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CORPORATE GOVERNANCE

ANNUAL REPORT (CNMV REPORT)

191

Corporate Governance Annual Report

ANNUAL CORPORATE GOVERNANCE REPORT OF LISTED COMPANIES

Details of issuerEnd date of reference financial year: 31/12/2015Spanish company tax code (C.I.F.): A-28414811Trade name: ADVEO GROUP INTERNATIONAL, S.A.Registered office: Calle Miguel Ángel, 11, 4 Planta, 28010 MADRID

A OWNERSHIP STRUCTURE

A.1 Complete the following table on the Company’s share capital:

DATE OF LAST CHANGE

SHARE CAPITAL (€)

NUMBER OF SHARES

NUMBER OF VOTING

RIGHTS01/12/2014 19,396,740,00 12,931,160 12,931,160

Indicate whether different share classes exist associated with different voting rights:

> Yes > No

A.2 List the direct and indirect holders of significant ownership interests in the Company at year-end, excluding directors:

FULL NAME OR CORPORATE NAME OF SHAREHOLDER

NUMBER OF VOTING RIGHTS HELD DIRECTLY

NUMBER OF VOTING

RIGHTS HELD INDIRECTLY

% OF TOTAL VOTING RIGHTS

JOSE MARIA MORENO DE TEJADA OLIVA 305,000 0 2.36%

SEGUNDO ANGEL MORENO DE TEJADA OLIVA 782,519 0 6.05%

ELISA MORENO OLIVA 488,307 0 3.78%

NMÁS1 ASSET MANAGEMENT SGIIC, S.A. 0 1,428,350 11.05%

BANCO MADRID GESTION DE ACTIVOS S.G.I.I.C., S.A. 432,502 0 3.34%

FULL NAME OR CORPORATE NAME OF INDIRECT SHAREHOLDER

NAME OF HOLDER: FULL NAME OR CORPORATE NAME OF DIRECT SHAREHOLDER NUMBER OF VOTING RIGHTS

NMÁS1 ASSET MANAGEMENT SGIIC, S.A. QMC II IBERIAN, S.L. 88,419

NMÁS1 ASSET MANAGEMENT SGIIC, S.A. QMC II IBERIAN CAPITAL FUND FIL 1,339,931

Indicate the most significant changes to the shareholding structure to have occurred during the financial year:

Corporate Governance Annual Report (CNMV Report)

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A.3 Complete the following tables on members of the Company’s Board of Directors holding voting rights through company shares:

NAME OR TRADE NAME OF THE DIRECTOR

NUMBER OF VOTING RIGHTS HELD DIRECTLY

NUMBER OF VOTING RIGHTS

HELD INDIRECTLY% OF TOTAL

VOTING RIGHTSALVARO VIDEGAIN MURO 1,638 0 0.01%

ELADIO BEZARES MUNILLA 53,438 0 0.41%

JUAN ANTONIO HERNANDEZ-RUBIO MUÑOYERRO 91,035 0 0.70%

GESTION DE INVERSIONES RIMUSA, S.L. 796,584 0 6.16%

QMC DIRECTORSHIPS, S.L. 1 0 0.00%

ABEL LINARES PALACIOS 500 0 0.00%

JAIME CARBÓ FERNÁNDEZ 45,000 0 0.35%

IRENE CANO PIQUERO 100 0 0.00%

ALBERTO MORENO DE TEJADA CLEMENTE DE DIEGO 10,500 0 0.08%% of the total voting rights held by the Board of Directors 7.25%

Complete the following tables on members of the Company’s Board of Directors holding rights over company shares

A.4 Indicate any family, commercial, contractual or corporate relationships, if any, that exist between significant shareholders, insofar as such ties are known to the Company, unless they are insignificant or stem from normal business or trading activities:

FULL NAME OR CORPORATE NAME OF RELATED PARTIESJOSÉ MARÍA MORENO DE TEJADA OLIVA

ELISA MORENO OLIVA

Nature of relationship: Family Brief description: SIBLINGS

FULL NAME OR CORPORATE NAME OF RELATED PARTIESJOSE MARIA MORENO DE TEJADA OLIVA

SEGUNDO ANGEL MORENO DE TEJADA OLIVA


FULL NAME OR CORPORATE NAME OF RELATED PARTIESELISA MORENO OLIVA

SEGUNDO ANGEL MORENO DE TEJADA OLIVA


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A.5 Indicate any family, commercial, contractual or corporate relationships, if any, that exist between significant shareholders, and the Company and/or its group, unless they are insignificant or stem from normal business or trading activities:

A.6 Indicate whether the Company has been notified of any shareholders’ agreements pursuant to the provisions stipulated in Articles 530 and 531 of the Spanish Corporation Law. Where appropriate, provide a brief description of such agreements and list the shareholders bound by them:

> Yes > No

Indicate whether the Company is aware of the existence of any concerted actions among its shareholders. Where appropriate, provide a short description of such actions:

> Yes > No

Expressly indicate any amendments to or termination of such agreements or concerted actions to have occurred during the financial year:

The company is not aware of the existence of concerted actions among its shareholders.

A.7 Indicate whether any individuals or legal entities exercise control or are able to exercise control over the Company pursuant to Article 4 of the Spanish Securities Market Act. If this is the case, identify such individuals or legal entities:

> Yes > No

OBSERVATIONS

A.8 Complete the following tables on the Company’s treasury stock:At year-end:

NUMBER OF SHARES HELD DIRECTLY

NUMBER OF SHARES HELD

INDIRECTLY (*)% OF TOTAL

SHARE CAPITAL269,500 0 2.08%

(*) Held through:

Detail any significant changes to have occurred during the financial year, pursuant to the provisions of Spanish Royal Decree 1362/2007:

Explain the significant changes

DATE OF NOTIFI CATION

TOTAL DIRECT

SHARES ACQUIRED

TOTAL INDIRECT

SHARES ACQUIRED

% OF TOTAL SHARE

CAPITAL30/04/2015 131,115 0 1.014%03/07/2015 135,165 0 1.048%29/09/2015 141,5721 0 1.095%

A.9 Detail the conditions and term of any current resolutions of the General Shareholders’ Meeting mandating the Board of Directors to issue, buy back or transfer treasury stock.

Resolution of the General and Extraordinary Shareholders’ Meeting held on 30 May 2014 to:

Authorise the Board of Directors of ADVEO GROUP INTERNATIONAL, S.A, and the subsidiary or dependent companies of ADVEO GROUP INTERNATIONAL, S.A, in accordance with the provisions stipulated in Articles 146 and pursuant to the Spanish Corporation Law, to acquire the shares of ADVEO GROUP INTERNATIONAL, S.A, by purchasing them (always within the applicable legal limits), determining the maximum and minimum purchase price of each share at 25 euros and 1.5 euros respectively, and ensuring that the nominal value of the shares purchased, directly or indirectly, when added to shares already owned, where appropriate, by ADVEO GROUP INTERNATIONAL, S.A and its subsidiary or dependent companies, does not exceed 20% of the share capital, and provided that the purchase allows the Company to endow a restricted reserve according to the terms laid down in Article 148 of the Spanish Corporation Law. This reserve shall be maintained as long as shares have not been transferred or redeemed.

The term of the authorisation to buyback the shares of ADVEO GROUP INTERNATIONAL, S.A. is five years from the date of this General Shareholders’ Meeting.

For these reasons, the Board of Directors is vested with the fullest powers to request any authorisations and enter into any agreements as may be required or appropriate in order to comply with the current legislation, and to execute and successfully carry out this agreement.

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A.9. bis Estimated floating capital:

% Estimated floating capital 70.00

A.10 Detail any restrictions in place on the transfer of securities and/or any restrictions on voting rights. In particular, indicate the existence of any restrictions that may impede a company takeover through the acquisition of its shares on the open market.

> Yes > No

A.11 Indicate whether the General Shareholders’ Meeting has agreed to adopt neutralisation measures in the event of public takeover bids under the provisions set out in Law 6/2007.

> Yes > No

Where appropriate, explain the measures approved and the terms according to which the restrictions would be rendered ineffective:

A.12 Indicate whether the Company has issued securities not traded on a regulated market of the European Union.

> Yes > No

Where applicable, indicate the different share classes and, for each share class, the rights and obligations conferred.

B GENERAL SHAREHOLDERS’ MEETING

B.1 Indicate and, where appropriate, describe any differences in relation to the minimum requirements laid down in the Spanish Corporation Law regarding the quorum necessary to convene a General Shareholders’ Meeting.

> Yes > No

B.2 Indicate and, where appropriate, describe any differences in relation to the rules laid down in the Spanish Corporation Law regarding the adoption of corporate resolutions:

> Yes > No

Describe how they differ from the rules laid down in the Spanish Corporation Law.

B.3 Indicate the rules applicable to amendments to the Company’s Corporate By-Laws. In particular, indicate the majorities required to amend the Corporate By-Laws and, where appropriate, the rules for protecting shareholders’ rights when amending the By-Laws.

The rules applicable to the amendment of the Corporate By-Laws are determined in Article 31 of the Corporate By-Laws and Article 19 of the Regulations of the General Shareholders’ Meeting, which are worded as follows:

“Article 31 – Convening of the Meeting

1. The General Shareholders’ Meeting shall be deemed valid at the first meeting convened if the shareholders, present or represented, possess at least twenty-five percent (25%) of the share capital with voting rights. When convened for the second time, the meeting shall be considered valid regardless of the capital present therein.

2. For Ordinary and Extraordinary General Shareholders’ Meetings to validly approve the transformation, merger, de-merger or overall transfer of assets or liabilities, issue bonds, increase or reduce the capital or make any other changes to the Corporate By-Laws, remove or limit the preferential rights for new shares, or transfer the Company’s registered address abroad, at the first meeting convened, shareholders holding at least fifty percent (50%) of the share capital with voting rights must be present or represented.

When convened for the second time, shareholders holding at least twenty-five percent (25%) of the above-mentioned capital must be present or represented. If, at the second meeting convened, shareholders represent twenty-five percent (25%) or more of the share capital with voting rights but do not attain fifty percent (50%), the agreements referred to in this paragraph may only be adopted by the favourable vote of two thirds (2/3) of the capital present or represented at the meeting. When shareholders in attendance represent more than fifty percent (50%), resolutions are passed by absolute majority of the capital present or represented.

3. Absences of shareholders that occur after having convened the General Shareholders’ Meeting shall not affect its validity.

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4. If, in order to validly adopt a resolution with regard to one or more of the items on the agenda of the General Shareholders’ Meeting, the provisions of the law or Corporate By-Laws should require the attendance of a given percentage of the share capital and this percentage were not achieved, or the consent of certain shareholders concerned were required and they were not in attendance or represented, the General Shareholders’ Meeting shall only resolve and decide on any items on the agenda not requiring the attendance of said percentage of the share capital or said shareholders.”

Article 19. Convening of the Meeting

1. The General Shareholders’ Meeting shall be deemed valid at the first meeting convened if the shareholders, present or represented, possess at least twenty-five percent (25%) of the share capital with voting rights. When convened for the second time, the meeting shall be considered valid regardless of the capital present therein.

2. For Ordinary and Extraordinary General Shareholders’ Meetings to validly approve the transformation, merger, de-merger or overall transfer of assets or liabilities, issue bonds, increase or reduce the capital or make any other changes to the Corporate By-Laws, remove or limit the preferential rights for new shares, or transfer the Company’s registered address abroad, at the first meeting convened, shareholders holding at least fifty percent (50%) of the share capital with voting rights must be present or represented. When convened for the second time, shareholders holding at least twenty-five percent (25%) of the above-mentioned capital must be present or represented.

3. Absences of shareholders that occur after having validly convened the General Shareholders’ Meeting shall not affect whether it takes place.

4. If, in order to validly adopt a resolution with regard to one or more of the items on the agenda of the General Shareholders’ Meeting, the provisions of the law or Corporate By-Laws should require the attendance of a given percentage of the share capital and this percentage were not achieved, or the consent of certain shareholders concerned were required and they were not in attendance or represented, the General Shareholders’ Meeting shall only resolve and decide on any items on the agenda not requiring the attendance of said percentage of the share capital or said shareholders.”

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B.4 Indicate the attendance figures for the General Shareholders’ Meetings held during the year corresponding to this report and those for the previous year:

ATTENDANCE FIGURES

Date of the General Shareholders’

Meeting% attending

in person % voting by proxy

% remote voting

TotalElectronic voting Other

30/05/2014 35.21% 34.89% 0.00% 0.00% 70.10%26/06/2015 22.17% 39.43% 0.00% 0.00% 61.60%19/11/2015 33.74% 17.08% 0.00% 0.00% 50.82%

B.5 Indicate whether the Corporate By-Laws stipulate any restrictions on the minimum number of shares required to attend the General Shareholders’ Meeting:

> Yes > No

Number of shares required to attend the General Shareholders’ Meeting 100

B.6 Section repealed.

B.7 Indicate the address and method of accessing information on Corporate Governance on the Company’s website, as well as other information on General Shareholders’ Meetings to be made available to shareholders on the Company’s website.

The address and method of accessing information on Corporate Governance on the Company’s website is:www.adveo.com / Shareholders and Investors / Corporate Governance

To access information on General Shareholders’ Meetings to be made available to shareholders on the Company’s website, a direct link to this information is supplied when sending the notice to attend shareholders’ meetings. To consult information on previous General Shareholders’ Meetings, please visit:www.adveo.com / Shareholders and Investors / General Shareholders’ Meeting

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C MANAGEMENT STRUCTURE OF THE COMPANY

C.1 Board of Directors C.1.1 Maximum and minimum number of directors stipulated in the Corporate By-Laws:

Maximum number of directors 15Minimum number of directors 5

C.1.2 Complete the following table indicating the board members:

FULL NAME OR CORPORATE NAME OF DIRECTOR

REPRE-SENTATIVE

CATEGORY OF THE

DIRECTORPOSITION ON

THE BOARD

DATE OF FIRST AP-

POINTMENT

DATE OF LAST AP-

POINTMENT ELECTION PROCEDURE

ALVARO VIDEGAIN MURO Independent DIRECTOR 26/05/2012 26/05/2012RESOLUTION OF THE

GENERAL SHAREHOLDERS' MEETING

ELADIO BEZARES MUNILLA Proprietary VICE-CHAIRMAN 27/05/2006 28/05/2011RESOLUTION OF THE

GENERAL SHAREHOLDERS' MEETING

JUAN ANTONIO HERNANDEZ-RUBIO MUÑOYERRO Proprietary CHAIRMAN 27/05/2006 28/05/2011

RESOLUTION OF THE GENERAL SHAREHOLDERS’

MEETING

GESTION DE INVERSIONES RIMUSA, S.L. Proprietary DIRECTOR 05/04/2001 29/05/2010

RESOLUTION OF THE GENERAL SHAREHOLDERS’

MEETING

QMC DIRECTORSHIPS, S.L. Proprietary DIRECTOR 16/12/2004 30/05/2009RESOLUTION OF THE

GENERAL SHAREHOLDERS’ MEETING

ALBERTO MORENO DE TEJADA CLEMENTE DE DIEGO Proprietary BOARD

SECRETARY 26/06/2015 26/06/2015RESOLUTION OF THE


ABEL LINARES PALACIOS Independent DIRECTOR 26/06/2015 26/06/2015RESOLUTION OF THE


JAIME CARBÓ FERNÁNDEZ ExecutiveCHIEF

EXECUTIVE OFFICER

19/11/2015 19/11/2015RESOLUTION OF THE


IRENE CANO PIQUERO Independent DIRECTOR 19/11/2015 19/11/2015RESOLUTION OF THE


Total number of directors 9

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Indicate any departures from the Board of Directors during the reporting period:

FULL NAME OR CORPORATE NAME OF DIRECTORCATEGORY OF THE DIRECTOR AT THE TIME OF DEPARTURE DATE OF DEPARTURE

MILLAN ALVAREZ-MIRANDA NAVARRO Executive 05/06/2015FRANCISCO JAVIER DIAZ MARROQUIN Proprietary 22/10/2015XABIER ARRATIBEL IMAZ Proprietary 22/10/2015

C.1.3 Complete the following tables on board members and their respective categories:

EXECUTIVE DIRECTORS

FULL NAME OR CORPORATE NAME OF DIRECTOR POSITION IN THE COMPANY’S ORGANISATION CHARTJAIME CARBÓ FERNÁNDEZ CHIEF EXECUTIVE OFFICER

Total number of executive directors 1% of the total board 11.11%

EXTERNAL PROPRIETARY DIRECTORS

FULL NAME OR CORPORATE NAME OF DIRECTOR

FULL NAME OR CORPORATE NAME OF SIGNIFICANT SHAREHOLDER REPRESENTED OR WHO PROPOSED THE APPOINTMENT

ELADIO BEZARES MUNILLA ELADIO BEZARES MUNILLAJUAN ANTONIO HERNANDEZ-RUBIO MUÑOYERRO SEGUNDO ANGEL MORENO DE TEJADA OLIVAGESTION DE INVERSIONES RIMUSA, S.L. GESTION DE INVERSIONES RIMUSA, S.L.QMC DIRECTORSHIPS, S.L. QMC II IBERIAN CAPITAL FUND FILALBERTO MORENO DE TEJADA CLEMENTE DE DIEGO JOSE MARIA MORENO DE TEJADA OLIVA

Total number of proprietary directors 5

% of the total board 55.56%

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INDEPENDENT EXTERNAL DIRECTORS

Full name or corporate name of director:

ALVARO VIDEGAIN MURO

Profile: A graduate in Law and Economics from the University of Deusto, Spain. INSEAD-Europe Campus, Diploma in Strategic Planning and Marketing. Chairman of the Board of Directors of Tubacex, S.A.


