CorporateSocial Responsibility

2014

Contents

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Contents

1. Group description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

History of the Zeltia Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

The Group today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2. Corporate governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Zeltia group management structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Management structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Corporate governance and ethical management policy . . . . . . . . . . . . . . . . . . . . . . 19

Awards granted to the group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

3. Group R&D: Patients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

Pharmamar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

Sylentis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34

4. Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

Zelnova . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

Xylazel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

Genómica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39

Pharmamar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39

5. Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

6. Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52

7. Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64

8. Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68

Pharmamar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69

Zelnova . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Xylazel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Environmental parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73

9. Community action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74

Main contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74

Other group activities with an impact on society . . . . . . . . . . . . . . . . . . . . . . . . . . . .82

10. Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84

11. Regulatory bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86

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1. Group description

History of the Zeltia Group

Zeltia was founded in 1939 as a spin-off from the Miguel Servet laboratory in Vigo.

There was a notable shortage of pharmaceuticals in the aftermath of the Spanish Civil War and the early years of World War II, and Zeltia sought to palliate this situation by drawing on the region's medicinal plants and on abattoir by-products as raw materials. The company obtained a number of patents, including one of the first slow-release insulins in the world, and the Porriño laboratories synthesised sulphamide.

Zeltia's first products were rye ergot for gynaecology and digitalis extracts for cardiology, among the main plant extracts, and bile, hepatic extracts and insulin of animal origin; they soon served as a basis for the production of wide range of medicines.

Zeltia was founded as a pharmaceutical company with a strong focus on research and innovation in areas where the deficiencies were greatest.

In 1942, Zeltia's chemical synthesis team, directed by Professor Calvet, laid the foundations for a new business line: agricultural products and insecticides. Zeltia's products rapidly became successful throughout Spain, with ZZ as the top-selling brand; the Group's various activities were separated into divisions.

Within the pharmaceutical industry, Zeltia and six other leading laboratories founded Antibióticos, S.A., a company that would lead the field in fermentation and not only supply antibiotics to the domestic market but also become a major exporter. Zeltia owned 23% of the company until 1985, and it did more than just provide funding: it provided a management philosophy.

During the 1950s, Zeltia expanded its product range and commenced scientific and commercial alliances with foreign companies such as Imperial Chemical Industries (ICI) and Cooper McDougall & Robertson Limited. In the early 1960s, Spain began to emerge from economic isolation and Zeltia commenced a period of cooperation with

foreign (primarily British) companies. In 1964, Zeltia set up three joint ventures with those companies: Zeltia Agraria (subsequently ICI-Zeltia), to address problems in agriculture; ICI Farma, to develop and manufacture pharmaceuticals; and Cooper Zeltia, to manufacture household and industrial insecticides and pharmaceutical and biological products for veterinary use. The pre-existing divisions were integrated into those three companies, which were managed by Zeltia.

In 1975, Zeltia formed an alliance in Spain with German company Desowag Bayer Holzschutz to produce and market wood decoration and protection products, as a result of which Xylazel was founded.

By the early 1980s, the group companies had grown considerably in size, and Zeltia divested Antibióticos and ICI Farma, among others.

As a result of Zeltia's continuing to interest in pharmaceuticals, in 1986 it founded PharmaMar, a pioneer at world level in the development of anti-cancer drugs of marine origin.

In 1991, Zelnova was spun off from Cooper Zeltia. PharmaGen was founded to focus on molecular diagnostics and forensic research; it was renamed Genómica in 2002.

The Group in its current configuration was created in the 1990s, through the definition of the two main business areas in which it currently operates: Biopharmaceuticals and Consumer Chemicals. In Biopharmaceuticals, the group focused from an early date on developing drugs of marine origin through PharmaMar. That activity is complemented with Pharma Gen (renamed Genómica).

In the last decade, PharmaMar has made major progress with its molecules and is now a world leader in the development of anti-tumour drugs of marine origin. PharmaMar has marketing approval for one drug, Yondelis®, to treat advanced soft tissue sarcoma and relapsed ovarian cancer relapse, and three other molecules in clinical trials. Yondelis®, which is being co-developed with Janssen Pharmaceuticals and Taiho Pharmaceutical, has received regulatory approval from the European authorities for treating soft tissue sarcoma (2007) and relapsed

ovarian cancer (2009); it has been commercialised in Europe since the end of 2007. Yondelis® is currently approved for sale in 78 countries.

The biopharmaceutical segment was expanded in 2000 by creating a new company: Neuropharma (renamed Noscira in 2008), to research and develop drugs related to the nervous system, particularly Alzheimer’s disease (AD). However, in view of Phase IIb trial results with its only compound, the General Shareholders' Meeting agreed to dissolve it in 2012.

In 2006, Zeltia founded biopharmaceutical company Sylentis to seek innovative therapeutical agents based on interference RNA (RNAi). Sylentis has two molecules in Phase II clinical trials for glaucoma and dry eye syndrome, and is performing preclinical trials for various illnesses in the area of ophthalmology.

The Group's other main business area, Consumer Chemicals, comprising Zelnova and Xylazel, has been developed and enhanced as a vital asset. In 2003, Zelnova acquired leading household cleaning brands

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such as “Hechicera”, “Bonacera” and “Baldosinin” from Spanish company Thomil.

In 2006, Zelnova bought Italian company Copyr, the principal supplier of automatic aerosols for the hospitality business in its domestic market. This acquisition increased Zelnova's international exposure to the insecticide and air freshener business.

In recent years, Xylazel has completed the launch of a full range of own-brand products for wood protection and is now the market leader in this segment; it completed its line by launching its own metal protection and filler products.

Zeltia Group celebrated its 75th anniversary in 2014: A long, sound track-record that stands out among Spanish biopharmaceutical companies.

The merger between Zeltia and PharmaMar was announced that same year. The goal of this transaction, in its first stage, would be for the main business, oncology, to be listed directly; it would also provide the resulting company with the flexibility required to undertake corporate transactions in the future, such as a listing in the US.

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The group today

Zeltia, S.A. is the parent company of a Spanish group of companies that operate in two distinct sectors: Biopharmaceuticals and Consumer Chemicals. The companies comprising the Group are:

Biopharmaceutical companies: PharmaMar, •Genómica and Sylentis.

Consumer chemicals companies: Xylazel, Zelnova •and Copyr.

XYLAZEL, S.A. manufactures and markets paint and varnish, particularly for wood decoration and treatment. Its products protect wood against fungi, moulds, xylophagous insects such as wood borers and termites, rain, sun and other threats. It caters to the DIY, professional and industrial segments. Xylazel is a well-known and prestigious brand; it also produces metal protectors such as rustproof enamels. Its wood protection products include Xylazel Fondo, Xylazel Plus, Xylazel aceites de teca (teak oils) and Xylazel carcomas (woodworm treatment), while its metal protection products include Oxirite, in a wide range of colours and finishes. The company was founded in 1975 and is based in Galicia.

ZELNOVA, S.A. produces and commercialises chemical products for households and industrial use, such as insecticides, air fresheners, cleaners and disinfectants. It has leading brands such as Casa & Jardín, Kill-Paff, ZZ Paff, Coopermatic, Baldosinin o Hechicera. The company has an important position in several segments of the insecticide market, such as sprays for household use and plants (Casa Jardín brand), electric insecticide dispensers (Kill Paff brand), and liquid insecticides (Bio-Kill brand). Zelnova has been using ozone-friendly propellants for over 20 years. It has also pioneered, in Spain, the use of electric mosquito killers that do not use refill

tablets, and the first electric air freshener (based on the Kill Paff system). Established in 1991 as a spin-off from Cooper Zeltia, S.A., it has its headquarters in Galicia.

COPYR, S.p.A. is based in Italy. Founded in 1962 and based in Milan; since it was acquired by Zelnova in 2006, Copyr has continued with its main activity of manufacturing and selling automatic aerosol dispensers under its Copyrmatic brand. Copyr also produces products for ecological farming.

PHARMAMAR, S.A.U. is the world's leading company in the discovery and development of new cancer drugs of marine origin. It explores the oceans as a source of new molecules to combat this disease. As a result of its endeavours, PharmaMar has one drug on the market: Yondelis®, for treating soft tissue sarcoma and relapsed ovarian cancer. It also has three other compounds in clinical development (i.e. tests on patients) and several in pre-clinical development (i.e. tests on animal models). One-third of all patents on drugs of marine origin and a similar proportion of academic papers on the subject are the result of PharmaMar's research. The company's voyages have yielded the world's most extensive private collection of marine organisms, containing about 150,000 samples. From the original marine sample, PharmaMar synthesises the active compound so as to have a source of the molecule without affecting the seas or relying on natural sources. Founded in 1986, the company is based in the Madrid region.

GENÓMICA, S.A.U. was founded in 1990 and was the first private company in Spain to provide molecular diagnostic services. The company has two lines of business: it develops and markets in vitro molecular diagnostic kits based on the Clinical

Biopharmacy Consumer chemicals

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Arrays technology, which enables simultaneous detection of multiple pathogens and markers in a single test-tube, leading to a rapid, specific diagnosis. Genómica is also a leader in DNA analysis, and it is the first laboratory in Spain that is accredited by ENAC (Spain's national accreditation agency) for this type of test. The company also provides technology transfer by installing turnkey genetic fingerprinting and forensic biology laboratories. The company is based in the Madrid region.

SYLENTIS S.A.U. is the Zeltia Group's most recently-created company, founded in 2006. This company seeks innovative therapeutic agents based on interference RNA (RNAi), a new technology whose discoverers were awarded the Nobel Prize for Medicine in 2006. Focused primarily on treatments for ophthalmology, it has two compounds in clinical trials for glaucoma and dry eye syndrome, and other molecules in pre-clinical development in other areas. Sylentis is based in the Madrid region.

The Zeltia Group's key figures in 2014 were as follows:

Group net revenues totalled 149.7 million euro in 2014, 5.5% more than in 2013 (141.8 million euro).

Net revenues from the Biopharmaceutical segment amounted to 82.3 million euro, of which 76.8 million euro correspond to PharmaMar for Yondelis® sales, and 5.5 million euro to Genómica. The Biopharmaceutical business accounted for 56% of Group net revenues in 2014.

Revenues at the consumer chemicals subsidiaries totalled 66.6 million euro. Those companies accounted for 44% of the Group's total revenues in 2014.

Group R&D expenditure totalled 52.5 million euro in 2014, 23% more than in the previous year: 45.3 million euro at PharmaMar, and 6.7 million euro at Sylentis and Genómica.

Marketing and commercial expenses amounted to 42.2 million euro in 2014, 2% more than in 2013. In 2014, PharmaMar established a subsidiary in France to market Yondelis® there. This new subsidiary, along with those established in Italy and Germany in previous years, is having a positive impact on the company's sales margin. The consumer chemical companies registered 19.1 million euro of sales and marketing expenses.

31 December 2014Thousand euro 31 December2013

Total net revenues 149,652 141,824

R&D in the period 52,456 42,717

Marketing and commercial expenses 42,173 41,251

Other revenues 28,408 22,858

Income attributable to the parent company 13,115 11,322

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Zeltia Group is the highest-rankingSpanish company in terms of R&D intensity,since it spends 33.2% of revenues on R&D

2. Corporate governance

Zeltia group management structure

CHAIRMAN ZELTIA GROUP

CEOMr. Luis Mora

CEOMr. Jesús L. Silva

CEOMrs. Rosario Cospedal

CEOMr. Gonzalo Durán

Mr. José María Fernández Sousa-Faro

VICE-CHAIRMAN OF ZELTIA GROUP Mr. Pedro Fernández Puentes

Chairman Mr. José María

FernándezSousa-Faro

SYLENTIS

Chairman Mr. PedroFernándezPuentes

ZELNOVA

Chairman Mr. José Antonio

de UrquizuIturrarte

XYLAZEL

Chairman Mr. José María

FernándezSousa-Faro

GENOMICA

Chairman Mr. José María

FernándezSousa-Faro

PHARMAMAR

Zeltia's corporate governance rules are set out mainly in the Board of Directors Regulation. Those rules cover the management structure,

the Board of Directors and Board committees, and directors' remuneration.

Management structure

The Board of Directors is Zeltia, S.A.'s organ of management, administration and representation and it is vested with all powers except those reserved for the Shareholders' Meeting by law and by the Bylaws.

The company does not have a General Manager. Reporting directly to the Board of Directors are the Chairman and Vice-Chairman, who are the first and second executives, respectively, of the Company.

Board of Directors

The Board of Directors comprised the following members as of 31 December 2014:

Name of director Representative Office Last appointed

Mr. José María Fernández Sousa-Faro N/A Chairman 29-06-2010

Mr. Pedro Fernández Puentes N/A Vice-Chairman 29-06-2010

Mr. Santiago Fernández Puentes N/A Director 29-06-2010

Rosp Corunna Mr. José Francisco Director 13-06-2012

Participaciones Empresariales, S.L. Leyte Verdejo

Mr. José Antonio de Urquizu Iturrarte N/A Director 29-06-2010

JEFPO, S.L. Mr. José Félix Pérez-Orive Carceller Director 29-06-2010

Mr. Jaime Zurita Sáenz de Navarrete N/A Director 13-06-2012

Mr. Joseba Andoni Aurrekoetxea N/ABergara Director 27-05-2014

Mr. Carlos Solchaga Catalán N/A Director 29-06-2010

Mr. José María Bergareche Busquet N/A Director 29-06-2010

Eduardo Serra y Asociados, S.L. Mr. Eduardo Serra Rexach Director 13-06-2012

Mrs. Montserrat Andrade Detrell N/A Director 13-06-2012

The Board Secretary, who is not a director, is Sebastián Cuenca Miranda.

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Board of Directors committees

The Board of Directors of Zeltia, S.A. has established 3 committees comprising directors of Zeltia, S.A.: the Executive Committee, Audit Committee and Remuneration and Appointments Committee.

Executive Committee

This committee comprises three directors who are appointed by the Board. The committee is chaired by the Chairman of the Board, with the Board Secretary acting as secretary. As of 31 December 2014, the Executive Committee comprised:

Name Office Category

Mr. José María Fernández Sousa-Faro Chairman Executive Director

Mr.Pedro Fernández Puentes Director Executive Director

JEFPO, S.L. Director Other External

Mr. Sebastián Cuenca Miranda Secretary, not a member Secretary of the Board of

Directors

Executives and Group staff may attend and speak at Executive Committee meetings when invited to do so.During 2014, the Executive Committee held six meetings.

The Executive Committee exercises those powers delegated to it by the Board of Directors in relation to the ordinary management, administration and representation of the Company, in accordance with the same principles of operation as are established in the Articles of Association and the Board Regulations. The Executive Committee focuses basically on:

a) The on-going supervision or control of the management and ordinary administration of the Company, with periodic monitoring of its economic management and of developments in relation to its budgets and strategic plans.

b) Deliberation on matters in the following areas before they are submitted to the Board of Directors:

Financial statements, the directors' report and •the proposed distribution of income for each financial year.

The company's budgets and plans of action and •management guidelines.

Supervision of the fundamental aspects of the •Company's organization, with a view to making it as efficient as possible.

Material or financial investments and divestments •which are of particular importance to the Company.

c) Generally assisting the Board in decisions on matters not delegated to the committee.

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Audit Committee

It comprises at least three and at most five directors designated by the Board, a majority of whom are non-executive directors. At least one of the members must be an independent director.

The Secretary of the Committee will be one of its members, the Secretary of the Board of Directors, the Vice-Secretary or the Legal Counsel of the board, as determined by the Board of Directors. The Audit Committee comprised the following members as of 31 December 2014:

Name Office Category

Mr. Carlos Solchaga Catalán Chairman Independent

JEFPO S.L. Director Other External

Mr. José Antonio de Urquizu Iturrarte Director Independent

Mr. Joseba Andoni Aurrekoetxea Bergara Director Proprietary

Mr. Sebastián Cuenca Miranda Secretary, not a member Secretary of the Board

of Directors

The external or internal auditors, and any member of the Group's personnel whose activity bears a relationship with the committee's functions may attend Committee meetings whenever its Chairman deems it appropriate. The Audit Committee meets as often as convened by its Chairman, when requested by at least two of its members, and when requested by the Board of Directors. In 2014, the Committee met seven times (on 2 of those occasions, decisions were adopted in writing without a meeting).

The responsibilities of the Audit Committee are as follows:

a) To provide information, during the Shareholders' Meeting, on the questions raised by shareholders which fall within its scope of authority.

b) To propose to the Board of Directors, for submission to the General Shareholders' Meeting, the appointment of the external auditor, the conditions of the engagement, the scope of the professional mandate and, where appropriate, the revocation or non-revocation of his appointment.

c) To serve as a channel of communication between the Board of Directors and external auditors so as to receive information on any issues that may jeopardize the independence of the latter and any others relative to the process of conducting the audit, and any other communications envisaged in audit legislation

and in technical auditing rules, evaluate the results of each audit and the responses from the management team to its recommendations, mediating in the event of discrepancies between auditors and the management team with regard to the principles and criteria applied in the preparation of financial statements. At all events, each year the external auditor must provide the Audit Committee with written confirmation of his/her independence with respect to the Company, as well as information on any additional services provided to the Company, as provided for in the applicable legislation.

d) To monitor the effectiveness of the Company's audit units and its internal control and risk management systems, to be apprised of appointments and replacements of the people in charge, and to discuss with the external auditors any significant weaknesses in the internal control system detected during the audit.

e) To supervise the process of drawing up and presenting the regulated financial information and the internal control systems of the Company.

f) To issue each year, prior to issuance of the auditors’ report, a report expressing its opinion on the independence of the external auditors. In any event, this report must address the provision of additional services of any kind provided to the Company.

