CSR Report2018

Contents

CSR Report 2018 2

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1. About ROVI

2. Responsible and sustainable management

3. Customers, patients and professionals

4. Human resources

5. Suppliers

6. Society

8. Environment

9. Supplementary information

7. Shareholders

1.1. Groupprofile1.2. Businessmodel1.3. Worldpresence

2.1. StatementbytheChiefExecutiveOfficer

3.1. Managementprinciples

4.1. Managementprinciples

5.1. Managementprinciples

6.1. Managementprinciples

8.1. Managementprinciples

9.1. AboutthisReport

2.2. CSRstrategyandobjectives

3.2. Balanceoftheyearandfuturechallenges

4.2. Balanceoftheyearandfuturechallenges

5.2. Balanceoftheyearandfuturechallenges

6.2. Balanceoftheyear

8.2. Consumptionandwaste

9.2. GRIContentIndex

2.3. Ourstakeholders

3.3. Innovation

4.3. Equalopportunitiesandwork-lifebalance

5.3. CSRinthesupplychain

2.4. Materialityanalysis

3.4. Quality

4.4. Attractingtalentandtraining

2.5. Ethicsandintegrity

3.5. Pharmacovigilanceandproductsafety

4.5. Tradeunioninformation4.6. Occupationalhealthandsafety

2.6. Riskmanagement

CSR Report 2018 3

1. About Rovi

CSR Report 2018

v

1.1. Group profile

ROVIisaspecialised,fully-integratedpharmaceuticalcompanyengagedintheresearch,development,tollmanu-facturingandmarketingofsmallmoleculesandbiologicalspecialties,withthreemajorpillarsofgrowth:

• Pharmaceuticalspecialties:withadiversifiedportfolioofitsownandlicensedinnovativeproducts,protectedbypatents.TheLMWHDivision,whichrepresented40%ofGroupsalesin2018,shouldbehighlighted.

• Tollmanufacturingofpre-filledsyringesandoralforms.

• Asolid,low-riskR&Dpolicy.

AllthecompaniesthatformtheROVIGroupareawarethattheiractivityisconducivetothehealthimprovementsprovidedbytheirproductsandwishtoprovidearesponsetocertainsocialdemandsinrelationtotheimpactsoftheiractivitiesonsocietyandtheenvironment.Forthisreason,ROVI’seconomicdevelopmentmustbecompatiblewithitsconductinrespectofethics,society,employment,theenvironmentandrespectforhumanrights.

[102-1,102-3,102-5]

Name: Laboratorios Farmacéuticos Rovi, S.A.

Address: JuliánCamarillo,35.28037Madrid.Spain

Telephone: 0034913756230

Website: www.rovi.es

Sharecapital: 3,364,137.90 euros

Numberofshares: 56,068,965

Parvalue. €0.06 share

Activity: Manufacturingandmarketingofpharmaceuticalproductsandtollmanufacturingservices.

Markets:Markets:TheROVIgrouphasdirectpresenceinSpain,Portugal,Germany,France,UnitedKingdom,ItalyandPolandandislistedontheBarcelona,Bilbao,ValenciaandMadridStockExchanges.

COMPANY INFORMATION

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CORPORATE STRUCTURE

(*)AsofDecember31,2018,thiscompanywasn’tincludedintheconsolidationscope.

Corporate name Address Actividad

LaboratoriosFarmacéuticosROVI,S.A. Madrid,C/JuliánCamarillo,35

PanQuímicaFarmacéutica,S.A. Madrid,C/RufinoGonzález,50

Gineladius,S.L. Madrid,C/RufinoGonzález,50

RoviContractManufacturing,S.L. Madrid,C/JuliánCamarillo,35

BemipharmaManufacturing,S.L. Madrid,C/JuliánCamarillo,35

BertexPharmaGmbH Inselstr.17.14129Berlin(Germany)

FrosstIbérica,S.A. AlcaládeHenares,AvenidaComplutense,140Madrid(Spain)

RoviNiotech,Ltda LaPaz(Bolivia)

RoviBiotechLimited DavisHouse,4thfloor,Suite425,RobertStreet.CRO1QQQCroydon(UnitedKingdom)

RoviBiotech,S.R.L. VialeAchillePapa,30.20149Milan(Italy)

RoviGmbH Rudolf-Diesel-Ring,6.83607Holzkirchen(Germany)

RoviS.A.S. RueduDrac,24.38180Seyssins(France)

RoviBiotechsp.zo.o.orRoviBiotechspółkazo.o

Warsaw,Mokotów,ul.Rzymowskiego53,02-697Warsaw,Poland

Manufacturing, marketing and sale of pharmaceutical, healthcare and medicinal products.

Import, export, purchase, sale, distribution and marketing of articles related to comprehensive women’s healthcare.

Development, distribution and trading of pharmaceutical products related to microparticle technology.

A

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B

A

A

A

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[102-4,102-45]

Laboratorios Farmacéuticos

Rovi, S.A.

FrosstIbérica,

S.A.

Bemipharma Manufacturing,

S.L.

Pan Química Farmacéutica,

S.A.

Gineladius,S.L.

BertexPharmaGmbH

RoviBiotechSp.z.o.o

RoviBiotechLimited

RoviBiotech,

S.R.L.

Rovi Contract Manufacturing,

S.L.

100% 100% 100%

100%100% 100% 100% 100%

100%

100%

100%

Rovi GmbH

Rovi, S.A.S.

99%

Rovi, S.A.S.

1%

CSR Report 2018 6

SHAREHOLDERS

NorbelInversiones,

S.L.

62.102% 4.821%Alantra AssetManagement, SGIIC, S.A.

4.787%JO Hambro CapitalManagement Limited

3.390%T. Rowe PriceInternationalFunds, Inc.

Free float14.727%

Wellington ManagementGroup, LLP

5.116%

5.057%Indumenta Pueri, S.L.

CSR Report 2018 7

HISTORY AND MAJOR MILESTONES

1946

2009

1981

2012

1998

2013

2002

2014

2003

2015

2006

2016

2017

2019

2018

Foundationofthecompany

Startofresearchintolow-molecular-weightheparins

InternationalizationofROVIfollowingapprovalofBemiparinoutsideSpain

ConstructionoftheGranadaR&D&icentreandplant

RegistrationprocessforanenoxaparinbiosimilarwiththeEMAandFDA

FDAcertificationoftheinjectablesplant

BeginningofPhaseIIIclinicaltrialofDoria®(RisperidonaISM®)

LaunchofanenoxaparinbiosimilarinSpain,France,UnitedKingdom,Italy,Austria,EstoniaandLatviaunderthetrademark“EnoxaparinaRovi”

AgreementwithNovartisforthemarketingofNeparvis®

AcquisitionofthenewinjectablesplantinSanSebastiándeLosReyes,withwhichitreinforceditstollmanufacturingcapacityandsecuredthegrowthofBemiparinandthepotentialenoxaparinbiosimilar

LaunchofBemiparinontheSpanishmarketandstart-upofoperationsin

Portugal

Increasedinternationalcoverageto59countries

AgreementstomarketproductsfromNovartisandMedice

StrategicagreementwithMerckSharp&Dohme(MSD)

SuccessfulcompletionofPRISMA-2studyoftheclinicaldevelopmentofthenewlong-

actinginjectableRisperidonaISM®

CommencementofthemarketingofanenoxaparinbiosimilarinGermany

InformationontheprincipalresultsofthePhase3studyofDoriain

patientswithschizophrenia,whichwerefavourable

CSR Report 2018 8

TRADEMARKS, SERVICES AND PRODUCTS [102-2]

ROVIconcentratesitsactivityonninemaintherapeuticareas:

• Cardiovascular

• Osteoarticular/Women’shealth

• Anaesthesia/Pain

• Diagnosticimagingcontrastingagents

• Centralnervoussystem

• Urology

• Endocrinology

• Respiratorysystem

• Primaryhealthcare

ROVI’sgrowthenginesareBemiparin,thedistributionlicenceagreements(Neparvis®,Volutsa®,Orvatez®andUlunar®),theenoxaparinbiosimilar,theexistingpharmaceuticalspecialtyproductportfolio,newproductdistribu-tionlicencesandnewcustomersinthetollmanufacturingarea

PHARMACEUTICAL SPECIALTIES

ROVIhasadiversifiedportfoliocomprisingmorethanfortyofitsownandlicensedproducts.Thisportfoliohasadefensiveprofile,sinceithasbeenpracticallyunaffectedbyreferencepricinginSpain.

ROVIaspirestobecomeaworldleaderinlow-molecular-weightheparins(LMWHs).Toachievethis,ithastwoproductsfromitsownresearch:Hibor®andEnoxaparina.Thelow-molecular-weightheparindivisionaccountsfor40%oftotalgroupsales.

Hibor®

Hibor(Bemiparin)isalow-molecular-weightheparin(fast-actinganticoagulant)usedtopreventandtreatvenousthromboembolicdisease(VTD)inbothsurgicalandmedicalpatents,andfortheacutelong-termtreatmentofpatientswhohavesufferedVTD.VTDisaseriousandpotentiallyfatalprocess,themaincharacteristicofwhichis

CSR Report 2018 9

theformationofafibrinclot,thrombosis,insidetheveinsofthedeepveinsystem,withtheconsequencesthatmayresultfromtheevolutionofthevenousthrombus,whichmaygrow,progressandfragment.Intheeventoffragmentation,someofthefragmentsmayreachthelungandcausepulmonaryembolism.InSpainalone,itisestimatedthatcloseto65,000casesofdeepveinthrombosisoccureveryyear,aswellasafurther25,000casesofpulmonaryembolism(dataextrapolatedfromThrombHaemost2000,2001and2005).

Overrecentyears,Bemiparinhasbecomeoneofthemaintreatmentsforthisdiseaseworldwide,havingexpandeditspresenceto56countriesastheresultofastrategicalliancenetwork.Currently,BemiparinisROVI’sprincipalproductandaccountsfor32%ofthegroup’soperatingrevenue.

EnoxaparinaROVI

ROVIbeganmarketingitsenoxaparinbiosimilar(low-molecular-weightheparin)inSpainunderthetrademark“EnoxaparinROVI”.Withthislaunch,ROVIexpandeditspresenceinEurope,whichhadcommencedin2017withthemarketingoftheproductinGermanyandbeenextendedtotheUnitedKingdomandItalyinthefirsthalfof2018andtoAustria,Estonia,FranceandLatviainthesecondhalf,inadditiontoSpain.Furthermore,alsoin2018,ROVIsignedanagreementwithBiogaranSAS,theleadingFrenchpharmaceuticalcompanyingenericsandbiosimilarsandasubsidiaryofLaboratoriosServier,tomarketitsenoxaparinbiosimilarinFranceonasemi-exclusivebasis.

ROVI’senoxaparinsodiumbiosimilarisananticoagulantthatbelongstothelow-molecular-weightheparingroup.Itisusedtotreatandpreventdeepveinthrombosisandpulmonaryembolism.

Asof31December,2018,ROVIhadobtainedauthorisationtomarketitsenoxaparinbiosimilarinalltheEuropeancountriesexceptGreeceandLuxembourg.Theenoxaparinmarketismorethan900millioninEurope(accordingtoestimatesbasedonthe2018salesreportedbySanofi-Aventis),withamarketshareof75%concentratedinGermany,France,Spain,UnitedKingdom,PortugalandPoland(QuintilesIMS-2015figures),countriesinwhichROVIhopestomarketitsproductdirectlythroughitssubsidiaries.OutsideEurope,in2018,ROVIsignedanagreementwithHikmaPharmaceuticalsPLC,alistedmultinationalpharmaceuticalgroup,fortheexclusivedistributionandmarketingofitsenoxaparinbiosimilarin17MENAI(MiddleEastandNorthAfrica)countries:SaudiArabia,Jordan,Algeria,Egypt,Tunisia,Sudan,Syria,Yemen,Iraq,Oman,UnitedArabEmirates,Kuwait,Qatar,Bahrain,Libya,PalestineandLebanon.Furthermore,ROVIsignedanagreementwithSandoz,adivisionofNovartisAGandoneoftheworldleadersingenericandbiosimilarmedicines,forthedistributionandmarketingofitsenoxaparinbiosimilarin14countries/regions(Australia,NewZealand,Philippines,HongKong,Singapore,Vietnam,Malaysia,Canada,SouthAfrica,Brazil,Colombia,Argentina,MexicoandCentralAmerica).Underthisagreement,ROVIgrantsSandozanexclusivelicencetomarkettheproductinthreeofthesecountries,HongKong,SingaporeandVietnam.

ROVImanufacturesandpackagesitsenoxaparinbiosimilarinSpainthankstoitsfourproductionplants,inwhichitinvested17,2millioneurosbetween2014and2016inordertoincreasecapacityandprepareforthisnewproductionmilestone.Enoxaparinsalestotalled30.2millioneurosin2018.

Withtheenoxaparinbiosimilar,ROVIaspirestobecomeoneofthemainEuropean-and,inthemedium-andlong-term,worldplayersina900-million-eurosmarketwherethereareonlytwootherbiosimilars,likewiseincreasingitspresenceinemergingmarketswithapotentialof500millioneuros,duetothecompetitiveedgeprovidedbytheverticalintegrationofprocessesinthegroup.

ThefollowingaretheproductsmarketedunderlicensingagreementsthatmakethegreatestcontributiontotheGroup’sEBITDA:

CSR Report 2018 10

Neparvis®

ROVIbegantomarketNeparvis®(sacubitril/valsartan)ofNovartisinDecember2016.Thisproductisindicatedinadultpatientsfortreatmentofsymptomaticchronicheartfailurewithreducedejection(theproportionofbloodleavingtheheart)fraction.

Hirobriz®Breezhaler®andUlunar®Breezhaler®

Inthelastquarterof2014,ROVIcommencedthemarketingofBreezhaler(indacterolmaleate),andUlumarBreezhaler(indacaterolmaleateandglycopyrroniumbromide)inSpain.Boththeseactivesubstancesarelong-actingbronchodi-latorsindicatedforthemaintenancetreatmentofChronicObstructivePulmonaryDiseases(COPD)inadultpatientsandadministeredbyinhalationsthroughtheBreezhalerdevice.ROVImarketsthetwoproductsunderlicencefromNovartis

Volutsa®

ROVIbegantomarketVolutsa(solifenacinsuccinateandtamsulosinhydrochloride),anAstellasPharmaproduct,in2015.Itisindicatedforthetreatmentofmoderatetoseverestoragesystemssymptoms(urgency,increasedmictu-ritionfrequency)andvoidingsymptomsassociatedwithbenignprostatichyperplasia(BPH)inmenwhoarenotrespondingadequatelytomonotherapytreatment.

Vytorin®,Orvatez®andAbsorcol®

Vytorin®(ezetimibeandsimvastatin),Orvatez®(ezetimibeyatorvastatin)andAbsorcol®(ezetimibe)areproductsusedasadjunctivetherapytodietinpatientswithhypercholesterolemiaandarethefirstofthefiveMSDmarketinglicencesgrantedtoROVI.Inthesecondquarterof2018,thepatentfortheactivesubstanceezetimibeexpiredand,therefore,thepriceofAbsorcol®dropped.Likewise,genericmedicinesformulatedwithezetimibeandsimvastatinhaverecentlystartedtobemarketedand,therefore,thepriceofVytorin®hasbeenloweredinordertomaintainitscompetitivity.

Medikinet®andMedicebran®

Medikinet(methylphenidatehydrochloridewithmodifiedrelease)andMedicebran(methylphenidatehydrochloridewithimmediaterelease)areprescriptionproductsindicatedfortreatmentofADHD(AttentionDeficitHyperactivityDisorder)inchildrenandadolescents.BothproductsarefromthecompanyMediceandROVIhasbeendistributingthemonanexclusivebasisinSpainsinceDecember2013.

Inthefirstquarterof2019,ROVIannouncedtheacquisitionoftwoproducts,Falithrom®andPolaramine®.Thesepurchasesarewithintheframeworkofitsoperatingleveragestrategyforitsinternationalsubsidiaries.

Falithrom®

InJanuary2019,ROVIannouncedthepurchaseofFalithrom®,whichhadbelongedtoHexalAG,acompanybelongingtotheSandozDivisionofNovartis,inordertodistributeitdirectlyinGermany.Underthisagreement,Falithrom®willbemarketeddirectlyinGermanybyROVI,oncetheadministrativeprocedurestoauthorisethetransferofthemarketingauthorisationhavebeencompletedwiththeGermanFederalInstituteofMedicinesandMedicalDevices(BfArM).

CSR Report 2018 11

Thisproductisusedforthepreventionandtreatmentofthromboembolicdisease,includingvenousthrombosisandpulmonaryembolism,aswellasthepreventionofischemicstrokesinpatientswithatrialfibrillation.

Polaramine®andPolaracremTM

ROVIhasreachedanagreementwithasubsidiaryofMerckSharpandDohme(“MSD”)wherebyitacquirescertainrightsforMSD’sdexchlorpheniraminemaleateproductline,allowingittodistributethisproductdirectlyinSpaininitsdifferentpharmaceuticalforms(tablets,syrupandampoules,marketedunderthetrademarkPOLARAMINE®,andcream,marketedunderthetrademarkPOLARACREM™)andinFranceinitsinjectableform(ampoules).

Thisproductlinebelongsagroupofmedicinesknownasantihistamines.Theyareindicatedforthesymptomatictreatmentofseasonalandperennialallergicrhinitis,vasomotorrhinitis,allergicconjunctivitis,allergiccutaneousmanifestationsofurticariaorangioedema;andreactionstobloodorplasma.Itisalsoindicated,togetherwithadre-nalinorotherappropriatemeasures,fortreatmentofanaphylacticreactionsaftertheacutemanifestationshavebeencontrolled.Theseproductsoftenrelievecutaneousmanifestationssuchasallergiceczema,atopicandcontactdermatitis,insectbites,dermographismsanddrugreactions.