ABEL LINARES PALACIOS

Profile: Degree in Higher Aeronautical Engineering from the Universidad Politécnica de Madrid and Senior Management from the Instituto de Empresa. Member of Instituto de Consejeros y Administradores IC-A.

Currently Independent Director for Catenon Worldwide Executive Search and Board member for WISeKey (Swiss eSecurity company), founder and CEO of Nunkyworld, a Strategic Consultancy boutique.


IRENE CANO PIQUERO

Profile: Degree in Economic and Business Sciences from Oviedo University.

Director of Asociación Española de Economía Digital (ADIGITAL) since 2010, she is a member of the Advisory Council of Spain Start Up and a member of the Young President’s Organization (YPO). Currently Managing Director of the company Facebook Iberia.

Total number of independent directors 3% of the total of the board 33.33%

Indicate whether any directors considered independent directors receive from the Company, or from its Group, any amount or benefit of any nature other than their remuneration as director, or maintain or have maintained, over the course of the last financial year, a business relationship with the Company or any company in its Group, either in their own name or as a

significant shareholder, director or senior manager of an entity that maintains or has maintained such a relationship.

The situations described above do not apply to any of the independent directors.

Where applicable, include a statement of motivation from the board outlining the reasons why it considers that the director in question can perform their duties as an independent director.

OTHER EXTERNAL DIRECTORS Other external directors will be identified, and details will be provided as to why they cannot be considered as proprietary or independent directors, and regarding any links they have with the Company, its executives or shareholders:

Indicate any changes, where applicable, that have occurred during the reporting period regarding the category of each director:

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C.1.4 Complete the following table providing information on the number of female directors over the last four financial years, as well as the category of these directors:

NUMBER OF FEMALE DIRECTORS% OF THE TOTAL NUMBER OF DIRECTORS

OF EACH TYPE

Financial Year 2015

Financial Year 2014

Financial Year 2013

Financial Year 2012

Financial Year 2015

Financial Year 2014

Financial Year 2013

Financial Year 2012

Executive 0 0 0 0 0.00% 0.00% 0.00% 0.00%

Proprietary 0 0 0 0 0.00% 0.00% 0.00% 0.00%

Independent 1 0 0 0 11.11% 0.00% 0.00% 0.00%Other external directors 0 0 0 0 0.00% 0.00% 0.00% 0.00%

Total: 1 0 0 0 11.11% 0.00% 0.00% 0.00%

C.1.5 Explain the measures taken, if any, to seek to include a sufficient number of women on the Board of Directors to guarantee an equal balance of men and women.

Explanation of the measuresThe Company selects executive and independent directors without discriminating against candidates on the basis of gender and by applying the principle of equal opportunities. Recruitment procedures do not include any bias in this respect, and any recruitment companies are instructed accordingly.

Regarding proprietary directors, they are appointed by the shareholders; consequently, as a Company we must accept the representatives proposed by the shareholders unless any incompatibility exists.

C.1.6 Explain the measures taken, if applicable, by the appointments committee to ensure that recruitment procedures are not subject to implicit bias that might hinder the appointment of female board members, and to ensure that the Company deliberately seeks out and includes among the potential candidates, women who meet the desired professional profile:

Explanation of the measuresThe Appointments and Remuneration Committee has expressly delegated the competency of monitoring gender equality and promoting the inclusion of women to the Board of Directors. With regard to the recruitment procedures conducted, potential candidates have expressly included women who meet the desired professional profile.

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When, despite the measures taken, there are few or no female directors, explain the reasons:

Explanation of reasonsSee the response in section C.1.5. C.1.6.bis Explain the conclusions of the Appointments Committee on the verification of compliance with the policy for appointing directors. And, in particular, explain how said policy is aiming to reach a number of woman directors by 2020 equal to or in excess of 30% of the total members of the Board of Directors.

Explanation of the conclusionsDuring the financial year, in implementation of the policy for appointing Directors envisaged in the Company’s internal regulations, the Committee drew a series of conclusions that took the form of a series of proposals to the Board of Directors, including the following:

- Adjustment of the number of Directors in response to the representation of the capital on the Board and the free float, with the optimum model being a Board comprising an odd number of directors, with 9 members: 5 proprietary, 3 independent and 1 executive.

- Utmost simplification and professionalisation of the Company’s Governance Bodies to respond to the important business transformation challenges that ADVEO will be facing over the next few years, and limitation of the number of Directors to avoid any extra costs to the Company in these difficult times, with a cost austerity measure adopted by the Board of Directors and the new management team.

Specifically, and with regard to the objective for women members to make up at least 30% of the Board of Directors by 2020, the measures taken to avoid any gender-based discrimination in the appointment of directors have yielded their first results with the appointment of a new female independent director. As and when the capital structure so allows, these measures may result in the inclusion of more women on the board.

C.1.7 Explain how shareholders with significant holdings are represented on the board.

Shareholders with significant holdings are represented on the board proportionally to the distribution of share capital. C.1.8 Explain, if applicable, the reasons why proprietary directors have been appointed at the request of shareholders holding less than 3% of the share capital:

Provide details of any rejected formal requests for board representation received from shareholders whose shareholding is equal to or greater than that of other shareholders who have successfully appointed proprietary directors. In such cases, explain the reasons for rejecting the requests:

> Yes > No

C.1.9 Indicate whether any director has resigned from their position before their mandate has expired; state whether the said director explained the reasons for the resignation to the board, and detail the channel used for the notification. If the resignation was made in writing to the whole board, list the reasons given below:

Name of the director:MILLAN ALVAREZ-MIRANDA NAVARRO

Reason for departure: Differences in criteria for business management in Spain.

Name of the director:FRANCISCO JAVIER DIAZ MARROQUIN

Reason for departure: Resignation of member of the Company’s Board of Directors for personal reasons, under the understanding that, in compliance with the recommendations of the Appointments and Remuneration Committee, the Board requires a different operating structure.

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Name of the director:XABIER ARRATIBEL IMAZ

Reason for departure: Resignation of member of the Company’s Board of Directors for personal reasons, under the understanding that, in compliance with the recommendations of the Appointments and Remuneration Committee, a different operating structure is required, with the incorporation of other profiles of directors to strengthen certain areas necessary for the development of the Company’s future plans.

C.1.10 Indicate the powers, if any, delegated to the Chief Executive Officer(s):

Full name or corporate name of director:JAIME CARBÓ FERNÁNDEZ

Brief description:All powers of the Board except those that cannot be delegated.

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C.1.11 Identify, where appropriate, the board members who hold office as directors or executives in other companies belonging to the group of the listed company:

FULL NAME OR CORPORATE NAME OF DIRECTOR TRADE NAME OF THE GROUP ENTITY POSITION

ARE EXECUTIVE FUNCTIONS REQUIRED?

ELADIO BEZARES MUNILLA MONTE URGULL, S.L. MEMBER NOJUAN ANTONIO HERNANDEZ-RUBIO MUÑOYERRO MONTE URGULL. S.L. CHAIRMAN NOGESTION DE INVERSIONES RIMUSA, S.L. MONTE URGULL, S.L. MEMBER NOALVARO VIDEGAIN MURO MONTE URGULL, S.L. MEMBER NO

C.1.12 List any company directors who are members of the boards of directors of other non-group companies that are listed on official stock markets, when such appointments have been disclosed to the Company:

FULL NAME OR CORPORATE NAME OF DIRECTOR TRADE NAME OF THE GROUP ENTITY POSITION

ALVARO VIDEGAIN MURO TUBACEX. S.A. CHAIRMANELADIO BEZARES MUNILLA BODEGAS RIOJANAS. S.A. DIRECTORQMC DIRECTORSHIPS, S.L. CIE AUTOMOTIVE. S.A. DIRECTORQMC DIRECTORSHIPS, S.L. TUBOS REUNIDOS, S.A. DIRECTOR

C.1.13 Indicate and, if applicable, explain whether the Company has established rules regarding the number of boards on which its directors may sit:

> Yes > No

Explanation of the rulesIn compliance with the provisions of Article 7.5 of the Regulations of the Board of Directors, the following cannot be Directors nor, if applicable, natural persons representing a legal entity Director:

a) natural persons or legal entities acting as Director in more than four (4) companies whose shares are admitted to trading on national or foreign markets.

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C.1.14 Section repealed.

C.1.15 List the total remuneration of the Board of Directors:

Remuneration of the Board of Directors (thousands of euros) 699

Amount of accumulated pension rights of current directors (thousands of euros) 0

Amount of accumulated pension rights of former directors (thousands of euros) 0

C.1.16 List any members of the senior management who are not executive directors, and indicate the total remuneration paid to them during the financial year:

FULL NAME OR CORPORATE NAME POSITIONJEAN-YVES ALFRED SEBAOUN CHIEF OPERATING OFFICER

JOSE IGNACIO GOMEZ ZAVALA CORPORATE HUMAN RESOURCES DIRECTOR

JUAN MANUEL VENEGAS VALLADARES CORPORATE GENERAL COUNSEL

CASPAR MARTIJN LUIJTEN CHIEF BUSINESS DEVELOPMENT AND STRATEGY OFFICER

DANIEL LOZANO LOZANO GROUP CHIEF FINANCIAL OFFICERJAVIER RIGAL MARTÍNEZ CHIEF INFORMATION OFFICERLUIS RAMOS TRUJILLO CHIEF INFORMATION OFFICERMANUEL LÓPEZ ANTÓN GROUP CHIEF FINANCIAL OFFICERDETLEF HENTZEL MANAGING DIRECTOR GERMANYMIGUEL ÁNGEL SEBARES URBANO

MANAGING DIRECTOR SPAIN AND PORTUGAL

FABRIZIO PISTONI MANAGING DIRECTOR ITALYEDDY PRIEM MANAGING DIRECTOR BENELUX

PHILIPPE GUILLOTIN MERCHANDISING AND MARKETING DIRECTOR FRANCE

Total remuneration of senior management (in thousands of euros) 2.605

C.1.17 List, if applicable, the identity of members of the Board of Directors who are also members of the Board of Directors of companies of significant shareholders and/or entities of their group:

List, if appropriate, any relevant relationships, other than those included under the previous sub-section, linking members of the Board of Directors with significant shareholders and/or entities of their group:

C.1.18 Indicate whether any changes have been made to the regulations of the board during the financial year:

> Yes > No

Description of changes(i) Change to Articles 1 (Purpose), 2 (Interpretation), 3 (Amendment), 4 (Dissemination), 6 (Creation of value for shareholders), 8 (Qualitative composition), 10 (The Chairman of the Board), 11 (The Vice Chairman), 12 (The Board Secretary), 14 (The Executive Committee), 15 (The Audit Committee), 16 (The Appointments and Remuneration Committee), 17 (Meetings of the Board of Directors), 18 (Development of sessions), 19 (Appointment of Directors), 21 (Re-election of Directors), 22 (Term of office), 23 (Cessation of Directors), 24 (Objectivity and secrecy of votes), 25 (Faculties of information and inspection), 26 (Assistance of experts), 27 (Director Remuneration), 28 (Director Obligations), 29 (Transactions with significant shareholders), 30 (relative to the principle of transparency), 31 (Relations with shareholders), 33 (Relations with markets), 34 (Information instruments), 35 (Preparation of the annual accounts and half-yearly and quarterly financial statements), 36 (Relations with auditors) and 37 (Transitional provision);

(ii) Elimination of current articles 5 (General supervisory function), 7 (Other interests), 9 (Quantitative Composition), 13 (Appointed bodies of the Board of Directors), 20 (Appointment of external directors) and 32 (Relations with institutional shareholders);

(iii) Incorporation of new articles 5 (Board competences), 7 (Members of the Board of Directors and appointment of Directors), 13 (Internal Board Committees), 27 (General duty of care), 28 (Duty of loyalty), 29 (Duty to avoid situations of conflict of interest); and

(iv) Approval of a consolidated text of the Regulations of the Board of Directors, incorporating any amendments and accordingly renumbering the chapters into which it is divided.

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C.1.19 Indicate the procedures for selecting, appointing, re-electing, evaluating and dismissing directors. Provide details of the competent bodies, the formalities to be followed and the criteria to be used for each of these procedures.

Article 15 of the Regulations of the Board of Directors makes reference to the Appointments and Remuneration Committee, establishing:

“Article 15. Appointments and Remuneration Committee

.../...

2. Without prejudice to the other tasks assigned it by the Law, the Corporate By-Laws or these Regulations and others assigned by the Board, the Appointments and Remuneration Committee shall have the following competences: .../...

c) submitting proposed appointments of independent directors to the Board of Directors for co-option or submitting them to the decision of the General Shareholders’ Meeting, along with proposals for re-election or separation of said Directors made by the General Meeting;

.../...”

Article 8 of the Regulations of the Board of Directors sets out the rules to follow regarding the qualitative composition of the Board of Directors:

“Article 8. Qualitative composition

.../...

2. The Board of Directors shall ensure that its non-executive Directors are in clear majority over executive directors.

.../...

4. On the basis of the provisions of paragraph 1 above, the Board shall also ensure that the majority group of non-executive directors includes holders (or their representatives) of stable significant holdings in the share capital of the Company (proprietary directors). In addition, it will also seek to include highly-regarded persons who are capable of supporting and advising the management of

the Board, even when the previous circumstance does not apply. Such persons will be considered independent directors, provided they comply with the requirements laid down in paragraph 1 of this article.

5. In order to establish a reasonable balance between proprietary directors and independent directors, the

Board shall take into account the Company’s ownership structure.

.../...”

The procedure applicable to the re-election of directors complies with provisions set out in the Regulations of the Board of Directors, namely Article 19 as follows:

“Article 19. Re-election of Directors

1. Proposals to re-elect Directors which the Board of Directors decides to submit to the General Shareholders’ Meeting are subject to a formal process in accordance with the following terms:

(i) In the case of Independent Directors, the proposal will be prepared by the Appointments and Remuneration Committee.

(ii) In the case of the other directors, the proposal will be prepared by the Board of Directors, after receiving a report by the Appointments and Remuneration Committee.

(iii) The proposed re-election of Board members must in any case be accompanied by an explanatory report of the Board of Directors, assessing the skills, experience and merits of the candidate proposed, which will then be attached to the minutes of the General Shareholders’ Meeting or that of the Board.