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Remuneration and Appointments Committee

The Committee comprises three non-executive directors designated by the Board of Directors. The Secretary of the Committee will be: one of its members, the Secretary of the Board of Directors, the Vice-Secretary or the Legal Counsel of the board, as determined by the Board of Directors.The Remuneration and Appointments Committee comprised the following members as of 31 December 2014:

Name Office Category

Mr. José Antonio de Urquizu Iturrarte Chairman Independent

Eduardo Serra y Asociados, S.L. Director Independent

Mr. Santiago Fernández Puentes Secretary and Member Proprietary

Remuneration item Thousand euro

Fixed remuneration (executive directors) 755

Variable remuneration (executive directors) 630

Board meeting attendance fees 460

Bylaw-mandated remuneration 1,296

Life insurance premiums 24

Other 0

TOTAL 3,165

Meetings may be attended by the person in charge of executing the Company's remuneration policy and any other member of staff that the Committee invites. The committee meets whenever the Board or Chairman requests a report or the adoption of proposals and whenever it is advisable. In 2014, the Committee met eight times (on 4 of those occasions, decisions were adopted in writing without a meeting).

The Remuneration and Appointments Committee has the following functions:

a) To provide advice in relation to the level of commitment required of the Board members in the performance of their duties.

b) Submitting proposals with respect to the appointment of independent directors to the Board, for presentation to the General Meeting or for approval by the Board itself by co-optation.

c) Considering candidates for vacancies on the Board who are proposed by sitting Directors.

d) Proposing, to the Board of Directors, the system and policy for remunerating the Company's directors and chief executive. Nevertheless, the Committee may advise the Company's chief executive and company employees in general.

e) Regularly reviewing the remuneration programmes, assessing their suitability and performance.

f) Ensuring that transactions between the Company and its investees, and between those same parties and Directors and substantial shareholders are performed on an arm's-length basis and in accordance with the principle of equal treatment, overseeing any conflict of interests which may arise in related-party transactions.

Board of Directors remuneration

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PER DIEMS Thousand euro

Board of Directors of Zeltia 239

Executive Committee of Zeltia 19

Audit Committee of Zeltia 32

Remuneration and Appointments Committee of Zeltia 20

Other Group committees 150

TOTAL 460

REMUNERATION Thousand euro

Board of Directors of Zeltia 746

Executive Committee of Zeltia 181

Audit Committee of Zeltia 71

Remuneration and Appointments Committee of Zeltia 60

Other Group committees 238

TOTAL 1,296

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Profiles of the members of the Board of Directors as of 31 December 2014

Mr. José María Fernández Sousa-Faro (Chairman of Zeltia, PharmaMar, Genómica and Sylentis, Director of Zelnova).

Graduated in Chemistry in 1967. PhD in Biochemistry in 1971 from Madrid Complutense University. Between 1971 and 1979, he was tenured professor and subsequently Chair of Biochemistry at the University of Santiago de Compostela. Master's Degree in Business Management from IESE (University of Navarra) in Madrid.

Between 1967 and 1979, he also worked at the following institutions: Physikalisch-Chemisches Institut at the University of Basel (Switzerland), Department of Molecular Biology at Washington University in Saint Louis (USA), L’Institut de Biologie Physico-Chimique at the Foundation Edmond de Rothschild in Paris, ICI Pharmaceuticals Division (Alderley Edge research labs) and Shell (Sittingbourne research labs). Dr. Fernández Sousa has close to 100 academic publications and patents in the fields of biochemistry, antibiotics, molecular biology, and anti-infective and anti-tumour drugs.

Hired by Antibióticos, S.A. as Research Director from 1979 to 1985, he was also a member of the Board of Directors of Antibióticos, S.A., ICI-Farma, Transfesa, Pescanova, Penibérica and Banco Guipuzcoano.

He has been Chairman of the Board of Directors of Zeltia since 1985.

José María Fernández de Sousa-Faro holds the following institutional positions: Member of the Board of Asociación Madrileña de la Empresa Familiar (AMEF), member of the Executive Committee of Fundación COTEC para la Innovación Tecnológica, Vice-Chairman of the Spanish Bioindustry Association (ASEBIO) and Chairman of Fundación de la Innovación Bankinter.

Pedro Fernández Puentes (Vice-Chairman of Zeltia and PharmaMar, Chairman of Zelnova).

Graduated in Chemistry in 1963 from the University of Santiago de Compostela.

From 1965 to 1975, he worked at Cooper-Zeltia, S.A. in the new product development laboratories. He was Chairman of Cooper Zeltia, S.A. from 1971

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until its spin-off into Zelnova, S.A. and Cooper-Zeltia Veterinaria, S.A., and was also Chairman of Xylazel, S.A. from 1995 to 1997. He has been a member of the Boards of Directors of ICI-Farma and ICI-Zeltia. He is also Chairman of Ingercover Sicav, S.A., CZ Veterinaria, S.A., and BIOFABRI, S.L.

JEFPO S.L. - Represented by José Félix Pérez-Orive Carceller ((Vice-Chairman of Xylazel, director of Zeltia and Zelnova. Mr Pérez-Orive is a director of PharmaMar and Genómica in a personal capacity).

Graduated in Pharmacy in 1969 and also has a law degree. He obtained an MBA from IESE (Barcelona) in 1971, and an MSc from Harvard Business School in 1978.

Head of Antibióticos, S.A. in the USA and Spain from 1979 to 1987. Since 1987, he has been Chairman of Pérez Orive & Asociados, a company specialised in mergers and acquisitions. He has written books on management and articles in prestigious magazines. He has been a director of over thirty companies and given over 100 keynote lectures to major institutions.

José Antonio de Urquizu Iturrarte (director of Zeltia, Chairman of Xyazel and director of Zelnova).

Civil engineer, MBA from INSEAD (Fontainebleau, France).

He has held the following executive positions: Project manager at Dragados y Construcciones, steel mill manager at Patricio Echeverría, senior manager at McKinsey & Co., Executive Chairman of Koipe, General Manager of Spencer Stuart, Executive Chairman of Agroman and Vice-Chairman of Mercer Management Consulting (Marsh & McLennan group). Former Chairman of Radiotrónica, and director of Jacobs Suchard Group in Spain, Cinsa EP (Ep-tisa Group), Corporación Patricio Echeverría, and Ibermática.

He currently holds the following positions: Banco Guipuzcoano (Member of the Advisory Committee), Grupo Erhardt (Director), Member of the Strategy Committee of CIET (Centre for Technical Research and Studies of Gipuzkoa).

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Santiago Fernández Puentes (director of Zeltia and Xylazel).

Graduate in Architecture from Madrid Technical University and La Coruña University.

He currently works in his own firm.

Rosp Corunna Participaciones Empresariales S.L. – Represented by José Leyte Verdejo (director of Zeltia and Pharma Mar).

Graduated in Law and Business from the Comillas Pontifical University (ICADE).

After graduation, he worked for four years at the Madrid office of Arthur Anderson Asesores Legales y Tributarios. He later joined Barclays Banks and was head of Deutsche Bank's Private Banking department for Galicia and Asturias. He also headed Caixa Galicia's Private Banking division.

Since 2000, Mr. Leyte Verdejo has been the chief executive of ROSP CORUNNA, a holding company formerly the family office of Rosalía Mera and currently of her daughter, Sandra Ortega.

He is a member of the Boards of Directors of Zeltia, PharmaMar and Denodo Technologies, and teaches graduate courses at several academic institutions.

Eduardo Serra y Asociados S.L. – Represented by Eduardo Serra Rexach (director of Zeltia).

Graduated in Law in 1968 from Madrid Complutense University. In 1974, he was number 1 in the new draft of Spanish State Attorneys.

In 1982, he was appointed Under-Secretary of Defence and was Deputy Minister from 1984 until his resignation in 1987. Between 1987 and 1996, he held a number of managerial positions in the private sector, including Cubiertas y MZOV, Peugeot-Talbot Spain and Airtel Móvil, and he was Chairman of Teletra Spain.

In parallel with his professional career, he engaged in activities of social interest, such as joining the Fundación de Ayuda Contra la Drogadicción in July 1987.

He was Minister of Defence from 1996 to 2000. In 2000, he chaired the Prado Museum Board of

Trustees. In October 2000, he became Non-Executive Chairman of the Spanish investment banking division of UBS Securities, a position which he held until May 2006.

Jaime Zurita Sáenz de Navarrete (director of Zeltia).

PhD in Law and Chair of Mercantile Law at Madrid Complutense University.

He is currently a practising lawyer.

Joseba Andoni Aurrekoetxea Bergara (director of Zeltia).

He graduated in Law from Deusto University. He has a Master's degree in Social Policy from Deusto University.

He is a lawyer by profession. He currently holds the following positions: General Counsel for BBK, Chairman of the bank's Community Investment Committee, Director of Bilbao Bizkaia Gas, and General Manager of ETN.

He has held the following position in the private sector: Director of Enagas, Chairman of BBK's Control Committee, and member of the Board of Directors of BBK. He has also been a senator, a member of Parliament, and alderman in Portugalete.

Carlos Solchaga Catalán (director of Zeltia).

After graduating in Economics from Madrid Complutense University in 1966, he obtained a post-graduate qualification at the Alfred P. Sloan School of Business at Massachusetts Institute of Technology (MIT) in 1971.

He began his career at the Bank of Spain, then transferred to the Instituto Nacional de Industria (INI) and subsequently to Banco de Vizcaya, where he was Director of Research and Advisor to the Chairman. He was Spain's Minister of Industry and Energy between 1982 and 1985 and later Minister of Economy and Finance between 1985 and 1993. Between 1991 and 1993, he was Chairman of the Internal Committee of the International Monetary Fund (IMF). He was a member of the Spanish parliament from 1980 to 1994, and headed the socialist parliamentary group in 1993-1994.

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José María Bergareche Busquet (director of Zeltia)

He graduated in Law and Economics from Deusto Commercial University.

CEO of Vocento until 2007, Chairman of Taller de Editores, S.A. between 1996 and 2004, President of the Spanish Section of the International Press Institute between 1994 and 1997, Second Vice-Chairman of Recoletos Compañía Editorial from 1992 to 1996, Chairman of IFRA between 1989 and 1993, a member of the Governing Council of Deusto University between 1996 and 2001, and Managing Director of Bilbao Editorial, S.A. (Grupo Correo) between 1989 and 2001. In 2003 he received the Ernst & Young "Entrepreneur of the Year" award and the Miguel Moya journalism award from the Madrid Press Association in 2004. He was Chairman of AEDE, the Spanish association of newspaper publishers, in 2005. Mr. Bergareche Busquet has been a member of the Basque Business Circle since February 2004 and has long been a member of the European Publishers Council (EPC).

Montserrat Andrade Detrell (director of Zeltia).

Ms. Andrade Detrell graduated in Biology in 1975, holds a degree in Medicine and received a diploma in Family and Community Medicine from Madrid Complutense University in 1983.

She also holds: a Master's in Breast Disease from the University of Strasbourg (France) (1991), a Postgraduate Diploma in Breast Disease from the University of Barcelona (1992), a Master's in Breast Disease from the University of Barcelona (1993), a specialist's certificate in Senology and Breast Disease from Madrid Complutense University (1996), and Certification to supervise X-ray facilities for diagnostic and medical purposes from the Research Centre for Energy, Environment and Technology under Spain's Ministry of Industry, Energy and Tourism (1991). She also received training in internal medicine at the San Carlos University Hospital in Madrid (1985-1988).

She was also Head of Institutional Relations at Zeltia, S.A. from 2007 to 2012. Ms. Andrade is a member of the Spanish Society of Senology and Breast Disease and of the American Association of Breast Disease and has numerous publications.

Directors' complete biographies are available on Zeltia Group's web site in the Corporate Governance section.

Corporate governance and ethical management policy

Data protection

It is Group policy to comply scrupulously with current legislation with regard to the confidentiality of the data gathered in our activities and research. The companies most involved in this area are PharmaMar, Genómica and Sylentis, because of the nature of their activities, specifically their involvement in clinical trials and genetic analyses. Patient and client personal data are afforded special protection, as is the personal data collected in the course of the company's ordinary activities: information about employees, suppliers, external scientists, labour representatives, etc.

All the information gathered about participants in clinical trials is handled in confidence and protected appropriately. To this end, anonymisation and special protection measures are taken at clinical centres, and agreements are reached with contract research organisations (CROs) to process the data in accordance with the law. All the measures required by law to protect the integrity and confidentiality of the data have been implemented, and security is guaranteed in data capture, storage, processing and transmission. Examples of these measures:

Regular backups are made and stored in a secure •specialised off-site facility.

Data is encrypted while undergoing physical •transportation and electronic transmission.

Access to premises and systems housing •data is controlled and logged (physically and electronically).

Employees are trained in their legal obligations •under the Data Protection Law.

To date, all the files reported to the Data Protection Agency and required under the Organic Law on the Protection of Personal Data have passed regular

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independent audits. The company also updates its technology and processes constantly to adapt to new requirements.

Additional measures are applied to data from genetic analyses, including most notably:

The files requiring protection are registered with •the Data Protection Agency.

The position of Security Manager was created •and is held by Amaya Gorostiza, head of forensic medicine.

ENAC audits the forensic genetics department, •including data treatment, once per year.

Ethics in Clinical and Pre-clinical trials

All clinical trials by PharmaMar and Sylentis are conducted on volunteers and conform to the Declaration of Helsinki, national and international bioethics codes, such as the Oviedo Declaration,

and Good Clinical Practices (GCP). These trials are always assessed and approved by the applicable clinical research ethics committees.

Patients' rights, safety and welfare take precedence over the interests of science and the company; consequently, patients sign an express consent form in order to participate in trials and they receive all applicable information about the trial in accordance with the requirements of the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH). That information is also assessed and approved by the Clinical Research Committees and Regulatory Authorities where the trials are to be conducted.

Pre-clinical trials, which are conducted with animal models, also conform to ethical guidelines and to the recommendations of the leading scientific associations related to research with laboratory animals in the US and Europe: AALAS (American Association for Laboratory Animal Science) and

The Chairman of Zeltia with other award winners at the El Confidencial-KPMG award ceremony.

21

FELASA (Federation of European Laboratory Animal Science Associations). Before they commence, all trials are evaluated and approved by the corresponding Animal Experimentation Ethics Committees or their US equivalent, The Institutional Animal Care Committee (IACUC), to guarantee the welfare and humanitarian treatment of the animals during the trial.

PharmaMar, Genómica and Sylentis participate in the Spanish Technology Platform "Nanomedicine". The goal is to promote technological development and define strategic policy, enhance public and private investment in nanomedicine, identify priority areas, promote innovation in nanobiotechnology for developing new drugs and raise public awareness of nanomedicine.

Progress in these disciplines requires closer cooperation with other companies in the industry and the involvement of public authorities, hence the need to integrate into those platforms.

Awards granted to the group

In 2014, Zeltia Group received the following distinctions:

Madrid Healthcare Silver Plaque for PharmaMar.•

Ejecutivos Award for Zeltia Group as company of •the year.

University Enterprise Award from the University-•Enterprise Foundation Network (REDFUE) for Zeltia Group.

El Confidencial-KPMG award for best business •practices in Innovation for Zeltia Group.

José María Fernández Sousa-Faro receives the University Enterprise Award, granted by REDFUE.

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In recent years, the Zeltia Group and its Chairman have received the following awards, among others::

2013 Fundamed Award for R&D and Innovation, awarded to Genómica.

Gold Aspid 2013 Award for the “Best End-to-End Pharmaceutical Product Campaign for Professionals”, to PharmaMar for its international campaign to relaunch Yondelis® as treatment for ovarian cancer (in combination with PLD).

“El Economista” readers voted Zeltia Group as “Pharmaceutical Company of the Year“.

“Best Ideas“ award, granted by Diario Médico to Genómica for its colorectal cancer diagnostic kit.

2012 “Concello de Mos“ medal, for Zeltia Group.

2012 National Award for Research, Development and Innovation, granted by the Medical Science and Health Products Foundation (FundaMed) to Sylentis for its innovative RNAi technology applied to drug development.

2012 “100 Best Ideas“ Award, granted by Actualidad Económica to Sylentis.

Ejecutivos Award in 2012, granted to Zeltia in the Internationalisation category.

2012 Lifetime achievement plaque from ASEBIO, presented to Mr. José María Fernández Sousa-Faro in recognition of his track record in Biotechnology.

Internationalization Award, as part of the National Awards for Innovation and Design 2011, awarded by the Ministry of Economy and Competitiveness to PharmaMar.

2011 Spanish R&D and Innovation Special Jury Award, granted by Fundamed to Zeltia.

2011 “Best Ideas“ award, granted by Diario Médico to Observatorio Zeltia.

2011 “Innovative Attitude“ award by FECYT to Sylentis.

2011 “Stela“ award to Genómica by the Down Syndrome Foundation of Madrid.

2011 Bronze Sun Award by “El Sol“ Latin American Advertising Festival to PharmaMar-Ogilvy Commonhealth for the Yondelis booth at ESMO 2010 in Milan.

Best corporate website award in 2011 by Correo Farmacéutico to PharmaMar.

2011 National Biotechnology Award from Aliter International Business School to Rosario Cospedal, General Manager of Genómica.

2011 Biomadrid Award for Innovation in Technology, to Sylentis.

University-Enterprise Foundation Network (REDFUE) created the University-Enterprise Awards in 2000 to recognise the most no-teworthy collaborations between universities and business. Six editions have been held sin-ce its creation, which have strengthened the awards' prestige.

The awards are granted in two categories:

University:For the university that stands •out for its track-record of cooperation or for a specific project related to business.

Enterprise:For the company whose con-•tinuous cooperation with the university has had an impact on teaching and re-search.

Grupo Zeltia received the University-En-terprise Award in 2014 in the enterprise ca-tegory. Grupo Zeltia collaborates with more than 20 universities, 30 university hospitals, 30 scientific institutions and 6 business schools, as well as various foundations and centres affiliated with universities and R&D centres.