Diagnosticimagingcontrastagentsandotherhospitalproducts

ROVIisoneofthemarketleadersinthemarketingofcontrastagents,hospitalproductsforimagingdiagnosis(computedtomography,magneticresonanceimaging,ultrasoundscan,etc.).Thisarea,whichaccountsforapproxi-mately10%ofthecompany’srevenue,comprisesabroadproductportfolio,includingthosemarketedunderlicencefromBracco:Iomeron®andIopamiro®(forcomputedtomographyandintervention),Multihance®yProhance®(formagneticresonanceimaging),Sonovue®(forultrasounds),andBraccoInjeenering:EmpowerCTA+®,EmpowerMR®andCTExprès(contrastinjectionsystemsandcompatibledisposablematerial).

Thehospitalproductportfolioiscompletedbyhealthcareproductsforcareandmaintenanceofintravenouscathe-ters(Fibrilin®andFibrilinSalino®).

TOLL MANUFACTURING

ROVIhasbeensuccessfulinstrategicallypositioningitselftotakeadvantageofthetrendamongpharmaceuticalcompaniestooutsourcetheirmanufacturingprocesses.Thisallowsthecompanytomakeuseofthehighmanu-facturingcapacityavailableatitsfacilitiesbyprovidingthewholerangeofmanufacturingservicesforinjectables,suppositoriesandoralsolidforms.

Thecompany,throughitsthreeproductionplants,twoofwhichareusedforinjectables(ROVIContractManufacturinginMadridandtheSanSebastiándeLosReyesplant),whiletheotherspecializesinoralforms(FrosstIbérica),providesmanufacturingservicestoothercompaniesforawiderangeofpharmaceuticalforms,includingpre-filledsyringes,vials,suppositories,tablets,hardcapsulesandsachets.

CSR Report 2018 12

ROVI’sprofileisuniqueinthismarket,duetotheunificationofalltheserviceswithinthesamecompany,fromthedevelopmentofaprojectuntilthefinalproductrelease,includingpreliminaryclinicaltrials,stabilitystudiesandphysical,chemicalandmicrobiologicalanalyses,withtheresultingsavingoftimeandmoneyforthecustomers.Thus,itprovidesapersonalisedservicedependingontheneedsofeachcustomer.

ThecontractssignedwiththecustomersforwhomROVImanufacturesusuallyhaveanaveragetermofbetween3and5years,whichhelpstogenerateaconsiderable,stableflowofrevenue.Furthermore,thelongregulatoryprocessthatapharmaceuticalcompanyhastoundergotochangeitsmanufacturermakesthetollmanufacturingbusinessmodelgenerate“lifelongcustomers”,aslongastheserviceprovidedisoptimalinmeetingthecustomers’needs.

Contractmanufacturingisdividedinto:

Injectables

ROVIiscurrentlyoneoftheleadingpre-filledsyringemanufacturersinEuropeintermsofthenumberofunitsmanufactured(filled)peryear.Withatotalannualproductioncapacityof270millionunits,thereareveryfewcompe-titorsinthismarket,sinceentrybarriersarehigh,giventhebiologicalnatureofthemedicinesmanufacturedandtheasepticconditions(handlingoftheproductinsterile,microbiologically-controlledrooms)inwhichthepre-filledsyringesarefilled.

ROVIhasaplantspecialisedininthefillingandpackagingofparenteralsolutionsinpre-filledSCFsyringesoffrom0.5mlto20ml(filledfrom0.2mlto20ml)andinvialsoffrom2mlto10ml.Thesesyringesandvialsarefilledinasepticconditionsinsterilerueandthereisalsoterminalsterilisationiftheproductsorequires.Additionally,thereisthepossibilityofplacingsafetydevicesinthesyringes.Theannualcapacityforvialsis60million,whileitis150millionforsuppositories.TheplanthasbeenapprovedbytheEuropeanandUnitedStatesregulators.IthasalsobeenapprovedbytheauthoritiesofKorea,BrazilandtheGulfStatesandholdsthecertificationsISO9001,ISO14001andOSHAS.

Overrecentyears,ROVIhasincreaseditsproductioncapacitysubsequenttoagreementssuchastheonesignedwithCrucellSpainin2015,whichledtotheacquisitionoftheassetsoftheinjectablesmanufacturingplantlocatedinSanSebastiándelosReyes,withthebasicpurposeofallowingtheROVIGroup’sproductionlinesforinjectables(otherthanthosethatCrucellhadbeenmanufacturing)tobeexpandedinthefuture.In2016,itwasapprovedbytheEuropeanhealthauthoritiesandbegantooperateatfullcapacityin2017and2018.

Oralsolidforms

ROVIhasaplantforsolidformsthathasalongtraditioninthemanufactureofpharmaceuticalproductsandusesthemostadvancedtechnologyforthemanufactureoforalforms(tablets,coatedtablets,hardcapsulesandsachets).Theplant,with83,000squaremetres,hasaglobalannualcapacityof3,000milliontablets,300millionhardcapsulesand30millionsachets,usingdifferentproductionlines.Furthermoreithasstoragecapacityfor9,000pallets.

Inordertosupplyallmarkets,thisplantisapprovedbytheEuropeanandUnitedStatesauthorities.IthasalsobeenapprovedbytheJapanese,Mexican,Brazilian,KenyanandBelarusianauthoritiesandthoseoftheGulfStates.

CSR Report 2018 13

1.2. Business model

ROVIisaleadingpharmaceuticalcompanyengagedintheresearch,development,manufacturingandmarketingofsmallmoleculesandbiologicalspecialties.Ithasthreeprincipalpillarsofgrowth:

• Pharmaceuticalspecialties:diversifiedportfolioofitsownproductswithlong-termpatents.ROVIaspirestobecomeoneoftheworldleadersinlow-molecular-weightheparins(LMWHs)asaresultoftheextensiveexperienceoftheLMWHDivision.

• Tollmanufacturing:specialistinpre-filledsyringesolutionsandoralforms

• Sound,low-riskR&Dpolicy

ROVI’snature,principlesandcommitmenttotheactivityitisengagedinhasalloweditobtainaseriesofcompe-titiveedges,positioningitasoneofthemainleadersinitsmarketnicheinasectorwhich,moreover,hashighentrybarriers.

Sinceitwasfoundedin1946,ROVIhasbeenengagedmainlyinthestudyanddevelopmentofdrugsbasedonheparin,afast-actinganticoagulant,and,since1981,ofitsfractionedderivatives,low-molecular-weightheparins(LMWHs).AsaresultofROVI’s70years’experience,itsmainproduct,Bemiparin,haspositioneditselfasoneofthe

(millionsofeuros) 2018 2017 2016 2015

Totalrevenue 304.8 277.4 266.7 247.0

EBITDA 29.5 29.9 39.4 31.8

Netfinancialdebt -62.8 1.1 -9.0 12.1

Employees 1,224 1,191 1,150 1,098

KEY FIGURES [102-7]

CSR Report 2018 14

principaltreatmentsforvenousthromboembolicdiseaseworldwide.Thelaunchoftheenoxaparinbiosimilarin2017representedthelogicalevolutionofROVI’sexperienceinthelow-molecular-weightheparinfield.

Diversifiedportfolioprotectedbypatents

Thecompanyhasover40productsonitsportfolio(includingbothitsownandlicensedproducts)forwhichthereisgrowingdemandandwhicharevirtuallyunaffectedbythereferencepricingsysteminSpain.Theyaregroupedintoninetherapeuticareas,witharoundthirtyproductseitherfortreatingdifferentcomplaintsorforvariousdiagnosticssystems:

• Cardiovascular

• Osteoarticular(women’shealthcare)

• Respiratory

• Anaesthesia–painrelief

• Diagnosticimagingcontrastagents

• Centralnervoussystem

• Urology

• Endocrinology

• Primaryhealthcare

ROVIhaslaunched14newproductssinceOctober2005.

Infrastructurewithoperatingadvantages

ROVIisoneofthemaincompaniesinthetollmanufacturingbusinessinthesectorandamongtheworldleadersinpre-filledsyringeproduction.IthasoneofthelargestEuropeanplantsformanufacturingoralsolidforms,exportingtomorethan40countries.

ItsproductionplantsinMadridandAlcaládeHenares,togetherwiththeSanSebastiándelosReyesplant,haveallowedaconstantincreaseininjectablesproductionlinesandareapprovedbytheEuropeanandUnitedStatesregulators–theEuropeanMedicinesAgency(EMA)andtheFoodandDrugAdministration(FDA),respectively–.

Low-riskinnovation

ROVIoperateswithalow-riskstrategy,concentratingondiseaseswithextensivemedicalrequirements.Furthermore,thecompanyallocatesalargepartofitsrevenuetoresearch,inordertoremaininthevanguardintermsofbothproductsandmanufacturinganddevelopmentsystems.

CSR Report 2018 15

1.3. World presence

[102-6]

LaboratoriosFarmacéuticosRovi,S.A.currentlyhasitsregisteredofficeinMadrid(CalleJuliánCamarillo,35).Inaddi-tiontotheseoffices,in2017,ROVIopenednewofficesinPozuelodeAlarcón,Madrid(CalleJoséIsbert,2),wherethemanagementteam,themarketingandsalesareas,andothercentralgroupservicesarelocated.

ROVIoperatesdirectlyinthefollowingcountries:

• Spain,wherealargepartofitsmarketingoperationstakeplace,aswellasallitsmanufacturingservicesandResearch&Developmentactivities.

• France

• Portugal

• Italy

• Germany

• UnitedKingdom

• Poland*

Inthelastsixofthesecountries,ROVIhascorporatestructuresthroughwhichitcarriesonpharmaceuticalproductmarketingactivitiesdirectly.InthecasesoftheFrenchandPolishsubsidiaries,themarketingoftheproductshadnotcommencedasof31December,2018.

Additionally,throughstrategicallianceswithinternationalpartners,attheendof2018,ROVIwasdistributingitsmainproduct,Bemiparin,inmorethan50countriesallovertheworldandtheenoxaparinbiosimilarinGermany,Austria,Spain,Estonia,France,Italy,LatviaandtheUnitedKingdom.Likewise,ROVIhasthreetollmanufacturingplantsandexportstoover40countries.

(*)AsofDecember31,2018,thiscompanywasn’tincludedintheconsolidationscope.

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ROVI Group

55 countries in which the product has been launched throughstrategic alliances

+60 countries in which registration has been approved

10 countries in which registration is pending approval

14 countries in which registration process is in progress

Latin America Europe Africa

MiddleEast

Currently marketed in -Argentina-Belize-CostaRica-DominicanRepublic-ElSalvador-Guatemala-Honduras-Nicaragua-Panama-Venezuela-Chile-Bolivia-Mexico-Brazil

Registration approved -Ecuador-Peru-Colombia

Currently marketed in -Albania-Austria-Belarus-Bulgaria-CzechRepublic-Georgia-Greece-Estonia-Hungary-Ireland-Italy-Latvia-Lithuania-Moldavia-Poland-Romania-Russia-Slovakia-Slovenia-Turkey-UnitedKingdom-Ukraine

Registration approved-Portugal

Pending approval-Bosnia&Herzegovina-Kazakhstan-Switzerland-Azerbaijan

Registration process -Armenia-Kyrgyzstan-Croatia-Serbia&Montenegro-Tajikistan-Turkmenistan-Uzbekistan

Currently marketed in -Libya-Algeria-Morocco

Registration approved-Sudan-SouthAfrica

Pending approval-Tunisia-Egypt

Registration process -Botswana-Lesotho-Namibia-Swaziland

Currently marketed in-Jordan-Kuwait-Yemen-Bahrain-Syria-Oman-Iraq-SaudiArabia-Lebanon-Qatar-UAE

Pending approval-Iran

Registration process -Israel

Currently marketed in -HongKong-SouthKorea-India-China-Philippines

Registration approved-Pakistan-Thailand

Pending approval-Indonesia-Malaysia-Vietnam

Registration process -Taiwan-Singapore

GLOBAL PRESENCE OF BEMIPARIN

Asia

CSR Report 2018 17

2. Responsibleandsustainablemanagement

CSR Report 2018

2.1. Statementbythe ChiefExecutiveOfficer

[102-14]

ResponsibilityisoneofthedistinguishingfeaturesofROVI’sday-to-dayactivity.Ourcompanyhasaccumulateddecadesofexperienceworkinginanareathatisasessentialtosocietyashealthcareand,asacompany,weareclearthatourgoalistohelptoimprovepatienthealthwithtop-qualityproducts,manufacturedtothehigheststandardsofexcellenceandwiththegreatestrespectfortheenvironment.

Corporatesocialresponsibility(CSR)isacrucialpartofROVI’sidentity.Itisincorporatedintothecompany’sbusinessstrategytoensureitslong-termsustainabilityandreinforcetheconfidenceofitsstakeholders.CSRformspartofitsgovernance,managementandday-to-dayactivity.

CSRstrategydecisionsaremadebytheManagementCommitteeand,finally,theBoardofDirectors.Tochannelthem,ROVIhasputinplaceactionpoliciesthatexpressitscommitmenttobusinessethicsandprovideguidancefortheBoardofDirectorsandothergroupbodiesintheirrelationswithstakeholders.

Inthisarea,in2018,manyofROVI’seffortswereaimedatreinforcingitscommitmenttoethicalmanagementandtransparency.AnexampleofthisistheupdatingoftheCodeofEthics,theAntibriberyandAnticorruptionPolicyandtheCodeofEthicsforSuppliers,inordertofurnishtheorganisationwithaframeworkforactionthatensuresthatourday-to-dayactivityiscarriedonethically,honestly,morallyandlegally,inaccordancewiththeprinciplesandvaluesthatdefineROVIanditssubsidiaries.

Inthecourseofitsactivityasapharmaceuticalcompany,ROVIdoesnotonlyprovidetop-qualitypharmaceuticalproducts,butalsosupportstheresearchandsharingofscientificknowledgethatallowstheknowledgeofcertainpathologiestoprogress.AllthisiscarriedoutfromacompanyofSpanishoriginthathasdecidedtomaintainandreinforceitsactivityinSpainwhile,atthesametime,expandingitsinternationalpresencewithsubsidiariesinthemainmarketsoftheEuropeanenvironment.

Weareconvincedthatonlycompaniescommittedtosustainabledevelopmenthaveafuture.Thosethatbetonconstantcreationofhigh-quality,stableemployment;thattakeactiontoreducetheenvironmentalimpactoftheiractivitytoaminimum;thatmakeinvestmentinresearchandknowledge-sharingapriority;andthatensurethattheirday-to-dayissubjecttoethicalbusinesscriteria.That,atleast,isROVI’svisionforforthcomingyears,soastokeepgrowingasaresponsiblecompany,inlinewiththeobjectivesoftheUnitedNationsGlobalCompact.

Juan López-Belmonte Encina CEOofLaboratoriosFarmacéuticosROVI

CSR Report 2018 19

2.2. CSR Strategyandobjectives

[102-11,102-16,103-1,103-2,103-3]

ROVI’smission,visionandvaluesaretheguidelinesthatgovernallthedecisionsmadeinrelationtobothbusinessdevelopmentandtheprofessionalperformanceofitsworkers,guidingthegroup’sbusinessstrategy:

Mission“Weworkforthewell-beingofsocietyandtoimprovethequalityoflifeofpatientsandtheattentiontheyreceive,promotinghumanhealththroughresearching,manufacturing,marketinganddistributingmedicinesandotherhealthcareproducts”.

Vision“Weaspiretoberecognizedasabenchmarkforourworkintheresearchanddevelopmentofnewproductsandtobeperceivedasatrustedsupplierduetoourcommitmenttothemanufacture,marketinganddistributionofmedicinesandhealthcareproducts”.

Values

Honesty,integrityandethics Team,co-operation,involvement Efficiency

Consistency Self-criticism Equity Justice Honesty Legality

Commitment Co-operationEmpathyCo-responsibilitySolidarity

JusticeObjectivityBalanceDeterminationProfitability

Patientbenefits (Customersatisfaction) Respect Innovation

CommitmentInvolvementEmpathyProximityProactiveness

ConsiderationTruthfulnessHonesty

ProactivenessInvolvementCreativity

CSR Report 2018 20

AllthesefactorsformthebackboneofROVI’sday-to-daymanagementthroughthefollowingprinciplesforaction:

[102-12]

Legality Compliancewithcurrent legal regulationsintheplaceswhereROVIcompaniesarelocated.

HumanrightsSupporttheprinciplesoftheUnited Nations Global Compactbyadoptingandtransmittingthem,aswellasthoseofotherinternationalinstruments,especiallyintheareasofhumanrights,workplacepractices,theenvironmentandanti-corruption.

EthicsFollowtheguidelinesoftheCode of Ethics,whichincludesthecompany’scommitmenttotheprinciplesofbusinessethicsandtransparencyinallitsspheresofactionandregulatesresponsibleconductonthepartofallgroupprofessionalsinthecourseoftheirwork.

HonestyPromotefreemarketpractices,rejecting any kind of illegal or fraudulent practice andimplementingeffectivemechanismstoprevent,monitorandpenaliseirregularities.

Communication

Foment communication and dialogue channels,aswellaspromotingthegroup’srelationswithshareholders,investors,employees,customers,suppliersand,ingeneral,allitsstakeholders.Thus,thegroupcontributestoharmonisingbusinessvaluesandsocialexpectationsbyadapting,asfaraspossible,thegroup’spoliciesandstrategiestotheinterests,concernsandneedsofstakeholders,usingallthecommunicationtoolsavailable,includingdirectcontactandthegroup’scorporatewebsite.

Environment

Conservation and promotion of the environment. ROVIcarriesonitsactivitywiththefirmcommitmentofcontributingtosustainabilityfromanenvironmentalstandpoint.Thiscommitmentmaterializesbyintegratingtheenvironmentintothedifferentbusinessareas,conservingbiodiversity,preventingpollution,managingresourcesefficientlyandadaptingtoandmitigatingclimatechange,inaccordancewiththegroup’sEnvironmentalPolicy.

Contribution to society

ThetaxesROVIpaysintheplaceswhereitoperatesarethemaincontributionthatgroupcompaniesmaketosustainingpublicfundsand,therefore,areoneofitscontributions to society.

Transparency

Commitment to transparency asawaytotransmitconfidenceandcredibilityamongstakeholders.Thiswillentail:

a. Providingstakeholderswithrelevantandaccurateinformation,complyingwithanylegalpublicinformationrequirementsthatmayexist.

b.Preparingandpublishingfinancialandnon-financialinformation,using,inthelattercase,aninternationally-acceptedmethodology,andsubmittingtheinformationtotheappropriateinternalandexternalreviewprocessesthatguaranteethereliabilityoftheinformationandencouragecontinuingimprovement.