2. The proposal or, if applicable, the report issued by the Appointments and Remuneration Committee, will assess the quality of the work and dedication to the office of the Directors proposed during the previous mandate, with the Board needing to appoint the Director within the categories considered by this Regulation.”

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C.1.20 Explain to what extent the annual board assessment procedure has prompted significant changes to its internal organisation and the procedures applicable to its activities:

Description of changesThe self-assessment procedure has not prompted significant changes to the internal organisation. Pending check by the Appointments and Remuneration Committee

C.1.20.bis Describe the assessment process and the areas assessed as carried out by the Board of Directors, assisted, where applicable, by an external advisor, with respect to the diversity in its composition and competences, of the operation and composition of its committees, the performance of the Chairman of the Board of Directors and the Chief Executive Officer, and the performance and contribution made by each director.

PENDING

C.1.20.ter Provide a breakdown, as appropriate, of business relations that the advisor or any Group company maintains with the Company or any Group company.

PENDING

C.1.21 Indicate the circumstances under which directors are forced to resign.

Article 21 of the Regulations of the Board of Directors lays down the circumstances for the removal and resignation of

directors, determining:

“Article 21. Dismissal, removal and resignation of directors

1. The term of office of directors comes to end after the period for which they were appointed expires or when the General Shareholders’ Meeting decides so, using the powers conferred upon them.

2. Directors must make their role available to the Board and formalise their corresponding resignation in the following cases:

a) When they reach the age of seventy-five (75) years old.

b) When the executive positions for which they were appointed as a Director no longer exist.

c) When a change in circumstances means that any of the cases of incompatibility or prohibition established by the law, the Corporate By-Laws or these Regulations, apply.

d) When events or conduct on the part of the Director should cause serious damages to the Company’s assets or reputation or there is a risk of criminal liability on the part of the Company.

e) When they forfeit their honour, suitability, solvency, competence, availability or commitment to the functions necessary to be a Company Director.

f) When they receive a final sentence or are subject to proceedings or committed for trial for any of the offences set out in Article 213 of Spanish Corporation Law.

g) When staying on the Board may entail a risk for any reason and directly, indirectly or through persons connected with him, to the faithful and diligent exercise of functions in compliance with the Company’s interests.

h) When the reasons why they were appointed cease to apply and, in particular, in the case of Proprietary Directors, when the shareholder or shareholders who proposed, required or determined his or her appointment should sell or transfer all or part of the investment with the consequence that said condition is forfeited or insufficient to justify the appointment.

i) When, by means of a report or proposal made by the Audit Committee, they have been seriously reprimanded by the Board for having seriously breached their obligations as Directors.

j) When an Independent Director is involved by any of the circumstances of impediment envisaged by Article 8.1 (iii) of these Regulations.

k) When the situation of the activities carried out by the Director, or the companies it controls directly or indirectly, may compromise his suitability to hold the office. 3. If a natural person representing a legal entity Director should come under any of the circumstances envisaged by paragraph 2, he or she shall be unable to provide said representation.

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.../...

5. When any director vacates their position before the end of their term of office, whether by resignation or for any other reason, they should explain the reasons for doing so in a letter to be sent to all members of the board. All departures are reported as a significant event and the reason detailed in the Annual Corporate Governance Report.”

C.1.22 Exception made to the section.

C.1.23 Are reinforced majorities, other than those prescribed by law, required for any type of decision?:

> Yes > No

Where appropriate, describe any differences.

C.1.24 Indicate whether there are any other specific requirements, other than those relating to the directors, to be appointed chairman of the Board of Directors.

> Yes > No

C.1.25 Indicate whether the chairman has a casting vote:

> Yes > No

Matters for which the chairman has a casting voteIn the event of tied votes, the chairman will have the casting vote.

C.1.26 Indicate whether the articles of association or the board regulations set any age limit for directors:

> Yes > No

Age limit for Chairman: 75 yearsAge limit for CEO: 75 yearsAge limit for directors: 75 years

C.1.27 Indicate whether the Corporate By-Laws or the Regulations of the Board of Directors set limits on the term of office for independent directors, other than those established in the regulations:

> Yes > No

C.1.28 Indicate whether the Corporate By-Laws or the Regulations of the Board of Directors stipulate specific rules for proxy voting during board meetings; describe the procedure and, in particular, the maximum number of proxies a Director may have and any limitations to the categories that can be delegated, over and above the limits set by legislation. If this is the case, briefly describe the rules.

No formal procedures for proxy voting have been established.

Article 17 of the Regulations of the Board of Directors sets out the following:

Article 17. Procedure for meetings

.../...

Directors must attend Board meetings and when they are unable to do so in person, they shall ensure that they are duly represented, issuing all appropriate instructions in the form of a written, special, concrete power of attorney for each meeting, which shall be duly sent to the Chairman or Secretary. In any case, Non-Executive Directors can only be represented by another Non-Executive Director.

.../...

C.1.29 Indicate the number of meetings held by the Board of Directors during the financial year. In addition, where appropriate, indicate the number of times the Board has met without its Chairman being in attendance. The calculation will include attendance of representatives with specific instructions.

Number of board meetings 14Number of board meetings without the Chairman being in attendance 0

If the Chairman is the Executive Director, specify the number of meetings held, without the assistance or representation of any executive director, chaired by the coordinating director.

Number of meetings 0

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Indicate the number of meetings held by the various board committees during the financial year:

COMMITTEENO. OF

MEETINGSAPPOINTMENTS AND REMUNERATION COMMITTEE 7EXECUTIVE COMMITTEE 14AUDIT COMMITTEE 10

C.1.30 Indicate the number of board meetings held during the financial year with all members in attendance. The calculation will include attendance of representatives with specific instructions:

Number of meetings attended by all directors 13% of attendances out of the total number of votes over the financial year 92.86%

C.1.31 Indicate whether the individual and consolidated annual financial statements presented to the Board for approval were previously certified:

> Yes > No

Identify the person or persons, if any, who has/have certified the Company’s individual and consolidated annual financial statements for preparation by the Board:

NAME POSITIONJAIME CARBÓ FERNÁNDEZ CHIEF EXECUTIVE OFFICER

C.1.32 Explain the mechanisms, if any, established by the Board of Directors to avoid the individual and consolidated financial statements it prepares from being presented to the General Shareholders’ Meeting with a qualified audit report.

No formal mechanisms has been established to avoid individual and consolidated financial statements prepared by the Board of Directors from being presented to the General Shareholders’ Meeting with a qualified audit report.

Article 36.4 of the Regulations of the Board of Directors sets out the following:

Article 36. Relationship with auditors

.../...

4. The Board of Directors shall endeavour to prepare the financial statements so as to ensure that the auditor is not required to issue any qualified opinions. Nevertheless, when the Board considers that it must uphold its opinion, it will publicly explain the nature and the scope of the discrepancy.

.../...”

In any case, the event has not taken place.

C.1.33 Is the Secretary of the Board also a Director?

> Yes > No

If the Secretary is not a Director, complete the following box:


C.1.35 Indicate the mechanisms, if any, established by the Company to preserve the independence of external auditors, financial analysts, investment banks and rating agencies.

The company has established mechanisms in the Regulations of the Board of Directors.

“Article 36. Relationship with auditors

1. The Board’s relations with the Company’s external auditors operate through the Audit Committee when dealing with matters coming under the scope of the competences of said Committee.

2. The Board of Directors will refrain from hiring audit firms charging fees, for any of their services, of more than five percent (5%) of the Company’s total revenue during the previous financial year.

3. The Board of Directors shall disclose publicly the total fees paid by the Company to the audit firm for services other than auditing.

4. The Board of Directors shall endeavour to prepare the financial statements so as to ensure that the auditor is not required to issue any qualified opinions. Nevertheless, when the Board considers that it must uphold its opinion, it will publicly explain the nature and the scope of the discrepancy.

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5. Auditors will be hired for a period no shorter than three (3) years and no longer than nine (9) years from the start of the first financial period audited; auditors can then be hired annually after the initial period has ended. However, seven (7) years after the end of the initial period, the auditor responsible signing the auditor’s report on the accounts must be replaced and may only audit the Company again after a period of at least two (2) years.

Article 14. Audit Committee

The Company shall have an Audit Committee without executive functions and with faculties of information, auditing and an advisory role within its scope of implementation, governed by the following rules:

.../...

4. Without prejudice to the other tasks assigned to it by Law, the Corporate By-Laws and these Regulations, its competences shall include the following:

.../...

(viii) Establish appropriate relations with the external auditors to receive information on any issues that could jeopardise their independence, to be examined by the Committee, and any other issues connected to the auditing of accounts, as well as any other communications stipulated in the legislation applicable to the auditing of accounts and set out in auditing standards. In any event, each year the Committee must receive from the external auditors a written confirmation attesting to their independence vis-à-vis the Company or entities connected to it directly or indirectly; it shall also receive information on additional services of any type supplied and corresponding fees received from these entities by the external auditor or persons or entities bound to it in accordance with the provisions of legislation on the auditing of accounts.

(ix) Issue annually, before issuing the audit report, a report expressing an opinion on the independence of the auditor of accounts. This report must, in any case, contain an assessment of the provision of the additional services to which the above letter refers, considered both individually and as a whole, different from statutory auditing and in relation to the independence or auditing regulations.

.../...

In particular, the Committee is responsible for:

a) Supervising the sufficiency, adequacy and effectiveness of the processing systems used to produce the Company’s accounting information, to ensure the accuracy, reliability, sufficiency and clarity of the financial statements of both the entity and its consolidated Group included in the annual and quarterly reports detailing the accounting or financial information required by the Spanish Securities Market Commission (CNMV) and other regulatory authorities, including those in countries where the Group operates.

b) Analysing, prior to their presentation to the Board, the financial statements of the Company and its consolidated Group included in the annual and quarterly reports, to ensure they are accurate, reliable, sufficient and clear; these reports must also include all the necessary information and suitable level of aggregation. When carrying out these tasks, the Committee will receive the necessary support from the Group’s executive management and the Company’s Accounts Auditor. In particular, it will ensure that the annual financial statements to be submitted to the Board of Directors for their preparation are certified by the Chairman or by the Chief Executive Officer in accordance with the terms and conditions stipulated by internal and external rules applicable at all times.

c) Regarding the external auditor:

1. Selecting the external auditor for the Company and its consolidated Group, and that of all integrated companies, both in Spain and in other countries where they operate. For reasons of flexibility and simplicity regarding procedures and communications, it is preferable that the same audit firm is used for the entire Group unless, for reasons determined by the Committee, this is not possible or desirable.

The term of external auditing contracts will extend for annual periods, unless stated otherwise in the applicable legal rules. Contracts may be renewed year-on-year if the quality of the service is satisfactory and an agreement is reached regarding their remuneration. In this regard, the Committee must ensure that the remuneration of the external auditor for his work does not affect the relevant quality or independence.

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2. It will ensure that the Company reports any change of auditor to the Spanish Securities Market Commission (CNMV) as a significant event, and includes a declaration of any disagreements there may have been with the outgoing auditor and, if there were any such disagreements, their subject matter.

If an external auditor should resign, it will examine the circumstances that motivated this.

3. It will ensure that the external auditor holds an annual meeting with the full Board of Directors to inform it about the work done and the trends seen in the accounting position and risks of the Company.

d) It will monitor the independence of the external audit as follows:

1. Avoiding influence on the warnings, opinions or recommendations of the auditors.

2. Establishing and monitoring any incompatibility between the provision of auditing and consultancy services or any other services. External auditors may perform work for the Company other than auditing tasks only in the cases stipulated by law.

The committee will check, as often as required, that the external auditors carry out their work in accordance with the contractual conditions and comply with requirements of the competent official bodies.

3. Ensuring that the Company and external auditor comply with current legislation in force on the provision of services other than auditing, the limits to the concentration of the auditor’s business and, more generally, all other rules governing the independence of the auditors.

.../...”

C.1.36 Indicate whether the Company has changed the external auditor during the financial year. If this is the case, identify the incoming and outgoing auditor:

> Yes > No

If there were any disagreements with the outgoing auditor, explain the reasons for such disagreements:

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C.1.37 Indicate whether the audit firm performs non-audit work for the Company and/or its Group and, if this is the case, state the fee paid for such work and the percentage this represents of all fees invoiced to the Company and/or its Group:

> Yes > No

COMPANY GROUP TOTALAmount of non-audit work (thousands of euros) 16 5 21Amount of non-audit work / Total amount invoiced by the audit firm (as a %) 5.00% 1.13% 6.13%

C.1.38 Indicate whether the audit report on the previous year’s financial statements is qualified or includes reservations. Where applicable, indicate the reasons given by the chairman of the Audit Committee to explain the nature and scope of these reservations or qualified opinions.

> Yes > No

C.1.39 Indicate the number of consecutive financial years that the current audit firm has been auditing the financial statements of the Company and/or its Group. Likewise, state as a percentage the number of financial years audited by the current audit firm out of the total number of years that the annual financial statements have been audited:

COMPANY GROUPNumber of consecutive financial years 24 24Number of financial years audited by current audit firm / Number of years the Company’s financial statements have been audited (as a %) 100.00% 100.00%

C.1.40 Indicate and, where appropriate, give details of any procedures through which directors can receive external advice:

> Yes > No

Provide details of the procedureA procedure is in place through which directors can receive external advice. Article 24 of the Regulations of the Board of Directors determines the following:

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Article 24 Assistance of experts

1. In order to receive assistance while performing their duties, non-executive directors may request, at the Company’s expense, the hiring of legal, accounting and financial advisers or other experts.

The assignment must relate to specific problems of some significance and complexity arising during performance of their duties.

2. The hiring decision is to be communicated to the chairman of the Board and can be vetoed by the Board of

Directors if it proves that:

a) such assistance is not required for the satisfactory performance of the tasks entrusted to the non-executive directors;

b) the cost is not reasonable in view of the importance of the problem and the assets and income of the Company; or

c) the technical assistance requested can be adequately provided by experts and technicians within the Company.”

C.1.41 Indicate and, where appropriate, give details of any procedure to provide directors with the information required to prepare the meetings of the management bodies in a timely manner:

> Yes > No

Provide details of the procedureArticle 23 of the Regulations of the Board of Directors lays down the powers of information pertaining to Directors, establishing:

“Article 23. Information and inspection powers

1. In fulfilling his or her duties, the Director has the duty to demand and the right to receive from the Company all information as suitable and necessary to fulfil his or her obligations. In this regard, Directors are vested with the broadest powers to obtain information on any aspect of the Company, to examine its books, records, documents and look into the background of any corporate transactions and to inspect all of its facilities. The right to information extends to subsidiary companies, whether in Spain or in foreign countries.

2. In order to refrain from disrupting the day-to-day running of the Company, these powers to obtain information will be exercised through the Chairman or the Secretary of the Board of Directors, who will attend to the requests of any director by providing information directly, proposing appropriate contacts within the organisation or facilitating measures to allow directors to carry out any examination and inspection required on site.”

Additionally, the Board of Directors has a computerised management system that enables directors to have advance notice of the information necessary, so as to prepare for the meetings.

C.1.42 Indicate and, where appropriate, give details of whether the Company has established rules compelling the directors to provide information and, as appropriate, resign in cases in which they might damage the credibility and reputation of the Company:

> Yes > No

Provide details of the rulesArticle 12 of the Regulations of the Board of Directors establishes the situations when Directors are obliged to report and, if applicable, where they are required to resign.

Article 21. Dismissal, removal and resignation of directors

.../...

2. Directors must make their role available to the Board and formalise their corresponding resignation in the following cases:

.../...

d) When events or conduct on the part of the Director should cause serious damages to the Company’s assets or reputation or there is a risk of criminal liability on the part of the Company.

.../...

f) When they receive a final sentence or are subject to proceedings or committed for trial for any of the offences set out in Article 213 of Spanish Corporation Law.