“UNIVERSITY ENTERPRISE” AWARD, GRANTED TO GRUPO ZELTIA BY REDFUE

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MERCO 100 companies with the best Companies reputation Grupo Zeltia 48

MERCO 100 most prestigious José María FernándezLeaders companies Sousa-Faro 51

MERCO 100 best placesPeople to work Grupo Zeltia 79

MERCO 100 most responsible companies. Grupo Zeltia 56

Positionin 2014

ResponsibleCompanies

Trabectedin, the main ingredient in Yondelis®, is the subject of a chapter in the book "Molecules that changed the world", by prestigious researchers K.C. Nicolaou and Tamsyn Montagnon. The book highlights 40 natural products which have had a ma-jor impact on our daily lives.

Both Zeltia Group and its Chairman rank con-sistently in the lists of 100 most prestigious com-panies and leaders in Spain, drawn up by Merco. In 2014, Zeltia ranked first among biotechnology companies in Spain for the second consecutive year, having climbed to 48th position (from 69th in 2013). Zeltia Group Chairman, Mr. José María Fer-

nández Sousa-Faro, also appeared on the list, ran-king 51st in 2014, compared with 84th in 2013. Merco ranks Spanish companies according to re-putation after they are evaluated by more than 1,500 senior business executives, financial analysts, NGOs, unions, consumer associations and opinion leaders. Merco also produces a league table of the 100 best employers in Spain; Zeltia has been inclu-ded in that list for many years. Zeltia ranks 79th in that table.The ranking of preferred companies is based on a survey of workers, university and busi-ness school students and talent experts. Zeltia was included in the Responsible Companies list for the first time, ranking 56th.

Zeltia Group is the highest-ranking Spanish company in terms of R&D intensity according to the Industrial R&D Investment Scoreboard, drawn up by the European Commission's Joint Research Centre (JRC), since it spends 33.2% of revenues on R&D. Zeltia Group also ranks first in Spain in terms of R&D expenditure per employee: whereas Spanish companies spent an

average of 13,578 euro per employee in 2014, Zeltia spent 75,000 euro per employee in the year. It ranks 352nd in terms of private investment in R&D in the European Union, and 3rd among Spanish pharmaceutical companies in terms of R&D investment.Zeltia ranks number 1,241 on the European Union's Industrial R&D Investment Scoreboard1.

PharmaMar was granted the category of Excellent within Group A – "Companies with significant research activity and their own production plant or R&D facility" within the Spanish government's 2014 Profarma Plan, the same result as in the previous twelve editions. This designation is granted by the Ministry to companies that come closest to meeting the stated goals. The goals relate to R&D expenditure, investment in production, and the ratio of R&D expenditure to revenues, among others.

The Chairman of Zeltia Group has joined the "Transforma España" initiative, which is based on one hundred representatives of Spanish civil society contributing visions, proposals, energy and enthusiasm in search of the answer to a two-fold question: what is Spain's current status and how can we all contribute to ensure that Spain is admired in the future.

1 Source:The 2014 EU Industrial R&D Investment Scoreboard.

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3. Group R&D: patients

Despite the continuing efforts of the scientific community, there are unfor-tunately still diseases for which there is

no effective remedy, including cancer and glau-coma. Accordingly, the Zeltia Group has made a firm commitment to the millions of patients with those disorders: To advance in researching drugs that can palliate and cure these pathologies and improve the quality of life for patients and their families. PharmaMar is pursuing this goal in the field of oncology and Sylentis in ophthalmology.

The year 2014 brought good news for the R&D of our products and for oncology patients and people with eye diseases: PharmaMar's clinical trials are advancing while trials in new indications are com-mencing. This progress aroused great interest at con-ferences, where the results of our research are pre-sented, and among foreign companies with which advantageous agreements are being reached, such as the licensing and marketing contract signed by PharmaMar and Chugai for Aplidin®. Sylentis pro-ducts continue in Phase II clinical trials for glaucoma and eye pain, and a new line of research to treat eye allergies is also advancing. These achievements are a source of satisfaction and a reason for optimism.

Drug research and development by PharmaMar commences with undersea expeditions to gather samples. Extracts are generated from the samples and a selection is made of those that present interesting activity in vitro; pure compounds are isolated from the extracts, their structures are elucidated and they are then synthesised chemically. The compounds then progress to pre-clinical development, where the action mechanism is defined and the molecule is tested on animal models to gather the necessary information before it is tested on patients. Drugs that successfully complete pre-clinical trials undergo analytical, industrial and chemical development and are then tested on patients in clinical trials. Clinical trials comprise three phases (I, II and III) which are conducted on growing numbers of volunteers, and they provide information about the drug's efficacy and safety. Tests are also conducted using new molecular tools to discover genes and markers of response to our drugs. Research at Sylentis commences with a choice of target for which to design interference RNA (RNAi), and progresses through pre-clinical and clinical development.

Zeltia Group's tireless research efforts were recognised in 2014 when Sylentis received a new grant from the Centro para el Desarrollo Técnico e Industrial (CDTI) for an individual project. Sylentis also received grants for two public-private partnerships (PPPs) under the RETOS programme, organised by Spain's Ministry of Economy and Competitiveness. The company continues to use grants awarded in previous years, which support innovative projects, some performed by a single company and others in cooperation with other companies and public research centres, so as to make the maximum use of human and technical resources for better dissemination of knowledge.

Zeltia is participating in the following public-private partnerships funded by Spain's Ministry of Economy and Competitiveness, the European Regional Development Fund (ERDF) and CDTI:

SURFEYE • Consortium: Sylentis heads this consortium, which includes Biotechnology Institute IMASD, BioDan Science, Bioftalmik, Fundación de Investigación Oftalmológica, University of Santiago de Compostela and University of the Basque Country. The main objective is to establish innovative treatments for eye inflammation and personalised treatment for eye surface regeneration based on haematologic derivatives. It will also develop personalised diagnostic systems to address disease with the most appropriate treatment.

TERET• Consortium: Sylentis heads this consortium, which includes Leadartis, LEITAT Technological Center, and the Biomedical Research Networking Centers (CIBER). The goal of this project is to research new treatments for degenerative illnesses of the retina, focusing specifically on macular degeneration associated with age, diabetic retinopathy and retinitis pigmentosa.

MARINMAB• Consortium: PharmaMar heads this consortium, which includes the Institute for Research in Biomedicine (IRB Barcelona) and the Autonomous University of Madrid. The objective is to research and develop new drugs, antibody-drug conjugates, with a view to generating new anti-cancer molecules which are selective, effective and have fewer adverse effects.

INDREYE• Consortium: Sylentis heads the consortium, which includes SALVAT Laboratories, the Foundation for Biomedical Research at San Carlos Clinical Hospital, the Microelectronics Institute of Barcelona-National Microelectronics Centre, part of the National Research Council (CSIC), and the University of Oviedo. This project aims to change the traditional approaches for diagnosis and treatment of dry eye syndrome with a view to specifically addressing each type of illness that causes this syndrome.

BIOKÉTIDO• Consortium: PharmaMar heads this consortium, with the Centro de Investigaciones

Biológicas (CIB), which forms part Spain's National Research Council (CSIC), and Oviedo University. The project aims to use biotechnology to develop bioprocesses for supplying marine-derived antitumour compounds.

ORALBEADS • Consortium: This consortium is headed by PharmaMar and also comprises the University of the Basque Country, ICMAB-CSIC, the IDIBELL Foundation and the Spanish National Cancer Research Centre (CNIO). This project involved the development of micro/nanostructured dispersions of solids for the oral administration of marine antitumour compounds.

In 2014, PharmaMar and Sylentis obtained grants for three new projects under the EU Framework Programme for Research and Innovation as part of the new Horizon 2020 programme. These include INMARE (PharmaMar), which aims to use marine-based enzymes in industrial applications; NANOPILOT (Sylentis), the goal of which is to create a pilot plant for nanomedicine production; and NABBA (Sylentis), based on the development of nanomedicines capable of crossing biological barriers.

PharmaMar is already participating in six other projects under the EU's framework programme. “OPTATIO: Optimizing Targets and Therapeutics in High Risk and Refractory Multiple Myeloma”, “MICRO B3: Microbial Biodiversity, Bioinformatics and Biotechnology”, “MACUMBA: Marine Microorganisms: Cultivation Methods for Improving their Biotechnological Applications”, “MULTIFUN: Multifunctional Nanotechnology for Selective Detection and Treatment of Cancer”, “MAMBA: Marine Metagenomics for New Biotechnological Applications” and “BLUEPHARMTRAIN”.

Zeltia Group tracked the new Horizon 2020 programme closely in 2014 with a view to optimising the participation of group companies in innovative collaboration projects between European countries. PharmaMar, Genómica, Sylentis and Xylazel aim to contribute to, and lead, many projects, some of which were implemented in 2014 and will bear fruit in the coming years.

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26

Pharmamar

Cancer

Cancer is a set of diseases characterised by abnormal cell proliferation. Its malignancy arises from its capacity to invade organs and tissues.

Scientists have established a number of factors which can trigger the development of tumours, such as genetic predisposition, exposure to chemicals or viruses, and even stress, although the causes of the illness are not known for certain.

At least 280 different types of cancer have been recognised, which complicates the search for a cure. Although the different types of cancer behave similarly as regards their rapid uncontrolled growth and ability to invade other tissues, each cancer differs in terms of prognosis and treatment depending on the tissue where it arose and the parts of the organism which it invades. The most prevalent cancers are breast, lung, colorectal and prostate cancer.

Five- and ten-year survival rates for cancer have increased in the last few decades and, on average, it is estimated that more than 46% of patients diagnosed with cancer will survive for more than ten years after the diagnosis, although it depends on the type of cancer and the country. Constant research and a steady flow of new drugs provide hope of an increase in cancer patient survival rates.

Research and development

PharmaMar explores the sea's ecosystems as a source of new chemical substances with anti-tumour activity. Identifying new marine products with biological properties that differ from existing drugs is an essential route to finding molecules with novel action mechanisms that may improve cancer treatment.

Hundreds of thousands of cancer patients, and their families and loved ones, will benefit from this research; the fact that currently there is no cure reinforces the need to seek increasingly effective treatments. PharmaMar currently has four molecules in various phases of clinical development.

There is also a move towards selecting patients based not just on the histological characteristics of the tumour but also on molecular criteria, which will allow a more rational treatment of patients in the future. The goal is for the treatment to be administered only to patients with tumours with a specifically defined molecule (e.g. the presence of a target which the antitumour compound attacks), as they would benefit most from the treatment. To this end, PharmaMar is working to identify the patients who would benefit most from the treatment, applying pharmacogenomic techniques in its trials to identify those patients.

PharmaMar's expenditure on research and development in 2014 amounted to close to 45 million euro, and the company had spent over 689 million euro between its foundation over 25 years ago and the end of 2014.

Clinical trials

To date, PharmaMar compounds have been the subject of over 110 clinical trials at 300 hospitals worldwide, and over 12,000 cancer patients have been treated with our drugs in clinical research.

PharmaMar is currently conducting clinical trails on the following types of cancer:

Lung cancer:• ranks first in terms of cancer deaths among men and third among women (after colon and breast cancer), and causes more than 1 million deaths per year worldwide.

Breast cancer: • this is the most common form of cancer among women in developed countries, where it is the second-most frequent cause of cancer death among women (after colon cancer).

Ovarian cancer: • ranked fifth in terms of cancer deaths among women, it causes over 100,000 deaths per year worldwide.

Soft-tissue sarcoma:• tumours of various types that arise in adipose, muscle or nerve tissue, tendons, blood or the lymph vessels. It is estimated that over 35,000 new cases are diagnosed each year in Europe and the US, and the 5-year survival rate is under 50%, depending on the type of sarcoma and stage of development.

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Multiple myeloma: • a malignant proliferation of plasma cells in the bone marrow, leading to a hematopoietic imbalance. It is estimated to cause over 30,000 deaths each year in the US and Europe.

Advanced acute leukaemia: • this cancer of the blood and bone marrow involves runaway production of white blood cells by the bone marrow. This type of cancer tends to worsen quickly if not treated.

Malignant solid tumours: • there are different types, depending on the type of cells that make them up. They include sarcomas, carcinomas and lymphomas, such as angioimmunoblastic T-cell lymphoma.

Among the clinical trials performed by PharmaMar, it's important to distinguish between those performed with Yondelis®, which are conducted in the Medical Department with an authorised product, and those performed with Aplidin®, PM1183 and PM184, which are conducted in the Clinical Development Department with products for which the goal is to obtain marketing authorisation. PharmaMar currently has the following products in clinical studies:

Yondelis• ®, co-developed with Janssen Research & Development, LLC (Janssen):is in various post-authorisation trials which seek to optimise its clinical use in the two indications for which it has marketing authorisation (soft tissue sarcoma, and platinum-sensitive ovarian cancer in combination with pegylated liposomal doxorubicin) and to identify new indications. The trials which commenced in 2014 are as follows:

- TRAVELL: trial with Yondelis® in advanced retroperitoneal leiomyosarcoma and liposarcoma (well differentiated/dedifferentiated).

- PROSPECTYON: multi-centre descriptive trial on the regular use of Yondelis®+Caelyx® in recurring platin-sensitive ovarian cancer in France.

- TOMAS: trial which explores trabectedin+olaparib in advanced/metastatic

and inoperable sarcomas after conventional therapies have failed.

- Hyper_TET: trial which explores the combination of trabectedin with hypothermia in patients with advanced soft tissue sarcoma.

- YonLife: etrial with trabectedin in patients with soft tissue sarcoma in which recommendation guides will be drafted to improve patients' quality of life.

- TSAR: trial which compares treatment with trabectedin in patients with soft tissue sarcoma with the best supportive treatment in France.

-TRASTS: Phase I-II trial which explores the combination of trabectedin with radiotherapy in patients with soft tissue sarcoma.

- YonSar: observational trial on the effectiveness and tolerance profile of Yondelis® in real life in patients with soft tissue sarcoma.

Aplidin• ®: in multiple myeloma, the pivotal registration trial with this drug in combination with dexamethasone will conclude in the near future. Patient monitoring to determine if the combination of Aplidin® and dexamethasone leads to greater progression-free survival than in the control arm, in which dexamethasone is used as monotherapy, will conclude in 2015. With a view to using Aplidin® in the earliest phases of the illness, a combination trial is under way with bortezomib to determine the recommended dose of the combination and then to evaluate its efficacy in the initial phases of the illness.

Following the good results obtained with Aplidin® in a sub-type of peripheral T-cell lymphoma, the phase II trial in angioimmunoblastic T-cell lymphoma will begin in the near future, having reached consensus with the US Food & Drug Administration (FDA).

PM1183:• monitoring of survival data in the Phase II trial in refractory ovarian cancer has concluded. Following the excellent results obtained, it was decided to commence a pivotal Phase III trial in this indication, evaluating PM1183 as monotherapy

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vs. a control arm with topotecan and liposomal doxorubicin.

The interim analysis has concluded for the Phase II clinical trial in patients with advanced breast cancer selected on the basis of the presence of mutations, known or otherwise, of the BRCA 1 or 2 genes (hereditary cancer). The data reflects an excellent response rate in the cohort of patients with the BRCA gene mutation, as well as activity that is independent of the previous treatment with platinum, unlike PARP inhibitors, which generally require that patients not have received previous treatment with platinum. In view of this analysis, recruitment will continue and the registration strategy in this indication is being prepared.

Recruitment continues in the randomised Phase II trial in non-small cell lung cancer. This trial was implemented after good efficacy results were obtained in the Phase I trial in combination with gemcitabine.

Recruitment continues for the Phase I trial with PM1183 as monotherapy in patients with myelodysplastic syndrome and advanced acute leukemia.

As regards combination trials, recruitment continues for the trial with doxorubicin to explore a lower dose to be administered with the size dose of PM1183 to improve tolerability in patients with small cell lung cancer and endometrial cancer. Recruitment continues to optimise the dose of PM1183 in the combination trial with capecitabine in patients with inoperable advanced breast, colorectal and pancreatic cancer. The recommended dose has been defined for paclitaxel and PM1183 in the combination trial with paclitaxel in weekly doses, with or without bevacizumab, in patients with solid tumours. Recruitment commenced in Switzerland and the UK for the trial in combination with cisplatin in patients with solid tumours.

PM184:• The clinical trial conducted in the US and Spain found the optimal dose for future Phase II trials. Active recruitment continues in another trial, in France and Spain, to confirm the recommended dose and evaluate the drug's activity in various indications.

A Phase I trial with PM184 combined with gemcitabine has commenced at two centres, in Spain and the United States. This trial stems from the excellent results obtained with the combination in preclinical trials.

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Drug life cycle

ACTIVE PRINCIPLEDESIGN

RES

EAR

CH

&

DEV

ELO

PMEN

TC

LIN

ICA

LD

EVEL

OPM

ENT

OPE

RA

TIO

NS

REG

ULA

TORY

AFF

AIR

S

DEVELOPMENT ANDNON-CLINICAL TRIALS (GLP)

CLINICALTRIALS (GCP)

REGISTRATION PRODUCTION

New moleculeDS

Analyticaldevelopment

Processdevelopment

Non-clinical trials (GLP)

OK

NO

Drugdesign

Phase I trials

Processdevelopment

and escalation Manufactureof commercial

batches

Applicationfor registration

Variations overproduct's commercial

life cycleFollow-up

Phase IV trials

Observationaltrials

Phase II trials

Phase III trials

Toxicity andevaluation of

biologicalactivityDS process design

(synthesis orfermentation)

for registration

Preparation ofbatches for

clinical trials

Transfer ofmethods

to QC

Developmentvalidation

analytical methods

Rising GMP requirements

YES

Transferand processvalidation

Compile information to prepare Drug Master File(DMF) for registration

The diagram below shows the various phases through which a drug passes, from the

commencement of research to when it reaches the patient.

Communication with patients

The Clinical Oncology Department regularly receives queries and requests from interested persons, which are answered as quickly as possible. We reply to all patient queries, explaining that they need to discuss their issue with their doctor

and offering the possibility for their oncologist to contact oncologists and researchers at hospitals where our compounds are undergoing clinical trials with a view to possible participation in a clinical trial or compassionate use programme, if the patient's specific case is appropriate and complies with the defined protocols.