CSR Report 2018 21

Onthebasisoftheseprinciples,thefactthatROVI’seconomicdevelopmentmustbecompatiblewithethicalconduct-socially,inthelabourarea,environmentallyandintermsofrespectforhumanrights-isaccepted.Theworkcarriedouttotransmit,knowandimplementthesevalues,whicharelikewiseusedtoguidetheactionsanddecisionsoftheBoardofDirectorsandotherROVIbodiesintheirrelationswithstakeholders,expressesthegroup’scommitmenttobusinessethicsandsustainability.

Inthisrespect,thefollowingsupporttoolshavebeendeveloped:

1. CorporateSocialResponsibilityPolicy

2. IntegratedManagementPolicy(EnvironmentandOccupationalHealthandSafety)

3. CodeofEthics

4. AnnualSocialCorporateResponsibilityReport

ApplyingthesetoolsandprinciplesinROVI’sday-to-dayallowsaconstantdirectionandstrategytobemaintainedinordertoattainthefollowingsustainabilitygoals:

TheincorporationofCorporateSocialResponsibilityintothemanagementoftheROVIgrouptakesplacethroughtheGeneralCSRPolicy,whichexplainsthattheManagementCommitteeisresponsiblefordesigning,evalua-tingandmakinggeneralreviewsoftheCorporateSocialResponsibilityPolicy.OverseeingandensuringthatManagementmeetthegoalsthathavebeenfixedandrespectthecompany’ssocialinterestobjectiveisthetaskoftheBoardofDirectors.

In2017,apermanentinternalbody,calledtheSocialResponsibilityCommittee/SocialPerformanceTeam,wascreated,withthecapacitytoinform,provideadviceandmakeproposals.Withinitssphereofaction,asone

GOALS

Favourattainmentofthegroup’sstrategicobjectives.

Improvethegroup’scompetitivenessbyimplementingmanagementpracticesbasedoninnovation,equalopportunities,productivity,profitabilityandsustainability.

Managerisksandopportunitiesderivedfromthechangingenvironmentresponsibly,maximizingthepositiveimpactsofthegroup’sactivitiesinthedifferentterritorieswhereitoperatesandminimizinganyadverseimpactsasfaraspossible.

Promoteacultureofethicalconductandincreasebusinesstransparency,inordertogeneratecredibilityandconfidenceamongstakeholders,includingsocietyasawhole.

Promotetrustrelationshipsandvaluecreationforallstakeholders,providingallofthemwithabalancedandintegratingresponse.

CSR Report 2018 22

ofthedutiesassignedtoit,thisCommitteereportstotheManagementCommitteeandtheNominationandRemunerationCommissiononthedegreeofprogressinimplementingtheCSRPolicyandstrategy.

Atthesametime,thedutiesoftheAuditCommitteeincludereviewingthecorporatesocialresponsibilitypolicy,ensuringthatitisorientatedtowardsvaluecreation,andmonitoringCSRstrategiesandpolicies,assessingthedegreeofimplementationthereof.ThisCommitteealsooverseesandevaluatestheprocessesconcerningrela-tionswiththedifferentstakeholdergroups.

Additionally,theROVIgrouphasreinforcedtheCSRareabyincludingaspecialisedprofessional,whosefunctionsincludesolelycommunicationandCSR,reportingtotheHumanResourcesManagerandtheCommunication,CSRandInstitutionalRelationsManager.

[102-40,102-42,102-43]

InROVI’sbusinessstrategy,corporatesocialresponsibility(CSR)iscrucialtoensurethecompany’slong-termsustai-nabilityandreinforcetheconfidenceofthedifferentgroupsofstakeholderstowhichROVIisrelated.ROVIconsidersCSRtobeacommitmentacquiredwithsociety,giventheimportanceofitsworkandproductsinimprovingpeople’shealthandqualityoflife.Therefore,overrecentyears,ithascarriedonintensiveactivitytosupportresearchandfomentthepreventionandknowledgeofcertaindiseases.

Thecompanyhasidentifiedsixgroupsthatcontributedirectlyorindirectlytogoodbusinessresults.Thegoalsithopestoreachinitsrelationshipwitheachoneofthemare:

Employees Togenerateenthusiasmandprovidetrainingandmotivation. Suppliers ToallowthemtofindinROVIapartnerformutualbenefit. Shareholders Tocreatemorevalueinawaythatcanbesustainedinthelongterm. Customers/Patients/Professionals Toofferproductsbasedonqualityandexperience.. Societyandenvironment Tomakeanactivecontributiontosocialprogressandenvironmentalprotection. Publicauthorities Tocreatechannelsforcooperationwiththepublicauthorities.

2.3. Our stakeholders

CSR Report 2018 23

Meansofcommunication withstakeholdersandobtainingfeedbackfromthem

Thecompanystrivestomaintainconstantandfluiddialoguetodetectandrespondtostakeholderinterests,thuscontributingtothebusiness’slong-termviability.Todothis,ithasanumberofcommunicationandconsultationchannelsinplacetofindouttheneedsofitsstakeholdersandrespondtotheirexpectationsandneeds:

Workers

• Suggestionboxes:thesemaybefoundthroughoutthefacilitiesandareintendedenableemployeestosubmitanonymouscommunicationsconcerningimprovements.

• Confidentialcommunicationmechanismsforirregularitiesconsideredillegal,criminalorabreachoftheprinciplesofROVI’sCodeofEthicsorinternalrulesandpolicies.

Suppliers

• Avoluntarydocumentcalled“CSRCommitment”issenttoallthegroup’ssuppliersandsubcontractors.Thisdocumentrequestscertificationsorurgesthemtoadoptgoodpractices.

• On-siteauditswhichcheckthat

ݸ Suppliersoperateinaccordancewithnationalandlocalregulations.

ݸ Therearenosignificantbreachesofworkplacesafetyrules.

ݸ Nopracticesinfringingworkers’rightsexist.

• ConfidentialcommunicationmechanismsforirregularitiesconsideredillegalorabreachofROVI’sCodeofEthicsforSuppliers.

Shareholders

Sincethecompanywasfirstlistedonthestockmarkets,ithasreportedregularlyonallitsactivitiesandappliesits‘PolicyforCommunicationwithShareholders,InstitutionalInvestorsandProxyAdvisors’.

DIRECTINVESTORCOMMUNICATIONCHANNELS:

• ir@rovi.es

• Webformatwww.rovi.es/contacto

ShareholdershavethepossibilityofreceivingROVI’sfinancialinformationautomaticallythroughane-mailalertsystemandthegroupprovidesregular,promptandrelevantinformationonthecompany,suchaspresentationsandlegaldocumentsoneconomicandfinancialaspectsandcorporategovernance,whichmaybeconsultedonthecorporatewebsitewww.rovi.es.

CSR Report 2018 24

Customers

Itisessentialforthegrouptoestablishlastingbusinessrelationshipsbasedoncloseness,anattitudeofpermanentserviceandtrust.Allthisbeginswithtotaltransparencyandopennesstothesethroughthedifferentchannelsofestablishedconsultations,tomanagerequestsforinformationbothfrominternationalpartnersandfromdirectclients,patientsandprofessionals.

Inthisway,since2008,theinternationaldistributionpartnersofBemiparinahavethewebwww.bemimed.comandsince2009,ROVIhasanexclusiveportalforhealthprofessionalsonitswebsite(www.rovi.es)tochanneltheirrequestsforinformation.Ineachofthecompaniesofthegroup,therearetrainedprofessionalsfortheattentionofthemainqueriesthatmayarisebothtodirectclients(partnersorwholesalers)andtopatientsandprofessionals.

Thisisthewayinwhichclaimscanalsobereceived,atwhichpointthecompanystartsaninvestigationprocessinordertoidentifythecauseandpreventitfromrepeatingitself.Thisinvestigationmayinvolveseveraldepartmentsorevensuppliersand/orsubcontractors.Theeffectivenessoftheseactionsisanalyzed,annually,intherevisionofthesystembyROVI’sManagement.

InthesamewayROVI,asamanufactureranddistributorofmedicines,iscommittedtothesafetyofthepatientstowhomourmedicinesareadministered.Todothis,ithasestablishedtheappropriatecontrolssothatthedrugsmaintainthebestbenefit/riskbalanceand,inaddition,hasimplementedapharmacovigilancesystemthatallowsdetectingpossibleadversereactionsthatoccurwithourmedicinesandhealthproducts.Anadversereactionisanyresponsetoamedicationthatisharmfulandunintentional.

ROVIhasvariousemailaddressesenabled,dependingonthecountry,forreportingadversereactions:

Societyandenvironment

ROVI’scommitmenttosocietyandenvironmentalprotectionisfirmandconstantandformspartofitsday-to-dayactivity.

Thecompany’senvironmentalpolicyisbasedoncommitmentstocontinuousimprovement,legalcomplianceandadditionalvoluntaryrequirements.Inrelationtoenvironmentalqueries,ROVIhasacorporateprocedure(SOPc813“Communication,ParticipationandConsultation”)throughwhichitmanagescommunications(queries,complaints,etc.)relatedtotheenvironmentandoccupationalhealthandsafety.Onthecorporatewebsite(www.rovi.es),thequality,environmentalandoccupationalhealthandsafetycertificationsheldbygroupcompaniesareavailabletothepublic.

Furthermore,ROVIusespartofitsresourcestopromotemedicalresearch.Overrecentyears,thecompanyhascarriedonintensiveactivitytosupportresearchandfomentthepreventionandknowledgeofcertaindiseases.

Country Telephone Email

Spain +34917617561/+34661888642 farmacovigilancia@rovi.es

Portugal +351213105617/+351918466100 farmacovigilancia@rovisa.com.pt

UnitedKingdom +44(0)2036420677 uk-pharmacovigilance@rovi.com

Germany +498024478255 pharmakovigilanz@rovi.com

Italy +393457081782 farmacovigilanza@rovi.com

France +33476969621 fr-pharmacovigilance@rovi.com

Poland +48608096772 phv@pharmconsult.com.pl

CSR Report 2018 25

[102-44,102-47]

InordertodeterminewhichissuesaremostimportanttoROVIanditsdifferentstakeholdersandincludetheseitemsinthecompany’sAnnualReport,amaterialityanalysiswascarriedoutin2018withtheassistanceoftheconsultancyfirmPwC.Theworkconsistedofanexternaldiagnosis–inwhichanalysesweremadeoffourcompaniesinthesamesector,15referencestudiesandinformationappearinginthegeneral,financialandindustry-relatedmedia–andaninternaldiagnosis–withaself-evaluationofthegroup’sperformanceandsixinterviewswithmembersofthemanagementteam–.Thus,20materialissueswereidentifiedandarediscussedinthisreport,groupedintoeightcategories:

GOOD GOVERNANCE AND ETHICAL CONDUCT1.Responsiblegovernance2.Ethicsandcompliance3.Risksandcrisismanagement

TRANSPARENCY AND DIALOGUE4.Informationtransparency5.Dialogueandrelationswithstakeholders

PRODUCT QUALITY AND SAFETY6.Productquality7.Pharmacovigilanceandproductsafety

ENVIRONMENT8.Circulareconomy9.Atmosphericemissions10.Climatechange11.Drugpollution

RELATIONS WITH CUSTOMERS, PATIENTS AND HEALTH PROFESSIONALS12.Attentiontoandrelationswithcustomers,patientsandhealthprofessionals

WORK ENVIRONMENT13.Safetyandwell-being14.Traininganddevelopment15.Attractingandretainingtalent16.Internaldialogueandcommunication

SUPPLY CHAIN17.Responsibilityinthesupplychain

HEALTH AND WELL-BEING OF SOCIETY18.Accesstomedicines19.Researchanddevelopment20.ContributiontothesocialandeconomicprogressofthecommunitiesinwhichROVIoperates

2.2. Materiality analysis

CSR Report 2018 26

6

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589

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12

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15

Influence on business

Imp

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for

stak

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MATERIALITY GRAPH

ThefollowingmaterialitygraphshowsthedegreeofinfluenceofthesemattersonROVI’slong-termobjectives.Thisinfluencehasadualaxis:theinfluenceonbusinesssuccessandtheimportanceforstakeholders.

CSR Report 2018 27

2.5. Ethics andintegrity

InordertoreaffirmthevaluesandprinciplescrucialtoROVI’sactivities,thegrouphasaCodeofEthics,approvedbytheBoardofDirectors,theobjectiveofwhichisforallinteractionswithshareholdersandsocietyingeneraltobegovernedbyethicsandgoodpractices.ThisCodeofEthicsinbindingonallemployeesandprovidesguidanceinthecourseoftheirdutiesandintheeventofconflictsofinterest.

AccordingtotheCode,thecompanyundertakestoapplythehigheststandardsofethicsandtransparencyinitscommunications,informationrecordsandreports,inrelationtobothfinancialmattersanditsproductsandactivities.Thisimpliestheobligationthat,whenpreparingthegrouporindividualaccounting,financialstatements,books,recordsandaccounts,legalrequirementsmustbemetandcurrentaccountingprinciplesmustbecorrectlyapplied,inordertogiveanaccuratepictureofthecompany’sbusinessactivitiesandfinancialsituation.

Likewise,ROVIhasa“CodeofEthicsforSuppliers”,themainobjectiveofwhichistoensurethatitssuppliersandothercomponentsofthechainrespectcurrentlegislationandthevaluesandprinciplesofROVIwhileprovidingservicestothegroup.

ThebodyresponsibleforensuringcompliancewiththeCodeofEthicsistheComplianceFunction(formedbytheComplianceDepartmentandtheComplianceCommittee),towhichthisdutyisassignedinits“ComplianceCharter”,approvedbytheAuditCommitteeon25July,2017.TheComplianceCommitteeisapermanentinternalcollegialbodythatreportsdirectlytotheAuditCommitteeandisconsideredanadvisorybodytosaidCommitteeincompliancematters.TheComplianceDepartmentisthearearesponsibleforperformingtheday-to-daycompliancecoordinationactivities,providingsupporttotheComplianceCommitteeandreportingonrelevantmatters.

Likewise,ROVIhasanEthicsChannel,whichcanandshouldbeusedbyanycompanyemployeetoinformtheEthicsCommittee–thebodyresponsibleformanagingtheChannel–ofanybreachofcurrentlegislation,theCodeofEthics,internalpoliciesand/orthevoluntarycodesandstandardstowhichROVIhasadhered,suchastheCodeofGoodPracticesofthePharmaceuticalIndustry,aswellasanyfinancialoraccountingirregularities.ROVIemployeesmaycommunicatewiththeEthicsChannelatthee-mailaddresscanaletico@rovi.esorbyphysicalmail.

Likewise,ROVIhasaspecificEthicsChannelforsupplierspartners,externalcollaborators,etc.thatallowsthemtoreportanyirregularityorbreachoftheROVIgroup’sCodeofEthicsforSupplierstheymaydetecttotheorganisation.VariousmechanismshavebeenputinplacetoenablesupplierstocommunicatewithROVI’sEthicsChannelforSuppliers,amongwhichthee-mailaddresscanaleticoproveedores@rovi.esisincluded.

Thetwochannelsareregulatedbythe“RegulationsoftheEthicsChannelforEmployeesandSuppliers”,thelatestupdateofwhichwasapprovedbytheAuditCommitteeon7November,2017.TheseRegulationsstatethatthebodyresponsibleformanagingthesechannelsistheEthicsCommittee,whichislikewiseresponsibleforensuringthatallreportsreceivedarehandledandmanagedappropriately,infullandconfidentially.Thisbodyisresponsibleforanalysingcasesofnon-complianceandproposingcorrectivemeasures.Thepossiblepenaltiesderivedfromnon-compliancearetheresponsibilityoftheHumanResourcesDepartment.

CSR Report 2018 28

ThecompanyhasanAnti-BriberyandAnti-CorruptionPolicythatappliestoallROVI’semployeesandagentsandsetsouttheguidelinesthattheymustallobserveinordertoavoidanyconductthatcouldbeclassifiedascorruption.[205-2]

ROVIundertakestoactivelysupporttheUniversalDeclarationofHumanRightsandrequiresitsemployeestocomplywithsaidprinciplesintheirday-to-dayactivityinthegroup.Thecompanycombatspracticescontrarytohumandignityandworkplacediscrimination.

During2018,ROVIpersonnelreceivedtrainingintheCodeofEthics.Thistraininghadtwomaingoals:first,toreinforcetheideathatallemployeesandmembersofgoverningbodiesofROVIaresubjecttotheCodeandthatitisbindingonallofthemand,second,toprovidetrainingonalltheprinciplesforactioncontainedintheCodeofEthics,withtheirpossibleapplicationsandinterpretations.

ROVIalsostrivestomonitorandverifytherecommendationsoftheUnifiedCodeofGoodGovernanceforListedCompaniesand,therefore,(i)on25July,2017,theBoardofDirectorsapprovedanewupdateoftheInternalCodeofConductintheSecuritiesMarkets,whichadaptstheactionsoftheCompany,itsgoverningbodies,employeesandotherpersonssubjecttotherulesonconducttosecuritiesmarket-relatedlegislation;and(ii)on7November,2017,theAuditCommitteeapprovedtheRegulationsoftheAuditCommitteeinlinewiththeCNMV’sTechnicalGuide3/2017onAuditCommittees.Thus,thecompanyhasmechanismstopreventconductthatisdamagingtoitsshareholdersandstakeholders,suchasaconcentrationofpower,lackoftransparencyorlackofauditorindependence.

CSR Report 2018 29

2.6. Risk management

ROVIhasaRiskManagementandControlSystemthatallowsanypossiblecontingencythatcouldpreventtheattain-mentofcorporateobjectivestobeidentified,classified,assessedandprovidedwitharesponse.

Theobjectivesofthissystem,whichissupervisedbytheAuditCommission,aretopromoteattainmentoftheproposedobjectives,avoidadverseimpactsderivedfromthematerialisationofrisks,preservethecompany’simageandrepu-tation,ensurecontinuityintheanalysisanddetectionofpossiblethreats,obtainreliableaccountinginformationandreinforceconfidenceinthecompany’scompliancewiththeapplicablerules.