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g) When staying on the Board may entail a risk for any reason and directly, indirectly or through persons connected with him, to the faithful and diligent exercise of functions in compliance with the Company’s interests.

.../...

3. If a natural person representing a legal entity Director should come under any of the circumstances envisaged by paragraph 2, he or she shall be unable to provide said representation.

.../...

5. When any director vacates their position before the end of their term of office, whether by resignation or for any other reason, they should explain the reasons for doing so in a letter to be sent to all members of the board. All departures are reported as a significant event and the reason is detailed in the Annual Corporate Governance Report.”

C.1.43 Indicate whether any director has notified the Company that they have been prosecuted or called to trial for any of the offences set out in Article 213 of the Spanish Corporation Law:

> Yes > No

Indicate whether the Board of Directors has examined the case. If this is the case, provide a justified explanation of the decision taken regarding whether or not the director should continue to hold office or, if applicable, describe the actions taken by the Board of Directors up to the date of this report or any actions planned.

C.1.44 List any significant agreements signed by the Company that enter into force, are amended or withdrawn in the event of a change in control of the Company due to a takeover bid, and their effects.

No such agreements exist.

C.1.45 Identify, in aggregate form, and provide detailed information on agreements between the Company and its directors, executives and employees that establish compensation, guarantee or protection clauses, for cases of resignation or dismissal without cause or when the contractual relationship ends as a result of a public takeover bid or another such transaction.

Number of beneficiaries: 1Type of beneficiary:Senior Manager of the Company

Description of the agreement:In case of dismissal, compensation amounting to one year’s salary has been agreed.

Indicate whether these agreements must be reported to and/or authorised by the management bodies of the Company or its Group:

BOARD OF DIRECTORS

GENERAL SHAREHOLDERS’

MEETINGBody authorising the clauses Yes No

YES NOIs the General Shareholders’ Meeting informed of the clauses?

X

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C.2 Committees of the Board of Directors

C.2.1 Provide details of all of the committees of the Board of Directors, their members and the proportion of executive, proprietary, independent and other external directors that sit on these committees:

APPOINTMENTS AND REMUNERATION COMMITTEENAME POSITION CATEGORY

ELADIO BEZARES MUNILLA MEMBER Proprietary

ABEL LINARES PALACIOS CHAIRMAN Independent

GESTION DE INVERSIONES RIMUSA, S.L. SECRETARY Proprietary

ALVARO VIDEGAIN MURO MEMBER Independent

% of proprietary directors 50.00%% of independent directors 50.00%% of other external directors 0.00%

Explain the functions assigned to this committee, describe the organisational and operating rules and procedures and summarise its most important actions during the year.

The duties, organisation and operation of the Appointments and Remuneration Committee are established by Article 15 of the Regulations of the Board of Directors.

PENDING MORE IMPORTANT ACTIONS.

EXECUTIVE COMMITTEENAME POSITION CATEGORYELADIO BEZARES MUNILLA MEMBER ProprietaryJUAN ANTONIO HERNANDEZ-RUBIO MUÑOYERRO CHAIRMAN Proprietary

QMC DIRECTORSHIPS, S.L. MEMBER ProprietaryABEL LINARES PALACIOS MEMBER IndependentALBERTO MORENO DE TEJADA CLEMENTE DE DIEGO SECRETARY Proprietary



The duties, organisation and operation of the Executive Committee are established by Article 12 of the Regulations of the Board of Directors.

PENDING MORE IMPORTANT ACTIONS.

Indicate whether the composition of the Executive Committee reflects the participation within the board of the various categories of directors:

> Yes > No

AUDIT COMMITTEENAME POSITION CATEGORYALVARO VIDEGAIN MURO CHAIRMAN IndependentGESTION DE INVERSIONES RIMUSA, S.L. SECRETARY Proprietary

QMC DIRECTORSHIPS, S.L. MEMBER ProprietaryABEL LINARES PALACIOS MEMBER Independent



The duties, organisation and operation of the Audit Committee are detailed in Article 14 of the Regulations of the Board of Directors.

Identify the director member of the Audit Committee who has been appointed, considering his knowledge and experience in accounting, auditing or both areas and report on the number of years that the Chairman of this committee holds the office.

Name of director with experience ALVARO VIDEGAIN MURO

No. of years of Chairman in the office 1

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C.2.2 Complete the following table with information on the number of female directors that have sat on the various committees of the Board of Directors over the last four financial years:

NUMBER OF FEMALE DIRECTORS

Financial Year 2015 Financial Year 2014 Financial Year 2013 Financial Year 2012

Number % Number % Number % Number %

APPOINTMENTS AND REMUNERATION COMMITTEE 0 0.00% 0 0.00% 0 0.00% 0 0.00%

EXECUTIVE COMMITTEE 0 0.00% 0 0.00% 0 0.00% 0 0.00%AUDIT COMMITTEE 0 0.00% 0 0.00% 0 0.00% 0 0.00%



C.2.5 Indicate, where appropriate, the existence of regulations governing the Board’s committees, where they can be consulted, and whether any amendments have been made during the financial year. Likewise, indicate whether an annual report on the activities of each committee has been prepared voluntarily.

The various Board Committees are regulated by the provisions set out in the Corporate By-Laws and the Regulations of the Board of Directors.

In financial year 2015, changes were made to the Corporate By-Laws and the Regulations of the Board of Directors, which have been presented in this report.

Additionally, the Audit Committee is regulated by specific Regulations that were not changed in any way during financial year 2015.

All this documentation is available for consultation on the Company’s website.

In the same way, the Chairmen of the various Board Committees report on the activities of each of the Committees over the previous financial year at the Company’s Annual General Shareholders’ Meeting.


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D RELATED-PARTY AND INTRA-GROUP TRANSACTIONS

D.1 Explain, where applicable, the procedures for approving related-party or intra-group transactions.

Procedure for reporting the approval of related-party transactionsThe Board of Directors formally reserves the right to disclose and authorise any transaction between the Company and a significant shareholder.

Under no circumstances shall it authorise the transaction if the Appointments and Remuneration Committee has not issued a report beforehand evaluating the transaction from the perspective of ensuring the equal treatment of shareholders and assessing the market conditions.

Significant related-party transactions are also reported on the Company’s website.

On 1 May 2015, ADVEO ESPAÑA, S.A. signed a commercial consultancy contract with the entity ONE&ONLY OFFICE PRODUCTS, S.L., with registered address in Valdemoro, Madrid, Calle Málaga, no. 12, and CIF number B-84871912, whose main shareholder and Sole Director is Guillermo Moreno de Tejada Clemente de Diego, brother of the external proprietary director and Secretary of the Board, Alberto Moreno de Tejada Clemente de Diego.

In financial year 2015, in exchange for its services, ONE&ONLY OFFICE PRODUCTS, S.L. received the amount of SEVENTY-FIVE THOUSAND EUROS (75,000 euros).

As the requirements of Article 30 of the Regulations of the Board of Directors are not applicable, there is no need for prior authorisation by the Board. Thus Alberto Moreno de Tejada Clemente de Diego was appointed Director of the Company on 26 June 2015 after signing the specified consultancy contract.

D.2 List any transactions that are significant by virtue of their amount or relevant due to their nature between the Company or entities in its Group, and the Company’s significant shareholders:

D.3 List any transactions that are significant by virtue of their amount or relevant due to their nature between the Company or entities in its Group, and the Company’s directors or executives.

D.4 List any significant transactions carried out by the Company with other entities belonging to the same Group, provided that these are not omitted when preparing the consolidated financial statements and do not form part of the ordinary business of the Company in terms of its purpose and conditions.

In all cases, list any intra-group transactions carried out in countries or territories considered tax havens:

D.5 Indicate the amount of other related-party transactions.

0 (thousands of euros).

D.6 List the mechanisms set up to detect, determine and resolve any potential conflicts of interest between the Company and/or its Group, and its directors, executives or significant shareholders.

The mechanisms set up to detect, determine and resolve any potential conflicts of interest between the Company and/or its Group, and its directors, executives or significant shareholders are detailed below:

“Article 29. Duty to avoid situations of conflict of interest

1. Under the scope of the duty to avoid situations of conflict of interest reported in paragraph 2.e) of the article above, the Director must abstain from:

a) Carrying out transactions with the Company or companies of its Group, except where they are ordinary transactions, concluded under standard conditions for customers and of little relevance, thereby meaning those for which information is not necessary to provide a true image of the Company’s assets, financial position and results.

b) Using the name of the Company or citing his role as Director to unduly influence the implementation of private transactions.

c) Using corporate assets, including the confidential information of the Company, for private ends.

217


d) Taking advantage of Company business opportunities.

e) Obtaining advantages or remuneration of third parties other than the Company and its Group, associated with the fulfilment of his office, except for matters of mere courtesy.

f) Acting on his own behalf or for a third party in any way where an effective, actual or potential connection with the Company means that he is in a situation of permanent conflict of interests with those of the Company.

2. The foregoing provisions shall also apply if the beneficiary of the actions or activities that are prohibited is a person connected to the Director.

3. In any case, Directors must inform the Board of Directors of any situation of direct or indirect conflict that they or persons connected to them may have with the interests of the Company. Situations of conflict of interest as may be experienced by the Directors will be disclosed in the report.

4. Without prejudice to the foregoing, the Company may make exceptions as set out in this article in individual cases authorising the implementation by a Director or related person of a given transaction with the Company, the use of certain corporate assets, the taking advantage of a concrete business opportunity, the obtaining of an advantage or remuneration of a third party.

5. The Company’s General Shareholders’ Meeting may exempt a Director or person related to him or her from the prohibition of obtaining an advantage or remuneration from third parties or of implementing transactions whose value exceeds ten percent (10%) of the Company assets. An exception can only be made to the obligation not to compete with the Company set out in paragraph 1.f) above if no damages are expected to be caused to the Company or if the damages will be offset by the benefits to be achieved from the exception. The exception will be agreed specifically and separately by the General Shareholders’ Meeting.

6. In the other cases concerned by the prohibitions of this Article, the authorisation can also be given by the Board of Directors, upon receiving a report by the Audit Committee, provided the independence of the members granting it is guaranteed with respect to the Director to whom exemption is granted. Additionally, assurance must be given of the innocuous nature of the operation authorised for the corporate assets or, as applicable, its implementation under market conditions, as well

as the transparency of the process. Directors involved or who represent or are related to shareholders involved, must abstain from participating in the resolution and voting in this respect.

7. An exception will only be made to the obligation for authorisation established above for any operations that meet all three of the following characteristics:

1. they are carried out on the basis of standardised contracts that apply across the board to numerous clients;

2. they are carried out on the basis of prices or rates of a general nature established by the party acting as the provider of the goods or services in question; and

3. the amount does not exceed one percent (1%) of the Company’s annual income.”

“Article 30. Transactions with significant shareholders

1. The Board of Directors formally reserves the right to know of any transaction of the Company or companies of its Group with shareholders individually or jointly with others holding a significant stake, including shareholders represented on the Board of Directors of the Company or other Group companies or with persons related to them or to their Directors. Directors who represent or are related to shareholders involved, must abstain from participating in the resolution and voting in this respect.

2. Under no circumstances shall the Board authorise the transaction if the Audit Committee has not issued a report beforehand evaluating the transaction from the perspective of ensuring equal treatment of shareholders and assessing the market conditions.

3. Exceptions can only be made to this resolution for transactions that simultaneously meet all three characteristics described in paragraph 7 of the Article above, with respect to transactions implemented by the Company with its Directors or persons related to them.”

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D.7 Is more than one company of the Group listed in Spain?

> Yes > No

Identify the subsidiaries listed in Spain:

Listed subsidiary companyIndicate whether they have publicly and accurately defined their respective areas of business activity and any business relationships that exist between them, as well as those between the listed subsidiary and other Group companies.

Describe any business dealings between the parent company and the listed subsidiary company, and between the said subsidiary and other Group companies

Indicate the mechanisms in place to resolve any potential conflicts of interest between the listed subsidiary and other Group companies:

Mechanisms to resolve potential conflicts of interest

E RISK CONTROL AND MANAGEMENT SYSTEMS

E.1 Describe the scope of the Company’s Risk Management System, including tax-related risks.

The purpose of Adveo’s risk management system is to offer reasonable assurance that the Company’s organisational structure is able to achieve its business objectives by means of a systematic and methodological system that assesses, manages and improves the effectiveness of the following areas:

• Good Governance: the procedures used by the representatives of shareholders to oversee the monitoring of risks and controls by Management.

• Risk Management: the procedures put in place by Management to identify, assess and respond to potential risks that may affect the Company’s ability to achieve its business objectives.

• Internal Control: the policies, rules, procedures and activities that constitute the control system put in place by Management to ensure that risks are properly managed and mitigated.

Since its creation, the risk management system put in place by the Group has been providing the necessary tools, resources, policies and procedures required to identify and address the risks arising from its operations in a global environment, implementing the necessary controls, whether preventive or detective.

The Adveo Group has also set up a comprehensive risk management system that operates continuously and strengthens management across the different areas, business units, activities, subsidiaries, geographic areas and support areas at the corporate level.

E.2 Identify the bodies within the Company responsible for preparing and implementing the Risk Management System, including tax.

The Audit Committee, as an executive body of the Board of Directors, is responsible for approving the risk control and management policy, for monitoring the effectiveness of the internal control and risk management systems and approving the adequacy and integrity thereof, and reviewing the appointment and replacement of its managers.

The Group’s Finance Department is responsible for setting up and maintaining an adequate and effective risk control and management system for the financial reporting process, and is also responsible for the design, implementation and operation of the system.

The Internal Audit department conducts regular and independent assessments of the critical risk management system by applying a Key Risk Indicator model.

The Board of Directors is notified of any relevant issues arising during the course of this monitoring process and reserves the right to approve the risk management and control policy as well as the periodic monitoring of the information and control systems.

E.3 Describe the main risks, including tax risks, which may prevent the Company from achieving its business objectives.

The Adveo Group has redefined its risk map during the 2015 financial year, adapting it to the new corporate structure:

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Market risk:Volatility of raw materials in the marketed products.Impact of competition.Effects of demand.Regulatory changes.

Strategic risks:International expansion policy.Integration of the Group’s businesses.Adequate selection of products to be marketed.Reputational and brand management.

Financial risks:Level of indebtedness.Compliance with control mechanisms set by the bank.Impact of credit granted to customers.Liquidity to meet corporate obligations.Interest rate fluctuations.

Information system risks:Availability and integrity of systems.Data security.Consistency of information for management.Segregation of functions.Control of outsourced services.

Operating risks:Linked to distribution: correct planning of purchases and adequate logistics management. Linked to the organisational structure: risk relating to its suitability and it possessing adequately qualified staff.Linked to marketing: pricing policy, commercial conditions and optimal quality of customer service. Risks of a general nature: fraud and regulatory compliance.

E.4 State whether the entity has a risk tolerance level, including as regards tax.

Since financial year 2011, and having applied its annual update in 2015, a new method of drawing up the risk map has been used, which allows the Company to have a greater level of participation in the identification, measurement and management of risks by selected managers, in order to mitigate the impact of any risks within a fixed time frame.

The Board of Directors, through the executive body of the Audit Committee and jointly with the Internal Audit Department, reviews the risk map periodically and approves a specific response plan for major critical risks in accordance with the Group’s risk tolerance level.

E.5 Describe any risks, including tax risks, which have materialised during the financial year.

Two groups of risks materialised during the financial year:

Intrinsic risks associated with business model, activity and markets on which the Adveo Group operates, namely the risk attached to demand and competition, which has had a negative impact on business growth in markets where the economic outlook has been poor.

And risks relating to the adequacy of information systems and the upgrading of technology required for the continuity of the Group.

No other significant risks have materialised.

E.6 Detail the plans for responding to and monitoring the key risks, including tax risks, of the entity.

The risk management model of the Adveo Group requires that all departments assign managers to implement the necessary controls with a view to mitigating the potential adverse impact of any identified risks that may affect the Company.