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Compassionate use programmes

All medical products must receive authorisation prior to being marketed. However, one option for patients with an illness for which there is no satisfactory therapeutic alternative available or who cannot participate in a clinical trial is a compassionate use programme, where they can be treated with a non-authorised medical product. Compassionate use programmes seek to provide patients with new treatments that are under development.

Until 2010, PharmaMar offered access to Yondelis® through a compassionate use programme in those European countries where the drug was not yet commercialised, at the request of the hospital or doctor and under a protocol established with the health authorities. PharmaMar does not currently have any compassionate use programmes for Yondelis®. Janssen –which holds the rights to market Yondelis® outside Europe and Japan– has three compassionate use programmes for ovarian cancer and soft tissue sarcoma covering territories where the drug is not yet approved:

SAR-3002: Phase IIIb from second-line therapy •for soft tissue sarcoma. A total of 2,801 patients had been treated under this programme by the end of 2014.

INV-IND: This programme affords access to the •drug for patients not admitted to the SAR-3002 programme. A total of 614 patients had been treated under this programme by the end of 2014.

Named Patient Program (NPP):A total of 242 •patients had been treated under this programme by the end of 2014.

Orphan drug research

Orphan drugs are those that help to diagnose, prevent or treat rare diseases that are very serious or life-threatening.

The definition of rare diseases varies from region to region: The European Union (EU) classifies them as illnesses affecting less than 5 out of every 10,000 people, whereas the USA uses the figure of less than 200,000 people affected nationwide. For companies to have a reasonable

expectation of recouping their investment through the drugs' commercialisation, research into these rare diseases is encouraged by offering companies exclusive sale periods.

PharmaMar's commitment to developing drugs of this type is evidenced by the fact that three of its main drugs have been designated as orphan drugs by the European Commission and the FDA for soft tissue sarcoma, ovarian cancer and multiple myeloma. One of these compounds has also been designated as an orphan drug in Switzerland for treating soft tissue sarcoma and ovarian cancer, and in both Korea and Japan for soft tissue sarcoma. The company's goal is to obtain orphan drug designation in all cases where it is legally feasible.

Quality management

PharmaMar has been authorised by the Spanish Agency for Medicines and Healthcare Products (AEMPS) to manufacture medicines for human use and investigational drugs (secondary conditioning and batch certification), and to import human use and investigational drugs. It is also registered with the Subdirectorate-General of Drug Inspection and Oversight at the AEMPS as a laboratory authorised to sell drugs (authorisation number 4012E) and as a manufacturer of active ingredients for human use. In 2014, the production of radiopharmaceuticals was added to that scope.

All products produced by PharmaMar for patients' use are subject to strict quality assurance procedures in order to ensure their purity, potency, quality and safety. Before a drug is released for use, the Quality Control Laboratory analyses the physical, chemical and microbiological characteristics and properties of each batch and verifies that it meets the specifications established and agreed with the health authorities. Raw materials for manufacture are analysed before use; in-process controls are established to ensure that the process proceeds as planned, and manufacturing methods are validated to ensure that they are reproducible and that they consistently produce batches of the product to specification. The Quality Assurance Department reviews the documentation on the production process so as to ensure that all pre-defined quality requirements are met.

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All relevant pre-clinical trials conducted by PharmaMar as part of drug development are carried out in accordance with internal procedures and systems that ensure compliance with Good Laboratory Practices (GLP).

PharmaMar's clinical trials are conducted in accordance with Good Clinical Practices (GCP) and information processing standards and conform to the rules and guidelines of the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH), the FDA (Food & Drug Administration) and EMA (European Medicines Agency), as well as all local regulatory requirements in the countries where trials are carried out. The data gathered in clinical trials is contained in the Ensayos Clínicos file at PharmaMar, which is registered with the Spanish Data Protection Agency, is handled in accordance with PharmaMar's Security Policy and is only accessible to authorised personnel, as provided in Royal Decree 223/2004, of 6 February, regulating clinical trials with drugs.

PharmaMar has also adopted the Farmaindustria Ethics Code of Good Practices in Promoting Medicines, adapted from that of the EFPIA (European Federation of Pharmaceutical Industries and Associations), which represent the pharmaceutical industry in Spain and Europe.

PharmaMar is inspected regularly by a team of experts from the AEMPS. The last such inspection, in the production area, was carried out in February 2014. It resulted in Pharma Mar being recertified as compliant with Good Manufacturing Practices (GMP) in the production of trabectedin, the active ingredient used to make Yondelis®.

The FDA conducted an inspection of PharmaMar's installations in Colmenar Viejo to determine the degree of compliance with Current Good Manufacturing Practices (cGMP) in the production of the active principle trabectedin (Yondelis®) and classified the facilities as accepted for the manufacture of that compound.

Additionally, in 2014 the FDA accepted PharmaMar's proposal for producing its anti-tumour agent PM1183, and approved the intermediates that the company will use to produce the drug.

The person in charge of this unit is José Luis Ortega, Head of Quality.

Cooperation with other bodies

PharmaMar attaches great importance to cooperation with high-level research groups at public and private research centres and universities in Spain and other countries. These relationships facilitate the exchange of technical knowledge in the pursuit of science and research, thus contributing to the future of our society.

There are agreements with over 90 scientific institutions throughout the world which assist with R&D, providing the latest research in such fields as molecular biology, cellular biology, structural elucidation, action mechanisms, nanotechnology and other related disciplines, enhancing the scientific knowledge and human resources brought to bear on each project based on each group's degree of specialisation.

Bioprospection efforts are assisted by universities, centres for marine biology, and Environment and Fisheries Ministries throughout the world to enable the company to comply with global and local regulations on biodiversity while engaging in joint initiatives to expand knowledge of flora and fauna in each marine habitat.

The Clinical Department works with over 300 hospitals in Europe, the USA and Canada, Asia and Australia, where the studies required for product development during clinical trials are carried out.

PharmaMar also has launched a training programme for interns with 20 universities, secondary schools and business schools in Spain and other countries. Under this programme, final-year pharmacy, biology, chemistry, biochemistry and biotechnology students and those completing secondary school or a Masters programme can receive 3-6 months of supervised work experience; the programme is also a valuable source of human capital for the future. Pharmamar had 32 interns in 2014, two of whom were hired by the company upon completing their internship.

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Pharmacovigilance

Pharmacovigilance is the activity that enables the pharmaceutical industry, among the various agents that use medicines, to protect patients' health through early identification, quantification and evaluation of the risks associated with its products. Through pharmacovigilance, pharmaceutical companies can continuously assess the safety profile of their drugs (both in clinical trials and those commercially available) and ensure that preventive and/or corrective measures are taken to safeguard patients' welfare where necessary.

PharmaMar employs a system to manage the risks associated with the safety of its products. Identifying potential risks begins with preclinical research, such as toxicological information, which aims to predict risks for humans. Identifying and managing real risks begins with clinical development, when information is passed on to clinical researchers and patients in the trials. Measures to minimise risks are also implemented during clinical trials. Once commercialisation is authorised, the clinical trial's precautions and adverse reactions are updated in such documentation as the technical files for health professionals and patient information leaflets. PharmaMar drafts and updates a Risk Management Plan for its products. Information collected post-authorisation feeds back into the Risk Management Plan, which is used to keep health professionals and patients informed of any change or action.

As the holder of a marketing authorization for Yondelis®, PharmaMar files regular safety reports with the European Agency and also updates its Risk Management Plan. Assessments to date have confirmed the pre-existing safety profile and the positive risk/benefit ratio of Yondelis® for the current therapeutic uses.

There were no returns of Yondelis® in 2014 due to issues with the product's quality or safety.

Sylentis

Glaucoma

Glaucoma is a group of eye disorders characterised by damage to the optical nerve that leads to progressive loss of eyesight and can ultimately cause blindness. The disease is asymptomatic until the sufferer begins to note a reduction in their field of view. It is estimated that half of glaucoma sufferers do not know it. It is usually associated with higher intraocular pressure, which damages the optical nerve and seriously and irreversibly compromises the field of view.

Glaucoma is one of the main causes of blindness. Over 67 million people worldwide have glaucoma, and the figure is expected to reach 80 million by 2020. There are approximately one million glaucoma

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patients in Spain at present. There is no cure for the disease, and medicine has only managed to slow its progress.

Dry eye syndrome

Dry eye syndrome results from an alteration in the tear film, which damages the external part of the eye. This leads to general discomfort, including eye pain, the sensation of having a foreign body in the eye, burning, itching, changes in vision, sensitivity to light, seeing coloured halos, the sensation of heavy eyelids, etc.

The causes of dry eye syndrome are generally associated with insufficient tear and moisture in the eye because either the patient lacks tear producing glands or because of a trauma, infection or as a side effect from use of another drug. External factors, such as the use of contact lenses or excessive exposure to cold or hot air, can exacerbate symptoms and discomfort.

This is the most common eye disorder, and an estimated more than 30 million people worldwide suffer from dry eye syndrome.

Research and development

Sylentis focuses its research on drugs obtained using interference RNA (RNAi) technology. The importance of this novel technique is evidenced by the fact that its discoverers, Andrew Fire and Craig Mello, were awarded the Nobel Prize for Medicine in 2006. RNAi has revolutionised biology by making it possible to design and develop drugs from a totally new perspective.

It can be used to selectively silence genes through post-transcriptional degradation of the messenger RNA that leads to the corresponding protein or enzyme. Accordingly, the technique acts on specific enzymes involved in pathologies and enables them to be regulated through the rational design of drugs that can silence the expression of the gene that codes for the enzyme or protein.

Sylentis is pursuing several lines of research:

Ocular: glaucoma, dry eye syndrome, ocular •allergies and other diseases of the eye.

Inflammatory: inflammatory bowel diseases •(Crohn's disease and ulcerous colitis).

Central nervous system: cerebral ischaemia, •neurodegenerative diseases and dementia.

Basic research: formulation and chemical •modification of molecular structures to increase stability and efficacy in models in vivo.

Formulation of RNAi products for oral •administration.

In 2014, the company made considerable progress on the eye allergy line, the goal being to identify new treatments for this disorder based on RNAi. As a result of this research, a specific candidate was chosen to block a target involved in eye allergies and it is under development. The RNAi mechanism of action, which prolongs the drug's action over time, provides for safer and more effective treatments which are also perfectly compatible with the eye surface.

Alnylam Pharmaceuticals has granted Sylentis an option to licence the intellectual property of InterfeRx™ for the development and commercialisation of RNAi therapeutics.

Clinical trials

Sylentis is one of only four companies in the world with RNAi-based products undergoing clinical trials and it's the first company in Spain to develop a product based on this technology.

The company's most advanced compound, SYL040012 (Bamosiran), is in the form of ophthalmic drops to treat elevated intraocular pressure and glaucoma. Phase I and Ib clinical trials have been completed with this compound. The results obtained, in terms of both safety and efficacy, were very promising, with the result that clinical development continued with a Phase II multicentre international trial to demonstrate its efficacy in humans. The results of this trial demonstrate excellent tolerance to the drug, both locally and systemically, as well as statistically significant efficacy of one of the evaluated doses. In 2014, Sylentis received authorisation from the regulatory authorities for a Phase Ib trial with Bamosiran to treat glaucoma and ocular hypertension. This clinical trial, which aims to

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identify the most effective dose, will be performed in 21 hospitals in Spain, Estonia, Germany and the US, recruiting 180 patients.

The company's second most-advanced compound, SYL1001, is for the treatment of ocular pain associated with dry eye syndrome. A Phase I clinical trial on healthy volunteers was completed, with optimal results in terms of local and systemic safety. A pilot Phase II clinical trial in patients with dry eye syndrome is currently under way.

Quality research

Sylentis obtained the "Madrid Excelente" distinction. Madrid Excelente is a mark granted by the Madrid Regional Government in recognition of companies' quality and excellence with a view to fostering competitiveness. The mark does not refer to a specific product or service but is based on an analysis of the company's overall management quality. It is given to companies that are committed to innovation and continuous improvement, social responsibility, satisfying people, and contributing actively to the region's economic and social development.

The Spanish Agency for Medicines and Healthcare Products (AEMPS) authorised Sylentis as a pharmaceutical laboratory to manufacture research drugs. This recognition is a response to the company's hard work and to the expectation that its project is generating. Sylentis was inspected by the Spanish Agency for Medicines and Healthcare Products (AEMPS) and obtained an unqualified renewal of its authorisation.

Sylentis has implemented Good Manufacturing Practice (GMP) in its facilities. Additionally, most of the preclinical trials it performs in-house or outsources adhere to Good Laboratory Practices. Its participation in clinical trials also conforms to Good Clinical Practices, as required by law, and it ensures that contract research organisations and individual researchers also comply.

Cooperation with other bodies

Sylentis has cooperation agreements with numerous public and private institutions in Spain

and other countries so as to effectively transfer knowledge and resources and make progress with product research and development.

The public institutions that cooperate with Sylentis's research and development programmes include the Spanish Higher Council for Scientific Research, Madrid Complutense University, the Institute of Neuroscience, Navarra University Clinic, Ramón y Cajal University Hospital, Hospital Clínico San Carlos, the University of Oviedo, and the University of Alicante. It also works with private contract research organisations in various trials.

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4. Customers

The Zeltia Group's current customers are the users of Zelnova, Xylazel, Genómica and Phar-maMar products and services. In chemicals,

molecular diagnostics and antineoplastics, our com-panies make a commitment to customers from the outset: to guarantee a quality service, provide consu-mers with products that meet their needs, maintain satisfactory communications, and solve their pro-blems as efficiently as possible.

Our customers are fundamental to the Zeltia Group, and we direct all our efforts, both human and technical, to meeting their needs. By developing innovative products, we steadily improve our offering and enhance the quality we provide.

In accordance with its international growth strategy, PharmaMar opened a commercial subsidiary in France in 2014. Zeltia Group opened new offices in China (Genómica) in 2013 and in Germany and Italy (PharmaMar) and Sweden (Genómica) in 2012, all of which are markets with high growth potential where the Group seeks to increase its sales.

Zelnova

Zelnova has approximately 995 direct customers.

Zelnova's products are air fresheners, domestic insecticides and cleaning products, which are marketed via two divisions: Household Products (insecticides, air fresheners, odour neutralisers, rat poison, wax, impregnators, cleaners, bathroom products, grease removers, furniture cleaners, etc.) and Environmental Hygiene Products for industry (hospitality industry, etc.).

Xylazel

Xylazel has approximately 1,100 direct customers.

It manufactures and distributes paints and varnishes. It provides paints and varnishes for protecting wood and metal, as well as fillers, oils, etc. and a technical service to handle customer queries, advice, complaints, etc.

Genómica

Genómica has approximately 85 direct customers.

The company provides its customers with proprietary in vitro diagnostic kits (papillomavirus, herpes, enterovirus, viruses and bacteria causing respiratory infections, enterobacteria, micro-organisms that cause sepsis, sexually transmitted micro-organisms, detection of mutations in the genes associated with anti-tumour therapy, and polymorphisms associated with bone metabolism disorders), genetic identification analysis (paternity tests, genetic fingerprinting and filiation), and technology transfer (turnkey installation of genetic fingerprint labs).

In addition to signing an agreement with ANADIR (the Spanish National Association of

People Affected by Irregular Adoptions), Genómica is also involved in several collaborations to perform genetic profiles and create a family search database to help reunite mothers and children in cases of alleged baby theft.

Pharmamar

PharmaMar has approximately 1,049 customers.

Following the launch of Yondelis® in Europe in 2007 for soft tissue sarcoma and in 2009 for ovarian cancer, PharmaMar's customers are hospitals and clinics in Europe which are served by the company's own sales network or its sales and distribution partners. Sales queries are handled directly by account managers in each country's commercial structure.

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Communication with customers

Customers can obtain information through a variety of channels: The main (and the most direct and personal) channel is via area sales representatives. The Consumer Chemicals companies have a sales network covering practically all of Spain, and sales staff visit customers regularly to establish a direct relationship.

Internationally, sales are channelled through distributors, which are selected on the basis of their technical and financial capacity and signed under contract.

Customers are given brochures describing the products and services, merchandising material, display stands, promotional literature, etc. Each year, the price list is circulated with a letter addressed individually to each customer.

End consumers can visit each company's website to obtain information about the variety of products that the Group manufactures and markets. They may also contact the companies by phone or e-mail to clarify administrative matters.

The company's product packages, brochures and advertising material all carry the e-mail address, website and phone number. Customers who are in a position to influence consumer purchase decisions are also exposed to ongoing advertising campaigns in publications specific to their activity.

In the case of PharmaMar, contact with the customer (healthcare professional) is provided via the commercial structure or by telephone, e-mail etc. (the particulars are available on the websites). Because of the pharmaceutical industry's peculiar features and the high degree of specialization in oncology, calls with clinical queries from patients are channelled through the doctor responsible for their treatment. Technical or clinical questions and queries are answered with the support of the Medical Information Service and the Medical Department to ensure that replies are rigorous on the basis of clinical experience. The customer services system also ensures that queries from countries where we have partners are relayed to those partners for handling.

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Information for customers

The Marketing Departments generally take all necessary steps to ensure that the company responds to customer needs: Information addressed to customers is drafted clearly and comprehensibly and takes account of consumer feedback obtained via the sales force, the quality and complaints handling system, distributors, market experience and knowledge, and regular surveys. Customers' opinions are very important when making decisions about any product (development, design, production, labelling, manuals and marketing), and product literature and labels are corrected on the basis of customer feedback.

Additionally, the implementation of a new computer system led to substantial changes in the billing system which make it possible to offer more detailed and personalised information to each type of customer, adapting to their specific needs.

The PharmaMar scientific information and promotional material provided to healthcare professionals is produced in several languages and

undergoes a rigorous approval process that conforms to the standards on best practices in various countries and Europe-wide.

