallarta showed their commitment to the environment through a project to protect baby turtles of the Carey and Laud species: they gather the eggs laid by the turtles on the beaches and during the rainy season keep them safe in a "turtle camp." When the baby turtles break the shell, they are delivered to the environmental authorities, who return them to their natural habitat. Leader and Europe Scholarships   The Carolina Foundation and the Ministry of Foreign Affairs have created Leader scholarships to help achieve closer ties between Latin America and Spain, and offer Latin American students the possibility to pursue a professional career in Spain. At NH Hoteles, we have worked on this initiative in our own business: providing accommodation, food and meeting rooms to the 120 beneficiaries of the scholarships. In the same way we are working with Scholarships Europe, in which pre-university students make a trip through Europe to discover the higher education opportunities available in these countries and show their abilities. Millennium Bus: journey towards health and development   The NGO Medicus Mundi has started up an initiative called "Millennium Bus: journey towards health and development," which aims to raise awareness among citizens of the Millennium objectives set for the year 2015. To do this it is making a journey NH Krystal Puerto Vallarta Mexico Employees of NH Pirineos with Jordi Millennium Bus Project supported by Medicus Mundi - Spain

through 16 provinces of Spain on a bus with a team setting up itinerant exhibitions and different awareness-raising activities. NH Hoteles is supporting this initiative by provide accommodation to the Millennium Bus team in our hotels at special rates, while supporting the NGO by raising awareness among customers and employees on the Eight Millennium Objectives: In addition, other social actions have been undertaken to allow for the active participation of employees:   Amigo Voucher and Employee Solidarity Rate To help our employees get involved in the projects we invest in as a company, every employee earmarks 1€ of their employee rate (special rates for services of NH Hoteles for employees) or 2€ of their Amigo Voucher (special price for accommodation and breakfast for employees' family and friends) for the sum donated or invested in these projects. NH Hoteles has committed to donate in 2007 a sum 4.5 times what it raises in the employee rate and amigo voucher. The totality of these funds constitutes the social action budget to be managed by the Corporate Responsibility department of the company.   Donations of computers, furniture and other products NH Hoteles is supporting the Hospital Foundation of San Salvador and the association "Ordenadores sin Fronteras", by donating computer materials, furniture and other materials not being used in our facilities for rehabilitation and use in the work of both organizations, promoting education and computer literacy among the people they help. Christmas Campaign For the first time, in 2006 we organized a Christmas Campaign and Volunteering in which employees voluntarily donated food, toys and blankets for distribution among different centres and soup kitchens, local NGOs and foundations. In addition to the donation, employees could volunteer in the collection and delivery of items donated. NH Corporate Responsibility 2006 60 Employee donations for the Christmas Campaign of 2006 in Spain

NH Hoteles Projects of Social Action • Abre sus Ojos (Spain) • Asociación Femenil Vallartense of Support for Battered Women (Mexico) • Asociación Semilla (Spain) • Asociación Vallartense de Apoyo contra el Cáncer (Mexico) • Asociación Víctimas del Terrorismo 11M (Spain) • Becas Europa (Spain) • Becas Líder (Spain – Latin America) • Turtle Camp (Mexico) • Casa del Sol (Mexico) • Casa Hogar Máximo Cornejo Quiroz (Mexico) • COLT ALB, centre for deaf and mentally handicapped children (Bucharest) • International Red Cross • Fundación CODESPA (Mexico) • Fundación Integra (Spain) • Fundación Pablo Sarasate (Spain) • Fundación Pequeño Deseo (Spain) • Fundación Randstad (Spain) • Down Syndrome Foundation (Spain) • FUNSIDA (Spain) • Valora Foundation (Spain) • Hermanas de la Madre Teresa de Calcuta (Spain) • Intermón Oxfam (Spain) • Krebskranke Kinder for children with cancer (Germany) • Make a Wish (Germany and Mexico) • Medicus Mundi (Spain) • Manos en Acción MAENAC (Ecuador) • Mensajeros de la Paz (Spain) • Menudos Corazones (Spain) • Obra Padre Mario (Argentina) • Orfanato Comuna Vidra (Romania) • Rotary Club (Germany and Spain) • Solidarios (Spain) Spreading Culture At NH Hoteles, we promote culture through different initiatives such as the Mario Vargas Llosa Short Story Award, in its 10^th edition in 2006, an award that has established itself among those with the most prestige in the field of short stories, and which allows for the dissemination of the work and recognition for an author internationally. Nearly 15,000 authors from 31 countries have competed for the award in these ten years. The winning stories are published by NH Hoteles in three languages: Spanish, English and German, and are distributed in every room in the chain's hotels as a free service to our customers. Since 1996, NH Hoteles has distributed more than 3 million books in Spain, Germany, Netherlands, Austria, Switzerland, Belgium, Argentina, Portugal, Chile, Cuba, Uruguay and Mexico. In the field of music, we are once again supporting the Symphonic Orchestra of Navarre and the Pablo Sarasate Foundation with a major financial grant. In the visual arts, NH Hoteles is supporting young artists and helping them achieve recognition for their creativity and work through our collection of NH Stock Art, which features the works of new talents exhibited in our hotels. NH Stock Art now has a formidable collection composed of works by 170 international artists. NH Corporate Responsibility 2006 61 10^th Edition of the Mario Vargas Llosa Awards of NH Short Stories