The Internal Audit Department and the Audit Committee are responsible for overseeing and monitoring the risk mitigation action plans established, as the latter is the body delegated by the Board of Directors to manage and oversee this area.

The company periodically analyses and assesses the management and internal control system to ensure any corrective measures have been adopted by the Audit Committee and the Internal Audit Department.

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F INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS IN RELATION TO FINANCIAL REPORTING (INTERNAL CONTROL OVER FINANCIAL REPORTING – ICFR)

Describe the mechanisms included in the control and risk management systems for financial reporting (ICFR) in your entity.

F.1 Control environment of the entity

Identify and describe the main characteristics of at least the following items: F.1.1. The bodies and/or functions responsible for: (i) the existence and maintenance of an adequate and effective ICFR, (ii) its implementation and (iii) its monitoring.

In accordance with the provisions set out in the Corporate By-Laws and the Regulations of the Board of Directors, the Board of Directors of Adveo Group International, S.A. is ultimately responsible for the existence and maintenance of an adequate and effective internal control system for its financial reporting (ICFR), as well as for its supervision. In order to comply with this remit, the Finance and Internal Auditing Departments are at the disposal of the Committee.

Likewise, the heads of the operating companies of each country, together with the respective control managers, and the heads of the global corporate areas, are in turn responsible for designing and implementing the ICFR.

F.1.2. Where applicable, and particularly in reference to the financial reporting process, describe the following elements:

• The departments and/or mechanisms in charge of: (i) designing and reviewing the organisational structure; (ii) defining clear lines of responsibility and authority, with an appropriate distribution of tasks and functions; and (iii) deploying sufficient procedures to communicate this structure effectively throughout the Company.

The Group has an organisational structure with clearly defined lines of responsibility and authority in the different processes for each business unit and relevant subsidiary of the Group.

The Finance Department, the Human Resources Department and the Chief Executive Officer are responsible for defining these lines of responsibility and authority and for distributing the tasks and functions in relation to the financial reporting process.

• Code of conduct, approving body, degree of dissemination and instruction, principles and values covered (stating whether it makes specific reference to record keeping and financial reporting), body responsible for investigating breaches and proposing corrective or disciplinary actions.

On 29 September 2015, the Board of Directors approved the General Code of Conduct, having informed the Extraordinary General Shareholders’ Meeting of its contents on 19 November 2015.

ADVEO believes that one of the main sources of value for its Company and all stakeholder groups (shareholders, managers, employees, customers, etc.) is the firm upholding of a series of good practices, which, inspired by widespread ethical principles (integrity, collaboration, customer focus, responsibility, far-sightedness, honesty, respect, loyalty, sincerity, tolerance, solidarity, etc.), inspire its action, influencing the Company’s business, its decision-making and everyday activity.

The Code applies to all companies or businesses making up the ADVEO Group, regardless of where they are located, and is binding on all members of ADVEO’s Board of Directors and the administrative bodies of the Group companies, Management staff and all employees of the ADVEO Group, regardless of position and office held and legal relationship with the Company. The Code is available from the corporate web page and has been translated into the various different local languages of the countries in which ADVEO operates.

The General Code of Conduct will be disclosed and disseminated to the Professionals of the Group in compliance with the plan approved to this end by the Compliance Unit, which may use other specific units of the Company, the external dissemination of the Code also being subject to the same conditions.

The economic-financial information will be a true reflection of the economic, financial and equity position of the Company in accordance with standards of accountancy, clarity and

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transparency and widely-accepted International Financial Reporting Standards. In the same way, tax will be paid in accordance with current tax legislation.

Employees whose business takes place in the financial areas of the Group must be aware of the obligation and responsibility entailed, taking great care in processing and handling economic-financial data.

ADVEO undertakes to maintain a suitable internal control system on the processing of financial information (ICFR), guaranteeing its regular supervision. Employees must therefore cooperate in full with internal and external auditors, providing them with truthful, intact and complete information. The accuracy and integrity of the financial information that, in accordance with current legislation, is to be disclosed to the Market, will also be monitored.

The Compliance Unit is in charge of analysing possible violations of the Code of Conduct and will prepare an annual report on the degree of compliance with it; this will be submitted to the Company’s Audit Committee for its review, approval and subsequent submission to the Board of Directors.

• Whistleblower Channel, to report to the Audit Committee any irregularities of a financial or accounting nature, as well as potential breaches of the code of conduct and irregular activities within the organisation, stating whether disclosures made through this channel are confidential.

In order to foster compliance with the law and rules of conduct established in the Code of Conduct as well as with all implementing rules and procedures, the Company has an internal channel for communication and whistleblowing to enable the reporting of any irregularities with potentially serious implications, regarding financial, accounting or other matters, as may be noted in the Group.

If a report should be made through this Channel, including the report of irregularities with potential financial and accounting implications, without prejudice to the start of investigations envisaged by this Procedure, the Compliance Unit will immediately inform the Auditing Committee of the Board through its Chairman, providing all the information received.

Whistleblowing facilities shall guarantee absolute confidentiality for those making the report.

• Training and refresher courses for personnel involved in preparing and reviewing financial information and evaluating ICFR, which address, at the very least, accounting rules, auditing, internal control and risk management.

The heads of each department and the respective subsidiaries are responsible for identifying areas for improvement and for the training needs of staff under their responsibility, making appropriate training proposals to be submitted to the Human Resources Department for approval. The Company will establish an annual training plan setting out the needs of the Group in line with the Strategic Plan – which is currently being prepared – in accordance with priorities determined by the various corporate departments in conjunction with the Human Resources Department.

Staff involved in preparing and reviewing financial information regularly attend seminars and courses to learn about changes regarding taxation and accounting, and are kept constantly informed about any changes to accounting or taxation matters by subscribing to an alert service provided by the main audit firms and regulatory bodies.

F.2 Risk assessment in financial reporting

Provide information on, as a minimum:

F.2.1. The main characteristics of the risk identification process, including risks of error or fraud, stating:

• Whether the process exists and is documented.

The Group, through its Internal Audit function, has a risk map to identify situations that may impact on the financial reporting process. The Risk Map was implemented in 2011 with the collaboration of a specialist Consultancy, and was updated by the Internal Audit Department in 2015, covering all areas of potential risk: industrial, environmental, financial, strategic, etc.

In 2015, the Internal Audit Department completed a risk map for the Group, which focused on monitoring certain financial and business processes.

Any risks identified are subjected to a prioritisation process, selecting the most relevant by applying professional judgement using a series of indicators (existence of documented processes

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and controls, existence of systems that automate processes, past incidents, whether the process is well-known and well-established or whether a judgement is required to carry out estimations). The risks of fraud are not subject to explicit identification, although they are taken into account insofar as they can cause material errors in the financial information.

After determining the most relevant risks, the Company selects and designs the controls required for their mitigation or management, with these controls being subject to monitoring and documentation, as well as to being systematically reviewed by the internal audit.

The risks selected are reviewed periodically on the basis of their impact on the organisation and existing resources.

• Whether the process covers all financial reporting objectives (existence and occurrence; completeness; valuation; presentation, breakdown and comparability; and rights and obligations), and whether it is updated and how frequently.

Each quarter, the Group’s Finance Department identifies the most significant operations that may have an impact on the closing process and resulting from the business/strategic plan, analysis of trends in the sector, regulatory impact, analysis of liquidity, competition, investments, etc.

The relevant operations and transactions of potential significance for the financial statements, as well as the main estimates and recurrent valuations, are documented and periodically reviewed and updated.

• Whether there is a process in place for identifying the scope of consolidation, taking into account among other aspects the possible existence of complex corporate structures, vehicle companies or special purpose entities (SPE).

The scope of consolidation is determined according to the criteria stipulated in international financial reporting standards and is reviewed monthly or whenever any regulatory changes are made by the Group’s Finance Department.

• Whether the process covers all other types of risk (operating, technological, financial, legal, reputational, environmental, etc.) insofar as these affect the financial statements.

The process of identifying the risk of error in the financial information takes into account the effects of other types of risk (operational, technological, legal, reputational, environmental, etc.), insofar as they affect the financial statements – risks that are assessed and managed by various corporate units. However, when identifying financial information risks, no express identification of these types is carried out.

• Which of the entity’s governance bodies is responsible for supervising the process?

The Audit Committee, as an executive body of the Board of Directors, is responsible for monitoring the effectiveness of the Company’s internal control and risk management systems, as well as the procedure for preparing and presenting regulated financial reporting.

F.3 Control activities

Identify and describe, where appropriate, the main characteristics of at least the following:

F.3.1. Procedures for reviewing and authorising the financial information and the description of ICFR to be published for the securities markets, stating who is responsible in each case and providing documentation and flow charts of activities and controls (including those relating to the risk of fraud) for each type of transaction that may materially affect the financial statements, including the procedure for the closing of accounts and the specific review of the judgements, estimates, evaluations and projections.

The Adveo Group has established a procedure to prepare the financial information, which includes controls of the various sub-processes involved which have an impact on the information, such as the processes of generating income and expenses, the management of associated receivables and payables, investments, depreciation, valuation of stocks, processes associated with collections and payments, payroll, reporting and consolidation, the process of closing the financial statements, etc.

Transactions that could materially affect the financial statements are identified by the Group’s Finance Department and are documented. Indicators showing business trends, financial positions, projections and business plans are analysed periodically.

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The financial information to be published for the market is prepared by the Finance Department and is reviewed by the Chief Executive Officer. The Audit Committee is responsible for monitoring the information and, once it has been examined, it is forwarded to the Board of Directors. The Board of Directors is responsible for approving the information to be published for the market.

The Group publishes a series of explanatory notes that accompany the financial information submitted to the market; these notes provide comments on all unusual items with non-recurring effects and other items such as sales performance by business line, income statements by business line, EBITDA, balance sheets, leverage ratio and stock exchange performance.

F.3.2. Internal control policies and procedures for IT systems (including, among others, secure access, change control and operation of the same, business continuity and segregation of duties) that support key company processes for the preparation and publication of financial information.

The IT systems on which the financial information is based and that are used directly in its preparation have policies regarding secure access and segregation of duties, based on the definitions authorised by the manager responsible for each area to guarantee security in terms of access to data and programmes, and control over any changes, thus mitigating the risk of errors or fraud in relation to the financial information.

The IT Department implements the instructions given by the Finance Department in areas such as user profiles and access control, to ensure the integrity and reliability of the financial information.

F.3.3. Internal control policies and procedures aimed at supervising the management of activities subcontracted to third parties, as well as evaluation, calculation or valuation tasks entrusted to independent experts, when these may materially affect the financial statements.

The activities subcontracted to third parties shall comply with the selection procedures put in place by the Group, following independence criteria and avoiding conflicts of interest.

The Group uses external consultants with a renowned reputation primarily for issues relating to tax, employment, law and corporate operations. Likewise, it has also used external consultants to analyse and produce certain aspects of the Group’s Strategic Plan.

Reports received pertaining to activities subcontracted to third parties are reviewed and discussed with the said third parties in order to assess the impact of the conclusions reached and the decisions taken within the process of preparing the financial statements.

F.4 Information and communication Identify and describe, where appropriate, the main characteristics of at least the following:

F.4.1. A specific role in charge of defining and maintaining up-to-date accounting policies (accounting policy area or department) and resolving queries or disputes arising from their interpretation, remaining in regular contact with those in charge of operations within the organisation, and keeping an updated manual of accounting policies, which is communicated to all the Company’s operating units.

The Finance Department is responsible for keeping the accounting policies updated and resolving any queries or disputes arising from their interpretation. The Finance Department regularly provides reports to the Executive Committee and the Audit Committee in which it records any relevant operations and transactions of potential significance for the financial statements, as well as significant estimates and valuations, and these reports are periodically reviewed and updated.

These documents are discussed jointly with the external auditors and are approved by the Group’s Finance Department. With the help of external consultants, we are currently working on preparing accounting policy manuals for the entire Adveo Group.

Moreover, the staff involved in preparing and reviewing the financial information subscribe to accounting and tax publications, receiving communications from major audit firms and regulatory bodies.

F.4.2. Mechanisms for the capture and preparation of financial information in a standardised format, which are enforced and used by all the units of the entity or the Group, supporting the main financial statements and accompanying notes as well as the ICFR disclosures.

The mechanism for gathering and preparing the information that supports the main financial statements of the Adveo Group is based primarily on the use of a unified consolidation management

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tool (called SAP BPC). This tool is accessible from all geographical areas, and is currently deployed throughout the Group.

A large part of the information that supports the breakdowns and notes to the statements is included in the consolidation tool. The remainder of the information is retrieved from spreadsheets in standardised formats, referred to as reporting packages, which are compiled on a monthly basis.

F.5 Monitoring the operation of the system

Identify and describe the main characteristics of at least the following:

F.5.1. The ICFR monitoring activities undertaken by the Audit Committee, indicating whether the entity has an internal audit function responsible for, among other duties, supporting the audit committee in its monitoring of the internal control system, including ICFR. Likewise, information is to be provided on the scope of ICFR assessment carried out during the financial year, and the procedure used by the party carrying out the assessment to communicate the results of the latter, stating whether the entity has an action plan that details any corrective measures and whether consideration has been given to its impact on financial reporting.

The monitoring of the ICFR is the responsibility of the Audit Committee and its activities mainly include: (i) monitoring compliance with the certification process by the various parties responsible for the financial information, (ii) reviewing, with the support of the Internal Audit Department, the design and operation of the internal control system in order to evaluate its effectiveness, and (iii) holding periodic meetings with external auditors, internal auditors and senior management to review, analyse and comment on the financial information, the scope of companies covered and the accounting criteria applied, as well as, where appropriate, any significant shortcomings identified in terms of internal control.

In turn, the Audit Committee – in collaboration with the Financial Department and the Internal Audit unit for the analysis, evaluation and effective monitoring of systems used for the internal control and management of the relevant risks of Adveo Group International, S.A. and its Group of companies – independently reviews the design and operation of the internal control system to identify any weaknesses and make recommendations for improvement.

The Internal Audit unit permanently monitors the main business processes of the Adveo Group in all countries where the Group operates to identify risks, propose preventive and detective controls in order to mitigate such risks, correct the identified weaknesses and implement the suggested improvements.

The combination of reviews carried out means that the Internal Audit evaluates the internal control system in terms of its design and its operation, and issues an opinion on the effectiveness of the internal controls established to guarantee the reliability of the financial information. It then forwards this to the Audit Committee during the course of periodic meetings.

F.5.2. Whether any discussion procedure is in place through which the accounts auditor (in accordance with the provisions set out in the Spanish National Auditing Standards or NTA, as per their Spanish acronym), the internal auditor and other experts may notify senior management and the Audit Committee or the entity’s directors of any significant weaknesses in internal control identified during the process of reviewing the financial statements or any others entrusted to them. Likewise, information is to be provided on whether there is an action plan to correct or mitigate any shortcomings identified.

The Audit Committee is responsible for discussing with the accounts auditors and the Internal Audit unit any weaknesses of the internal control system identified during the audit. It is also responsible for establishing the appropriate relationships to collect information on any issues that could jeopardise the independence of the auditors, which the Committee shall examine. Finally, its remit also covers any other issues connected to the auditing of accounts and the internal audit, as well as any other communications stipulated in the legislation applicable to the auditing of accounts and set out in the auditing standards.

In this regard, any issues identified by the internal and external auditors during their reviews, as well as action plans to mitigate such issues, are shared and discussed with the Corporate Finance Department and the Audit Committee.

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F.6 Other relevant information

Adveo Group International, S.A. and its subsidiaries have an internal control over financial reporting system involving the departments responsible for management control, accounting and treasury, under the supervision of the Internal Audit unit. The aim of the system is to reasonably guarantee the reliability of the financial information, ensuring that the financial information provided by each subsidiary to Adveo Group International S.A. for consolidation contains no errors or material omissions and provides a true reflection of results and assets within their area of responsibility.