Customer satisfaction

It is vital to ascertain customers' opinions and identify aspects of our services that can be improved. Our companies conduct regular surveys of customers and end consumers to gauge their satisfaction with the products. Once the results are quantified, the Commercial Department analyses the data and, based on complaints and reject counts, takes the appropriate measures to address the least positive aspects.

Any complaint or claim from a customer is registered in writing. All complaints are channelled through the Commercial Department which, based on the nature and magnitude of the issue, refers it, with a full dossier, to the departments it considers appropriate: Quality, Production, Technical, etc. for them to analyse the problem, issue a report and propose a solution. Once the report has been drafted, it is remitted to the Commercial

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Department, which decides on the appropriate commercial solution to the problem raised by the customer, based on commercial criteria. A written reply is sent to the customer. The Commercial Department draws up regular reports on trends in complaints and complaints handling.

The people in charge of customer relations at the various subsidiaries are: José Antonio Pérez Raya (Zelnova), José Manuel Cortiñas Viñas (Xylazel), Antonio Sevilla and Juan Bataller (Genómica) and Juan Nogués Ortuño (PharmaMar).

Advertising and competitors

The companies use a number of channels to reach end consumers: Products are advertised on TV and in the specialist press during periods of peak demand (insecticides are a very seasonal product). We also work with customers in designing brochures, display cases, etc. to promote the products all year round. With respect to rivals, we are committed to complying with the general rules of fair trading and to avoiding any action that will be explicitly harmful to a competitor.

In the case of Genómica and PharmaMar, not only are their pharmaceutical and diagnostic products highly specialised, but their advertising is targeted very directly at customers to subtly emphasise the technical quality and benefits with respect to those of the competition, but without mentioning the latter. For this purpose, the company uses published independent scientific studies that support its message, as well as demos and small comparative surveys. The companies also advertise at scientific conferences which are attended by product advisers familiar with the industry. Competitors merit our full respect, and sales arguments are purely technical, enabling the customer (who is technically sophisticated and knows the advantages and disadvantages of each product) to assess the best technique or product on the basis of his/her needs and the available analytical and therapeutic options.

Value for money

Zelnova offers a wide range of products to suit every consumer's needs. By establishing a threshold level of quality that meets customer needs, we offer a wide range of products at

different price points, from high-value brands such as ZZ Paff and Casa Jardín to retailer own label products, which offer assured quality at a more affordable price.

Xylazel's image is that of a specialised company with innovative, distinctive, value-added, quality products which are, therefore, expensive. This perception is very clear in all its products for wood protection, decoration, treatment and care, which give it a large share of the niche market in paints and protective varnishes for wood.

Compliance

Xylazel's primary products are wood protectors and treatments, which are made with active principles and, as they are considered biocides, must conform to the pertinent legislation, which includes exhaustive assessments with respect to customer health, safety and the environment.

New legislation is being implemented, including the Biocidal Products Directive (BPD), amendments to the European Agreement concerning the International Carriage of Dangerous Goods by Road (ADR), the regulation on the Registration, Evaluation, Authorisation of Chemicals (REACH), and the new Regulation on Classification, Labelling and Packaging of substances and mixtures (CLP Regulation). This requires the company to comply with a broad range of rules over the long term, all of which are aimed at eliminating any type of impact on the environment or people.

Compliance with this legislation is costly, in terms of both direct costs and of human resources and relationship costs. Xylazel has long been in compliance with these regulations, as evidenced in the Spanish Health Ministry's Register of Pest Control Products.

Xylazel's products comply with the legislation in force on the classification and labelling of hazardous products and with the regulations limiting emissions of volatile organic compounds. These regulations require all products to be classified and labelled with regard to their impact on health and the environment, and the supplier and manufacturer to have a safety data disclosure available for customers and the Administration.

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There were only small incidents in 2014 stemming from non-compliance with legal or internal regulations regarding product information and labelling, advertising, promotion or sponsorship. In the case of Xylazel, an obsolete product with an old label referring to wood protectors which complied with the legislation at that time but which the authorities decided to withdraw from the market was found during a customer inspection. An error was detected in the disclaimers attached to advertising texts for biocides; the matter was resolved without incident.

Furthermore, there were no complaints with respect to customers' privacy or personal information leaks.

Product quality

The appropriate control and monitoring systems are in place to ensure that only products meeting

the established requirements are sold. Checks are performed from reception of raw materials through the manufacturing phase down to the final product, diagnostic test or drug.

No products were returned or recalled for health or safety reasons in 2014.

The people in charge of Quality at the various subsidiaries are: Mónica Mascato (Zelnova), José Ramón Álvarez (Xylazel), Ascensión Hernández (Genómica) and José Luis Ortega (PharmaMar).

Zelnova, Xylazel and Genómica are certified to ISO 9001:2008, and their product quality management and quality control processes conform to that standard. That is the most comprehensive standard, since it covers quality in design, production, installation and service.

Zelnova has the Higher Level certification under the IFS HPC standard.

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IFS HPC certification

In 2013, Zelnova obtained the highest possible certification, Higher Level, under the IFS HPC standard (International Featured Standard Household and Personal Care).

IFS HPC is used to audit companies which manufacture personal care (cosmetics) and household products and sell them to consumers under their own brand names (private label).

It is an internationally-recognised standard which ensures that IFS-certified companies deliver products that adhere to defined specifications with a view to

continuously improving product safety and quality. It helps reduce costs and ensure transparency throughout the entire production chain of household and personal care products.

The number of companies that have obtained this certification is very small, both in Europe and in Spain; Zeltia's certification evidences its commitment to developing high-quality innovative products and provides a clear competitive advantage over other manufacturers.

Large retail chains with IFS certification include Carrefour, Auchan, Aldi, Casino, Lidl, Leclerc, Metro, Migros, Wal-mart, Coop, etc…

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Xylazel has the following quality certifications:

The SEAIC Seal of the Spanish Society of •Allergology and Clinical Immunology, endorsing the new line of Xylazel Aire Sano paints for people with allergies and asthma.

The A+ Seal from the French Ministry of Ecology, •Sustainable Development, Transport and Housing, supporting the new line of Xylazel Air Sano paints as acceptable for people with allergies and asthma.

AITIM Quality Seal from the Technical Research •Association of Woodworking Industries for the Xylazel IMPRALIT KDS wood protector.

ECOLABEL, for its Aire Sano product line.•

The A+ Seal from the French Ministry of Ecology, •Sustainable Development, Transport and Housing,

supporting Xylazel Air Sano paints due to their low VOC content.

Certification of compliance with the criteria •established under regulation EN71:3 on the safety in toys and the migration from certain hazardous compounds, for Xylazel's Aire Sano paint for children's environments.

Compliance with Euroclass B-s1, d0 fire safety •requirements for Xylazel Aire Sano paint for healthcare environments.

Compliance by Xylazel Aire Sano paint for •healthcare environments with the criteria under regulation 852/2004 for food environments without direct contact with food.

Compliance by Xylazel Aire Sano paint for •healthcare environments with criteria for

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resistance to certain disinfectants under regulation UNE-EN ISO 2812:3.

Guarantee from the Spanish Society of Preventive •Medicine, Public Health and Hygiene (SEMPSPH) for Xylazel Aire Sano paint for healthcare environments.

Testing by LABORATORIO CONTROL •MICROBIOLOGICO, S.L. according to protocol JIS Z 2801, which confirmed that the dry film of Xylazel Aire Sano paint for healthcare environments does not support the proliferation of microorganisms.

Cooperation agreement with the Spanish •Paediatric Association (AEP) for Xylazel Aire Sano paint for children's environments.

GENÓMICA has the following quality certificates for:

EC Conformity certificate for the following •products CLART® HPV, CLART® Pneumo Vir, CLART® ENTHERPEX, CLART® MetaBone, CLART® SeptiBac, CLART® EnteroBac, CLART® CMA and CLART® STIs, in accordance with Directive 98/79/CE on in vitro diagnostic medical devices.

ENAC accreditation for the genetic identification •laboratory in accordance with ISO 17025. This accreditation has been expanded to include genetic-forensic tests with stem cells, adipocytes, cells in suspension and teeth.

Certification to ISO 13485:2003, as well as •adaptation and certification to the new version of ISO 13485:2012, which ensures that the quality management system complies with the regulatory requisites of any country in the world.

CMDCAS Certification, issued by TÜV Rheinland •North America, for sales in Canada with the following scope: design, development and manufacture of in vitro diagnostic kits to detect metabolic disorders, tumour genotyping and infectious diseases.

ISO 9001 Certification: 2008, granted by TÜV •Rheinland.

GENOMICA has been accredited by the National Accreditation Agency under ISO/IEC 17025, with number 525/LE 1176, for "Identification and Forensic-Genetic Analysis of human tissue and fluids, stem cells, adipocytes, cells in suspension and teeth", with an extension in 2013 to include samples on FTA cards and new trial methods, making it the first privately-owned laboratory in Spain that is accredited for those analyses.

New product research and development

ZELNOVA

New product development is aimed not only at rounding out the product range to meet market demands but also at complying with new legislation regarding health and environmental protection: the law on reducing volatile organic compounds and the Biocide Law. The Biocide Law has drastically reduced the number of active ingredients available for use, making it necessary to develop new formulations.

Various research lines are currently under way, in fields ranging from air fresheners to insecticides, and application systems are being enhanced to cover new uses. The aim is to develop innovative systems that provide benefits not covered to date by the devices on the market. Work is also being done to optimise various products so as to reduce costs while maintaining or even enhancing their performance. The goal is to expand the offer of innovative formats, perfumes in line with market trends, and new applications and dispensation systems. Moreover, new systems are being developed which maintain the final product's performance and efficiency but use propellants with a lower environmental and toxicological impact and lower cost.

Some of these projects were performed in conjunction with researchers at the University of Vigo, Leon Biotechnology Institute, and Tecnalia Technology Research Centre.

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XYLAZEL

The company seeks to develop innovative products that take advantage of real business opportunities in the market, comply with increasingly demanding legislation and improve both personal and environmental safety. As a manufacturer of wood preserving products, the coming years will bring major changes due to implementation of the directive regulating the classification and marketing of biocides. The range of wood protection products must be adapted to comply with the new requirements.

The company worked on the following lines in 2014:

Work began on a new product for the Aire Sano •line which was launched in 2012 with Xylazel Aire Sano paint suitable for persons with allergies or asthma. It is called Xylazel Aire Sano paint for healthy households. Like all of the products in this line, it has a very low VOC content, with the result that it is suitable for indoor use for people that are particularly sensitive.

Modifications to the formulae to conform to the •new legislation on the classification and labelling of hazardous products, which has resulted in considerable changes in certain formulas with dry-film and product preservatives in the packaging or changes in other substances, such as cobalt driers and products classified as very hazardous.

A new oil called Oxitrol for treating rusted steel •was brought to market.

A new product was developed to replace •Xylazel Aqua Aceite para Teca (teak oil) which is more water resistant and gives better drying results.

Development of new water-based varnish with •waterproofing properties which last longer in outdoor applications and a water-based primer for tannin-blocking sealer.

Development of a new, more resistant formula •for floor paint.

Development of a water-based floor varnish that •adheres to floating wood floors.

Development of a new water-based sealant to •avoid leaching of wood tannins.

Progress in the development of a new water-•based high-gloss rust-proof paint for use directly on metal, as well as improvements to Oxirite in terms of drying, effectiveness, durability and safety.

A new paint is being developed to replace Xylazel •Protective Paint to comply with new legislation and improve certain aspects related to resistance and manufacturing.

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The Xylazel Aire Sano line of products, which were launched in 2012 with Xylazel Aire Sano paints for people with allergies and asthma, continued to grow in 2013 with two new products (paint for healthcare environ-ments and paint for children's environments) and with the development in 2014 of paint for healthy households. This is a unique line of paints in Spain.

- Xylazel Aire Sano paint suitable for persons with allergies or asthma is an organic paint with no substances that are detrimental to people's health or the environment. Once dry, the painted surface does not emit volatile compounds which can have a significant sensitising or irritating effect. As a result, people who come into contact with Xylazel Aire Sano paint for persons with allergies or asthma are assured that they will not be exposed to substances that may aggravate the symptoms of respiratory illness, such as allergies or asthma.

It is the first and only decorative paint for domestic use in Spain which is endorsed by the Spanish Society of Allergology and Clinical Immunology and it also bears the A+ seal from the French Ministry of Ecology, Sustainable Development, Transport and Housing, in accordance with decree 2011-321.

- Xylazel Aire Sano paint for healthcare environments helps avoid the growth of bacteria and fungi on painted walls in hospitals. This contributes to improving

the hygiene and health conditions required in hospitals and avoids a large number of hospital-acquired infections which generally extend patients' stay and can even lead to death in very serious cases. These types of infections, which can be substantially reduced with this type of paint, also cost hospitals hundreds of millions of euro.

It is a high-quality paint that can withstand washing and common disinfectants, and contains encapsulated silver ions to avoid the proliferation of bacteria on the painted surface.

It is endorsed by the Spanish Society of Preventive Medicine, Public Health and Hygiene, and costs about the same as a high-quality decorative paint.

- Xylazel Aire Sano paint for children's environments is a special paint which is very low in VOC compounds and hazardous emissions. Cleaner environments for children help reduce respiratory illnesses. The paint is also stain resistant and washable.

With a view to improving air quality, the paint also performed well in tests mandated by the European Union, obtaining: Ecolabel certification and an A+ seal for Indoor Air Quality. The product also complies with European standard EN 71-3 on safety requirements for toys and children's furniture. A cooperation agreement has also been signed with the Spanish Paediatric Association (AEP).

GROWTH IN THE XYLAZEL AIRE SANO PRODUCT LINE

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GENÓMICA

In 2014, GEONOMICA launched two in vitro diagnosis products based on CLART® technology, one of them for microbiology, CLART® HPV4, and the other for oncology, CLART® CMA EGFR.

CLART• ® HPV-4 is an in vitro diagnostic kit for the detection and genotyping of 35 different types of Human papillomavirus (HPV) using multiplex PCR and subsequent visualisation with CLART® low-density array technology. This product allows for the possibility of directly analysing the patient's sample without extracting genetic material. Moreover, this new version of GENOMICA's HPV detection kit (CLART®HPV2) notably reduces test times and increases sensitivity to some types of HPV while also incorporating an additional subtype (VPH 68A).

CLART• ® CMA is a kit for detection and genetic identification of spot mutations in genes in the EGFR (epidermal growth factor) route. In 2014, GENOMICA had two oncology products

for sale, CLART® CMA KRAS.BRAF.PI3K and CLART® CMA NRAS.iKRAS, which are used to detect spot mutations whose presence or absence allow for the appropriate selection of treatment for metastatic colorectal cancer. This year, GENOMICA launched a new product line, CMA, with CLART® CMA EGFR, which uses a specific PCR multiplex (ARMS technology) and subsequent visualisation in low-density arrays to determine mutations, deletions and insertions of the EGFR gene in order to choose the right treatment for non-small cell lung cancer. The design of CLART® CMA kits enables users to pick and choose, combining several amplification and viewing references in a single array, since they share the same analysis protocols.

PHARMAMAR

PharmaMar's research and development of new products is described in considerable detail in section 3 of this report.

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5. Suppliers

The Zeltia Group's chemical and biopharmaceutical companies interact with a large number of suppliers who provide

a broad range of products and services to our production process. As business partners, we strive to maintain solid, lasting relationships with our suppliers based on mutual benefit, contributing to the growth of the organisation.

Suppliers are selected on the basis of compliance with quality standards, reputation in

the market, suitability to our needs, and price. That is to say, we seek suppliers that offer the best combination of quality, service and price using an objective, transparent selection process that takes account of sustainable procurement criteria. Our companies apply purchasing processes certified to ISO standards. There is no discrimination against suppliers for reasons of race, creed, nationality or gender. We use questionnaires to ensure that our services suppliers have the same anti-discrimination values with regard to their suppliers.

In some cases, candidates must submit documentation certifying their capabilities and complete a form disclosing such information as: any quality, environmental, social responsibility and health and safety certificates they possess, as well as whether or not they have internal procedures for training, manufacturing processes and internal organisation. This information is evaluated by a Supplier Management Committee, which issues a recommendation as to whether or not the supplier is appropriate. Approved suppliers are subject to a system of continuous improvement and scoring based on the number of quality incidents and other factors such as delivery dates; this method re-evaluates suppliers and appropriate improvement actions are identified and implemented.

We demand that our suppliers provide products and services of the required quality and that they comply with their tax obligations. Raw materials suppliers must comply with REACH, a new EU regulation on the registration, evaluation, authorisation and restriction of chemicals. The Zeltia Group companies reserve the right to conduct audits to verify suppliers' quality systems.

The International Standards for Phytosanitary Measures (ISPMs) contain the rules for reducing risks associated with wooden pallets in international trade. The most recent revision to the standards maintains heat treatment as the standard phytosanitary measure for these materials, recommending it as an alternative to fumigation with methyl bromide, a gas considered to deplete the ozone layer. In order to contribute to protecting the ozone layer, PharmaMar requires that its packaging suppliers have certificates and identifying marks to the effect that the wooden pallets it receives were heat treated and not fumigated with methyl bromide.

We maintain close relations with our suppliers via meetings at trade fairs, visits, telephone calls, mail, fax, e-mail and the web.

The vast majority of our suppliers are based in Spain or elsewhere in Europe; accordingly, they are assumed to comply with labour legislation and respect human rights. We also require that suppliers comply with regulations on workplace safety and environmental management.

The Zeltia Group supports unconditionally the principles of the United Nations Global Compact and OECD Guidelines, and we are openly opposed to worker exploitation, child labour, discrimination in any form, and any abuse of human rights or complicity with such abuse.