ROVIfollowsariskmanagementandcontrolmodelbasedonthreelinesofdefence:

• Thefirstlineofdefenceisformedbythegroup’sdifferentoperatingareas,which,inthecourseoftheirday-to-dayoperations,mustidentify,classify,assessandmonitortherisks,inaccordancewiththerisklevelacceptedbyROVI.

• Thesecondlineofdefencecomprisestheriskcontrolandmanagementservice.Thisserviceisresponsiblefortheimplementationoftheriskcontrolandmanagementsystem,cooperatingininitiallyestablishingitand,onceitisinplace,contributingtoitsenhancement,monitoringitsperformanceandcoordinatingitsdevelopment.

• ThethirdlineofdefenceisInternalAudit,whichsupervisestheinternalcontrolandriskmanagementsystemsbyauditingboththefirstandsecondlinesofdefence.

Responsibilityforriskcontrol,monitoringandmanagement

Accordingtothecompany’sRegulationsoftheBoardofDirectors,theBoardofDirectors,atafullBoardmeeting,isresponsibleforapprovingtheRiskManagementandControlPolicy,includingtaxrisks,aswellastheregularmoni-toringoftheinternalreportingandcontrolsystems.Exercisingthisresponsibility,inMay2016,theRiskManagementandControlPolicy,whichincludesROVI’sgeneralriskmanagementprinciples,wasapproved.AccordingtothisPolicy,thebodiesinvolvedinsaidmanagementare:

• AuditCommittee:bodyresponsibleforreviewingandsupervisingthecompany’sinternalcontrolandriskmana-gementmechanisms,aswellastheirefficacy,sothatthemainriskscanbeappropriatelyidentified,managedandmadeknown.

• ManagementCommittee:identifies,classifies,assessesandmonitorstherisks,takingthecategoriesofriskandacceptablerisklevelsfixedbytheAuditCommitteeintoaccount,andappliesthemeasuresinplacetomitigatetheimpactintheeventthatanyrisksmaterialise.

• HeadofRiskManagementandControlSystem:hasthetaskofimplementingtheSystem,cooperatingininitiallyestablishingitand,onceitisinplace,contributingtoitsenhancement,monitoringitsperformanceandcoordinatingitsdevelopment.Likewise,he/shereportsperiodicallytotheAuditCommitteeonthecorrectopera-tionoftheSystemand/or,ifapplicable,anyrisksthatmayhavematerialised.

CSR Report 2018 30

RISK CONTROL AND MANAGEMENT PROCESS[102-15]

ThestepsthatROVIfollowsinriskmanagementareasfollows:

• Fixingtherisklevel.Annually,theAuditCommitteeestablishesariskclassificationinaccordancewiththepossibleimpact(financial,strategic,reputational,etc.),consideringtheprobabilityofoccurrence

• Identification.ThedifferentareasofROVIproceedtoidentifytherisksthatcouldaffectattainmentofthecompany’sobjectives.Oncetheyhavebeenidentified,risksareclassifiedasfollows:

ݸ Strategic risks:thosethataffecthigh-levelobjectives,directlyrelatedtoROVI’sstrategicplan.

ݸ Operational risks:thosethataffectobjectivesrelatedtotheefficiencyandefficacyoftheoperations,includingobjectivesconcerningperformanceandprofitability.

ݸ Reporting risks:theyaffectobjectivesconcerningthereliabilityoftheinformationprovidedbothinternallyandexternally.

ݸ Compliance risks:thosethataffectcompliancewiththeapplicablerulesandlegislation.

• Assessment.Eachoneoftherisksidentifiedisassessedinaccordancewiththeprobabilityofoccurrenceandimpact.Theassessmentobtainedwilldeterminethepositionofeachriskonthecorporateriskmap.

• Determinationoftheresponsetoarisk.Measuresareadoptedtotackleanypossiblecontingenciesaseffi-cientlyandeconomicallyaspossible,minimizingexposure.Atthesametime,mechanismsandproceduresmustbeputinplacetoallowmanagementtosupervisetheimplementationofactionstoneutralizeanyriskdetectedandcontroltheireffectiveness.

• Riskmanagementmonitoring.Allthedepartmentshavebothperiodicandcontinuousinformationsystemscapableofdulycapturinganychangesthathaveeitheralreadytakenplaceorwillbetakingplaceinthefuturethatmightpreventattainmentofobjectivesundertheforecastconditions,aswellastheviability,efficiency,effi-cacyandsufficiencyoftheresponsesestablishedforthedifferentrisks.

• ReportingtotheAuditCommittee.TheAuditCommitteeisinformedonatleastthefollowingaspectsofriskmanagementatleasteverysixmonths:

ݸ WhethertheRiskControlandManagementSystemisoperatingefficientlyornot,takingpossiblechangingconditions,bothinternalandexternal,intoaccount.

ݸ WhetherRiskManagementincidentsaredetectedandsolvedswiftly.

ݸ WhethertheMaphasbeendulyupdatedwiththeapplicablechanges(changesintherisksconsidered,anyapplicablenewrisks,etc.).

ݸ WhetheranyoftherisksincludedintheCatalogueoranyotherriskmaterializedintheprecedingperiod.

CSR Report 2018 31

Controlandriskmanagementsystems inrelationtotheprocessofissuingfinancialreporting(ICFR)

ThesystemforInternalControloverFinancialReporting(ICFR)aimstoobtainreasonablecertaintyastothereliabilityofthefinancialreporting.Thebodiesresponsibleare:

• The Board of Directors,responsiblefortheexistenceandcontinuityofanappropriateandeffectiveICFRinaccor-dancewiththeversionoftheRegulationsoftheBoardofDirectorsapprovedon26April,2016.

• Senior ManagementperformsthefunctionsofimplementinganddesigningtheICFR,asislikewisesetoutintheaforementionedRegulations.

• TheAudit Committee isthebodyresponsibleforoverseeingICFR,asstatedinthecompany’sBylaws,theRegulationsoftheBoardofDirectorsandtheRegulationsofAuditCommittee,whichassignthefollowingrespon-sibilities,amongothers,toit:

ݸ Tooverseetheprocessofpreparingandpresentingthefinancialreportingonthecompanyand,whereappli-cable,thegroup,ensuringitiscomplete;reviewingcompliancewithlegalrequirements,delimitingtheconso-lidatedgroupandtheproperapplicationofaccountingpolicies;andputtingforwardproposalsaimedtosafeguardtheintegrityofthefinancialreportingtotheBoardofDirectors.

ݸ Toregularlyreviewandoverseetheinternalcontrolandriskmanagementsystemsandtheefficacythereof,inorderforthemainriskstobeidentified,managedandmadeknownappropriately.

ݸ Toreviewtheclarityandintegrityofallthefinancialreportingandrelatednon-financialreportingthatROVImakespublic,suchasthefinancialstatements,managementreports,riskmanagementandcontrolreportsandcorporategovernancereports,evaluatinginwhichcasesthestatutoryauditorsshouldbeinvolvedinreviewinganyoftheadditionalreportstothefinancialstatements.

CSR Report 2018 32

3. Customers, patientsandprofessionals

CSR Report 2018

3.1. Management principles

ROVIhasatriplecommitmentwithcustomers,patientsandprofessionals.Theyarethecentreofitsday-to-dayacti-vityanditwantstoachieveahighdegreeofsatisfactionwiththem,creatingsolidandlong-lastingrelationsoftrust.

Theprincipalgoalis,therefore,topermanentlyseektomeettheneedsandexpectationsofitscustomers,whetheritbebyproviding“alacarte”servicesinthetollmanufacturingareaorbyofferingthebesttreatmentoptionstohealthprofessionals,notforgettingthepatients,whomaybenefitfromthelatestadvancesandbestmedicinesfortreatmentoftheircomplaints.

Awarethatqualityandexperiencearethebasisofthecompany’sbusiness,thegroup’sGeneralCSRPolicyesta-blishesaservicebasedonthesefactorsastheprincipleforactioninrelationtothesestakeholders,thusassumingthefollowinglistofimplicitcommitments:

• TobetoninnovativepharmaceuticalsasagrowthengineforROVI.

• Topayspecialattentiontoprotectingthehealthandsafetyofourcustomersandpatientsthroughoutthelifecycleofourproducts.

• Toobservedueconfidentialityindataprocessing.

• Tomanageandsolvetheirqueriesandcomplaintsintheshortesttimepossible.

• Tomonitorcustomerexperienceviasurveysthatmeasuretheirsatisfactionandothermeansandsystemsthatallowpermanentactivelisteningtothecustomerinallthoseprocessesandoperationsinwhichthelatterrelatestothecompany.

• Tooperateappropriateandefficientcommunicationchannels,usingthebest-adoptedmeanstodoso.

• Toobserveandcomplywiththerulesthatregulatecommunicationandmarketingactivitiesandassumethevoluntarycodesthatendowsuchactionswithtransparencyandveracity.

Thegroupdividesitsactivityintotollmanufacturingandthedistributionofproductsthatareeithermanufacturedatitsplantsormarketedunderalicense.ROVIoffersotherlaboratoriesthepossibilityofoutsourcingtheirmanufac-turingprocessesforabroadrangeofpharmaceuticalforms,includingpre-filledsyringes,vials,suppositories,tablets,hardcapsulesandsachets.

Likewise,ROVI’sproductsaredistributedtointernationalsubsidiariesandpartners,pharmaceuticalwholesalers,pharmaciesandhospitalsalloverSpain,whichformanewgroupofdifferentiatedcustomersforthecompanyFinally,ROVIhasbeenworkingasamarketingpartnerformedicinesandmedicaldevicesofothercompaniesforyears.

CSR Report 2018 34

Thegroupconsidersitessentialtoestablishlong-lastingcommercialrelationshipsbasedonproximity,withaperma-nentapproachofprovidingserviceandtrust.Todothis,ithassetupaquerychannelforinformationrequestsbybothinternationalpartners,throughanexclusiveportalcreatedin2008(www.bemimed.com),anddirectcustomers,patientsandprofessionals.

GuaranteeingthesafetyandefficacyoftheproductsthatthecompanyplacesinthemarketisthemaingoalofROVIandallthepeoplewhoformpartofit.Todothis,allgroupcompanieshaveproceduresthatdescribethecontrolscarriedoutinallprocessphases,includingproductresearchanddevelopment,thereceiptofrawmaterials,packagingmaterials,production,storageanddistribution,untiltheproductsareconsumedbyourcustomers.

Thestandardsinplacemeetthecompany’sinternalrequirementsandalsotheexternalrequirementsimposedbytheregulatorybodiesofthedifferentproductsthatmakeupROVI’sportfolio.

Inordertoassesscompliancewiththeseprocedures,internalauditsofallthegroup’sfacilitiesareperformedregularly.Annually,therearemanagementreviews,inwhichthemainpointsthatrequireimprovementinourorganisationsareanalysed.

Furthermore,thequalityauditsperformedbyexternalentitiesshowthecommitmenttocontinuingimprovementandtheupholdingofhigh-qualitystandards.

Moreover,dependingonthefrequencyestablishedinthelegislationapplicabletotheproducts,allthegroupcompa-niesareinspectedbyeithertheSpanishhealthauthoritiesorthoseofthecountriestowhichtheirproductsareexported.

3.2. Balanceoftheyearand futurechallenges

CSR Report 2018 35

3.3. Innovation

Researchanddevelopmentarestrategicfactorsinordertocompeteintoday’smarketanddifferentiatethecompanyfromothersinthesector.ROVIisacompanycommittedtoinnovation,withapatentportfoliocomprisingmorethan500patents,408ofwhichhavebeengranted,while98areintheexaminationandevaluationphase.

ROVI’sactivityofresearch,developmentandmanufactureofpharmaceuticalproductsiscoordinatedentirelyinSpain,distributedovertheMadridandGranadacentres.Thecompanyis,therefore,fullycommittedtoinnovationandthisinvolvementhasmaterialisedinfiguresshowingthegrowingR&Dinvestmentin2018,whenitincreasedto32.4millioneuros,incomparisonwiththe28.3millioneurosof2017andthe17.5millioneurosof2016,asaresultofprojectssuchasthedevelopmentofthePhaseIIItrialofRisperidonaISM®andthePhaseIofLetrozolISM®.

Currentdevelopmentsinresearcharedirectedprimarilyatthreeareas:drug-releasetechnologies,glycomicsandmultilayertechnologiesapplicabletourethralcatheters.ROVI’sresearchanddevelopmentproductportfolioconcen-tratesmainlyonheparinderivativesandotherglycosaminoglycansandthedevelopmentofnewcontrolled-releasesystemsbasedonthepatentedISM®technology,inordertoobtainnewpharmaceuticalproductsthatallowthedailyadministrationofdrugsinchronicorprolongedtreatmentstobereplacedbycontrolled-administrationsystems.

ROVIhasmadesignificantprogressinthedevelopmentofthefirstcandidateofitsleading-edgedrug-releasetech-nology,registeredunderthetrademarkDORIA®.Thisfirstcandidateguaranteesprolongedreleaseofrisperidone,asecond-generationantipsychoticmedicinetheuseofwhichisconsolidatedforthetreatmentofschizophrenia.AftersuccessfullycompletingtheprogramforPhasesIandIIofDoria®,ROVIcommencedthepivotalPhaseIIItrial,PRISMA-3,withtherecruitmentofthefirstpatientinMay2017andanupdateoftheprojectwaspublishedwithdetailsofthedesignandthecostofPhaseIII,togetherwithapresentationgiventoanalystsinOctober,2017.InMarch2019,ROVIpublishedtheprincipalfavourableresultsoftheDORIA®PhaseIIIstudy,whichshowthatprimaryandsecondaryefficacyvariableshavebeenachievedforpatientswithacuteexacerbationofschizophrenia.Consequently,ROVIplanstofileanNDA(NewDrugApplication)–anapplicationthatisfiledwiththeFDA(FoodandDrugAdministration)intheUnitedStates–inthesecondhalfof2019.

ThePRISMA-3studyisarandomised,multicentric,double-masked,placebo-controlledclinicaltrialtoevaluatetheefficacyandsafetyofmonthlyintramuscularinjectionsoftheproductregisteredunderthetrademarkDORIA®inpatientswithacuteexacerbationofschizophrenia.IntheUnitedStatesandEurope,therearearound3millionpatients(source:IQVIA)diagnosedwithschizophreniadisorders.Thiscomplaintcannotbecuredbuttherearetreatmentsthatcontrolthesymptomsefficiently.Thesetreatmentsusedsecond-generationantipsychotics(SGA),whichhaveapredictableefficacyandsafetyprofile.Fromamongthem,risperidoneisoneofthemostwidely-usedactivesubstances.

Long-actinginjectables(LAIs)arebecomingthebenchmarkforthecareofschizophrenia,ratherthantheoraltreatment,and,withDoria®,ROVIhopestooccupyaprominentpositioninschizophreniatreatmentwithLAIsintheUnitedStatesandEurope,withanestimatedtotalvalueof4,200milliondollarsin2021–3,300milliondollarsintheUnitedStatesand930milliondollarsinthefivemainmarketsinEurope–(source:IQVIA).

CSR Report 2018 36

Inaddition,inNovember2017,theclinicaldevelopmentwithLetrozolcommenced.Thisisthefirstlong-actingaroma-taseinhibitorforthetreatmentofhormone-dependentbreastcancerandROVI’ssecondISM®technology-basedcandidate.During2018,thefirstPhaseIclinicaltrialwascarriedout,theLISA-1study.Thisisanopen,single-dose,dose-increasingstudytoevaluatethepharmacokineticprofile,safetyandtolerabilityofintramuscularinjectionsofLetrozolISM®,withdifferentconcentrations,inhealthypost-menopausalwomen.

Thetwoprojectsrepresentasignificanteconomiceffortforthecompany,backedbythegrantingofpublicfundsfromtheTechnologicalIndustrialDevelopmentCentre(CDTI).

Atthesametime,ROVIkeenlydrivesandsupportsresearch,bothatacademiclevelandwithintheSpanishbusi-nessfabricthroughsmall-andmedium-sizedcompanies.Todothis,itholdsagreementswithdifferentuniversitiesinordertocombineeffortsandreinforcescientific,technologicalandeducationalactivities,aswellasspreadingknowledge,inSpain,continuouslycooperatingwiththeUniversityofGranadainresearchactivitiesandthetrai-ningofscientificpersonnelthroughprojectswithintheframeworkoftheincentivesawardedbytheTechnologicalCorporationofAndalusia.Likewise,duringthe2018annualperiod,ROVIledtworesearchconsortiawithsmall-andmedium-sizedcompanies,BIOMAP,withintheframeworkoftheFederInterconnectaProgram,andBLUESPE,whichlikewiseobtainedfinancingfromtheIndustrialTechnologicalDevelopmentCentre.

CSR Report 2018 37

3.4.Quality

Guaranteeingthequality,safetyandefficacyoftheproductsitplacesinthemarketistheprincipalobjectiveofROVIandallthepeoplewhoformpartofit.Todothis,allthegroupcompanieshaveputinplaceproceduresthatdescribethecontrolsperformedatallstagesoftheprocesses,includingproductresearchanddevelopment,thereceiptofrawmaterials,packagingmaterials,production,storageanddistributiontoourcustomers.

Thestandardsinplacemeetthecompany’sinternalrequirementsandtheexternalrequirementsimposedbytheregulatorybodiesofthedifferentproductsthatmakeupourportfolio.Inordertoassesscompliancewiththeseprocedures,internalauditsofallthegroup’sfacilitiesareperformedregularly.Annually,therearereviewsbygroupmanagement,inwhichthemainpointsthatrequireimprovementinalltheorganisationsthatformpartofthegroupareanalysed.

Furthermore,thequalityauditsperformedbyexternalentitiesshowROVI’scommitmenttocontinuingimprovementandtheupholdingofhigh-qualitystandards.Dependingonthefrequencyestablishedinthelegislationapplicabletotheproducts,allthegroupcompaniesareinspectedbyeithertheSpanishhealthauthoritiesorthoseofthecountriestowhichtheirproductsareexported.

Lab. Fcos Rovi

Pan Química

Lab. Fcos. Rovi perm. Establish.Portugal

Rovi GmbH (Germany)

Rovi Biotech Limited(UnitedKingdom)

Rovi Biotech S.R.L. (Italy)

Rovi S.A.S (France)

SUB. DISTR.