F.7 Report of the external auditor

Report:

F.7.1. Whether information on the ICFR sent to the markets has been reviewed by an external auditor, in which case the entity should attach the corresponding report as an annex. If this is not the case, reasons must be provided.

The auditor has reviewed the breakdowns supplied by the Company on internal control over financial reporting as part of its review of the Management Report within the scope of its auditing of the Company’s annual financial statements.

G LEVEL OF COMPLIANCE WITH CORPORATE GOVERNANCE RECOMMENDATIONS

Indicate the extent of the Company’s compliance with the Code of Good Governance of listed companies recommendations.

If the Company does not comply with any of the recommendations or only partly complies, include a detailed explanation of the reasons for the failure to comply, so as to provide sufficient information to shareholders, investors and the market in general to allow them to assess the Company’s behaviour. General explanations are not acceptable.

1. The Corporate By-Laws of listed Companies should not place an upper limit on the votes that can be cast by a single shareholder, or impose other restrictions that hinder the takeover of the Company by means of share purchases on the market.

> Compliant > Explain

2. When the parent company and a subsidiary company are listed on the stock market, both companies should provide detailed disclosure on:

a) Their respective areas of activity and any business dealings between them, as well as any dealings between the listed subsidiary and other Group companies.

b) The mechanisms in place to resolve potential conflicts of interest.

> Compliant > Partially compliant > Explain > Not applicable

3. During the ordinary General Shareholders’ Meeting, as a complement to the written dissemination of the Corporate Governance Annual Report, the Chairman of the Board of Directors should inform the shareholders verbally, providing sufficient detail, of the most relevant aspects of the Company’s corporate governance and, in particular:

a) The changes implemented since the previous ordinary General Shareholders’ Meeting.

b) The concrete reasons why the Company did not follow any of the recommendations of the Code of Corporate Governance and any alternative rules applicable to this matter, should they exist.

> Compliant > Partially compliant > Explain

4. The Company defines and promotes a policy of communication and contact with shareholders, institutional investors and voting auditors that is fully compliant with rules against market abuse and treats all shareholders in the same position equally.And the Company publishes this policy on its website, including information on the way in which it has implemented it and how it identifies the interlocutors or those responsible for doing so.

> Compliant > Partially compliant > Explain

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5. The Board of Directors does not submit a proposed delegation of faculties to the General Shareholders’ Meeting to issue shares or convertible securities apart from stock options for an amount exceeding 20% of the capital at the time of delegation.And when the Board of Directors approves any issue of shares or convertible securities apart from stock options, the Company immediately publishes the reports about this exclusion to which reference is made in corporate law, on its website.

> Compliant> Partially compliant> Explain

6. Listed companies preparing the reports specified below, whether compulsory or voluntary, publish them on the websites sufficiently ahead of the ordinary General Shareholders’ Meeting, even if dissemination is not compulsory:

a) Report on the independence of the auditor. b) Reports on the operation of the Audit and Appointments

and Remuneration Committees. c) Report by the Audit Committee on restricted operations. d) Report on the Corporate social responsibility policy.

> Compliant> Partially compliant > Explain

7. The company broadcasts General Shareholders’ Meetings directly on its website.

> Compliant> Explain

The Company does not have all the technical means necessary for the live broadcasting of the General Shareholders’ Meeting on the internet.

8. The Audit Committee monitors to ensure that the Board of Directors makes an effort to present the accounts to the General Shareholders’ Meeting without limitations or reservations or qualifications in the audit report, and, in any exceptional cases where such reservations or qualifications may exist, the chairman of the Audit Committee and the auditors should explain their content and scope clearly to the shareholders.

> Compliant > Partially compliant> Explain

9. The Company permanently publishes the requirements and procedures it will accept to attest to the ownership of shares, the right to attend the General Shareholders’ Meeting and the exercise or delegation of the right to vote, on its website.These rights and procedures encourage the attendance and exercise of rights by shareholders and apply in a non-discriminatory fashion.


10. When any shareholder so entitled should exercise the right to supplement the agenda or submit new proposed resolutions before the date of the General Shareholders’ Meeting, the Company: a) Immediately disseminates news of these additional items

and proposed resolutions. b) Publishes the model attendance card or delegation form

for voting or remote voting with the specific amendments to allow for voting on the new items on the agenda and alternative proposed resolutions within the same terms as those proposed by the Board of Directors.

c) It submits all these points or alternative proposals to voting and applies the same voting rules to these as to those formulated by the Board of Directors, including, specifically, the assumptions or deductions on the voting.

d) After the General Shareholders’ Meeting, it reports the results of the votes cast on these supplementary items or alternative proposals.

> Compliant > Partially compliant> Explain> Not applicable

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11. If the Company envisages paying attendance premiums to the General Shareholders’ Meeting, it first establishes a general policy on such premiums and ensures that the policy is correct.

> Compliant > Partially compliant> Explain> Not applicable

12. The Board should carry out its functions with a unity of purpose and independent judgement, treating all shareholders equally, guided at all times by the Company’s best interest and, as such, endeavour to ensure the pursuit of profitable business that is sustainable in the long-term and maximise the Company’s economic value.In pursuing the Company’s interests, in addition to compliance with laws and regulations, it must adopt a conduct based on good faith, ethics and respect for custom and commonly accepted good practices, seeking to reconcile its own corporate interests with the legitimate interests of its employees, suppliers, customers and other stakeholders who may be involved, as applicable, as well as the impact of the Company’s business on the community as a whole and the environment.


13. The Board of Directors should be of the size required in order to function in an efficient and participatory manner; this means that it is advisable to have between five and fifteen members.


14. 14. The Board of Directors shall approve a director appointment policy that:

a) Is concrete and verifiable. b) Ensures that proposed appointments or re-elections are based

on a prior analysis of the needs of the Board of Directors. c) Encourages diversity of knowledge, experience and gender.

The results of the prior analysis of the needs of the Board of Directors shall be gathered together in the grounded report of the Appointments Committee to be published upon convening

the General Shareholders’ Meeting, which will then ratify, appoint or re-elect each director.Furthermore, the director appointment policy shall pursue the target for 2020 of female directors making up at least 30% of the Board of Directors. The Appointments Committee shall verify compliance with the director appointment policy once a year, and shall report on this in the Corporate Governance Annual Report.


15. Proprietary and independent external directors should form a clear majority on the Board of Directors, and the number of executive directors should be the minimum necessary taking into account the complexity of the corporate group and the executive directors’ percentage share in the Company’s capital.


16. The percentage of proprietary directors out of all non-executive directors should not exceed the existing proportion between the capital of the Company represented by said directors and the rest of the capital.

This criterion may be mitigated:

a) In large cap companies where few shareholdings are legally considered to be significant.

b) In companies with multiple shareholders represented on the Board of Directors that are not otherwise related.


17. The number of independent directors should represent at least half of the total number of directors.However, when the Company is not a large cap company or when, despite being one, it has one shareholder or various shareholders acting in concert that control more than 30% of the share capital, the number of independent directors shall represent at least one third of all directors.


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18. The companies should publish on their websites, and keep up to date, the following information on their directors:

a) Professional and biographical profile. b) Other Boards of Directors on which they stand, whether

or not the companies are listed, and other remunerated activities they pursue of any nature.

c) An indication of the directors’ categories, noting the shareholders that they represent or to whom they are related in the case of proprietary directors.

d) The date of their first appointment as a director of the Company, as well as the dates of subsequent appointments.

e) Shares in the Company, and options on those shares, held by them.


19. Following verification by the Appointments Committee, the Corporate Governance Annual Report shall contain an explanation of the reasons for which proprietary directors have been appointed at the request of shareholders with shareholdings of less than 3% of capital. If applicable, it shall also lay out the reasons for not noting formal requests for a presence on the Board from shareholders with shareholdings equal to or greater than those of others at whose request proprietary directors have been appointed.

> Compliant> Partially compliant> Explain> Not applicable

20. Proprietary directors should resign when the shareholder represented by them sells the entirety of their shareholding. They should also do so in the appropriate numbers when the aforementioned shareholder reduces their shareholding to a level that would require a reduction in the number of their proprietary directors.


21. The Board of Directors should not propose the removal of any independent director before the end of the statutory period for which they were appointed, except where there is just cause as perceived by the Board of Directors, following a prior report from the Appointments Committee. In particular, such just cause shall be understood to exist when the director has taken on new offices or made new commitments that prevent him from dedicating the necessary time to his duties as director, acted in violation of the duties inherent to their post, or entered into any circumstances that might cause them to lose their independent status in accordance with the provisions of applicable legislation.

The removal of independent directors may also be proposed as a result of takeover bids, mergers or other similar corporate transactions involving a change to the Company’s capital structure when such changes to the structure of the Board are favoured by the proportionality criterion indicated in Recommendation 16.


22. The companies should establish rules compelling the directors to provide information and, as appropriate, resign in cases in which they might damage the credibility and reputation of the Company and, in particular, to inform the Board of Directors of any criminal cases in which they appear as defendants, and of the subsequent legal proceedings.If a director is prosecuted or called to trial for any of the offences set out in corporate legislation, the Board of Directors should examine the case as soon as possible and, in view of the specific circumstances, decide whether or not it is appropriate for the director to remain in their post. The Board of Directors should also record the above, giving reasons, in the Corporate Governance Annual Report.


23. All directors should voice their opposition clearly when they consider that a proposed decision that has been submitted to the Board of Directors might be contrary to the Company’s interests. The same should be done, particularly, by independent directors and other directors not affected by the potential conflict of interest, in the case of decisions that might harm the shareholders not represented on the Board of Directors.

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When the Board of Directors makes significant or repeated decisions about which the director has expressed serious reservations, the director should draw the appropriate conclusions and, if they choose to resign, explain the reasons for this in the letter referred to in the following recommendation.

This Recommendation also applies to the Secretary of the Board of Directors, even if the Secretary is not a director.


24. When a director vacates their position before the end of their term of office, whether by resignation or for any other reason, they should explain the reasons for doing so in a letter to be sent to all members of the Board of Directors. Without prejudice to the reporting of the aforementioned departure as a significant event, the reason for the departure should be detailed in the Annual Corporate Governance Report.


25. The Appointments Committee should ensure that non-executive directors have sufficient time available to correctly fulfil their duties.The Regulations of the Board of Directors should establish a maximum number of corporate boards on which its directors can stand.


26. The Board of Directors should meet with the necessary frequency to perform its functions efficiently and at least eight times a year, following the schedule of meetings and issues drawn up at the beginning of the financial year, allowing every director individually to propose other items not originally on the agenda.


27. The directors’ absences should be reduced to unavoidable cases, and quantified in the Corporate Governance Annual Report. Where applicable, it should authorise representation with instructions.


28. When the directors or the Secretary express concerns regarding a proposal or, in the case of the directors, regarding the Company’s performance, and such concerns are not resolved by the Board of Directors, these concerns should be recorded in the minutes at the request of the person who expressed them.


29. The Company should establish suitable channels by which directors can obtain a precise assessment for fulfilment of their duties, including, if circumstances should so dictate, external auditing paid by the Company.


30. Regardless of the knowledge demanded of directors in order that they should fulfil their duties, the companies should also offer directors programmes for updating their knowledge when circumstances suggest this may be appropriate.

> Compliant> Explain> Not applicable

31. The agenda of meetings should clearly specify the items on which the Board of Directors will be required to pass a resolution or resolutions proposed so as to allow the directors to study and find out in advance exactly what they need to know to this end.

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When, on an exceptional basis and for reasons of urgency, the Chairman wishes to submit resolutions or decisions to the approval of the Board of Directors that are not included on the agenda, then specific, express consent shall be required of the majority of the directors in attendance, and this shall be noted in the minutes.


32. Directors should be regularly informed about changes in the ownership structure and the opinions of the major shareholders, investors and ratings agencies about the Company and its Group.


33. As the party responsible for the effective operation of the Board of Directors, in addition to going about the duties assigned to him by law and the Corporate By-Laws, the Chairman shall also prepare and submit to the Board of Directors a calendar of dates and items to be discussed; he shall organise and coordinate the regular assessment of the Board and, if applicable, that of the Company’s CEO; he shall be responsible for guiding the Board and ensuring its effective operation; he shall ensure that sufficient time is devoted to the discussion of strategic matters and shall authorise and revise the programmes for the updating of the knowledge of each director, where circumstances so dictate.


34. When there is a coordinating director, in addition to the faculties assigned him by law, the By-Laws or Regulations of the Board of Directors also assign him the following: to chair the Board of Directors in the absence of the Chairman and Deputy Chairmen, if such should have been appointed; to voice the concerns of non-executive directors; to maintain contact with investors and shareholders in order that he shall know their viewpoints and so as to allow him to express an opinion on their concerns, particularly as regards the Company’s corporate governance; and coordinate the Chairman’s succession plan.


35. The Secretary of the Board of Directors should particularly make sure that the actions and decisions of the Board of Directors take due consideration of the recommendations on Good Governance given in this Corporate Governance Code, as applicable to the Company.


36. Once a year, the Board of Directors should evaluate and adopt, if applicable, a plan of action to correct any shortcomings detected with respect to:

a) The quality and efficiency of operation of the Board of Directors.

b) The operation and members of its committees. c) The diversity in the members and competences of the Board

of Directors. d) The performance of the Chairman of the Board of Directors

and CEO. e) The performance and contribution made by each director,

paying special attention to the parties responsible for the various Board Committees.

In order to assess the various committees, reference shall be made to the report they make to the Board of Directors and for the assessment of the latter, to the report made by the Appointments Committee.

Once every three years, the Board of Directors will be assisted in the assessment procedure by an external advisor, whose independence will be verified by the Appointments Committee.

Business relations that the advisor or any Group company entertains with the Company or any Group company must be described in the Corporate Governance Annual Report.

The process and areas assessed will be described in the Corporate Governance Annual Report.


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37. When there is an executive committee in place, the participation structure of the various categories of directors should be similar to that of the Board itself, and its Secretary should be the Secretary of the Board of Directors.


38. The Board of Directors should always be aware of the issues dealt with and the decisions made by the Executive Committee, and all the members of the board should receive a copy of the minutes of the Executive Committee’s meetings.


39. The members of the Audit Committee, and in particular its Chairman, should be appointed with due consideration of their knowledge and experience of accounting, auditing and risk management. The majority of these members should be independent directors.


40. Under the supervision of the Audit Committee, there will be an internal audit department that ensures the proper functioning of the information and internal control system and which reports hierarchically to the non-executive chairman of the Board or of the Audit Committee.


41. The person responsible for the internal audit role should present their annual work plan to the Audit Committee, inform the Committee directly of any incidents that may arise during its compilation, and submit to it an activity report at the end of each financial year.


42. In addition to the duties envisaged by the law, the Audit Committee shall also have the following:

1. Regarding the information and internal control systems:

a) Monitoring the preparation and integrity of financial information relating to the Company and, where appropriate, the Group, checking for compliance with legal provisions, the accurate demarcation of the scope of consolidation and the correct application of accounting principles.

b) Monitoring the independence of the internal audit function; proposing the selection, appointment, reappointment and removal of the head of internal audit department; proposing this department’s budget; approving the guidelines and working plans, ensuring that the activity is mainly focused on the risks relevant to the Company; receiving periodic reports on its activities; and verifying that senior management takes into account the conclusions and recommendations given in its reports.

c) Establishing and supervising a mechanism that allows employees to report, confidentially and – if possible and deemed appropriate – anonymously, any irregularities of potential significance, particularly financial and accounting irregularities, that they detect within the Company.

2. Regarding the external auditor:

a) If an external auditor should resign, it will examine the circumstances that motivated this.

b) It will ensure that the remuneration of the external auditor for his work does not affect its quality or independence.

c) It will ensure that the Company reports any change of auditor to the CNMV as a significant event, and includes a statement of any disagreements there may have been with the outgoing auditor and, if there were any such disagreements, their subject matter.

d) It will ensure that the external auditor holds an annual meeting with the whole of the Board of Directors to inform it about the work carried out and the trends seen in the accounting position and risks of the Company.