Company PharmaMar Genómica Sylentis Xylazel Zelnova

No. of suppliers 3,102 190 414 115 132

Of which:

Spanish 2,887 158 320 92 102

Rest of Europe 192 23 59 23 30

Developing countries 1 -- -- -- --

Rest of the world 22 9 35 -- 2

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6. Employees

The Zeltia Group had 665 employees, including those at subsidiaries outside Spain, as of 31 December 2014. We are fortunate to have

a valuable team which brings us closer to our goal to be the best in our fields of endeavour and make our achievements possible, such as our high market share, continuous progress with research and the commercialisation of our first drug: Yondelis®.

We are proud of the loyalty and trust of the employees at our chemical companies, Xylazel and

Zelnova, where the average length of service is 16 years, providing us with the invaluable experience accumulated over time. We are also very pleased that our biopharmaceutical companies—PharmaMar, Genómica and Sylentis—have a team of highly-qualified researchers whose ability and brilliance lead to excellent work day after day. Additionally, the Group employs a large proportion of women, including at executive level.

We would like to take this occasion to publicly thank each and every one of our employees for deciding to work with the Zeltia Group, and express our most sincere acknowledgement of their efforts, dedication and talent. With such an exceptional team, we have full confidence in our future.

We have a high index of women in the group wich occupy places at executive level

Work force statistics in 2014 and 2013

Statistics for subsidiaries in Spain

Chemical Companies

Employees in Spain XYLAZEL ZELNOVA 2014 2013 2014 2013

Average number of employees 94 93 90 92

Average age (years) 47 46 46 45

Average length of service (years) 16 17 15 14

No. of employees from other countries 1 1 1 1

No. of employees with disabilities 2 2 3 4

Breakdown by gender

% of men in total work force 70 71 63 63

% of women in total work force 30 29 37 37

% of men in management 100 100 80 80

% of women in management 0 0 20 20

Academic qualifications

% Graduates & PhDs 18 18 17 17

Breakdown of total work force by area

Administration 23 23 20 20

Commercial & Marketing 34 34 16 15

R&D/Quality/Control 5 5 11 11

Production & Distribution 30 29 41 44

General services 2 2 2 2

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Biopharmaceutical companies

Employees in Spain PHARMAMAR GENOMICA SYLENTIS 2014 2013 2014 2013 2014 2013

Average number of employees 302 284 53 43 17 15

Average age (years) 42 42 37 37 36 36

Average length of service (years) 8 7 7 6 7 6

No. of employees from other countries 17 11 2 2 2 1

No. of employees with disabilities 5 5 1 1 0 0

Breakdown by gender

% of men in total work force 39 37 26 33 12 0

% of women in total work force 61 63 74 67 88 100

% of men in management 55 64 40 33 0 0

% of women in management 45 36 60 67 100 100

Academic qualifications

% Graduates 47 50 43 44 53 46

% PhDs 21 20 19 19 35 40

Breakdown of total work force by area

Administration 41 10 7 6 1 1

Commercial & Marketing 31 30 11 9 0 0

R&D/Quality/Control 194 200 16 15 15 14

Production & Distribution 23 20 19 12 1 0

General services 13 24 0 1 0 0

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Zeltia S.A. Promaxsa Protección de Maderas

ZELTIA

2014 2013

Average number of employees 28 28

Average age (years) 46 46

Average length of service (years) 13 12

No. of employees from other countries 1 1

No. of employees with disabilities 0 0

Breakdown by gender

% of men in total work force 50 50

% of women in total work force 50 50

% of men in management 57 56

% of women in management 43 44

Academic qualifications

% Graduates & PhDs 80 75

Breakdown of total work force by area

Administration 27 27

General services 1 1

PROMAXSAPROTECCIÓNDE MADERAS

2014 2013

Average number of employees 26 19

Average age (years) 42 42

Average length of service (years) 4 5

No. of employees from other countries 1 1

No. of employees with disabilities 0 0

Breakdown by gender

% of men in total work force 82 68

% of women in total work force 18 32

% of men in management 100 100

% of women in management 0 0

Academic qualifications

% Licenciados/Doctores 10 10

Breakdown of total work force by area

Administration 4 4

Commercial & Marketing 4 5

R&D/Quality/Control 1 0

Production & Distribution 17 10

General services 0 0

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Zeltia Group adheres to the principles of the International Labour Organisation (ILO), the global body responsible for drawing up and overseeing international labour standards and which receives worldwide support and recognition in promoting fundamental labour rights as an expression of constitutional principles.

Employment contracts, collective agreements and remuneration

Over 93% of the Group's employees have indefinite contracts. Employees are normally hired on a one-year contract, with the probation period established by law in each case, after which they are hired on an indefinite basis if their work is satisfactory. Occasionally, staff is hired on temporary contracts to cater for seasonal surges in production.

All employees are covered by the Chemical Industry General Wage Agreement, and the company generally improves on the basic conditions of the agreement, including the remuneration, on a voluntary basis.

The remuneration paid to employees generally increased in line with the collective labour agreements. Salaries are fair and competitive since we need to retain highly-qualified staff. There is no significant difference between wages paid to employees of either sex within the same category.

PharmaMar has implemented an Equality Plan which seeks to ensure equality between men and women. There is a Standing Committee on Equality comprising equal numbers of representatives of the company and workers. The committee's purpose is to organise information and awareness campaigns for the workforce and to implement and monitor the Equality Plan.

In order to enhance employee commitment and motivation, many employees receive variable remuneration or a bonus based on targets agreed upon with their supervisor at the beginning of each year. Each objective is susceptible to specific, measurable objective assessment in line with its importance. Attainment of objectives is examined by the employee and supervisor, and a percentage of achievement is established which is used as the basis for establishing the employee's bonus.

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Employees at all Group companies have freedom of association and affiliation. The employees of Zelnova are represented by the CCOO, UGT and CIG trade unions.

The main managers with operational responsibility for labour matters are: Antonio García Marín (Zeltia), Gonzalo Durán (Zelnova), Jesús Lorenzo Silva (Xylazel), Luis Rupérez (PharmaMar), Rosario Cospedal (Genómica) and Ana Isabel Jiménez (Sylentis).

Incentive plan

In accordance with Decision Five adopted by the Shareholders' Meeting on 12 June 2013, the Board of Directors of Zeltia decided to apply a Stock Ownership Plan under which certain Group executives and employees (excluding members of the Board of Directors of Zeltia, S.A.) received shares of Zeltia, S.A. in 2014, free of charge, depending on the degree of attainment of their 2013 targets.

This Stock Ownership Plan has a double objective: to reward employees and executives whose performance in 2013 was satisfactory, and incentivate beneficiaries to stay in the Group.

Hiring policies

Company policy is to fill vacancies in-house if there is a candidate with the necessary profile and experience. Nevertheless, because of the diversity and complexity of our professional profiles, it is often necessary to hire from outside.

Depending on the category and/or location of the job, the selection process is conducted by the Group or outsourced to specialised firms. Many positions in our organisation require uncommon qualifications and experience; as a result, we resort to specialised consultants in Spain and other countries. Less specialised positions are filled by advertising in the press, on web sites specialised in job ads, or through university employment offices. Candidates are also found by word-of-mouth among employees and their acquaintances. Candidates must pass a number of interviews to assess their technical and personal skills and their ability to adapt to and integrate into the position,

the department and the company. Specialised tests are also carried out in accordance with the job brief. Job offers are announced internally on notice boards and the intranet. We also have a data base of CVs sent to us by candidates.

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Developing talent

We draw up training plans that determine staff training needs, ensure that nobody performs a task that requires specific training without having received such training, and ensure that staff receive the appropriate initial training for the specific tasks entrusted to them. Training plans include both internal training using company personnel and external training (Master's degrees, courses,

conferences, seminars, etc.). In 2014, the Group invested close to 620,000 euro in training, 15% more than in 2013. Employees also participated in many free training activities.

The table below shows the breakdown of training expenditure among the various Group companies:

PROMOTING YOUTH EMPLOYMENT

We have numerous agreements with universities and educational centres to provide internships. These agreements are signed directly with the universities or in cooperation with Employer Federations, Business Schools or Business-University Foundations. In 2014, the Group had 51 interns, 3 of whom was hired following graduation.

The entities that participate in these pro-grammes include the Complutense Univer-sity of Madrid, the Autonomous University of Madrid, Francisco de Vitoria University, Portugal's Trade and Investment Agency, Francisco Sánchez Secondary School (Tui), and the Master's Programme in Industrial Pollution at the University of Vigo School of Engineering.

GENÓMICA SYLENTIS PHARMAMAR ZELNOVA XYLAZEL ZELTIA Hour Hour Hour Hour Hour Hour

Training Conferences 36 52,272 224 15,373 8 18

Scientific Courses 335 4,959 4,463 295,491 164 1,435

Other 16 300

Training MBAManagement Other 8 1,236 16 2,515 227 9,240 35 681

Training Administrative 670 4,625 80 420 71 3,701

Languages (English,French, German) 165 5,421 8,895 45,813 80 420 221 9,312

Other types of training 6,323 152,613 416 3,960 549 6,179 93 5,041

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Changes in the workforce

There were no restructurings or significant changes in the work force at the chemical companies in 2014.

The staff at all biopharmaceutical companies increased: PharmaMar strengthened its Clinical Development, Marketing and Sales, Finance and Administration, R+D, and Operations and Quality Departments. Génomica expanded its R&D and Technical-Production Departments. Sylentis increased the staff in its R&D and Chemistry Departments.

Benefits and perks

The Group companies try, as far as possible, to help employees combine work and family life, particularly given the large number of births in employees' families. There were 31 births within the Zeltia Group in 2014. Mothers have the option of reducing their shifts and in companies and departments where this is possible, and employees are allowed to arrange their annual vacation at any time of the year, subject to taking two weeks between June and September. Xylazel offers the possibility of teleworking in specific circumstances. Companies which work a single unbroken shift allow flexitime and finish early on Fridays during the summer months. In general, the Chemical Industry General Wage Agreement is complied with while meeting employees' wishes as far as possible.

Employees receive other benefits, such as advances and bonuses for seniority. Health insurance is provided to almost 50% of employees. Employees of the chemical companies also have life and casualty insurance. Xylazel offers a pension plan and Zelnova and Xylazel provide study grants for employees' children, an in-house doctor and nurse, a social worker and fitted protective clothing.

Almost all Group companies have a staff dining areas equipped with crockery, refrigerators, microwaves, etc. so that employees can bring their own food if they wish. Some companies offer free coffee, and the others have coffee vending machines. Most employees whose working day includes a lunch break receive lunch vouchers.

Improvements are made to facilities each year in an attempt to enhance the working environment. Buildings have heating and air conditioning, and

architectural barriers have been eliminated in the PharmaMar and Zelnova buildings or ramps have been installed at the accesses.

PharmaMar, Sylentis and Xylazel provide buses to carry employees between the plants and the cities of Colmenar Viejo, Tres Cantos and Vigo, respectively.

A special Christmas dinner is held at which the Chairman addresses the employees. All employees receive a Christmas hamper.

Internal communications

Internal communications are a modern management tool of increasing importance in business. Communications are generally channelled via e-mail, the intranet, regular meetings, and notice boards.

Employees have easy access to management. There is a structured communications plan involving regular meetings between the various echelons (division heads, managers and department heads) to track and manage the objectives of the company and of each individual area and project.

Informal meetings are held frequently with teams from different areas to report on project progress. At Genómica, an employee gives a lecture each month about some aspect of the company's activities or another area of interest. These activities seek to enhance general knowledge, and foster interaction, initiative, teamwork, cooperation and respect.

PharmaMar and Sylentis conducts employee satisfaction surveys every two years.

Workplace health and safety

Safety at work is a necessity from both an ethical and an economic standpoint. All Group companies have workplace safety programmes that conform to current regulations, and they conduct regular evacuation drills and simulacra. All personnel receive instruction on workplace safety, the existing risks and the measures to be taken where necessary. In the specific case of Sylentis, employee training and awareness in the area of workplace safety has been enhanced by implementing a specific course, designating a

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Xylazel and Zelnova are also exemplary when it comes to workplace safety. There is a fire-fighting team comprising 6 employees trained and ready to take the immediate necessary measures until the professional fire-fighters arrive. That team is equipped with fireproof suits and breathing apparatus and it conducts a drill every two weeks, while checking that all the company's firefighting systems and equipment are in good working order. All members of staff participate in regular drills using fire extinguishers with controlled real fires.

PharmaMar is certified to the OHSAS 18001 Occupational Health and Safety Management System standard by Lloyd's Register Quality Assurance. This international standard confirms the company's commitment to the health and safety of its workers; in this context, the Zeltia Group is a pioneer in the biotechnology sector, where few companies are certified to this standard.

Zelnova also passed the SEDEX Members Ethical Trade Audit (SMETA) in 2014.

Employee health

All employees are offered an annual medical check-up; all tests, examinations and analyses are subject to informed consent, and the medical data obtained is treated as confidential. The check-ups are conducted in line with the risk inherent to each employee's specific job.

Under a broad interpretation of health monitoring that goes beyond the requirements of labour legislation, the Group's medical check-up includes blood and urine analysis, a blood pressure measurement, and nutritional counselling. The larger subsidiaries also offer an eye test and other specific tests such as PSA, electrocardiograms, etc.; they also have a company nurse to monitor employee health. In 2014, PharmaMar offered free flu vaccination to its employees.

specially-trained safety officer, and training two people in the emergency plans. The Group companies have passed the legally-required safety audits. The main people at Zeltia in charge of Health and Safety issues are Pedro Torrens (Zelnova), Alejandro Gundín (Xylazel), Andrés Sanz (PharmaMar), Verónica Ruz (Sylentis) and Ascensión Hernández (Genómica).

The following table shows the number of work-related accidents and days lost due to illness at Group companies in 2014:

Number Days lost

Due to illness 120 4,575

Accidents with medical leave 5 113

Accidents without medical leave 6 ---

Accidents on the way to/from work 0 ---

Deaths (due to illness) 0 ---

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Grupo Zeltia has 55 employees who have been working at its subsidiaries for more than 25 years. The group is very proud of their loyalty. We would like to thank them for their devotion and trust in us with this small tribute. Without them, Grupo Zeltia wouldn't be what it is today, and we would like to recognise the excellent work they do every single day. Thank you!

Some of our veteran employees are:

Isabel Fernández HoyasJuan Carlos Villalón GómezMaría Luisa de Francia CaballeroSerafín Rodríguez RamosJesús García SánchezFernando de la Calle VerdúRosa Sánchez GonzálezAmor Guerra GonzálezAntonio Sevilla BecerraFernando López Sánchez-PastorMaría Jesus Blanco Giráldez Ramón Fernández Giráldez Aurora Dasilva Ferreira José Ramón Barbosa Pérez Ángeles Ramilo Domínguez María Luz Gabeiras Castro Jesusa Lorenzo Maceira Carmen Martínez Lorenzo Juan Enrique Carrera Barbosa Gonzalo Durán Pastor Jaime Boubeta Núñez Ana Maria Herranz Herranz José Galofre Virgili Francisco Gómez Arenas

Jesús Lorenzo Silva Anuncia Pereiro Lorenzo Juan Ramón Lemos Herrero Alfredo Novoa Gallego Mª Mercedes Rodríguez González Jorge Ferreira Ramilo Francisca Vaquerizo Soriano Antonio Loureiro Pintos Mª Luisa Lourido Álvarez Mª Isabel Da Cruz Álvarez Marian Pujol Gómez José Muñoz Collado Lucio Salgado Romero Rene Petit Martínez Carlos Manuel Rego Fernandes Carles Oliver Legalina Alberto Pereiro Lueiro Antonio Vega Villar Emiliano Lorenzo Leirós Mª José Pujol Gómez Francisco Javier González Fernández José Ramón Álvarez Sacristán Silvana Dieguez Romariz

MORE THAN 25 YEARS WITH GRUPO ZELTIA

Zeltia Group

25 yearswith us

25 yearswith us

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7. Shareholders

Over 100,000 investors have placed their trust in Zeltia, and we owe them a debt of value-creation and responsibility.

As of 31 December 2014, Zeltia's market capitalisation was 593 million euro. Its shares are traded on the four Spanish stock exchanges (Madrid, Bilbao, Barcelona and Valencia).

Number of shares and share performance

As of 31 December 2014, Zeltia's capital stock amounted to 11,110,244.35 euro, represented by 222,204,887 shares with a par value of 0.05 euro each.

The company's outstanding shares have been listed in the electronic market since 20 October 1998.

In 2014, Zeltia's share price fluctuated between 2.35 and 3.07 euro (closing prices), ending the year at 2.67 euro.

In 2014, trading in Zeltia stock totalled 452 million euro, with an average of 654,014 shares changing hands each day; trading reached a low in September and peaked in November.

The IBEX-35 ended 2014 at 10,279.2 points, an increase of 3.6%; it was the second consecutive year of positive performance, a situation not seen since 2007. As a result, the IBEX-35 has appreciated by close to 75% since the lows of July 2012.

With respect to monetary policy, the ECB held the markets' attention throughout the year, as the latter awaited economic stimulus packages with a view to avoiding deflation in a context of scant growth in the Euro area. The situation reflects clear decoupling from the US economy, where signs of recovery are leading the Fed to taper its monetary stimulus policy.

In Europe, although the ECB continued to inject liquidity into the system in 2014, its eagerly expected QE programme was not implemented. In addition to the increased liquidity, benchmark interest rates were cut to historic lows. The ECB's goal was to reactivate the economy and reverse the decline in inflation.

There were various sources of geopolitical tension for the markets in 2014, such as the conflict in Russia, the delicate economic situation in Greece, and the Scottish independence referendum. Some of those tensions have not yet been resolved.