Food and Beverages Another way we contribute to society and the communities in which we operate is by promoting gastronomy with a number of initiatives that improve both the service offered and the adaptation of local products, the skills and training of our personnel and their professional development. The following are some of the initiatives developed and implemented in 2006 by the company: •  1^st International Nhube Congress, which was held in Madrid, Spain, with the attendance of more than 40 chefs, maître d'hotel, directors and others now working in one of the 18 Nhube spaces open in Spain, Germany, Netherlands and Mexico and the featured presence of the kitchen staff of El Bulli. •  Invitation and attendance to the 4th International Fusion Congress of Madrid and the 8th International Congress of The Best Cuisine in San Sebastián. •  Inauguration of the InNHova Workshop in the Casino of Madrid, led by the prestigious chef and Director of the Casino of Madrid, Paco Roncero. Moreover, the Casino of Madrid of NH Hoteles, has received a number of awards, including: •  Paco Roncero (La Terraza del Casino): Award for Best Chef of the Future from the International Academy of Gastronomy (May 2006). •  María José Huertas (La Terraza del Casino): Award for Best Sommelier of the Future from the International Academy of Gastronomy (May 2006). •  Sánchez Cotán Award to the “La Terraza del Casino” for Best Restaurant Menu Design (October 2006). •  Classification of “La Terraza del Casino” in cuisine guides: - Michelin: 1* - Gourmetour: 9 - CAMPSA: 2 suns •  “Best Restaurant in Madrid 2006” for Terraza del Casino In the 4^th Edition of the La Luna Awards of Metrópoli. •  Jorge Rellán: Award for “Young Maitre 2006” from the Regulatory Board of the Appellation of Origin La Mancha. •  Publication of book by Paco Roncero “Tapas del Siglo XXI” (Pub: Everest), winner of the Gourmand World Cookbook Awards 2006. Moreover, a number of training courses were given and major international projects undertaken, such as: •  Course at the Tourism Commission of Singapore on teamwork, creativity and olive oil. •  Course In AlpeAdria Cooking, Gourmet Cuisine Festival in Italy on dining room service. •  Attendance of Paco Roncero, Enrique Martínez and Ferran Adrià at Spain’s Ten (The 10 best chefs in Spain) in the International Culinary Center of New York, organized by ICEX. •  Gala dinner organized by NH Hoteles in the two most important tourism trade fairs in the world: Frankfurt and Barcelona. •  Addresses at the congress "Spain and its cooking in the world," held in the Culinary Institute of America. •  Course: TAPAS: A SPANISH EXPERIENCE. With the aim of bringing our culinary culture to the world, we organized a specialized course on tapas given in Vienna by the Chef Jesualdo Bermejo from the kitchen of the NH Hotel in Alcorcón. •  Development and implementation of the project “Taste the Seasons” at the business units in Germany and the Benelux, UK and Africa, with the aim of presenting the food and beverage at NH Hoteles as innovative and based on quality. •  Development and implementation of the project “The Spanish/German Wine concept” in Germany. NH Corporate Responsibility 2006 62

NH Corporate Responsibility 2006 63 Paco Roncero, Director of the Casino of Madrid

9 La Reserva de Sotogrande San Roque - Cádiz - Spain

9 NH Hoteles and the environment The path to sustainability NH Corporate Responsibility 2006 65 The corporate departments of projects and engineering and works are responsible for planning and carrying out environmental projects. We have set the specifications for the architectural designs of our buildings, both in new works and in rehabilitation. We also include standard environmental standards in the maintenance of our facilities and the work carried out in them. The corporate project department establishes design guidelines for new building projects and building rehabilitation, covering the following aspects: Classification, organization