General Unitsmanufactured/Uds.Distribuidas 19,571,222 25,353 296,268 312,691 135,192 1,168,506 0 21,509,232

Customer complaints

No.customercomplaints 155 9 10 13 3 4 0 174

Complaints/millionunits. 7.92 354.99 33.75 0 22 3 0 8.09

Customer queries - quality + therapeutic

No.customerqueries 237 0 9 171 19 0 0 246

Queries/ millionunits 12.11 0.00 30.38 547 141 0 0 11.44

CSR Report 2018 38

LaboratoriosFarmacéuticosROVI,asamedicineresearcher,manufactureranddistributor,isverymuchcommittedtothesafetyofthepatientstowhomitsmedicinesareadministeredinrelationtothedetectionofanyadversereaction,i.e.anyunintended,harmfulresponsetoamedicine.

Inthisrespect,ithasestablishedtheappropriatecontrolstoensurethatthemedicinesmaintainthebestbenefit/riskbalanceand,furthermore,hasimplementedapharmacovigilancesystemthatallowsanyadversereactionstomedicinesandhealthproductsitmarketstobedetected.

Moreover,ROVIhasvariousmeansofcommunicationinplace,suchasthee-mailaddressfarmacovigilancia@rovi.es andatelephonenumber(+34 91 761 75 61)fornotificationofadversereactions,inadditiontoROVI’swebsite,whichexplainshowtoproceedifonewishestonotifyanadversereaction.Thecompanyimmediatelyactivatesitspharmacovigilancesystemtocollectthegreatestamountofinformationpossibletoenableittoestablishtheappropriatecause-and-effectrelationshipbetweentakingthemedicineandtheadversereaction.

Incompliancewiththeguidelinesestablished,atotalof870adversereactionswererecordedin2018inrelationtoallthemedicinesmarketedbyROVI.

3.5. Pharmacovigilanceand productsafety

CSR Report 2018 39

4. Human resources

CSR Report 2018

4.1. Management principles

ROVI’scommitmentwithitsemployeesisthekeytothecompany’ssuccess.Thecompanystrivesforandpromotesgoodrelations,propertreatmentandtoleranceamongitsemployeesandthepeoplewithwhomitworks,bymeansofactivitiesandtrainingprogrammesandprovidingopportunitiesfordialogueandmediation.

ThedesignandimplementationofHumanTalentDevelopmentPoliciesformtheprocesswherebytheROVIgroup,dependingonitsobjectives,establishesitspersonnelneedsanddefinesitshumantalentmanagementplansandprograms,inordertointegratepersonnelmanagementandpracticesintotheorganization’spriorities.

ForROVI,thetrainingandpreparationofitsemployeesisofcrucialimportanceand,therefore,thecompanyappliessignificantresourcestoinvestmentinhumancapital.Throughpreparationandtraining,itfomentsprofessionalevolutionandgrowth,involvingbothprofessionalsandtheirdirectsupervisors.Youngprofessionalshavethesupportofmoreexperiencedcolleagueswhoguidethemandhelptodeveloptheirtechnicalskills.Thus,ROVIfavoursandensuresthetransferoftheknowledgeandexperienceacquiredbyseniorprofessionals,anotherofthegreatassetsofthegroup’sworkforce,tothenewgenerations.

Organisationofworkinghours

ROVIcarriesonitseconomicactivitiesinthreedifferentenvironments:theindustrialproductionarea,thesalesareaandtheindustrialstructure/officesarea.Theactivityofeachoneofthemhasdifferentdynamics,requiringdifferentworkinghoursandwaysoforganisingworkingtime.Inallofthem,theCompanyfomentscriteriafororganisingworkingtimeandtimeofftofacilitatethebestwork-lifebalancepossible,aswellasenablingROVIemployeestoexerciseresponsibleparenting.

Theindustrialenvironment,whichincludestheemployeesworkingatthepharmaceuticalproductproductionplants,makesitnecessaryforemployeeswhoareengagedinmanufacturingtasksorworkdirectlyrelatedtheretotohaveworkinghoursthatcoincidewiththetimesofactivityoftheproductionprocesses.Thismeansthatthisgroupofpeopleworks,ingeneral,underashiftsystem.Sinceweareawarethatshiftworkismorearduous,itisusedwhenthereisnootherpossiblealternativethatiscompatiblewiththeviabilityoftheactivityandthedemandfortheproductmanufacturedandwestrivetoreducetheinconvenienceoftheshiftdynamicsasmuchaspossible.Theholidayperiodintheindustrialareaisalsosubjecttothevolumeofactivityandmust,ingeneral,bearrangedonfixeddatesforthewholeworkforce.Atanyevent,weendeavourtoensurethatitisalwaysinsummerandROVIundertakesthatatleasthalftheholidayswillbeenjoyedinthesummerperiod.Additionally,thetimeoffscheduledtoadjusttheworkcalendarofthisgroupofemployeesisfixedtocoincidewithschoolholidays,sothattheemployeescanenjoyitwiththerestoftheirfamilies.

Employeesinthesalesareacarryontheiractivityindaytimeworkinghours,coincidingwiththoseofthecustomerstowhomtheymarketROVI’sproducts.Giventhenatureoftheiractivity,theyhaveahighdegreeofindependenceinplanningtheirwork,whichallowsthemtoreconciletheirworkwithanyneedsthatmayariseintheirfamilylife.

CSR Report 2018 41

Intheindustrialstructureandofficearea,timeisorganisedthroughflexibleworkinghours.Thisallowsemployeestostartandendtheirworkingdaywithamarginofchoice,dependingontheirneedsorpreferences.

Intheselasttwogroups,holidaysarepreferablytakeninsummerand,additionally,timeoffisarrangedduringschoolholidays.

4.2.Balanceoftheyearand futurechallenges

ThekeyfiguresconcerningROVI’spersonnelstructureshowthat,in2018,workforcemanagementcontinuedtofollowthesustainedupwardpathofpreviousyears,consistentlywiththecompany’scontinuinggrowthstrategyandintendedtoadapttheworkforcetocurrentbusinessneeds.

Therecruitmentmanagementstrategyfomentsstableemploymentthroughpermanentandtemporarycontracts,bothofwhichareusedtocover,inabalancedmanner,bothstructuralneedsandthespecificneedforworkersatanygivenmoment.Thisisshowninthedistributionoftheworkforce,wherepermanentcontractsandstableemplo-ymentprevail.

Intherecruitmentscarriedoutin2018,thebetonjobcreationwithyoungprofessionalscontinued,atthesametimeastheyweresupplementedbyexperiencedprofessionals.Thus,abalancedworkforcethatallowsthecompany’sstrategytobeimplementedisachieved.

Likewise,theresultsoftheCompany’seffortstomaintainandconsolidateitsworkforcewithabalancebetweenmenandwomenandpromotetheinclusionandaccessofcandidateswithdisabilitiesunderequitableconditions,consis-tentwiththestrategyofmainstreamingdiversityandequalopportunitiesaspartofitsculture,maybeobserved.

CSR Report 2018 42

[102-8]

2018

Men 558

Women 666

TOTAL 1,224

Men Women TOTAL

18-30years 78 106 184

31-40years 156 216 372

41-50years 195 213 408

51-60years 109 114 223

>60years 20 17 37

TOTAL 558 666 1,224

Men Women TOTAL DISTRIBUTION

PermanentFull-time 462 532 994 81%

PermanentPart-time - 4 4 0%

Totalpermanent 462 536 998 82%

Temporaryspecificprojectorservice 2 3 5 0%

Temporaryduetoworkbacklog 47 55 102 8%

Temporarysubstitutioncontract 4 6 10 1%

Training/Apprenticeship 27 49 76 6%

Temporarypart-time 15 17 32 3%

Temporaryfull-time–peoplewithdisabilities 1 - 1 0%

Totaltemporary 96 130 226 18%

TOTAL 558 666 1,224

Men Women TOTAL

Spain 550 654 1,204

UnitedKingdom - 1 1

Germany 3 3 6

Italy 3 3 6

France 1 1 2

Portugal 1 4 5

TOTAL 558 666 1,224

DISTRIBUTION EMPLOYEES BY GENDER

DISTRIBUTION EMPLOYEES BYAGE/GENDER

DISTRIBUTION EMPLOYEES BYCONTRACT TYPE/GENDER

DISTRIBUTION EMPLOYEES BY COUNTRY/GENDER

CSR Report 2018 43

2018

Men 17

Women 16

TOTAL 33

Men Women TOTAL

18-30years 2 0 2

31-40years 3 4 7

41-50years 5 8 13

51-60years 3 2 5

>60years 4 2 6

TOTAL 17 16 33

18-30 31-40 41-50 51-60 >60 TOTAL

Permanent 79 328 370 213 8 998

Temporaryspecificprojectorservice 2 2 1 - - 5

Temporaryduetoworkbacklog 31 31 33 7 1 103

Temporarysubstitutioncontract 1 5 3 1 - 10

Training/apprenticeship 69 6 1 - - 76

Temporarypart-time 2 - - 2 28 32

TOTAL 184 372 408 223 37 1,224

DISTRIBUTION DISMISSALS BY GENDER

Turnover

DISTRIBUTION DISMISSALS BY AGE/GENDER

DISTRIBUTION EMPLOYEES BY CONTRACT TYPE/AGE

CSR Report 2018 44

ROVIiscommittedtoestablishinganddevelopingpoliciesthatincludeequaltreatmentandopportunitiesforwomenandmen,withnodiscriminationbasedongenderorotherpersonalcharacteristicsinselectionprocesses,promotions,personaldevelopmentortheworkers’remunerationpolicy.

Tothisend,ithasanEqualOpportunitiesPlantoguaranteeequalopportunitiesandnon-discriminationandtopromotetheinclusionofnewactionsinthisareathatestablishmechanismsinareassuchasselectionandhiring,internalpromo-tionandprofessionaldevelopment,training,remuneration,work-lifebalance,genderviolenceandharassmentpreven-tion,andcommunication.ROVI’scommitmenttoequalityandnon-discriminationisalsoreflectedinthecompany’sCodeofEthicsandtheprinciplesthatgoverntrainingprogrammesandactions.

ApplyingtheEqualityPlan,anEqualOpportunitiesCommissionhasbeencreated.ItskeymissionistoproperlymonitorthemeasuresimplementedandensurethatROVI’scommitmentismet.

ThisequalitypolicyislikewisereflectedinROVI’sBoardofDirectors,wheretheselectioncriteriafortheappointmentofdirectorsisbasedonthecandidates’merit(peopleofrecognizedknowledge,skillsandexperience)andthepotentialcandidatesmayincludebothmenandwomenwhomeettheserequirements.Forthisreason,oneofROVI’sEqualityPolicytargetsfordirectorselectionisthatthenumberofwomendirectorsshouldrepresentatleast30percentoftotalBoardmembersin2020.

Ineachandeveryoneoftheareasinwhichitcarriesonitsactivity,withregardtoselection,promotion,wagepolicy,training,workandemploymentconditions,workplacehealth,theorganisationofworkinghours,andwork-lifebalance,ROVIassumestheprincipleofequalopportunitiesforwomenandmen,payingspecialattentiontoindirectdiscrimi-nation,definedasthesituationwhereanapparentlyneutralrule,criterionorpracticeplacesapersonofonegenderataparticulardisadvantageincomparisonwithapersonoftheothergender.Asaresultofthesepolicies,theROVIworkforcehasahigherpercentageofwomenthanmen.

ROVIdoesnottolerateharassmentandrejectsanykindofviolence,physical,sexual,psychologicalormoralharassment,theabuseofauthorityatworkoranyotherformofharassmentorconductthatgeneratesanatmospherethatisintimi-datoryoroffensiveinrespectoftheemployees’rights.Therefore,ROVIhasaProtocolforthePreventionandHandlingofCasesofMoralandSexualHarassmentintheworkplace,whichallemployeesareobligedtoknowandrespect.

ToguaranteethatanyreportsthatmaybereceivedinformingofaviolationoftheaforementionedProtocol,theCodeofEthicsor,ingeneral,anyapprovedpolicyorprocedurearehandledproperlyandreceiveanappropriateresponse,ROVIhasmadeanEthicsChannelavailabletoitsemployees,suppliers,tradingpartners,agentsandexternalcollaborators.TheRegulationsoftheEthicsChannelgoverntheproceduretofollowtohandleandprocessanyreportsornotificationsreceivedandensurethat,whenfacedwithanactionthatpotentiallycontravenestheCompany’sprinciplesandvalues,theCompanyisabletoreactstrictly,efficientlyanddiligently.

4.3. Equalopportunitiesand work-lifebalance

CSR Report 2018 45

Work-lifebalanceandsupportofco-responsibilitytherein

[401-2]

AtROVI,asetofmeasurestoreconcilefamilylifeandworkareapplied,withoptionsadaptedtodifferentpersonalandfamilysituationsaimedtocreateaworkenvironmentthatallowsahigherqualityoflifeandharmonybetweentheemployees’familylivesandtheirpromotionandprofessionalcareers.

TheCompanyappliesthework-lifebalancemeasurescontainedincurrentlegislation,aswelltheenhancementsintro-ducedbytheCollectiveAgreementoftheChemicalIndustry.

Regardingworkinghoursandtimeoff,asstatedabove,ROVIhasflexiblestartingandfinishingtimesforofficeandindustrialstructurepersonnel,allowschangesinshiftordaybetweenworkersintheindustrialarea,andshorterworkingdaysadaptedtotheneedsofeachperson.Likewise,itoffersflexibilityintheholidaycalendars,provideditiscompatiblewiththeactivityoftheareainwhichtheemployeeworks.

Inrespectofremuneration,ROVIguaranteesthatmaternitydoesnotrepresentanydecreaseintheusualincomeofthepregnantwoman.Thus,theCompanypaysawagesupplementthatcompletesthebenefitreceivedfromtheSocialSecurityto100%ofhersalary.Italsoofferssalaryoptions,withtheavailabilityofnurseryschoolvouchers,restaurantvouchersandhealthinsurance.Furthermore,ROVIoffersallitspermanentemployeescoverbythelifeinsurancepolicypaidbytheCompany.

Inordertopreventavoidabletravelandtrips,ROVIprovidesallthepersonnelwhosorequirewithalaptopcomputerwithconnectivitytotheROVInetworkandencouragestheuseofvideoconferencesandon-linemeetings.Likewise,iftheworkperformedsopermits,teleworkingisorganisedduringthelastweeksofpregnancy.Additionally,atworkcentreswherestreetparkingisdifficult,thecompanymakesaseriesofparkingspacesavailabletopregnantwomentomakeiteasierforthemtogettowork.

Disconnectionfromwork

Sothatitsemployeescanenjoytheirtimeoffeffectivelyandconservetheirpersonalandfamilyprivacy,ROVIfomentspoli-ciesalignedwithdisconnectionfromwork,avoidingcommunicationwithemployeesthroughanychannel(telephone,e-mailoranyother)outsideworkinghoursunlessthereisanurgent,unforeseenneedthatcannotbemetotherwise.

Likewise,meetingsinthelaterpartoftheworkingdayareavoided,inordertopreventoversteppingworkinghoursattheendofthedayandthusaffectingthework-lifebalance.

Remunerationpolicies

Theaverageemployeeremunerationin2018was38,735euros,representinganincreaseof1%incomparisonwith2017.

Theaverageremunerationofthemembersofthecompany’sManagementCommitteein2018,includingfixedandvariableremunerationandremunerationinkind,was234,142eurosformenand135,462eurosforwomen.Thedifferenceisbecause,inthecaseofthemen,threeofthemarealsoExecutiveDirectorsandtheirsalariesreflecttheadditionalresponsibilitiestheyhold.

CSR Report 2018 46

Wagegap

ROVIisconvincedoftheneedtoapplytheprincipleofequalpayforequalworkeffectivelyandtakessaidprincipleasthebasisofitswagepolicy,applyingitinitssalary-fixingpracticeuponrecruitmentoftheemployeeandinthesalaryreviewsthroughouttheemployee’sworkinglife.

Inordertoensureapplicationoftheprincipleofwageequality,ROVImonitorsthegenderwagegapbyperiodicallyassessingindicatorsthatshowwagegapsbyjobandgender,inordertofollowuponanygenderdifferencesandreducethem.

Men Women AVERAGE

Fixedremuneration 163,430€ 93,419€ 128,425€

Variableremuneration 61,960€ 36,763€ 49,362€

Remunerationinkind 8,752€ 5,280€ 7,016 €

TOTAL 234,142€ 135,462€ 184,802€

AVERAGE REMUNERATION OF MANAGEMENT COMMITTEE

2018 2017 TOTALVARIATION

Men 40,733€ 40,953€ -1%

Women 36,738€ 35,534€ 3%

AVERAGE 38,735 € 38,244€ 1%

AVERAGE REMUNERATION BY GENDER

CSR Report 2018 47

2018 2017TOTAL

VARIATIONMen Women Men Women

1 15,311€ 14,892€ 0€ 17,472€ 73%

2 16,677€ 17,012€ 16,170€ 16,194€ 4%

3 19,000€ 19,266€ 18,209€ 19,065€ 3%

4 25,082€ 23,432€ 25,641€ 23,736€ -2%

5 42,078€ 40,546€ 41,099€ 38,237€ 4%

6 50,426€ 36,687€ 52,153€ 37,993€ -3%

7 51,208€ 47,265€ 54,958€ 44,413€ -1%

8 105,465€ 105,050€ 153,205€ 146,637€ -30%

0 202,978€ 130,182€ 197,584€ 112,505€ 7%

Subsidiaries 87,949€ 72,367€ 106,499€ 103,300€ -24%

(*)Doesnotincludescholarshipremuneration,sincescholarship-holdersdonothaveaProfessionalGroup(**)ProfessionalGroupinaccordancewiththeXIXChemicalIndustryCollectiveAgreement

2018 2017TOTAL

VARIATIONMen Women Men Women

18-30years 21,966€ 21,983€ 21,099€ 19,787€ 7%

31-40years 30,535€ 34,460€ 29,625€ 32,108€ 5%

41-50years 47,312€ 45,095€ 46,989€ 45,167€ 0%

51-60years 58,097€ 41,546€ 55,003€ 28,357€ 20%

>60years 33,459€ 11,908€ 53,148€ 14,612€ -33%

AVERAGE RENERATION* BY PROFESSIONAL GROUP**/GENDER

AVERAGE REMUNERATION BY AGE/GENDER

In2018,ROVIengagedtheauditfirmPricewaterhouseCoopersAuditoresS.L.tocarryoutalimitedassurancereviewofwagegroupindicatorsbyprofessionalclassificationinGroupcompanies.Theindicatorsrelatedtotheannualperiodrunningfrom1April,2017to31March,2018andthereportswerepreparedonthebasisofthemethodologypublishedinJanuary2015bytheMinistryofthePresidency,ParliamentaryRelationsandEqualityinrelationtocalculatingthegenderpaygap.