Zeltia, which celebrated its 75th anniversary in 2014, saw its share appreciate by 15.58%, with a strong increase in liquidity. Notable events in the year included progress with clinical trials with PM1183, its most important strategic product, and Yondelis®. This

was reflected in an oral session at the ASCO annual meeting, where the positive results of the Phase II trial with PM1183 in relapsed ovarian cancer were presented. The result of this trial and the positive implications of this data for the development of this new drug boosted the company's share price to a high during summer. All news from PharmaMar partners in connection with Yondelis® was also positive. Taiho Pharmaceutical announced very good results from the clinical trial with Yondelis® for soft tissue sarcoma, which will support the future presentation of the dossier to the Japanese regulator. At the end of 2014, PharmaMar announced that Janssen Research & Development, LLC had presented an application to the FDA to market Yondelis® for soft tissue sarcoma. The year ended with Zeltia's announcement about its plans to merge PharmaMar and Zeltia prior to requesting listing in the US market. All of this news was very attractive for investors, as evidenced by the increase in the share's liquidity throughout the year.

Breakdown of capital

Zeltia's shares are widely held; according to disclosures to the National Securities Market Commission (CNMV) by the parties themselves, the following hold significant shareholdings: Mr José Mª Fernández Sousa-Faro owns 11% (4.6% through Ms Montserrat Andrade Detrell), Rosp Corunna Participaciones Empresariales, S.L. owns 5%, and Mr Pedro Fernández Puentes owns 4.5% (3.9% through Safoles SA).

Shareholders' Meetings

An Ordinary Shareholders' Meeting is held once per year. The 2014 meeting was held in Vigo on 27 May.

Shareholders' rights

Shares grant their legitimate holder the status of shareholder and the rights acknowledged in the law and in the Bylaws.

Under law, shareholders have the following rights:

1º.-The right to attend Shareholders' Meetings and to challenge decisions by the Shareholders' Meeting.

Holders of at least 100 shares may attend Shareholders' Meetings; holders of less than 100 shares may group with others to attain that number and grant proxy to one of them.

2º.- The pre-emptive right to acquire new shares or convertible bonds.

3º.- The right to share in the corporate profits and in the proceeds from its liquidation.

4º.- The right to information.

Once notice has been given of the Ordinary Shareholders' Meeting, any shareholder may obtain from the Company's registered offices or the office at Plaza del Descubridor Diego de Ordás 3, Madrid, the financial statements, proposed distribution of income, directors' report, auditors’ report, the annual corporate governance report,

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the motions submitted to the meeting, and any other reports and documentation that must be made available to shareholders.

Where the law so provides, shareholders may also request the delivery or shipment of the full text of those documents, free of charge. All that documentation is also available on the company's website, www.zeltia.com.

From the date of notice of the Shareholders' Meeting and up to and including the seventh day prior to the date scheduled for the Meeting at first call, shareholders may submit written requests for reports or clarifications that they wish, or may raise any question they desire about the items on the agenda. Also, in the same time period and in writing, shareholders may request reports or submit questions about the publicly-available information filed by Zeltia with the CNMV since the date of the last Shareholders' Meeting.

During the Shareholders' Meeting, shareholders may verbally request any information and clarification they wish about the items on the agenda.

Communications with shareholders

All relevant general information about Zeltia is kept up to date and is available to shareholders and the general public on the company's website, www.zeltia.com:

Regulatory disclosures to the CNMV, press •releases, and news items about the Zeltia Group.

Annual and quarterly financial statements.•

General information about the main Group •companies, with links to their respective web sites.

Bylaws.•

Information about the Board of Directors: •Regulation, committees, composition, etc.

Information about the Shareholders' Meeting: •notice and agenda, motions and documentation circulated prior to the meeting, quorum and decisions adopted, etc.

The web site also has news, monographs and presentations on health-related matters.

Shareholders may also call the shareholder hotline at 902 101 900 or send an e-mail to:INFO_RI@zeltia.com

Zeltia Group

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8. Environment

Our companies strive to protect the environment, not just in their activities but also in the development of products that

comply with the European Union's environmental regulations and the philosophy of the Kyoto Protocol on climate change. As a manufacturer of wood protection and conservation products, Xylazel is ecologically responsible since, by protecting wood, it protects the forests.

PharmaMar's research work is conducted with the utmost respect for the sea, which is the source of their compounds; molecules of interest are synthesised. Once a compound is identified, synthesis provides a supply without having to resort to the original marine organisms. Moreover, no more than 100 grams of each marine organism are extracted. In accordance with the Convention on Biodiversity, the company defends the sustainable use of the sea's valuable resources and the equitable distribution of its findings. By protecting, conserving and making sustainable use of these resources, PharmaMar not only contributes to the development of possible new pharmacological treatments from just a few grams of marine sample, but also furthers knowledge and conservation of local marine ecosystems. The information obtained by PharmaMar's expeditions is centralised in a database so as to optimise future exploration; it is also shared with local communities and teaching institutions.

PharmaMar's and Xylazel's environmental management systems are certified to the ISO 14001 standard; certified activities account for close to 60% of revenues and around 60% of employees.

In 2014, none of the companies had material environmental accidents, fines or lawsuits. The Group companies are located in industry parks and have very little environmental impact in terms of noise or smells, electromagnetic emissions, influence on biodiversity, or leaks or risk activities affecting ground or surface water in the areas where they are established.

The Group attaches great importance to saving and recycling plans; it uses photovoltaic panels and insulation on factory and warehouse roofs and separates its waste by type, with the participation of the staff. There are specific waste bins for cardboard and paper, plastic, metal, batteries, fluorescent tubes, and printer toner, all of which are managed by specialised companies. Additionally, the staff (particularly production personnel) receive talks about waste management.

In seeking to support respect for the environment, this Social Responsibility Report will be issued in electronic format only, thus saving the paper of a print edition.

The waste policies of the Group's largest subsidiaries, PharmaMar, Zelnova and Xylazel, are detailed below. The people in charge of the environmental policy at those companies are: Andrés Sanz, Pedro Torrens and Alejandro Gundín, respectively.

Pharmamar

PharmaMar is certified to the ISO 14001 environmental management standard. This internationally-recognised accreditation evidences PharmaMar's commitment to the environment and its decision to implement policies and actions that encourage continuous improvement and conservation of the sea. PharmaMar is a pioneer in the biotechnology sector, where there are very few companies with this certification.

PharmaMar conforms to Article 1 of the Convention on Biodiversity, which refers to the sustainable use of natural resources to balance ecosystems, society and the global economy. From an environmental protection standpoint, sample collection is governed by two existing international documents:

The Red List of Threatened Species, which is •the work of the International Union for the Conservation of Nature and Natural Resources (IUCN). The list is revised annually and includes all threatened species (more than 15,000).

CITES (the Convention on International Trade in •Endangered Species of Wild Fauna and Flora), to which participating governments adhere voluntarily.

We collect samples manually and selectively via scuba diving for marine invertebrates; we do not use any mechanical systems such as drag nets or dredging, thereby eliminating the impact on the natural environment. We also use an underwater robot with an umbilical cord which is operated from the surface and provides a real-time view of the seabed, allowing for the selection of sample zones and minimising human interaction with the ecosystem.

PharmaMar has implemented the following measures to control and reduce the environmental impact and increase energy efficiency:

Calculation of the company's carbon footprint, •which ranges from sea expeditions to collect marine samples through to commercial distribution of drugs, including transportation of those samples, conference attendance, etc.

Development of a three-year training plan •which ensures that employees are highly qualified in safety and environmental management.

Minimisation of atmospheric emissions by means •of HEPA particle filters in process areas and scrubbers for gases from the laboratory fume cupboards.

Control of hazardous waste produced at •PharmaMar installations and minimisation of the impact using waste separation programmes in the various areas of the company.

Control of process water using a purifying •plant that homogenises the water and adjusts chemical parameters to ensure that discharged industrial water is within the local limits.

Product storage areas are built of concrete, and •drain towards the water purification system to avoid risks of chemical spills and leaks.

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2 International Journal of Systematic and Evolutionary Microbiology (2012), 62, 1165–1170 DOI 10.1099/ijs.0.034066-0

In 2014, Grupo Zeltia Chairman José Ma-ría Fernández Sousa-Faro signed Zeltia's adhe-sion to the Spanish Green Growth Group.

This public-private project provides a platform for working together in the fight against clima-te change and towards a low-carbon economy. Its objectives include increasing participating by companies, sharing information, identifying op-portunities and supporting Spain's presence in international fora.

The group uses an environmental roadmap established by the European Union which is part of the 2030 agenda and the regulatory

package on climate and energy in Europe, with the following objectives:

Reducing emissions by at least 40% with •respect to 1990

Increasing the share of renewable energy •to at least 27% of the EU's energy con-sumption

Increasing energy efficiency by at least •27%.

Respect for, and the promotion of, biodiversity are the guiding principles of Zeltia Group's activities, developed through PharmaMar.

PharmaMar's bioprospection efforts are assisted by universities, centres for marine research, and Environment and Fisheries Ministries throughout the world to enable the company to comply with regulations on biodiversity while sharing findings with local scientific communities.

PharmaMar has discovered hitherto unknown marine organisms on its expeditions. For example, the company discovered a new species of deep-sea sponge, Streptomyces pharmamarensis, which was isolated from marine sediment and classified by PharmaMar researchers2.

Zeltia Group signed the Biodiversity Convention in 2013, thereby also joining the Spanish Business and Biodiversity Initiative. The latter is an initiative of Spain's Ministry of Agriculture, Food and the Environment which, in cooperation with business, aims to promote economic development that is compatible with biodiversity conservation.

As a result, Zeltia Group, and PharmaMar in particular, ratify their practice to date: preservation of biodiversity, sustainable use of their components, and fair and equitable sharing of benefits arising from the appropriate use of genetic resources. They also made a commitment to the following principles:

1.- Evaluating the impact of their activity on biodiversity and natural capital.

2.- Including biodiversity protection in management manuals.

3.- Defining realistic and measurable objectives to conserve biodiversity which will be reviewed at least once every three years.

4.- Disclosing activities and achievements in conserving biodiversity in annual reports.

5.- Informing suppliers of the company's biodiversity objectives and supporting them in gradually incorporating those same goals.

6.- Exploring potential collaborations in this area with scientific institutions, NGOs,

GRUPO ZELTIA JOINS THE SPANISH GREEN GROWTH GROUP

ZELTIA GROUP SIGNS THE CONVENTION ON BIOLOGICAL DIVERSITY

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ZELNOVA

Zelnova complies substantially with the environmental protection laws and allocates sizeable amounts each year to conserving and improving the environment, primarily to reduce noise pollution and improve liquid waste collection at the facility. Its goals in this area are set out in its environmental policy.

The most significant environmental actions include:

Waste treatment: •

- Use of a recycling centre to separate all the company's solid waste into bins for cardboard, plastic, organic waste and scrap metal.

- Possession and use of a plant for treating water and waste liquids; wastes are separated at source, thus minimising pollution.

- Joining the ECOEMBES (Green Point for packaging), ECOLEC (electrical appliances) and ECOPILAS (batteries and accumulators) systems for managing waste that cannot be managed internally. All waste is processed appropriately, since waste produced is handed over for management by authorised firms, both privately- and publicly-owned, such as SOGARISA (Centro de Tratamiento y Eliminación de Residuos Industriales de Galicia). Annual expenditure on waste management totals 275,000 euro.

Reduction in electricity consumption. This was •achieved by adopting measures such as using a single compressor; improving natural lighting; raising awareness among personnel; monitoring and reducing electricity consumption; scheduling manufacturing by synchronising the start-up and stoppage of boilers, compressors and agitators; and making optimal use of machinery operating periods with a view to saving energy.

Regular external measurements of atmospheric •emissions and liquid discharges, whose results are sent to the Galicia Regional Government Department of the Environment and the river authority, respectively.

Issuance of annual reports on transportation and •hazardous wastes produced during the year and disposed of through authorised waste managers.

Measurements of CO and NO emissions every six •months, which are sent to the Galicia Regional Government.

Changing raw materials to avoid those classified •as carcinogenic and modifying some perfumes and wax components with the same objective.

and government organisations with a view to improving business and environmental management.

7.- Appointing a person within the company to be responsible for achieving Convention objectives.

This document recognises that conservation of biological diversity is an integral part of economic development.

PharmaMar also supports Spain's ratification of the Nagoya Protocol on access to genetic resources and the fair and equitable sharing of benefits arising from their utilisation.

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XYLAZEL

Xylazel adopted the following measures in 2014 to improve energy efficiency and reduce its environmental impact. These measures reduced electricity consumption per cubic metre of output by 3%.

Installation of a new electric forklift and pallet •truck charging room with a system to retain accidental battery acid spills, for €22,000.

Gradual replacement of conventional fluorescent •lamps with low-energy LED bulbs.

Installation of new translucent panels on •warehouse roofs to use natural light, substantially reducing the use of electric lighting.

There are also several plans in place for environmental management and emergency plans for the event of environmental accidents:

Application of the 2013-2016 hazardous waste •abatement plan, originally presented to, and approved by, the competent environmental authority.

Use of the system to periodically evaluate the •consumption of raw materials and of ancillary utilities (diesel, electricity, water, paper, etc.) in manufacturing. The system also monitors Xylazel's emissions, discharges and waste production.

Implementation of a new water recirculation •system for firefighting in the factory, notably reducing water consumption.

Xylazel is certified to the ISO 14001:2004 standard. That certification is audited annual by BUREAU VERITAS to ensure that Xylazel's environmental management system conforms to the standard.

The audit includes a a review of all the legal requirements applicable to the installations, equipment and processes (licenses, authorizations, regulatory checks, etc.) and compliance with limits on environmental emissions and discharges, evaluating noise generation, emissions released into the atmosphere, sewage discharges, etc. The results were all well within the legally established limits.

As for compliance with the requirements of the ISO 14001 standard, Xylazel has defined an environmental policy which is integrated with the pre-existing quality policy and establishes general guidelines for the organization's environmental management.

This project involved implementing a tool for systematic control of Xylazel's relationship with the environment through its activities, the goal being to improve overall environmental performance.

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Environmental parameters

Use of direct energy provided by primary sources:

Discharge parameters:

Legal discharge limits and average values attained. All the parameters were well within the legal limits.

PHARMAMAR ZELNOVA XYLAZELConsumption parameters 2014 2013 2014 2013 2014 2013

Electricity (Mwh) 4,675 4,675 943 940 511.44 472

Gas oil (l) --- --- 50,902 38,000 5,600 5,895

Natural gas (fuel) (l) 272,343,000 282,525,000 --- --- --- ---

Water (m3) 8,664 8,486 20,000 29,000 1,619 953

PHARMAMAR ZELNOVA XYLAZEL

Legal limits 2014

Susp. solids < 1,000 mg/l 40 5 23

COD < 1,750 mgO2/l 152 157 52

BOD5 < 1,000 mgO2/l 341 80 27

6 < pH < 10 8.2 6.9 7.5

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9. Community action

Main contributions

Our greatest contribution to society is searching for new drugs against diseases such as cancer and glaucoma, for which

there is no effective cure as yet. Activities in that area are described in detail in the section of this report that deals with patients.

However, we also cooperate actively with numerous initiatives to promote research and disseminate knowledge. Zeltia Group's contributions in this area include:

We would like to highlight the following actions:

Agreements with national and international •universities and institutes as part of an intern training programme at PharmaMar, Sylentis and Xylazel, including University of Seville, Pablo de Olavide University, University of Alcalá, Complutense University of Madrid, King Juan Carlos University, CEU San Pablo University, Autonomous University of Madrid, European University of Madrid, Francisco de Vitoria University, Comillas Pontifical University, University of Naples Federico II, Catholic University of Valencia, Technical University of Valencia, University of Almería, University of Navarra, University of Vigo, University of La Coruña, University of Utrecht, University of Rome

Scholarships 254,812

Donations 116,800

Sponsorship of conferences. seminars and exhibitions 746,047

Cooperation with organisations 57,599

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Tor Vergata, École de Commerce Européenne Lyon, Portugal's Trade and Investment Agency, Master's Programme in Industrial Pollution at the University of Vigo School of Engineering, Aliter Business School, ESAME Foundation, Centro de Estudios Superiores de la Industria Farmacéutica (CESIF), ESIC Business & Marketing School, European School of Pharma Studies (EPHOS), Medical Practice Group, and the following secondary schools: Francisco Sánchez, Valdemilanos, Ángel Corella, Benjamín Rúa, Aguas Vivas, San Fernando, Gredos San Diego, José Luis Sampedro, Lycée Français, Ramiro de Maeztu, and Virgen de la Paloma, among others.

Active participation in associations to promote •biotechnology, such as ASEBIO (Spanish Association of Bioenterprises), of which Zeltia Group Chairman Mr José María Fernández Sousa-Faro is Vice-chairman.

Cooperation with associations to promote the •pharmaceutical industry, such as AEFI (Spanish Industrial Pharmaceutical Association) and EBE (European Biopharmaceutical Enterprises), which represent the pharmaceutical sector in Spain and Europe.

Participation in ALINNSA (Alliance for Research and •Innovation in Health), an association comprising public and private entities focused on biomedical research and innovation in Spain. The goal is to strengthen science, technology and innovation in life and health sciences in Spain, encouraging cooperation

between current players through coordination, joint programmes, internationalisation and strengthening of public-private partnerships. José María Fernández Sousa-Faro, Chairman of Grupo Zeltia, is a member of ALINNSA's governing board.

Cooperation with FEUGA (Fundación Empresa-•Universidad Gallega).

Zeltia Observatory, which promotes innovation •and dissemination and analysis of biotechnology-related information applied to healthcare.

Creation of the "Innovation, Health and •Communication Chair" at King Juan Carlos University in Madrid. This chair was recognized in Europe for promoting education for young people and quality employment when it was selected, along with 56 other initiatives, for inclusion in the 2013-2015 phase of Enterprise 2020, the European CSR initiative organized by Forética. The project has been included in the "Skills for Jobs" category, which mainly highlights aspects such as the promotion of entrepreneurship and youth employment, as well as social inclusion through work training (Employability). The chair, which focuses on education, research and information on healthcare services as well as on labour insertion through the improvement of knowledge and the identification of needs and possibilities for improvement, was presented at the Enterprise 2020 event held in Asturias in 2014.