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e) It will ensure that the Company and external auditor comply with current legislation in force on the provision of services other than auditing, the limits to the concentration of the auditor’s business and, more generally, all other rules governing the independence of the auditors.


43. The Audit Committee should be able to summon any employee or executive of the Company, and even order them to appear with no other executive present.


44. The Audit Committee shall be informed of all structural and corporate changes that the Company plans to make for its analysis and prior report to the Board of Directors on the economic conditions and impact on the accounts and, in particular, if applicable, the exchange ratio proposed.


45. The risk control and management policy should identify, at least:

a) The different types of financial and non-financial risk (operational, technological, legal, corporate, environmental, political and reputational, etc.) that the Company faces, including contingent liabilities and other off-balance sheet risks among the financial and economic risks.

b) The level of risk that the Company considers acceptable. c) The measures in place to mitigate the impact of the identified

risks, in case they should materialise. d) The information and internal control systems that will be

used to control and manage these risks, including contingent liabilities and off-balance sheet risks.


46. Under the direct supervision of the Audit Committee or, if applicable, of a specialised committee of the Board of Directors, there is an internal control and risk management function exercised by a unit or department within the Company, which is specifically assigned the following duties:

a) To ensure the correct function of the risk management and control systems, in particular, which identify, manage and suitably quantify all major risks affecting the Company.

b) To actively participate in the preparation of the risk strategy and important decisions on its management.

c) To ensure that the risk management and control systems mitigate the risks appropriately under the scope of the policy defined by the Board of Directors.


47. The members of the Appointments and Remuneration Committee – or the Appointments Committee and Remuneration Committee if they should be separate – should be appointed ensuring that they have the knowledge, skills and experience fit for the office they are called to fulfil, and the majority of these members shall be independent directors.


The Appointments and Remuneration Committee consists of four directors, two independent and two proprietary, with the Chairman of the Committee being an Independent Director. Consequently, there is no majority of Independent directors.

The members of these committees classified as independent are chosen according to their knowledge, skills and experience.

48. Large cap companies have separate appointments and remuneration committees.

> Compliant > Explain> Not applicable

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49. The Appointments Committee should consult the Chairman of the Board of Directors and Chief Executive Officer of the Company, in particular on matters relating to the executive directors.Any director should be able to request that the Appointments Committee take into consideration potential candidates to fill vacant directors’ posts, should it deem them suitable.


50. The Remuneration Committee should go about its duties independently and, in addition to the functions assigned it by the law, it shall also be assigned the following:

a) Submitting to the Board of Directors the basic conditions of contracts for senior managers.

b) Ensuring compliance with the remuneration policy established by the Company.

c) Regularly reviewing the remuneration policy applied to directors and senior managers, including share-based remuneration systems and their application, as well as guaranteeing that individual remuneration is proportional to what is paid to the other directors and senior managers of the Company.

d) Ensuring that any conflicts of interest do not prejudice the independence of the external audit of the Committee.

e) Verifying the information on remuneration of directors and senior managers contained in the various corporate documents, including the annual report on the remuneration of directors.


51. The Remuneration Committee should consult the Chairman and Chief Executive Officer of the Company, in particular on matters relating to the executive directors and senior management.


52. The rules for the composition and operation of the supervisory and control committees should be included in the Regulations of the Board of Directors and consistent with those applicable to the legally compulsory committees, in compliance with the foregoing recommendations, including:

a) They should only comprise non-executive directors, with a majority of independent directors.

b) They should be chaired by independent directors. c) The Board of Directors should appoint the members of

these committees on the basis of the knowledge, abilities and experience of the directors and the mandates of each committee and discuss its proposals and reports. The committees must, in the first full board meeting after their meetings, be held accountable before the board for their activities and be answerable for the work carried out.

d) The committees may seek external advice when they consider it necessary in order to carry out their duties.

e) Minutes should be taken of their meetings and these made available to all directors.


The Audit Committee and the Appointments and Remuneration Committee, in accordance with the provisions of Articles 14 and 15 of the Regulations of the Board of Directors, shall not include the provisions of paragraph a) of this recommendation, given that they establish that they shall be made up of at least three (3) and no more than five (5) members, who shall be exclusively non-executive directors, at least two (2) of whom must be independent directors. Consequently, there is no majority of Independent directors.

53. The supervision of compliance with the rules of Corporate Governance, internal codes of conduct and the corporate social responsibility policy shall be assigned to one or split between various committees of the Board of Directors, which may be the audit committee, the appointments committee, the corporate social responsibility committee, if such should exist, or a specialised committee that the Board of Directors, in exercising its faculties of self-organisation, should decide to create to this end; in any case, it shall be assigned at least the following minimum functions:

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a) Supervision of compliance with the internal codes of conduct and the Company’s rules of Corporate Governance.

b) Supervision of the communication strategy and relations with shareholders and investors, including small and medium shareholders.

c) Regular assessment of the suitability of the Company’s Corporate Governance system, in order to ensure that it fulfils its duty to promote the corporate interests and considers, as appropriate, the legitimate interests of the remaining stakeholder groups.

d) Review of the Company’s corporate social responsibility policy, ensuring that it seeks to create value.

e) Monitoring of corporate social responsibility practices and strategy and assessment of the degree of success.

f) Supervision and assessment of relations with the various groups of stakeholders.

g) The assessment of all aspects relating to the non-financial risks of the Company - including operative, technological, legal, corporate, environmental, political and reputational.

h) Coordination of the process of reporting non-financial information and on diversity, in compliance with applicable legislation and reference international standards.


54. The corporate social responsibility policy should include the principles or commitments made voluntarily by the Company in its relations with the various stakeholders; it should at least specify:

a) The objectives of the corporate social responsibility policy and the development of supporting tools.

b) The corporate strategy in relation to sustainability, the environment and social matters.

c) Concrete practices in matters relating to: shareholders, employees, customers, suppliers, social matters, the environment, diversity, tax liability, respect for human rights and prevention of illegal conduct.

d) The methods or systems for monitoring the results of the application of the concrete practices reported in the letter above, the associated risks and management.

e) The mechanisms used to supervise the non-financial risk, ethics and business conduct.

f) The channels used for communication, engagement and dialogue with stakeholders.

g) Responsible communication practices that avoid any manipulation of information and protect integrity and honour.


55. The Company shall report, in a separate document or in the Management Report, on the subjects connected with corporate social responsibility, using any of the internationally-accepted methods to do so.


56. The remuneration of directors should be that required to attract and retain the directors of the desired profile and to remunerate the dedication, qualifications and responsibility demanded by the position, but not so high as to compromise the independence of non-executive directors.


57. Only executive directors should be assigned variable remuneration linked to Company and personal performance as well as remuneration in the form of shares, options or rights over shares or instruments related to the value of the share and long-term savings systems like pension plans, retirement systems or other social security systems.Shares can be provided by way of remuneration to non-executive directors when they are kept until they stand down as directors. The foregoing shall not apply to any shares the Board deems it necessary to dispose of, as applicable, to pay the costs relating to the acquisition.


58. In cases of variable remuneration, the remuneration policies should include limits and any technical precautions necessary in order to ensure that this remuneration reflects the professional performance of its beneficiaries, and is not simply derived from general market developments, from developments in the business sector in which the Company operates, or from other similar circumstances.

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In particular, the variable components of remuneration:

a) Shall be linked to performance criteria that is predetermined and can be mediated and said criteria consider the risk assumed to obtain a result.

b) Promote business sustainability and include non-financial criteria that is suitable to create long-term value, like compliance with the Company’s rules and internal procedures and its risk management and control policies.

c) Shall be configured on the basis of a balance between the achievement of short-, medium- and long-term objectives, which enable the remuneration of the performance for continuous commitment during a sufficient period of time to appreciate the contribution towards sustainable value creation, so as to ensure that the elements of the measurement of this performance are not only hinged on spot, occasional or extraordinary events.


59. Payment of a significant part of the variable components of remuneration shall be deferred for a minimum period of time that suffices to prove that the established performance conditions have been met.


60. The remuneration related to the Company’s results should take into account any qualified opinions that may appear in the external auditor’s report and diminish those results.


61. A significant percentage of the variable remuneration of executive directors should be linked to the delivery of shares or financial instruments indexed to its value.


62. Once the shares or options or rights corresponding to the remuneration systems have been assigned, the directors cannot transfer ownership of a number of shares equivalent to twice their fixed annual remuneration, nor may they exercise any options or rights for at least three years after assignment.

The foregoing shall not apply to any shares the Board deems it necessary to dispose of, as applicable, to pay the costs relating to the acquisition.


63. Contracts should include a clause enabling the Company to claim reimbursement of the variable components of remuneration when payment has not been adjusted to performance conditions or when it has been made on the basis of data that was later discovered to be incorrect.


64. Severance payments should not exceed an amount established as equivalent to two years of the total annual remuneration and shall not be paid until the Company has proven that the director has complied with the performance criteria established.


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H OTHER USEFUL INFORMATION

1. If there is any information that is relevant to Corporate Governance in the Company or in Group entities that has not been included in the other sections of this report, but which is necessary to include to offer comprehensive, reasoned details of the governance practices and structure of the entity or its group, provide brief details.

2. Any other information, clarification or detail related to the sections of the report outlined above may also be included in this section insofar as it is relevant and not repetitive.

Specifically, please indicate whether the Company is subject to legislation other than that of Spain as regards Corporate Governance and, if so, include any information that the Company is required to provide other than the information requested in this report. 3. The Company may also indicate whether it has voluntarily subscribed to any other codes of ethical or good practice principles, whether international, sectoral or from another domain. If so, the code in question and the date of subscription must be specified.

There is nothing relevant to mention here.

This Annual Corporate Governance Report was approved by the Company’s Board of Directors at its meeting of 29/03/2016.

Indicate whether there have been any directors who have voted against or abstained with regard to the approval of this report.

> Yes > No

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TEMPLATE FOR ANNUAL REPORT ON REMUNERATION FOR THE DIRECTORS OF LISTED COMPANIES

Details of issuerEnd date of reference financial year: 31/12/2015Spanish company tax code (C.I.F.): A-28414811Trade name: ADVEO GROUP INTERNATIONAL, S.A.Registered office: Calle Miguel Ángel, 11, 4 Planta, 28010 MADRID

A THE COMPANY’S REMUNERATION POLICY FOR THE CURRENT YEAR

A.1 Explain the Company’s remuneration policy. The following information must be included in this sub-section:

• General principles and foundations of the remuneration policy.

• More significant changes made to the remuneration policy with respect to the policy applied in the previous financial year, as well as modifications made during the year to the conditions for the exercise of options already granted.

• Criteria applied and composition of comparable groups of companies whose remuneration policies have been examined in order to establish the company’s remuneration policy.

• Relative importance of variable remuneration concepts as compared to fixed remuneration concepts, and criteria followed in determining the various components of the directors’ remuneration package (remuneration mix).

Explain the remuneration policyThe principles and foundations of the company’s remuneration policy are based on the provisions of Article 40 of the Corporate By-Laws and Article 25 of the Regulations of the Board of Directors.

In accordance with the provisions of the first of the articles mentioned, “The Directors, by virtue of their status as such, shall receive remuneration consisting of (i) the attendance allowances for meetings of the Board of Directors and its Committees as determined for this purpose by the General Shareholders’ Meeting, the amount of which shall remain in effect until and unless modified by the General Shareholders’ Meeting; as well as, if applicable, (ii) remuneration consisting of a share in profits equivalent to five percent (5%) of the profit obtained by the consolidated group for the year, within the limits established by

law, from which, once any amount due to the Directors relating to share in profits has been calculated, the amount received by the Directors by way of attendance allowances in compliance with the provisions of section (i) above, will be deducted. If after carrying out this operation the result were a positive balance, this will be the amount that Directors effectively receive by way of share in profits.

The basis for determining the annual joint remuneration of the Directors by virtue of their status as such, consisting of a share in profits shall be calculated as the sum of the Pre-Tax Profit (taken from the consolidated separate income statement) and the Total Income and Expenses attributed directly to Equity (taken from the global consolidated income statement).

Directors who perform executive functions in the Company are excluded from the remuneration system established in the above paragraph. For their executive duties, they shall have the right to receive the remuneration determined by the Board of Directors, which shall consist of: a fixed amount that is appropriate for the services and responsibilities assumed; a variable supplementary amount and generalised incentive systems that are established for the Company’s senior management, which may comprise shares or share option rights or remuneration referenced to the value of shares subject to the requirements established by the legislation in force at the time; as well as a social insurance component that shall include appropriate pension and insurance schemes and social security. In the event of a dismissal not due to breach of contract, they shall have the right to compensation. In any case, the remuneration of Executive Directors shall be determined in compliance with the provisions of the Directors’ remuneration policy approved by the General Shareholders’ Meeting and will be included in a contract to be stipulated by the Director and the Company, and which must specify all situations for which remuneration may be obtained for the fulfilment of executive duties.”

The second article establishes that: “The Director shall have the right to obtain the remuneration established by the Board of Directors in compliance with the provisions of the Corporate By-Laws and that authorised by the General Shareholders’ Meeting and the Board of Directors regarding the remuneration of Directors.

The remuneration of Directors must in all events be proportional to the importance of the Company, the financial situation in which it finds itself at any given time and the market standards

ANNEX I

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for comparable companies. The remuneration system established must aim to promote the Company’s profitability and sustainability in the long-term and to incorporate the necessary precautions in order to avoid any excessive assumption of risks and compensate for unfavourable results.”

In financial year 2015, the Extraordinary General Shareholders’ Meeting held on 19 November 2015 approved a long-term incentive plan linked to the increase in the value of shares of ADVEO GROUP INTERNATIONAL, S.A. for the CEO and various managers of the ADVEO Group.

The criteria used to set the Company’s remuneration policy are laid out throughout this annual report.

The importance of variable remuneration concepts as compared to fixed remuneration concepts and the criteria followed in determining the various components of their remuneration package will also be laid out in this annual report.

The Board meeting held on 29 March 2016 approved, with respect to the remuneration policy of non-executive directors for financial year 2016, the suspension of the application of article 40.1 (ii) of the Corporate By-Laws on the sharing in profits equivalent to five percent (5%) of the profits obtained during the financial year by the consolidated group. At the same time, it approved establishing limits to the attendance allowances regulated under paragraph (i) above for financial year 2016, of a maximum of eleven attendance allowances per each director for meetings of the Board of Directors, and six at most for any of the Board Committees. The maximum remuneration, therefore, for a non-executive director who is not a member of any committee, will be 33,000 euros for 2016.

A.2 Information on the preparatory work and decision-making process followed in order to determine the remuneration policy and, where appropriate, the role carried out by the Remuneration Committee and other supervisory bodies in setting the remuneration policy. This information should include, where appropriate, the mandate and composition of the Remuneration Committee and the identities of the external advisers whose services have been used to define the remuneration policy. Where appropriate, the nature of the directors who have been involved in defining the remuneration policy should also be stated.

Explain the process for determining the remuneration policyBoard of Directors on 6 July 2006, and its rules of operation and competencies are contained in Art. 45 of the Corporate By-Laws and Art. 15 of the Regulations of the Board of Directors.

The Appointments and Remuneration Committee is the body responsible for ensuring that the remuneration policy of the Company’s Board of Directors and Senior Management is appropriate to the market and consistent with the development of the Company’s results.

Without prejudice to the other tasks assigned to it by the Board of Directors, in accordance with article 45 of the Corporate By-Laws mentioned above, the basic responsibilities of the Appointments and Remuneration Committee are as follows:

a) Evaluating the skills, knowledge and experience necessary for the Board of Directors. To this end, defining the roles and capabilities required of the candidates who will need to fill each vacancy, and evaluating the time and dedication required for them to perform their duties.

b) Establishing a representation target for the least represented gender on the Board of Directors, and preparing guidelines on how to achieve this target.

c) Submitting proposed appointments of independent directors to the Board of Directors for co-option, or submitting the decision to the General Shareholders’ Meeting, along with proposals for re-election or separation made by the General Shareholders’ Meeting.

d) Reporting on the proposed appointments of Directors other than independent directors for co-option or for submission to the decision of the General Shareholder’s Meeting, along with proposals for re-election or separation made by the General Shareholders’ Meeting.