Theaforementionedindicatorsmakeadiagnosticanalysisofthegroup’sworkforcetofindoutthedifferencesintheremunerationofmenandwomenwiththesamejobs.Theanalysisoftheindicatorsshowsthatthereisnogender-basedpaydiscriminationordifferencesinremunerationthatisnotbasedonpersonalfactors(qualifications,workexperience,lengthofservice,etc.)orposition(duties,degreeofresponsibility,workinghours,etc.).

CSR Report 2018 48

Thegroup’ssuccessindispensablyrequiresselectingandretainingtalenttransparentlyandeffectively.TheHumanResourcesDepartmentisresponsiblefordesigningandmanagingtrainingpoliciesandattractingandretainingtalent,andisinchargeofapplyingtheSelectionPolicyinrecruitments.ThisPolicyisbasedonprinciplessuchas:

• Equalopportunities.

• Objectivityandimpartiality.Selectionprocessesarebasedonmeritsandcapabilities.

• Confidentialityoftheprocess.

• Favouringtherecruitmentofyoungpeople,peoplefromdisadvantagedgroupsanddifferently-abledpeople.

• Promotionandreinforcementofinternalcandidatures.

Makingtrainingapriorityisalong-terminvestmentsothatthecompany’stalentiswellpreparedanddevelopsitshighestpotential.ForROVI,thetrainingandpreparationofitsemployeesiscrucialand,therefore,thecompanyinvestssignificantresourcesinhumancapital.Throughpreparationandtraining,itfomentsprofessionalevolutionandgrowth,involvingboththeprofessionalandhis/herdirectsupervisors.

Forthisreason,ROVIstrivesfortheemployeestohavethenecessarytrainingtocover,notonlytherequirementsoftheirpresentjob,butalsototacklefutureneedsderivedfromtheuseofnewtechnologies,equipment,instruments,etc.ortheneedtotakeongreaterresponsibilitiesandmoreimportantprojects.

Todrawuptheannualtrainingplans,thetrainingneedsineachareaareidentified,aprocessinwhichtheHumanResourcesDepartment,GroupManagementandMiddleManagementareinvolved.Theannualplanisalignedwiththestrategicandbusinessobjectives.Throughtraining,itissoughttoefficientlyhelppeopletocontributeandaddvaluetotheattainmentandachievementofROVI’sstrategicobjectives.

Likewise,allemployeeshaveanIndividualDevelopmentPlan.Dependingonthespecificneedsidentified,differentalternativesandtrainingplansareputintoplaceinordertopromotetheircareerplans.ROVIworkswithatrainingmodelthatfomentsself-responsibilityandcommitment.Thus,10%ofdevelopmentandlearningtakesplacethroughtrainingactionsintheclassroomorinvirtualore-learningformatand20%takesplacethroughfeed-back,observationorwiththesupportofmentors,coaches,professionalassociations,spacesforreflection,conversationswithotherpeople,leaders,etc.Lastly70%ofdevelopmentandlearningtakestheformofjobexperience,applyingnewlearninginrealsituations,problem-solving,participatinginprojectsandnewchallenges,rotatingthroughdifferentdepartments,etc.,alwaystakingtheprofessionalprofileandtheneedsofeachareaintoaccount.

4.4.Attracting talentandtraining

CSR Report 2018 49

Scholarships,trainingprogrammesandcooperationwitheducationalinstitutions

FortheROVIGroup,cooperationwithuniversitiesandprofessionaltrainingcentresisofkeyimportanceinincorpora-tingnew,youngtalentintothecompany.Thisiswhytheweholdmorethan20agreementswithSpanishuniversitiesatnationallevel,sothatundergraduatesintheirlastyearandstudentsstudyingforaMaster’sdegreeordoctoratecancarryouttheirpracticaltrainingindifferentareasofthecompany,whileprofessionaltrainingstudentscanobtaintheirpracticaltrainingcreditswithoneofthegroupcompanies.

85%ofthepeoplewhoholdascholarshipwithROVIfinallyjointhecompanywithacontract.Thepossibilityforyoungtalentstotrainandthegroup’sinvestmentinthistrainingisindispensableinordertohaveagoodreserveoftalentforthefuture.

Basicprinciplesof ROVIGroup’s trainingprogrammes/actins

Trainingprogrammeswillcontainaspectsrelatedtorespectforhumanrightsandwillfosteranethicalculture.

Nodiscriminationonthegroundsofgender,ageororigin.Professionalswithequalpositionsandprofessionaldevelopmenthavethesametrainingopportunities.

Trainingactionswillrespectthecurrentregulatoryframeworkanddemandsoftheworkandbusinessenvironment.ROVIwillprovidetraininginnewlegislation,sothatworkersknowandcomplywithcurrentlaws.

Theuseofdifferenttrainingtoolsisfavoured(classroom,on-line,platforms,etc.).

Sharingtheknowledgethatexistsinthecompany,continuinglearningandculturalexchangeisencouraged.

90%oftheROVIgroup’sscholarshipsareremunerated

90%ofthescholarshipsarefulltime

90%ofthescholarshipslastfor 6+6 months

CSR Report 2018 50

ROVIhasanappropriateunderstandingwiththeworkers’representatives.LabourrelationsatROVIarebasedonrespectfortheworkers’legalrepresentatives,strictcompliancewiththedifferentapplicableregulationsandpermanentdialoguethatallowsaconstructiverelationshipoftrusttobebuiltbetweenthetwoparties.

Dialoguewiththeworkerstakesplacewithsmoothcommunicationusingalltheresourcesavailable,especiallymeetings-bothregularly,inaccordancewithascheduledcalendar,andspecific,attherequestofeitherthecompanyortheworkers’representatives.Thisallowsthestatusofagreementstobemonitoredandanyincidentsarisingfromthecompany’sday-to-dayactivitytobesolvedswiftly.

AnimportantaspectofourworkscouncilsisthattheyarehighlyrepresentativeandparticipateintheSafetyandOccupationalHealthCommittees.Onthesecommittees,onaregularbasis,theCompany’sactionsintheseareasareconsulted,debatedandproposed,aswellasanyincidentsthathavearisenandproposalsforcorrectivemeasures.

[403-1]

4.5.Tradeunion information

PROFESSIONALCATEGORY

1 2 3 4 5 6 7 8 0 TOTAL

Hoursoftraining - 973.4 3,014.1 3,860.6 8,735.4 2,996.0 4,180.8 170.1 127.5 24,057.9

[404-1]

HOURS OF TRAINING BY PROFESSIONAL CATEGORY

HOURSPEREMPLOYEE

TRAININGINVESTMENT

20.3hoursperemployee(average)

247.2€eurosperemployee

CSR Report 2018 51

Themainmattersdiscussedonthesecommittees,wherethecompanyandtheworkershaveequalrepresentation,aretheassessmentandvaluationofoccupationalhazards,theprovisionofindividualprotectionequipment,theprotectionfacilities,informationandtrainingonoccupationalhazards,amongotherissues.Throughthesejointbodies,ROVI’semplo-yeesarerepresentedinthesemattersatthehighestlevel.

In2018,labourrelationsranasnormalwithoutanyconflictiveincidents.Duringtheyear,twosignificantnegotiationswerecommencedandconcludedinrelationtoitemsofremuneration,withasubstantialchangetoworkingconditionsandamovefromoneworkcentretoanother,whichconcludedsuccessfully.

ROVIinformsitsemployeesofmattersofgeneralinterest,companymilestones,agreementsororganisationalchangesthroughthedifferentchannelsavailable.Theresourcesusedtrytomakethebestuseofthelatesttechnologicaladvancesavailabletoreachtheentireworkforce,boththepeoplewhohaveaccesstoofficeITinthecourseoftheworkandthosewhodonot.Thus,communicationtakesplacethroughtheinternaltelevisionchannel,noticeboards,e-mailorthemobilephoneapplicationthatiscurrentlybeingimplemented.

WeshouldhighlightthefactthatallROVI’semployeesinSpainworkundertheemploymentconditionsregulatedintheXVIIICollectiveAgreementoftheChemicalIndustry,lastupdatedandsignedin2015.100%oftheemployeesarecoveredbythisAgreementorbytheagreementsapplicableineachspecificworkarea(offices,sales,etc.).Notonlydoesthecompanyabidebythelaw,butitalsoimplementscertainenhancements,suchaspayingasupplementtoSocialSecuritybenefitsintheeventofsickleave.

[102-41]

EmployeesofthesubsidiariesintherestofEuropearealsogovernedbythepertinentcollectivelabouragreement,exceptincaseswherelocallegislationstatestheyaresubjecttogenerallabourlegislation,giventhelownumberofemployeesatthesubsidiary.

4.6.Health andsafety

Theworkers’well-beingandhealthhasadirecteffectonthecompany’svaluecreation.Themanagementofpersonnel-relatedrisksisthedutyoftheHealthandEnvironmentDepartment,whichholdsexclusiveresponsibilityforaspectsrelatedtoenvironmentalmanagement,aswellasworkplacesafetyandhealththroughoutthegroup.

SaidDepartmentisresponsibleformanagingworkplacehazards.ROVIhasanIntegratedEnvironmentalandOccupationalHazardPreventionManagementPolicy,applicabletothewholegroup,theobjectiveofwhichtoprotectthelife,physicalintegrityandhealthofalltheworkers,includingboththegroup’sownworkersandthoseofthecompanieswhoworkwithit.ThisPolicyisbasedonaseriesofcorporateprocedures,aswellaslocalproceduresorworkinstructionsspecifictoeachcentre.

CSR Report 2018 52

TheprincipaloccupationalhazardsidentifiedbyROVI,followingthecorporateprocedureforidentifyinghazards,assessingrisksanddeterminingcontrols,aremainlythoseinherenttoaproductionplant:contactwithandexposuretochemicalproducts,noiseexposure,overexertion,etc.

Theserisksaremanagedthroughplanningthepreventiveactivity(existenceofspecificprocedurescompliancewithwhichminimizestheprobabilitythattheseriskswillmaterialize)andtraining(thereareoccupationalhazardtrainingplansandrefresherplans).Furthermore,therisksidentifiedaremanagedinaccordancewiththespecificprocedurescreatedtocontrolandregularlymonitortheactionstaken,suchasthoseconcerningworkpermits,safetyinspectionsandtheidentificationandevaluationoflegalrequirements.

Theapplicationofallthesemeasureshelpedmeettheaccidentratetargetfor2018inalltheGroupcompanies.Specifically,theROVIGroupsetagoalofanaccidentrate(No.ofaccidents/No.ofworkers*100)lowerthan1.5%withsickleaveandlowerthan3.5%withoutsickleave.Inaddition,eachplant,individually,definesspecificpreventionobjectives.Examplesoftheseare:

• Acquisitionofasystemforneutralisingchemicalproductsthatallowsinjuriescausedbycontactwithchemicalstobeminimisedinlaboratoryandproductionjobsincomparisonwith2017.ThisgoalwassetattheMadridandSanSebastiándelosReyesplants.

• Increaseof20%incomparisonwith2017ofProductionAreaworkerswithbroaderpreventiontraining.ThisgoalwassetattheGranadaplant.

• Reductioninthemoderateriskcategoryassociatedtofallingtoadifferentlevelinthetaskofinstalling/removingtherotaryvalveoftherollercompactor.ThisgoalwassetattheAlcaládeHenaresplant.

Inaddition,intheaspectofpromotinghealthylifestylehabitsamongemployees,ROVIcontinuedwiththeinitiativesimplementedinpreviousyears,suchashealthybreakfastsandvendingattheplants,practisingsportsatnearbysportscentresandparticipatingincharityraces,organisedbyROVI’sCorporateSocialResponsibilityarea.

Inordertopreventavoidabletravelandtrips,ROVIprovidesallthepersonnelwhosorequirewithalaptopcomputerwithconnectivitytotheROVInetworkandencouragestheuseofvideoconferencesandon-linemeetings.Likewise,iftheworkperformedsopermits,teleworkingisorganisedduringthelastweeksofpregnancy.Additionally,atworkcentreswherestreetparkingisdifficult,thecompanymakesparkingspacesavailabletopregnantwomen.

2018

Men 3.176

Women 4.662

TOTAL 3.919

(*)RatecalculatedasNo.accidents/No.ofhoursworked*1000000

2018

Hombres 0.229

Mujeres 0.125

TOTAL 0.177

(*)RatecalculatedasNo.ofworkingdayslost/No.ofhoursworked*1000

2018

Hombres 0.375

Mujeres 0.674

TOTAL 0.524

(*)RatecalculatedasNo.accidents/No.workers*100

FREQUENCY RATE FOR WORK-RELATED ACCIDENTS* BY GENDER

WORK-RELATED ACCIDENTS SEVERITY RATE* BY GENDER

WORK-RELATED ACCIDENT INCIDENCE RATE* BY GENDER

Note: accidents on the way to work and data of ROVI group employees are included. Information on personnel hired through temporary employment companies are excluded.

CSR Report 2018 53

Theapplicationofallthesemeasureshelpedtomeettheaccidentratetargetfor2018inalltheGroupcompanies,whichwaslowerthan1.5%ofaccidentstonumberofworkersatallthecentres.

Absence rate

ForROVI,goodmanagementinthisrespecthasadirecteffectontheworkforce’shealthandwell-beingand,conse-quently,onproductivity,thecompany’seconomicperformanceandattainingstrategicgoals.

ROVI’sabsencelevelsarebelowthoseinthesectorwhereitcarriesonitsactivity,inspiteofthefactthatthenumberofdays’absencein2018was9,972,equivalentto79,776workinghourslost,representinganabsencerateof2.09%.

Accidentswith sickleave

Days lost Deaths

14 602.5 0Frequencyrate–accidentswithsickleave

Severity rate

Incidence rate

3.919 0.177 0.524

2018 2017

Economicgroup Comp. Sector Economicgroup Comp. Sector

Totalabsolute 2.25% 3.44% 2.03% 3.20%

Absencerate 2.25% 3.44% 2.03% 3.20%

Absoluteabsence 2.09% 3.23% 1.84% 2.98%

2018 2017

Daysof sickleave

Days worked

Absence rate

Sector absence rate

Daysof sickleave

Days worked

Absence rate

Sector absence rate

TOTAL 9,972 443,803 2.25% 3.44% 8,943 440,817 2.03% 3.20%

Source: Mutua de Accidentes de Trabajo FREMAP. Global Annual Absence Report ROVI GROUP

CSR Report 2018 54

5. Suppliers

CSR Report 2018

5.1. Management principles

[102-9,102-10]

ROVIhasputinplaceaseriesofspecificactionprinciplesalignedwiththecompany’sprinciplesandvalues,awarethatsuppliersareagroupofstrategicinterestinitsactivities.TheROVIgroupmakesitsbesteffortstocomplywithitscommitments,whereselectioncriteriaandinformationtransparencyprevail,andisawareoftheimportantrolethatsuppliersplayinitsbusinessinthisrespect.

ROVIhasasupplierselectionpolicythatincludesalistofthecriteriausedtoselecteachtypeofsupplier.Thispolicyenvisagesbothinitialandregularevaluations.Thus,alistofapprovedsuppliers,keptbytheQualityDepartment,isdrawnup.ThereisalsoaSupplierContractingandPaymentPolicy,aimedtoestablishaframeworkforrelationswithsuppliersandcreditorsthatiscommontoallthegroup.Itstatesthatsupplierswithanannualvolumeofover100,000eurosmustalwayshaveadulysignedcontractinforce,regulateshowinvoicesshouldbesentandrecorded,andsetsoutthemeansofpaymentaccepted.

AsstatedintheROVI’sCodeofEthics,anypracticeinvolvingbriberyorcorruptionasawaytoobtainadecisionfavourabletothecompany’sinterestsisrejectedandpracticesintendedtodobusinessusingunduemeansarenottolerated.

NoROVIemployeemayofferathirdpartyanytypeofbenefitthataimstoinfluenceillicitlyorisofferedwiththeintentionofillicitlyinfluencingthethirdparty’scapacitytoadoptobjectiveandlegitimatebusinessdecisions.Likewise,ROVIemployeesareexpresslyprohibitedfromacceptinganykindofcorruptionorbriberyofferedbyathirdparty.

Allinteractionwithhealthprofessionals,healthorganization,healthsystems,pharmacies,stores,purchasers,distri-butors,suppliers,commercialpartners,publicemployeesoranyotherthirdpartiesmustbegovernedbylegalityandethicsandinlinewithROVI’svalues,companypolicies,theapplicablelawsandindustrystandards.

ROVIhasananti-corruptionpolicythatregulatesbothgivingandacceptinggifts.Thispolicymustbeknownandobservedbyalltheprofessionals.Innocasemaytheacceptanceorgivingofgiftsbeusedasasubterfugeforbriberyortheconcealmentofanillicitaction.

CSR Report 2018 56

Spanish76%

14%Other European Community

Non-Community 10%

In2018,ROVIworkedwith7,819suppliersfrom35countries.Whenanalysingthetypesofsupplier,attentionshouldbedrawntotheweightofthecompany’sSpanishsuppliers,whichrepresent76%ofthetotal,whilemorethan90%operateinEuropeanUnioncountries.Inthisrespect,theeffectofopeningnewsubsidiariesinthemainEuropeanmarkets,whichalsostimulatesthecontractingoflocalsupplierstoprovideservices,shouldbehighlighted.InadditiontoSpanishsuppliers,ifweconsiderthenumberofdifferentsuppliers(nottheamountoftheirinvoices),ROVIhasalargenumberofGerman,Portuguese,French,BritishandItalianserviceproviders.