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Creation of the First Master's programme in Drug •Research and Development by PharmaMar and King Juan Carlos University. This course aims to provide participants with the necessary expertise and experience to work in the pharmaceutical industry and in research centres.

Publication of scientific articles in specialised •international journals on oncology, pharmacology, therapeutics and diagnostics, including British Journal of Pharmacology, European Journal of Medicinal Chemistry, International Journal of Cancer, Journal of the American Chemical Society, Journal of Controlled Release, ACS Chemical Biology, Angewandte Chemie, Marine Drugs, Nature, International Journal of Clinical and Experimental Pathology, British Journal of Cancer, Investigational New Drugs, Haematologica, Molecular Cancer Therapeutics, Cancer Cell, Medical Oncology, Cancer Chemotherapy and Pharmacology, Annals of Oncology, Investigational New Drugs, Molecular Therapy, Histology and Histopathology, Human Genetics, and Vaccine. According to the ASEBIO report, PharmaMar is the Spanish company with the second-largest number of publications in high-impact scientific journals.

Publication of the book "El mundo submarino •de PharmaMar" (PharmaMar's Undersea World), which contains photographs of numerous marine

organisms taken on expeditions by our marine biologists, from which the company extracts the compounds for R&D and innovation.

Sponsorship of the ASEBIO report, which •highlights the situation and trends in Spain's biotechnology sector.

Participation in seminars and post-graduate •courses organised by universities and in Master's programmes and conferences in the fields of biomedicine and biotechnology. These courses facilitate the exchange of technical knowledge in the pursuit of science and research, thus contributing to the future of our society.

Cooperation with medical associations: Oncology •research groups which develop independent research projects in sarcomas, ovarian cancer and other types of cancer, such as AEEC (Spanish Association Against Cancer), Spanish Pharmacological Society, ESMO Foundation (European Society for Medical Oncology), and ESGO (European Society of Gynecological Oncology).

Cooperation with patients' groups: Rare •Diseases Europe (EURORDIS), Sarcoma Patients EuroNet Association (SPAEN), Spanish Association of Sarcoma Patients (AEAS), Spanish Group of Cancer Patients (GEPAC),

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Info Sarcomes, ARCAGY-GINECO for ovarian cancer,Grupo Português de Estudos Cancro do Ovário (GPECO), Grupo Português de Estudos de Sarcomas (GPES), Associaçao dos Enfermeiros de Oncologia Português (AEOP), Associazione Oncologica San Bassiano, Associazione Contro il Tumore Ovarico (ACTO),Fondazione Campanacci, Fondazione Bruno Boerci, Associazione Internazionale di Sensibilizzazione e Prevenzione delle Patologie della Donna, Associazione Piacentina Malato Oncologico, Fondazione Nerina e Mario Mattioli Milano, Insieme per Realizzare Iniziative di Solidarietà nel campo della Prevenzione, Cura e Ricerca in Oncologia Ginecologica (IRIS), Ovarian Cancer Patients Organization (OVARCOME), das Lebenshaus, die Stiftung Eierstockkrebs, Nord-Ostdeutsche Gesellschaft für Gynäkologische Onkologie (NOGGO), Tumorzentren, Bremer Krebsgesellschaft, Gemeinsam gegen Krebs and Stiftung Leben mit Krebs, among others. Support for these associations is part of the commitment to developing antitumour medicines and, particularly, drugs for orphan diseases, i.e.

those which have long been ignored by the healthcare authorities and the pharmaceutical industry. Governments are finally recognising the importance of incentivating research into diseases of this type and the industry is using the most innovative techniques to find drugs that may cure or alleviate these rare diseases for which there is not yet an effective remedy.

Sponsorship and support for several research •entities: Ramón Domínguez Biohealth RDI Foundation, Vall d'Hebron Research Institute, 12 de Octubre Hospital's Foundation for Biomedical Research, Castile-León Institute for Health Science Studies, and the Navarra University Foundation.

Collaboration with the Bamberg Foundation, •the goal of which is to improve healthcare management through actions which strengthen R&D, expertise and innovation, by organising studies and actions in which the healthcare, pharmaceutical, biotechnology, food, healthcare technology and ICT sectors participate, as well as the public administrations, the scientific

Fernando de la Calle, a researcher from PharmaMar, giving a lecture at European Biotech Week.

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community, healthcare centres, patients' associations and healthcare organisations, aimed at improving healthcare, and the efficiency and effectiveness of the healthcare system.

PharmaMar participated in the exhibition entitled •"Molecules of life: 50 years of Biochemistry and Molecular Biology in Spain", organized by the Spanish Society for Biochemistry and Molecular Biology at the National Museum of Natural Sciences in Madrid, on display until January 2014. The exhibition, which will travel to other science museums in Spain, offers visitors an interactive look at the basic molecules that compose cells, promote health and play a role in our daily lives.

Collaboration on the event "The search for innovative •drugs: New mechanisms of action", organised by the Spanish Royal Academy of Pharmacy.

Participation by PharmaMar in European •Biotech Week, with a lecture entitled "Marine

Biodiversity & Biotechnology applied to Human Health", presented at the School of Biology and pitched at biology and pharmacology students.

Sponsorship of the BioSpain Conference in •Santiago de Compostela in September 2014, in which Zeltia Group representatives participated in leading round table discussions.

Guided visits to the laboratories and facilities for •students, with educational talks pitched to the appropriate level.Students from CESIF's Master in Biotechnology and the Fulbright programme visited PharmaMar's laboratories, and students from A Guia (Vigo) Secondary School and the University of Vigo School of Engineering visited Xylazel.

Sponsorship of, and participation and presen-•tations at numerous scientific conferences and meetings.

The Zeltia Group Chairman, José María Fernández Sousa Faro with the President of the Galician Regional Government, Alberto Núñez

Feijoo, and the former Health Secretary, Ana Mato, at BioSpain.

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Zeltia Observatory promotes innovation, dissemination and analysis of biotechnology-related information applied to healthcare.

The "Zeltia Observatory" shares Grupo Zeltia's concern with education and training in science and technology from primary school up to university level, and is focused on fostering research by developing innovative projects, encouraging talent, and promoting R&D in Spain. It aims to contribute to progress and to enhancing competitiveness in the conviction that education, knowledge and information play a fundamental role.

To further its goals, the Zeltia Observatory has entered into agreements with top-level partners such as Centro de Estudios Superiores de la Industria Farmacéutica

(CESIF) and Forética. It also created the "Innovation, Health and Communication Chair" in cooperation with King Juan Carlos University.

Zeltia Observatory participated in the following activities in 2014:

Publication of the guide "Cancer as a rare •disease".

Publication of the third edition of the IBAC •3.5 report on Biotechnology Applied to Communication.

Organization of the seminar "The use of •ICT and healthcare", together with the Innovation, Health and Communication Chair at King Juan Carlos University Faculty of Science.

Zeltia Observatory

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In addition to these activities, the Group also engages in the following activities outside the field of new drug research and development:

Collaboration with Forética: an association of •companies and professionals which aims to encourage a culture of ethical management and social responsibility, providing organisations with useful knowledge and tools to successfully implement a competitive sustainable business model.

Outsourcing of advertising materials and graphic •design to sheltered workshops for people with disabilities, such as Trébore, a Paideia Galiza Foundation initiative. It also works with the Integraia travel agency, which employs people with disabilities, where it spent €64,184 in 2014.

Blood donation in cooperation with Spain's •Red Cross: In 2014, PharmaMar organised blood donation campaigns in cooperation with Madrid's Transfusion Centre.

Participation by Sylentis employees in "Operación •Kilo", a food bank programme.

Participation by Genómica employees in the •food drive for the Hermanitas de la Caridad Nursing Home in Madrid.

Cooperation with the Family Business Association •of Madrid, an independent group which defends the interests of family businesses in the Madrid region.

Cooperation with the Association for •Management Progress, which helps companies through executive development.

Cooperation with the Spanish Broadcasters •Association and the Spanish Association for Investor Relations.

Collaboration with Círculo de Confianza, a •platform for meeting, observation and analysis which seeks to promote a better understanding of new trends and changes in economics, society and politics.

Cooperation with ASEYACOVI, Association •of Entrepreneurs, Business-owners and Self-employed persons of Colmenar Viejo.

Acquisition of Christmas cards from NGOs.•

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Paideia Galiza Foundation

Trébore is a business initiative created by the Paideia Galiza Foundation as a source of employment and a mechanism for teaching skills to disadvantaged people. Since inception, the Paideia Foundation has been concerned with vulnerable groups in general, and people with disabilities in particular, based on the firm conviction that many people with disabilities could benefit from a work situation which contributes to enhancing their skills.

Other group activities with an impact on society

PROMAXSA PROTECCIÓN DE MADERAS, S.L. (PROMAX)

Promaxsa Protección de Maderas, S.L. (Promax) is a Zeltia Group subsidiary founded in 1981 to treat, protect and restore wood, both structural and ornamental, in monuments and buildings of our national heritage.

Down through the years, these works of art have been attacked by a wide range of xylophages—wood borers, moths, termites and fungi. But for Promaxsa's action to protect and restore these monuments, many would have been lost irretrievably, causing irreparable loss to our cultural heritage. In addition to eradicating the pests, the wood needs to be strengthened to regain the mechanical properties lost over time. Promaxsa also provides civil engineering services.

Promaxsa is the only specialised company with the AITIM Quality Seal (Technical Research Association of Woodworking Industries) for restorative and preventive treatments for woodwork.

The company's main services are:

Preventive and restorative wood treatments •against xylophages, including: wood borers, brown rot fungus, and termites, in both furniture and structural timber.

Termite control using bait with chitin synthesis •inhibitors, which is non-toxic for animals and people, without requiring structural work.

Termite control using chemical barriers.•

Strengthening wooden structures with the BETA •system, involving epoxy resins and fibreglass rods, which restores lost mechanical strength.

Fireproofing and massive wood stripping.•

Treatment of works of art and furnishings through •fumigation in a controlled atmosphere with inert gases. The finish on elements to be treated (varnishes, polychromy, parchments) impedes the use of the usual insecticides.

Wood structure calculation via engineering •studies.

Below is an example of one of the unique projects carried out Promaxsa in 2014, in the Lujanes Tower, in continuation of work performed in previous years.

LUJANES TOWER - MADRID

The Lujanes Tower in Madrid stands 21 metres tall and is part of the "Lujanes House" complex, opposite Madrid's former City Hall building. It is currently the headquarters of the Royal Academy of Political and Moral Science, which occupies the bulk of the building; the ground floor houses the "Madrid Society of Friends of the Country". The building is owned by the State and is administered by the Ministry of Education.

It is of great historical value, as part of the history of Madrid and of Spain. It is the oldest civilian building in Madrid and formerly housed the King of France. It was the headquarters of the Royal Academy of Political and Moral Science from 1866. Consequently, until the Second Republic, it was the centre of thinking on governance in Spain.

The restoration of the Lujanes Tower was commissioned by the Royal Academy of Political and Moral Science. The Tower needed work to repair deterioration and remedy problems of two types: In the context of construction, there were cracks, damp, detachment of components of the building, and damage caused by improper restoration work in the past, all of which posed a danger to the building and to passers-by. Work was also required to outfit the upper part the the tower appropriately to match the amenities and finish of the lower floors.

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Promaxsa was engaged to work on the timber structure: some of the wooden corbels in the roof had subsided, dragging down the roof structure, possibly due to rot.

The goal of the Lujanes Tower restoration project was to repair the structural defects and enhance the quality of the structure and finish without altering the building's image.

To this end, it was necessary to modify the form of collecting run-off by inserting a concealed gutter in the roof slope on all four sides. This solution resulted in a very fragile tile overhang, with the consequent risk of falling tile fragments; additionally, in the event of heavy rain, the water could spill over inside the building, damaging the timber supporting the tiles. They were replaced with a conservation corridor. To complete the restoration work, it was necessary to re-tile using the old tiles as ridge tiles atop a layer of new tiles, after first restoring the timberwork, replacing deteriorated

corbels and boards with matching components. It was also necessary to apply anti-termite treatment, both on the timber surface and by injection.

The top floor of the tower had to be refurbished to house part of the Academy's extensive library and provide reading areas. To this end, the entrance was refurbished, the walls were repaired, and the wooden ceiling and the roof were repaired. The wooden ceiling was left bare, with the result that it can be observed –and repaired– more easily.

Lujanes Tower - Madrid

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10. Communities

The Zeltia Group companies are established in the municipalities of Colmenar Viejo, Tres Cantos and Coslada (Madrid) and Porriño

(Galicia). The companies contribute to the growth of their local communities by creating and maintaining stable employment, paying taxes and providing a range of services. Additionally, the companies use the necessary resources to minimise the environmental impact of their activities, as detailed in the chapter on the Environment.

We contribute to the social and economic development of the communities where we are established by paying taxes, which promote development and fund infrastructure and other programmes.

The taxes paid to the Galicia region by the Group companies (property tax, business tax, various municipal taxes, etc.) amounted to nearly 95,000 euro in 2014. Taxes paid to the Madrid region under the same headings amounted to approximately 60,000 euro.

Our companies are also a major source of employment. We employ 154 people in Galicia.Xylazel and Zelnova also create jobs in other regions: a total of 33. We employ a total of 426 people in the Madrid region.

We also maintain smooth relations and an ongoing dialogue with the governments of the municipalities where we are established, and we participate in numerous events organised to promote the cities and to provide services to the community, such as job banks, seminars on technology and R&D, lectures, meetings, etc.

PHARMAMAR RECEIVES THE MADRID HEALTHCARE SILVER PLAQUE

The Madrid regional government has recognised PharmaMar for its achievements in the region with the Madrid Healthcare Silver Plaque. The award recognises PharmaMar “for being a responsible biopharmaceutical company with a pioneering marine biotechnology programme to discover new marine-based drugs, with a highly-qualified and specialised staff from 17 countries, and for creating jobs and attracting talent to the region“.

Services provided to the local communities include:

Visits by students to the laboratories and facilities •of Pharma Mar and Xylazel, including educational talks pitched to the appropriate level.

Cooperation with ASEYACOVI, Association •of Entrepreneurs, Business-owners and Self-employed persons of Colmenar Viejo.

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11. Regulatory bodies

Regulatory bodies are authorities with responsibility for drafting and enforcing the legislation relating to the development and

authorisation of new drugs. Zeltia's relations with the regulatory bodies that govern its various activities are fluid, transparent and efficient. Relations with regulators are based on direct contacts, frequent meetings and conference calls in which open communication and the exchange of knowledge make it possible to ascertain the authorities' opinion and set out the company's viewpoint in defence of its interests As part of this constructive dialogue, scientific and technical advice is sought, doubts are resolved, information requested by regulators is presented, and regulator's proposals and questions are noted for consideration in future actions. With a view to responding to constant changes in legislation due to directives and regulations issued by the European Union and other legal provisions in countries where the group operates directly or through subsidiaries or third-party agreements, the Group companies regularly update their procedures and documentation to ensure rigorous compliance with the legislation in force.

A number of initiatives were taken to increase transparency in relations between the regulatory authorities and the industry. For example, PharmaMar cooperates with regulatory bodies to draft guidelines and regulations, which enables us to comment on issues that could be improved and makes it possible for our interests to be taken into account. Through associations such as European Federation of the Pharmaceutical Industries and Associations/European Biopharmaceutical Enterprises (EFPIA/EBE), the company participates in discussions with the European Union, the European Medicines Agency (EMA), local regulators in Europe, and with the FDA on proposals for guidelines relating to drug development and sales. This involves the revision of draft new guidelines, directives and regulations.

As a listed company, Zeltia, S.A. is subject to the supervision of the National Securities Market Commission (CNMV). The Commission is entrusted with supervising and inspecting Spain's securities markets and the activity of all market participants.

The main regulatory bodies and institutions with which the Zeltia Group has contact, either directly or via subsidiaries, clinical trial monitors, partners, or associations of which it is a member, are as follows:

Spain: Ministries (Health & Social Policy, •Environment, Economy and Competitiveness, Culture, Industry, etc.), Madrid Regional Government Department of Health, regional healthcare services (SER+MAS in Madrid, SAS in Andalucía, SALUD in Aragón, CatSalut in Cataluña, etc.), the Spanish Medicines Agency, Institutes of Public Health, Pesticide Register, regional governments, city governments, and the National Securities Market Commission (CNMV).

Europe: EMA, European Commission, the •Ministries of Health of the various Member States, National Regulatory Agencies and the Price and Reimbursement Authorities.

USA: FDA, directly and through Janssen Research •& Development, LLC, a Johnson&Johnson subsidiary.

In Japan: Ministry of Health and the Medicine •and Health Product Agency, via PharmaMar's representative in that country.

The main issues discussed with regulatory authorities are:

PharmaMar: Authorisation and performance of •clinical trials, inspections, drug development (including paediatric and orphan drugs), scientific advice, maintenance of sales authorisation for Yondelis® and price and reimbursement negotiations.

Sylentis: Drug development, including the launch •of clinical trials and trial authorisation by ethics committees and regulatory agencies in Spain, Germany and Estonia. Organization of a pre-IND meeting with the FDA to discuss plans to commence the clinical trial in the US. Inspection by the Spanish Agency for Medicines and Healthcare Products (AEMPS) to renew its authorisation as a pharmaceutical laboratory to manufacture research drugs.

Genómica: Registration and obtainment of the •CE mark for diagnostic kits.

Zelnova: Obtainment of approval to market its •products.

Xylazel: Register of Biocides and Pesticides, •cooperation with the paint industry association

ASEFAPI (Asociación Española de Fabricantes de Pinturas y Tintas de Imprimir) and its actions before the Health Ministry, and new legal provisions such as the Law on Solvent Emissions to the Atmosphere, the Biocide Law and the Hazardous Products Law.

Zeltia: Issuance and listing of securities, financial •and business disclosures, and regulatory disclosures in connection with the capital markets.

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