Since2013,thegrouphashadasupplierpaymentpolicyinordertoestablishacommonframeworkforrelationswithsuppliersandcreditorsthroughoutthegroup.Thisguaranteestotalefficiencyinaccountingforinvoices,anappropriatepaymentpolicyandgreaterconsistencyinnegotiations.ROVI’saveragesupplierpaymentperiodin2018was51days,inlinewiththemaximumpaymentperiodsprovidedforinLaw17/2010,whichwasamendedbyLaw11/2013.

5.2. Balanceoftheyearand futurechallenges

SUPPLIERS BY PURCHASE VOLUME

CSR Report 2018 57

5.3. CSR inthesupplychain

ROVIrequiresallitssupplierstoguaranteefactorssuchasequalopportunities,occupationalsafetyorcareoftheenvironmentandtodeclaretheircommitmenttobasicprinciplesofethicsandprofessionalconduct.Atthesametime,ittriestoinvolvesuppliersandsubcontractorsintheadoptionofthebestcorporatesocialresponsibilityprac-ticesinordertoregulatetheiractivitiesinaccordancewiththestandardsincludedinthecertificationsSA-8000,SGE-21orsimilar.

Thecompanyhastwomechanismstotrytoguaranteeandencouragetheadoptionofgoodsocialresponsibilitypracticesinitssupplychain:

• Itperiodicallysendsavoluntary document entitled“Commitment to CSR” toallgroupsuppliersandsubcon-tractors,whereitrequestscertificationssuchasSA-8000orurgesthemtoadoptgoodbusinesspractices.Atpresent,morethan55%ofthecompanieshavesignedthissocialresponsibilitycommitment.ROVI’stargetisforallitssupplierstoadheretothisinitiative.

• On-siteaudits,inwhichitchecksthatsuppliersoperateinaccordancewithnationalandlocalregulations,thattherearenosignificantnon-compliancesinrespectofoccupationalsafetyandthattherearenopracticesthatinfringetheworkers’rights.Amongotheraspects,theauditorsensurethatasafeworkenvironmentisprovided,environmentallegislationisobserved,andemployeesdonotsufferabuseordiscrimination.

Additionally,theROVIGrouphasaCodeofEthicsforSuppliers,whichestablishesthatallsuppliersmustrespecttheprotectionoffundamentalhumanandlabourrightsrecognisedinternationally.Specifically,theCodeofEthicsforSuppliersrequiresallsupplierstocomplywiththefollowingprinciples:

• Eliminationofforcedlabour.

• Eliminationofchildlabour.

• Respectfortherightofassociationandcollectivebargaining.

• Equalopportunitiesandnon-discrimination.

• Thesuppliermustprovideafairworkenvironment,freeofanykindofviolence.

• Respectforcurrentlegislationonworkinghoursandremuneration.

Attentionshouldbedrawntothefactthat,asstatedabove,morethan90%oftheROVIGroup’ssuppliersoperateincountriesbelongingtotheEuropeanUnionandthosethatcarryontheiractivityoutsidetheEuropeanUnionenjoyrecognisedprestigeintheinternationalcommunity.Thismeansthatsuppliernon-compliancewithHumanRightsrequirementsisconsideredunlikely,limitedandundercontrol.

CSR Report 2018 58

6. Society

CSR Report 2018

6.1. Management principles

ROVI’sactivityhasadirectimpactonsocietyatdifferentlevelsandthegroupisverymuchawareofthis.Sinceitsbeginnings,ithasbeenpermanentlyinvolvedinsupportingmedicalresearchandcommittedtohighereducationinSpain,andhasactedresponsiblyinrespectofbothitstaxobligationsanditsroleasanemployerandeconomicagentofproximity.

Thegroup’sGeneralCSRPolicyestablishescontributingactivelytosocialprogressasaprincipleforactioninrela-tiontosocietyand,inthisrespect,ROVIiscommittedtoeconomicandsocialdevelopmentintheareaswhereitcarriesonitsactivity.

Commitment to society

ROVIassumestheimpactofitsactivityonsociety,assessingandmanagingthenon-financial,ethical,reputa-tional,socialandenvironmentalrisks,anditcommitsitselftothosesocialinitiativesoractivitiesthatbenefitsociety.ROVIconsidersthatitspriorityareasofsocialactionareimprovementsforthosewithdisabilitiesandtheirincorporationintotheworkplace,thepromotionofhealth,fosteringresearch,commitmenttotrainingandcorporatevolunteering.

6.2. Balance oftheyear

ROVIholdsagreementswithpublicandprivateentitiesinordertocombineeffortsthatreinforcescientific,technologicalandeducationalactivities,aswellasspreadingknowledge.

Inorderforqualifiedstudentstoaccessaworkenvironmentandimprovetheirskills,knowledgeandexperience,thecompanyhasatrainingprogramme.Inthisrespect,thereareco-operationagreementswith73educationalcentres(universities,institutions,officialtrainingcentresandbusinessschools)throughoutSpain.Thistraininghelpsstudentstocommencetheirworkinglifeinaprofessionalworkenvironmentand49peopletookpartin2018.

CSR Report 2018 60

Commitment to research

[102-13]

Atthesametime,ROVIusespartofitsresourcestopromotemedicalresearch.Overrecentyears,thecompanyhascarriedonintensiveactivitytosupportresearchandfomentthepreventionandknowledgeofcertaindiseasesincollaborationwithhealthprofessionals.

ROVIisverymuchinvolvedinsupportingco-operativeresearch,holdingimportantco-operationagreementswithdiffe-rentpublicbodiesanduniversities,suchastheco-operationagreementwiththeUniversityofGranada,withwhichitaimstocombineeffortsthatincreasescientific,technologicalandeducationalactivitiesandthesharingofknowledge.

TheCompanylikewiseco-operateswithscientificassociationsandsocietiesofdifferenttypesinsupportingthehealthprofessionals’questforinnovation.AnexampleistheSEFH/ROVIHospitalPharmacyDevelopmentawards,whichhavebeenawardedjointlywiththeSpanishHospitalPharmacySociety(SEFH)forthelasttwoyearsandrecogniseprojectsthatrepresentthecontributionofinnovativesolutionsthatarebeneficialtopatientwell-beingandqualityoflife.

SinceJune2016,ROVI,liketherestofthepharmaceuticalindustry,hasbeenpublishingthedataofpaymentsmadetohealthprofessionalsinordertoendowthisrelationshipwithgreatertransparency.Theamountusedforthesedonationsin2018willbedisclosedinthegroup’s2018AnnualReport,asoccurredin2017.

MILLIONSOFEUROS 2018 2017 2016

ECONOMICVALUEGENERATED 304.8 277.4 270.8

ECONOMICVALUEDISTRIBUTED

Shareholders 4.5 6.0 9.1

Suppliers 172.7 154.7 153.5

Society -1.2 0.3 1.8

R&D 32.4 28.3 17.5

Employees 70.2 64.0 60.5

Providersofcapital 0.8 0.9 0.5

Amortisationanddepreciation 12.0 11.5 11.0

Reserves 13.4 11.8 17.0

ECONOMIC VALUE GENERATED AND DISTRIBUTED

[201-1]

CSR Report 2018 61

Supporttogroupswithdisabilities

ROVIisawarethatthegroupofpeoplewithdisabilitiesisoneofthegroupsatriskofsocialexclusionwiththegreatestdifficultiesinfindingwork.Additionally,itisconvincedthatthecompanyisenrichedbythecontributionmadebythesedifferently-abledpeople,whoprovideitwithaddedvalue.

Inlinewiththeforegoing,ROVIiscommittedtomainstreamingpeoplewithdisabilitiesatworkandencourageshiringthem.Thus,at31December,2018,25employeeswithdisabilitieswereworkingforthecompany,20ofthemformedpartofROVI’sdirectworkforce,while5wereworkingthroughtemporaryemploymentcompanies.

• ISS Facility Services (Gelim).ROVIhascontractedoutthecleaningofitsofficestopeoplewithdisabilities.

• Ilunion,withwhichROVIhascontractedthelaundryservice.

• Fundación Manantial,whichhasthepurposeofintegratingpeoplewithseverementaldisorders.ROVIcooperateswiththisfoundationinseveralways,sinceitisalsocertifiedforthesecondarypackagingofthecompany’sproducts,inadditiontocateringservicesatgroupoffices.

TheCompanyholdsanagreementwiththeFundaciónProdiswherebyitconductsasupportedemploymentprogrammeaimedattheworkplaceinclusionofpersonswithintellectualdisabilitieswhoareabletoperformhigh-qualityworkwhentheyreceivethenecessarytrainingandsupport.ROVIfirmlybelievesinthepersonal,socialandemploymentcapacitiesofpeoplewithintellectualdisabilities,whoareabletoperformhigh-qualityworkwhentheyreceivepropertrainingandsupport.

Inadditiontotheforegoing,ROVIcarriesoutactionstofomenttheinclusionofthisgroupintheworkplaceintwospheres.First,withinitsactivitiesrelatedtoCorporateSocialResponsibility,itprovideseconomiccooperationtovariousnon-profitentitiesthatcarryontheiractivitiesintheareaoftheworkplaceandsocialinclusionofpersonswithintellectualdisabilities.Likewise,SpecialEmploymentCentresareitsserviceprovidersinseveraldifferentareasoftheCompany’sactivity.

Theproblemsofphysicalaccessibilityinworkenvironmentsanddifficultyinusingobjectsandproducts,irrespectiveoftheirtechnical,cognitiveorphysicalskills,arebarriersthathinderthefullmainstreamingofpeoplewithdisabilitiesinworkandsocialenvironments.

Regardingthefirstofthebarriers,ROVIstrivesfortheworkcentreswhereitcarriesonitsactivitytobeaccessibletoever-yonesafely,comfortablyandautonomously.

Inthisarea,ROVIiscarryingoutaremodellingplanatitsworkcentres,intendedtomakethemaccessibleforpeoplewithdisabilities.Applyingthisplan,fiveoftheorganisation’ssevenworkcentresarenowaccessibleanditisplannedtoadaptthetworemainingcentrestoallowaccessibility.

Inaddition,theproductsmarketedbyROVIarealsolabelledinBraille,sothatthevisuallyimpairedcanusethemauto-nomously,thusfullyattainingtheobjectivesforwhichtheyweredesigned.

And,finally,ROVIfosterssensitisationastheprimarytooltocombatbarrierstopersonswithdisabilities.Inthisrespect,itconductscorporatevolunteeringactivitiesincooperationwithnon-profitorganisationsengagedinthesocialintegrationifpersonswithmentalandintellectualdisabilities.Thus,employeesobtainfirst-handknowledgeofthemainbarriersthatpersonswithdisabilitieshavetosurmountintheirdailylives.Theseactivitiesaremadeknownthroughthecompany’sinternaltelevisionchannelandperiodicinternalpublications.Thus,thecompany’scommitmenttoaccessibilityandinclu-sionissharedwiththeemployeesandROVIstrivestoraiseawarenessofdisabilitiesandcombatthediscriminationsufferedbythisgroupofpeople.

CSR Report 2018 62

Socialaction,sponsorshipandpatronage

ROVIhasaconstantcommitmenttosocialactionclosetoitsenvironmentandco-operatespermanentlywithnon-profitorganisation.Thus,in2018,itcontinuedtoco-operatewiththeGranadaRedCrossinitschildassistanceandprotectionprojects;withProyectoHombreGranada,inthecontinuityofitssocialreintegrationactivities;andwithFundaciónRecover,co-operatinginitsprogrammestoimprovehealthcareinAfrica.

Thecompanyhascontinuedtobetonco-operationwithentitiesthatworkontheintegrationandmainstreamingofpersonswithdisabilitiesthroughsport,suchasFundaciónTambiénandFundaciónDeporte&Desafío.

Workingwithmanyofthesefoundations,ROVIhasbeenabletoexpandthecorporatevolunteeringactivitiesavailable,sothatROVIemployeescangettoknowtheworldofdisabilityfirst-hand,thankstoourinclusivesportsevents,suchastheAdaptiveSkiingCampusinSierraNevada(Granada),theAdaptiveDescentoftheRiverSella(Asturias),theVIISponsoredRaceofMadrid,andtheEco-TrekkingandMultisportsDays(bothinMadrid).In2018,135ROVIemployeestookpartinsomeoftheactivitiesscheduledbytheCSRArea.

Furthermore,continuingwithitspolicyofpromotinghealthylivinghabitsandco-operatingwithnon-profitentitiesthatworktoincludegroupsatriskortoimprovehealthcareindifferentcountries,ROVIco-operated,forthefirsttime,asasponsorforseveralcharityraces,suchastheVIICharityRaceforMentalHealth,organisedbyFundaciónManantialinMadrid,ortheIMedicusmundiSouthCharityRaceSouth,organisedbyMedicusmundiSouth(Granada).

FundaciónProdisalsojoinedthelistoffoundationsthatco-operatewithROVIin2018.Inthiscase,throughadualchannel:ProdishelpedthecompanyintheprocessofrecruitingapersonwithDown’ssyndromeforROVI’sHumanResourcesDepartment,whileitsSpecialEmploymentCentreworkedwiththeCorporateSocialResponsibilityDepartmentasasupplierofsportsmaterialforcorporatevolunteering(T-shirts,caps,etc.).Thus,Prodisjoinedothersuppliers,suchasISSFacilityServices(Gelim),IlunionorFundaciónManantial,whichareengagedtoprovidecertainservicesperformedbypersonswithdisabilities.

Additionally,throughout2018,ROVIcontinuedtheworkoftheDonationsCommittee,whichchannelstherequestsforco-operationthatROVIreceivesfromhealthcareorganisationsandsocialorhumanitarianentities.Itsmissionistorevieweachapplicationandcheckthatitcomplieswithcurrentlegislation,theCodeofGoodPracticesofthePharmaceuticalIndustryandROVI’sCodeofEthics.

Volunteeringandco-participation

Since2016,ROVIhasbeenrunningacorporatevolunteeringproject,whichhasbecomeoneofthepillarsofthecompany’ssocialaction,inordertocontinuetoincreaseitscommitmentandsolidarity.Thisprogramme’sgoalistogiveallemployeesthechancetoplayaleadingroleinchange,co-operatingasvolunteerswithsocialactionsorganisedwiththefoundationsandNGOswithwhichROVIhasbeenco-operatingforyears.In2018,thisprogrammecontinuedthroughthefollowingactivities:

• CharityRaceforMentalHealth,ofFundaciónManantial(17February).

• Adaptiveski-ingcampuswithFundaciónTambién,alsoinSierraNevada,Granada(17March).

• Mother’sDayvolunteeringwithFundaciónRecoverinFuenlabrada(6May).

• Eco-trekkingwithFundaciónDeporte&Desafío,inMadrid(2June).

• IMedicusmundiSurCharityRaceinGranada,ofMedicusmundiSur(1July).

• AdaptivedescentoftheRiverSella,withFundaciónTambién,inAsturias(27July).

CSR Report 2018 63

• Multi-sportsDaywithFundaciónDeporte&DesafíoattheSomontesSportsComplexinMadrid(15September).

• CharityRacetohelpchildren,oftheGranadaRedCross,inGranada(28October).

• TambiénMadridCharityRace,ofFundaciónTambién,inMadrid(28October).

Relationswiththepublicauthoritiesandtaxresponsibility

Asaproviderofactivesubstances,medicinesandhealthcareproducts,ROVIhasanongoingrelationshipwiththehealthauthorities.Thegroupactivelystrivestobevigilantandforstrictobservationofthehealthauthorities’requirementsinallitsactivities–industrialdevelopment,manufacturingandsupplyofproducts,aswellassupplyingunitsforclinicaltrials-,alwayscarriedoutinanenvironmentofstrictcompliancewithalllegalandregulatoryrequirementsthatapplytothem,aswellastheauthorisationsgrantedbytheauthorities.

Inaddition,ROVIhasaCorporateTaxPolicythatestablishesitscommitmenttostrictcompliancewithtaxrequirementsbyapplyinggoodtaxpracticesandactingtransparently,payingtaxesresponsiblyandefficientlyandpromotingrelation-shipsofco-operationwithgovernments,endeavouringtoavoidmaterialrisksandunnecessaryconflicts.Tosupportitstaxpractices,ROVIhirestheservicesofanexternaltaxadvisor,whokeepsthegroupupdatedonnewtaxdevelopmentsandadvisesonanydoubtsthatarise.Additionally,thetaxadvisorreviewsthepreparationandfilingofthedifferenttaxes,aswellasgroupdecision-makingontaxmatters.

THOUSANDSOFEUROSProfit before

tax

Income tax paid

Government grants

received

LaboratoriosFarmacéuticosRovi,S.A. 11,444 (3,108) 1,587

LaboratoriosFarmacéuticosRovi,S.A.permanentestablishmentPortugal (343) (33) -

LaboratoriosFarmacéuticosRovi,S.A.permanentestablishmentPoland (2) - -

LaboratoriosFarmacéuticosRovi,S.A.permanentestablishmentGermany - - -

RoviContractManufacturing,S.L.(*) 16,348 - -

BemipharmaManufacturing,S.L.(*) (36) - -

PanQuímicaFarmacéutica,S.A.(*) 531 - -

Gineladius,S.L.(*) (9) - -

FrosstIbérica,S.A.(*) 5,351 - -

BertexPharmaGmbH - - -

RoviBiotech,Limited (30) - -

RoviBiotech,S.R.L. 9 - -

RoviBiotech,GmbH (82) - -

RoviS.A.S. (729) - -

RoviBiotech,Ltda. - - -

TOTAL (3,141) 1,587

(*)Thesecompaniesformpartoftaxgroup362/07,ofwhichLaboratoriosFarmacéuticosRovi,S.A.istheparent.

CSR Report 2018 64

7. Shareholders

CSR Report 2018

ROVI’stwocommitmentstoitsshareholdersareclear:valuecreationandtransparency.Thecompany,sinceitwasfirstlistedonthestockmarkets,hascarriedoutintensiveactivityininvestorrelationsandregularlyreportsonallitsactivities,updatingandapplyingits“PolicyforCommunicationwithShareholders,InstitutionalInvestorsandProxyAdvisors”.

Likewise,ithasdifferentchannelsfordirectcommunicationwithinvestors.Shareholdersmay,iftheysowishauto-maticallyreceivefinancialinformationonROVIthroughane-mailalertsystemandthegroupprovidesregular,one-offand/orsignificantinformationonthecompanyintheformofpresentationsandlegal,economic/financialandcorporategovernancedocuments,whichmaybeconsultedonthecorporatewebsite.

Investorrelationsactivity

Atthesametime,ROVIcarriesoncontinuousactivitythroughouttheyearthroughmeetings,forumsandeventswithinvestors.During2018,ROVIheld12roadshows,participatedin9eventswithinvestorsandmade23visitstoinvestorsandteleconferencingcalls.Intotal,thisrepresentedattentiontomorethan215investors.

Analystcover

At31December,2018,ROVIwascoveredby14analysts.In2018,twonewanalystsbegantocoverROVI,JefferiesandRenta4,whileanothertwo,BancoSantanderandKeplerCheuvreux,resumedcover.TheconsensusoftheanalystswasabuyrecommendationforROVIwithanaveragetargetpriceof18.53euros,6%higherthantheclosingpriceoftheshareat31December,2018,whichwas17.45euros.

Capitalincrease

[102-10]

In2018,ROVIincreaseditsequityby88millioneuros.Nettransaction-relatedexpenseswere3.9millioneuros,meaningthatthenetcapitalincreasewas84.1millioneuros.

ThepurposeofthefundsobtainedfromthecapitalincreasewastopartiallyfundthePhaseIIIclinicaltrialsofRisperidonaISM®andotherexpensesrelatedtoRisperidonaISM®untilitwas,ifapproved,marketed;tofund,fullyorpartially,thePhaseIclinicaltrialsofLetrozolISM®;tosupportthecurrentmarketingoftheenoxaparinbiosimilarBecat®;andanyothergeneralcorporateneeds,possiblyincludingacquisitions.

Atthepublicationdateofthisreport,ROVIhasused22.5millioneurosofthesefundstoacquireFalithrom®andPolaramine®,amongotheruses.

CSR Report 2018 66

Capitalstructure

At31December,2018,significantshareholderswithaninterestofmorethan3%arethoseshownbelow:

Significantshareholdershold85.273%ofROVI’scapital.

InOctober2018,theincreaseinequityledtothedilutionofthemajorityshareholders,NorbelInversiones,S.L.,whoseinterestdroppedfrom69.640%to62.102%.

Allthesignificantshareholders,exceptJOHambroCapitalManagement,subscribedtothecapitalincrease.

AttentionshouldbedrawntotheinclusionofWellingtonManagementGroupasasignificantshareholder.Itsubscribedtothecapitalincreasewithaninterestof3,013%and,betweenthenand31December,2018,increaseditspositionby2.103percentagepoints,to5.116%.

PERCENTAGEOFVOTINGRIGHTS DIRECT INDIRECT TOTAL

NorbelInversiones,S.L. 62.102% - 62.102%

IndumentaPueri,S.L. - 5.057% 5.057%

AlantraAssetManagement,SGIIC,S.A. - 4.821% 4.821%

T.RowePriceAssociates,Inc - 3.390% 3.390%

JOHambroCapitalManagementLimited - 4.787% 4.787%

WellingtonManagementGroup,LLP - 5.116% 5.116%

TOTAL 62.102% 23.171% 85.273%

SIGNIFICANT SHAREHOLDERS

CSR Report 2018 67

8. Environment

CSR Report 2018

8.1. Environmental management principles

ROVI’scommitmenttoenvironmentalprotectionisfirmandconstantandformspartofitsday-to-dayactivity.ROVIisawarethat,inthecourseofitsday-to-daywork,ithasaninevitableimpactontheenvironmentandonworkplacesafetyandhealthinanumberofways,sinceeachoneofitscompaniesisinadifferentcontext,dependingonwhetheritisengagedinmanufacturingormarketingandwhereitislocated.Therefore,ROVIundertakestoreducetheeffectsofitsactivitytoaminimumwhenandwherethisispossible,likewiseallocatingalltheresourcesnecessarytoguaranteepeople’ssafetyandhealth.

TheGroup’sGeneralCSRPolicyhighlightenvironmentalcareasanindispensablebasisforitsactions.TogetherwiththeprinciplesofqualityandworkplacesafetytoprotectROVI’semployees,itisoneofthepillarsthatsupportthesustainablemanagementprinciplesofitsactivityfromanenvironmentalstandpoint.Itmaterialisesinactionsaimedtopreventpollution,manageresourcesefficientlyandfosterenvironmentalresponsibility,assetoutintheIntegratedEnvironmentalManagementandRiskPreventionPolicy,whichgovernsROVI’sactivitiesinenvi-ronmentalmatters.

ThegrouphasaDepartmentthatisexclusivelyresponsibleforenvironmentalmanagement-relatedaspectsandthoseconcerningworkplacesafetyandhealth,which,in2018,managedabudgetof1,042,972euros,usedforanumberofactionsbasedoncontinuingimprovementincompliancewithbothlegalrequirementsandadditionalvoluntaryrequirementsthroughimplementationofefficientenergysolutions,therationalmana-gementofnaturalresourcesandrecyclingofthewasteproduced,aspectsthatarethebasisofthecompany’senvironmentalstrategy.

ThekeytooltoensurecorrectmanagementofenvironmentalaspectsistheintroductionofanenvironmentalmanagementsystembasedonthecriteriaestablishedbytheinternationalstandardISO14001:2004andtheEcoManagementandAuditSchemeRegulation(EMAS).ThesecertificationsrecognisethequalityofROVI’senvironmentalmanagementsystemandassureitscommitmenttotheenvironmentintermsthatgobeyondcurrentnationallegislation.

Atpresent,thegroupcompaniesLaboratoriosFarmacéuticosRovi,S.A.,RoviContractManufacturingS.L.andFrosstIbéricaS.A.holdenvironmentalmanagementsystemscertifiedunderISO14001:2007.In2018,thesesystemswerelikewisecertifiedunderthenewversionoftheinternationalstandards,ISO14001:2015.

ROVIhasacorporatecommunication,participationandqueryprocedure,thoughwhichqueries,complaints,suggestions,etc.relatedtotheenvironmentandworkplacehealthandsafetyaremanaged.Onthecorporatewebsite(www.rovi.es),theenvironmentalcertificatesheldbygroupcompaniesareavailabletothepublic.

CSR Report 2018 69

Amongthemainrisksrelatedtotheenvironmentalactivity,apartfromthoseinherentthereto,aretherisksconcer-ningaccesstoandverificationoftheenvironmentalregulationsinthedifferentareasinwhichROVIoperates,aswellaspossiblerestrictionsimposedbytheauthoritiesinparticularlocations,specificallythefollowing:

• Non-compliancewithlegalrequirementsduetodeficientidentificationofeitherlegalrequirementsconcerningtheenvironmentorenvironmentalaspectsorofemergencies,whenthismayleadtopossiblesanctionsorstake-holderdissatisfaction.

• Failuretoadapttoachangeinthetrendinlegislationoranyapplicablenewlegislationonatimelybasis.

• Possibleadministrativerestrictionsinforceinparticularlocations.

• Impactonmaterialandhumanassetsduetoanenvironmentalincidentofneighboursoremployees.

• BadenvironmentalpracticesonthepartofexternalcompaniesprovidingservicesonapermanentbasisortheGrouppersonnelsupervisingthem.

• Non-compliancewithnoiseregulationsthatleadstocontingenciesordisciplinarysanctions.

• Pollutionduetoexceedingthepollutantemissionlimitsonboilersordischargestogroundwaterthatmayleadtoanadministrativesanction.

• Incidentsintransportinghazardouswastethatmayleadtoasanction.

• Deficienciesinpersonneltrainingonenvironmentalmatters.

• Releasingemissionsintotheatmosphereduetotheabsenceofmechanismstopreventtheproductleakingfromtheequipment.

• Failuretocheckinvoicesthatshowconsumptionofaninappropriateamountofwaterorenergy.

• Mixtureofdifferentkindsofwasteandgenerationofhazardouswaste.

• Absenceofenergyefficiencycertification.

• Failuretofiletheannualwastereportandminimisationplanonatimelybasis.

Inaddition,ROVImanagesindirectenvironmentalaspectsresultingfromtradingrelations,productsorservicesthatmayhaveadverseeffectsintheenvironmentalarea.Foreachproductionplant,ananalysisismadeofthelifecycleoftheprocessorproduct,wherealldirectandindirectenvironmentalaspectsinvolved(comingfromsuppliers)areidentifiedbidirectionally.Oncetheyhavebeenidentified,inaccordancewiththeCorporateProcedureforIdentificationandAssessmentofEnvironmentalAspects,theindirectaspectsonwhichROVIisabletotakeactionareverified.

Thepossiblematerialisationofenvironmentalrisksismanaged,likewise,throughtheCorporateProcedureforIdentificationandAssessmentofEnvironmentalAspects,whichsetsouthowenvironmentalrisksshouldbeidentified,reportedandquantified.

CSR Report 2018 70

8.2. Consumption andwaste

ROVI’sownactivitygeneratesanumberoftypesofwasteandacommitmentonthepartofthecompanyitself,establishingwastetreatmentandreductionasoneofitsprioritiesinordertoreducetheimpacttoaminimumandpreventitspollutiveeffects.Processesconcerningwastetreatmentareaimedmainlytominimiseitintheproductionprocessesandpropermanagementonceithasbeenproduced,andtofavouritsuseandrecyclingwheneverpossible.

Regardingenergy,atallROVI’sproductplants,water,electricityandgasindicatorsareverifiedandreportedonamonthlybasis,analysinganypossibledeviations.Likewise,intheDistributionbusiness,theenergyhasbeencontractedwithaproviderof100%renewableenergy.

Thekeyenvironmentalindicatorsareshownbelow.Thedatahavebeendividedamongthedifferentcompaniesorbusinessestoallowthemtobecomparedwitheachother,sincetheunitsproducedaremeasuredindifferentunitsforeachoneofthecompanies/businesses.Specifically:

• ManufacturingplantbelongingtoROVI,S.A.inGranada:thisistheplantwhereBemiparinandEnoxaparin,theactivesubstancesofROVI’sprincipalownresearchproductsareproduced.Inthiscase,theunitsproducedaremeasuredinMUI,theactivityoftheactivesubstanceproduced.

• DistributionbusinessofLaboratoriosFarmacéuticosROVI,S.A.andsubsidiaries:inthiscase,distributedunitsareused.

• InjectablesproductionplantsofRoviContractManufacturing,S.L.(SanSebastiándelosReyesandMadridplants):inthiscase,theunitsproducedareexpressedinindividualunitspacked.SolidformsproductionplantofFrosstIbérica,S.A.inAlcaládeHenares:here,thepackofsolidformsisusedastheunitproduced(tablets,coatedtablets,hardcapsulesandsachets).

CSR Report 2018 71

[301-1,302-1,303-1]

ROVIGranada ROCM Frosst Distribution

kWhelectricityconsumed 3,002,572 7,206,775 8,100,711 630,352

kWhenergy/millionunitsproduced 10 65,863 238,256 29,306

kWhnaturalgasconsumed 1,941,716 6,371,676 14,426,850 0

kWhnaturalgas/millionunitsproduced 6 58,231 424,319 0

Litresvehiclefuel 500 409 1,279 518,653

ROVIGranada ROCM Frosst Distribution

m3waterconsumed 27,399 51,842 62,516 985

m3water/millionunitsproduced 0.1 473.8 1.838.7 45.8

ENERGY CONSUMPTION*

NATURAL RESOURCE CONSUMPTION*

ROVIGranada ROCM Frosst Distribution

Tonnesofhazardouswastegenerated 1.037 186 176 25

Tonnesofnon-hazardouswastegenerated 1.336 464 283 1

TOTALwaste 2.373 651 459 25

Tonneshazardouswaste/millionunits 0.003 1.70 5.17 1.15

Tonnesnon-hazardouswaste/millionunits 0.004 4.24 8.31 0.03

TONNESWASTE/MILLIONUNITS 0.008 5.95 13.49 1.18

WASTE*

(*)Figuresforthelastmonthof2018areanestimatedbasedontheinformationforprecedingperiods.

CSR Report 2018 72

Climatechange

Asacontributiontothefightagainstclimatechange,ROVInotonlytakeselectricityconsumptionintoaccount,butalsomeasuresotherfactorsatitsfacilities,suchasCO2emissionsfromnaturalgasanddieselconsumptionderivedfromelectricityandvehicles,aswellasothersubstancesthatmightacttodestroytheozonelayer.

[305-1]

ROVI’sgreenhousegasemissionshavealwaysbeeninsignificant,verymuchlowerthanthelegally-establishedlevels.Likewise,intheDistributionbusiness,aMobilityPlanhasbeenapprovedinSpaininordertotrytoreducefuelandelectricityconsumption,whicharetheonlyemissionsmade.

ROVIGranada ROCM Frosst Distribution

TonnesC02emitted 1.135 3.073 4.936 290

TonnesCO2/millionunits 0.004 28.08 145.18 13.47

ATMOSPHERIC EMISSIONS*

(*)Figuresforthelastmonthof2018areanestimatedbasedontheinformationforprecedingperiods.

CSR Report 2018 73

9. Supplementaryinformation

CSR Report 2018

9.1. About this report

[102-46,102-48,102-49,102-50,102-51,102-52,102-53]

ThisreportdescribesthemainactivitiescarriedoutbyROVIinCorporateSocialResponsibility(CSR).Ontheannualbasisdecidedbythecompany,ROVIwishestoreportontheprogressmadeandchallengesassociatedtoitsCSR,aswellastheactionsthatallowittocontributetooursociety’ssustainabilityinthisrespectfor2018.

Thisreporthasbeenpreparedfollowingtherecommendationsofthe2016GlobalReportingInitiative(GRI)standards.Point9.2ofthisdocumentincludesatablethatlinkstheindicatornumberwiththesectionofthisdocumentwheretherelevantinformationisincluded.ROVI’scommitmenttoethicalmanagementandtransparencyisshowninthedevelopmentofitsinternalcodes.Furthermore,ROVIhasappliedstandardSA-8000“SocialResponsibility”tothenature,sizeandimpactofitsactivities,productsandservices,whichhelpstoreinforceitsprinciplesforaction.

Theinformationincludedinthisreportcoversthe2018calendaryear.Thelastannualreportwasdrawnupin2018withtheinformationfor2017.Thus,wepresentthereportfollowingtheannualcycle.

TheinformationprovidedinthisdocumentreferstotheentireROVIgroup,exceptinthosecaseswhereotherwiseindicated.

Iffurtherinformationisrequiredonanyofthedataincludedherein,thecompanyhasmadeadirectcommunicationchannelavailableate-mailaddressir@rov.es.

CSR Report 2018 75

GRIG4CONTENTS

ID INDICATOR Page

General content

102-1 Nameoftheorganisation 5

102-2 Activities,brands,productsandservices 9

102-3 Locationofheadquarters 5

102-4 Locationofoperations 6

102-5 Ownershipandlegalform 5

102-6 Marketsserved 16

102-7 Scaleoftheorganisation 14

102-8 Informationonemployeesandotherworkers 43

102-9 Supplychain 56

102-10 Significantchangestotheorganisationanditssupplychain 56-66

102-11 Precautionaryprincipleorapproach 20

102-12 Externalinitiatives 21

102-13 Membershipofassociations 61

102-14 Statementfromseniordecision-maker 19

102-15 Keyimpacts,risksandopportunities 31

102-16 Values,principles,standardsandnormsofbehaviour 20

9.2. GRI ContentIndex

[102-55]

CSR Report 2018 76

ID INDICATOR Page

102-18 Governancestructure

See2018AnnualCorporateGovernanceReport

102-40 Listofstakeholdergroups 23

102-41 Collectivebargainingagreements 52

102-42 Identifyingandselectingstakeholders 23

102-43 Approachtostakeholderengagement 23

102-44 Keytopicsandconcernsraised 26

102-45 Entitiesincludedintheconsolidatedfinancialstatements 6

102-46 Definingreportcontentandtopicboundaries 75

102-47 Listofmaterialtopics 26

102-48 Restatementsofinformation 75

102-49 Changesinreporting 75

102-50 Reportingperiod 75

102-51 Dateofmostrecentreport 75

102-52 Reportingcycle 75

102-53 Contentpointforquestionsregardingthereport 75

102-54 ClaimsofreportinginaccordancewiththeGRIStandards

ThisreporthasbeenpreparedinaccordancewithGRIStandards,Coreoption

102-55 GRIContentIndex 76

102-56 Externalassurance

See2018StatementofNon-FinancialInformation

CSR Report 2018 77

ID INDICATOR Page

GRI 200 ECONOMIC TOPICS

103-1 Explanationofthematerialtopicanditsboundary 20

103-2 Themanagementapproachanditscomponents 20

103-3 Evaluationofthemanagementapproach 20

201-1 Directeconomicvaluegeneratedanddistributed 61

205-2 Communicationandtrainingaboutanti-corruptionpoliciesandprocedures 29

GRI 300 ENVIRONMENTAL TOPICS

103-1 Explanationofthematerialtopicanditsboundary 20

103-2 Themanagementapproachanditscomponents 20

103-3 Evaluationofthemanagementapproach 20

301-1 Materialsusedbyweightorvolume 72

302-1 Energyconsumptionwithintheorganisation 72

303-1 Waterwithdrawalbysource 72

305-1 Direct(Scope1)GHGemissions 73

GRI 400 SOCIAL TOPICS

103-1 Explanationofthematerialtopicanditsboundary 20

103-2 Themanagementapproachanditscomponents 20

103-3 Evaluationofthemanagementapproach 20

401-2 Benefitsprovidedtofull-timeemployeesthatarenotprovidedtotemporaryorpart-timeemployees 46

403-1 Workerrepresentationinformaljointmanagementworkerhealthandsafetycommittees 51

404-1 Averagehoursoftrainingperyearperemployee 51

CSR Report 2018 78

CSR Report 2018 79

C/ José Isbert, 228223 Pozuelo de Alarcón (Madrid)Tel: (+34) 91 021 30 00www.rovi.es

CSR Report 2018