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e) Reporting on the appointment of members required to take part in each of the Board Committees.

f) Reporting on the appointment of the Chairman and Deputy Chairman of the Board of Directors, and reporting on the appointment and cessation of the Secretary and, if applicable, Deputy Secretary of the Board of Directors.

g) Reporting on the proposed appointments and separation of executive officers and basic contractual conditions.

h) Examining or organising the succession of the Chairman of the Board of Directors and Chief Executive Officer and, where necessary, making proposals to the Board of Directors to ensure that this succession takes place in an orderly and well planned manner.

i) Submitting to the Board of Directors the proposed remuneration policy of Directors and Managing Directors or those performing senior management functions under the direct responsibility of the Board, the Executive Committee or the CEO, as well as the individual remuneration and other contractual conditions of Executive Directors, ensuring their observance.

The Appointments and Remuneration Committee shall meet whenever the Board or its Chairman requests the issuing of a report or the adoption of proposals and, in any event, whenever appropriate for the proper execution of its duties.

In 2015, the Appointments and Remuneration Committee held 7 meetings. In its ordinary sessions, the Commission analyses the remuneration received in the previous quarter by members of the Board of Directors.

The composition of the committee is currently as follows:Chairman: Abel Linares Palacios.Secretary: Gestión de Inversiones RIMUSA, S.L., represented by Ricardo Muguerza Uralde.Members: Eladio Bezares Munilla and Álvaro Videgain Muro.

Following the review and approval in 2013 of the remuneration policy (which was advised by international HR consultancy HAY Group, and the company’s Corporate HR Department), this policy remained unchanged throughout the 2015 financial year.

However, for its continuous review of remuneration schemes, the Appointments and Remuneration Committee has received ongoing advice from the company’s Corporate HR Department, which has regularly attended the Committee’s meetings.

Due to the importance of shareholder remuneration policy, different management bodies of the company take part in the process of defining and approving this policy. The establishment of the company’s remuneration policy begins within the Appointments and Remuneration Committee, in which the main lines of remuneration for the Company’s directors and senior management are overseen. It is then submitted to the Board of Directors for its approval. Furthermore, the Appointments and Remuneration Committee periodically revises the remuneration systems, ensuring their transparency and considering their adequacy and performance in relation to the responsibility assumed by its members and the remuneration trends observed in other comparable listed companies.

A.3 Indicate the amount and nature of the fixed components, with breakdowns, where applicable, of remuneration for the performance of senior management functions on the part of the executive directors, of additional remuneration to the chairman or member of a committee of the Board, of the attendance allowances for meetings of the Board and its committees, and other fixed remuneration to the directors, as well as an estimate of the fixed annual remuneration to which they give rise. Identify other non-cash benefits and the basic parameters by which they are granted.

Explain the fixed components of the remunerationThe Company has only one Executive Director, acting as Chief Executive Officer, whose fixed remuneration, accrued annually, is appropriate to the services and responsibilities assumed and is sufficient to guarantee competitiveness in the market taking into account the usual remuneration levels in similar companies listed on the stock market.

This fixed remuneration is provided for in Article 40.2 of the Corporate By-Laws and in Article 25 of the Regulations of the Board of Directors, and is detailed together with the remainder of the conditions, financial and otherwise, agreed between the Company and the Chief Executive Officer in the corresponding Senior Management contract signed by both parties.

In compliance with the specified contract, the fixed annual remuneration of the Executive Director will rise to the annual figure of 450,000 euros gross during the validity of each of the years of the contract (without updating).

There are no other benefits available to the Executive Director, nor cash payments.

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According to the mentioned Article 40.2 of the Corporate By-Laws, Directors with executive functions in the Company will be entitled to receive the remuneration determined by the Board of Directors for said executive functions. This shall consist of: a fixed amount that is appropriate to the services and responsibilities assumed; a variable supplementary amount and generalised incentive systems that are established for the Company’s senior management, which may comprise shares or share option rights or remuneration referenced to the value of shares subject to the requirements established by the prevailing legislation at the time; as well as a social insurance component that shall include appropriate pension and insurance schemes and social security. In the event of a dismissal not due to breach of contract, they shall have the right to compensation. In any case, the remuneration of executive directors shall be determined in compliance with the provisions of the Directors’ remuneration policy approved by the General Meeting.

The right to receive attendance allowances for meetings of the Board and its committees or for carrying out the role of chairman or member of these committees, pursuant to Article 40.1 of the Corporate By-Laws, must be approved by the General Shareholders’ Meeting and is reserved exclusively for directors who do not perform executive functions.

A.4 Provide the amount, the nature and the main characteristics of the variable components of the remuneration systems.

In particular:

• Identify each of the remuneration plans from which the directors benefit, their scope, approval dates, implementation dates, periods of validity and main characteristics. In the case of share option and other financial instrument plans, the general characteristics of the plan will include information on the conditions for exercising those options or financial instruments for each plan.

• Indicate any remuneration in the form of a share in profit or bonuses, and the reason for which it was granted.

• Explain the fundamental parameters and the basis of any annual bonus scheme.

• The categories of directors (executive directors, external proprietary directors, external independent directors or other external directors) that benefit from remuneration systems or plans that incorporate variable remuneration.

• The basis of these variable remuneration systems or plans, the criteria selected for evaluating performance, as well as the components and methods of evaluation to determine whether or not these evaluation criteria have been met, and an estimate of the full amount of the variable remuneration to which the remuneration plan in force would give rise, according to the degree of fulfilment of the assumptions or objectives taken as a reference.

• If applicable, the payment deferral periods that have been established and/or the periods for the retention of shares or other financial instruments, should they exist, must be reported.

Explain the variable components of the remuneration systemsVariable Components of the Executive Director’s remuneration

The variable components of the company’s Executive Director’s remuneration are formed of:

1.- Variable incentive:

a) Short-term incentive (STI).In accordance with the contract regulating the relationship between the Company and the Executive Director, the latter will receive, in the form of an annual incentive by virtue of his or her individual performance and the Company’s performance, an amount equivalent to 50% of the amount of the fixed annual salary. The parameters for obtaining this variable remuneration will be the business goals agreed upon at the beginning of each year between the Board of Directors and the Executive Director, to be achieved in the year in question in accordance with the Strategic Plan in progress.

b) Long-term incentive (LTI).In its meeting of 19 November 2016, the General Shareholders’ Meeting authorised, in accordance with the provisions of Article 219 of the Spanish Corporation Law and other applicable legislation, the participation of the Chief Executive Officer of Adveo Group International, S.A. in a Long-Term Incentive Plan for shares, in accordance with which, Beneficiaries can receive, on a certain date and provided certain requirements are met, a given amount in cash linked to the increase in the value of shares of ADVEO GROUP INTERNATIONAL, S.A., on a date that is also determined (hereinafter referred to as the “Plan”), in accordance with the following basic characteristics:

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• Description of the remuneration system: The Plan aims to retain talent, incentivise the achievement of strategic objectives and promote the creation of value for shareholders, by providing beneficiaries with monetary remuneration (without shares) that is calculated with reference to the level of contribution made by each of the beneficiaries and linked to the change in the list price of the shares of ADVEO GROUP INTERNATIONAL, S.A., between the start of the Plan and its end.

The incentive will consist of the assignment of a given number of rights to the Beneficiaries, incorporating the option to receive remuneration based on the increase in value of the same number of shares in ADVEO GROUP INTERNATIONAL, S.A., during a period of time, taking its list value as reference and which will be paid at the end of the Plan, in cash (hereinafter the “Incentive”).

To calculate the Incentive, the average list price of the share of ADVEO GROUP INTERNATIONAL, S.A. during the three months immediately prior to the date recorded as the Plan start, (the “Initial Value”) will be taken as the initial point of reference, whereas the final point of reference will be the average list price of the share of ADVEO GROUP INTERNATIONAL, S.A. during the three months immediately prior to the date marked as the end of the Plan (the “Final Value”). The difference between the two values (considered as the annual accumulated profitability during the Plan period) applied to the number of units or rights attributed to each of the Beneficiaries, will determine the amount of the Incentive due to each.

For the calculation, the dilutive effects on the share value of any corporate operations of any kind carried out by the Company during the Plan period are taken into account. This includes, for instance, the distribution of dividends, capital increases, etc., in which case, the targets set out for the achievement of the Incentive will also be adjusted accordingly.

The right to receive the Incentive will only apply if the earnings per share are above a specific accumulated annual percentage of the Initial Value considered, to be established by the Board of Directors. In the event of said threshold being exceeded, the total earnings per share of ADVEO GROUP INTERNATIONAL, S.A. during the Plan period, will be taken into account when calculating the incentive.

If the Plan ends without having reached the minimum threshold defined above, the Plan may be extended for a further year, increasing the minimum threshold by a percentage (to be

determined by the Board of Directors) of the Final Value considered. If the minimum threshold should not have been achieved even after this extension, the Plan will be liquidated with the beneficiaries having no right to receive any Incentive.

• Amount of the Plan: The Plan shall be worth a total of TWO MILLION EUROS (€2,000,000), to which end the Company shall ensure that its treasury stock has a sufficient number of shares to cover said amount at the start of the Plan, according to its reference Initial Value. Said shares shall remain in the Company’s treasury stock, deposited in a securities account opened to this end, throughout the Plan duration.

Said amount of the Plan will be divided by the Initial Value and used to determine the total number of rights to be assigned to each Beneficiary. The CEO will be assigned 50% of the resulting rights, with the Board of Directors assigning the other 50% to the remaining Beneficiaries, on the proposal of the Appointments and Remuneration Committee.

The individual assignment of the rights shall be arranged merely for the calculation of the incentive and shall not imply that the Beneficiary acquires status as shareholder nor any other rights granted by said status.

• Determination of the Incentive: Subject to the conditions being met as laid down by the Plan, the Beneficiaries shall have the right to receive extraordinary remuneration, upon its maturity, which shall consist of an amount in euros (€) resulting from the application of the following formula:

Incentive = Number of rights x (Final Value - Initial Value), where:

Initial Value is the amount of the average list price of the share of ADVEO GROUP INTERNATIONAL, S.A. on the Madrid Stock Exchange (Stock exchange interconnection system - Continuous market or equivalent, as may replace it at any time) during the period running between 1 July 2015 and 30 September 2015), which has come to 7.4191 euros.

Final Value is equal to the average list price of the share of ADVEO GROUP INTERNATIONAL, S.A. on the Madrid Stock Exchange (Stock exchange interconnection system - Continuous market or equivalent, as may replace it at any time) during the period running between 1 October 2019 and 31 December 2019 (or equivalent terms in the year 2020,

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if the Plan should be extended), once increased proportionally to account for the dilutive effect that may arise from the corporate operations carried out by the Company during the Plan, such as, for example, the distribution of dividends, capital increases, etc.

The Plan will be liquidated and, if applicable, the Incentive will be paid to Beneficiaries in the three months following the Plan end date (December 2019 or 2020, as applicable).

• Plan Beneficiaries The Plan Beneficiaries may include the CEO and Managers of ADVEO GROUP INTERNATIONAL, S.A. or the companies of its corporate group (as defined by Article 42 of the Code of Commerce, hereinafter the “ADVEO Group” or the “Group”), who have a business or working relationship with the Group throughout the Plan period and who are appointed by the Board of Directors of ADVEO GROUP INTERNATIONAL, S.A., on the proposal of the Appointments and Remuneration Committee. The Plan will envisage possible future adhesions to the Plan of new beneficiaries who may join the Company and who meet the conditions set forth in the Plan.

Consequently, if before the Plan end date (31 December 2019 or 2020, as applicable), the Beneficiaries should extinguish their business or working relationship with the ADVEO Group, the right to receive the remuneration included under this proposal shall also automatically and irrevocably be extinguished. Without prejudice to the foregoing, if the business or working relationship of the Beneficiaries should be extinguished as a result of the death or permanent invalidity of the Beneficiaries, as long as the other conditions are met for disbursement of the Initiative, the Beneficiaries or its assignees shall receive the pending remuneration in advance, on the date that the relationship expires, proportional to the time that has passed from the Plan start and until the relationship was extinguished, taking the average list price of the shares in the three months prior to the date of extinguishing as the reference Final Value, mutatis mutandi.

In any case, the adhesion of Beneficiaries to the Plan shall be voluntary and may, in some cases, be implemented through legal entities. Likewise, the Beneficiaries’ right to receive the Incentive established in this proposal may not be consolidated, nor will it be automatically renewable.

• Plan duration: The Plan is a one-off, non-recurring extraordinary plan. The Plan shall apply as from the last quarter of 2015 and is expected to end in the last quarter of 2019; it can, if necessary, be extended until the last quarter of 2020.

If there should be any change in the control of the Company or Group company in which the Beneficiary works, the Plan shall expire early and be settled with the Beneficiary or Beneficiaries concerned proportionally to the period of time for which the Plan has been in force, applying the rules for calculating the Incentive as envisaged in the Plan.

2.- Other benefits and compensation in kind.

The Chairman of the Board of Directors has the right to use a company vehicle, the cost of which is assumed by the Company, which in 2015 amounted to 14,005.92 euros.

Variable Components of the compensation of Non-Executive Directors

In accordance with the provisions of Article 32 of the Corporate By-Laws, Non-Executive Directors of whatever class shall receive the attendance allowances that the General Shareholders’ Meeting establishes for each year, as well as compensation consisting of a participation in profits equivalent to five percent of the profit obtained in the year by the consolidated group, within the limits established by Article 218 of the Spanish Capital Corporations Act. Once the amount of the directors’ share of participation in profits has been determined, the quantities received by the Directors by way of attendance allowances shall be subtracted from this amount and, if this results in a positive balance, this will be the amount that Directors effectively receive by way of participation in profits.

The basis for determining the joint remuneration of the Board of Directors consisting of a share in profit shall be calculated as the sum of the Pre-Tax Profit (taken from the consolidated separate income statement) and the Total Income and Expenses attributed directly to Equity (taken from the global consolidated income statement).

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A.5 Explain the main features of the long-term saving systems, including pension and any other survivor benefits, financed partially or totally by the company, whether provided internally or externally, with an estimate of the amount or equivalent annual cost, indicating the type of plan, whether it is a defined benefit or contribution plan, the conditions of consolidation of financial rights for directors and compatibility with any type of compensation for premature resolution or termination of the contractual relationship between the company and the director.

Also indicate contributions on behalf of the director to defined contribution pension plans; or the increase of the director’s consolidated rights, when it concerns contributions to defined benefit plans.

Explain the long-term saving systemsLong-term saving systems are not provided for Directors, nor pensions or any other survivor benefit, financed partially or completely by the company, whether provided internally or externally.

A.6 Indicate compensation agreed or paid in the event of the cessation of their functions as a director.

Explain the compensationNo compensation was paid to Directors who ceased to carry out their functions in 2015.

However, at the time this report was prepared, a dispute brought by the former Company CEO was pending settlement, with an associated claim amounting to approximately 1.7 million euros.

A.7 Indicate the conditions that must be respected by the contracts of individuals carrying out senior management roles as executive directors. Among other things, information will be provided on the duration, the limits of compensation, contract term clauses, periods of notice as well as payment in substitution of the said period of notice, and any other clauses relating to hiring bonuses, as well as compensation or redundancy pay for the premature resolution or termination of the contractual relationship between the company and the executive director. Include, among other things, non-competition, exclusivity, minimum term or loyalty agreements and post-contractual non-compete clauses.

Explain the conditions of the contracts of executive directorsAccording to Article 40.2 of the Corporate By-Laws, Directors with executive functions in the Company shall be entitled to receive the remuneration determined by the Board of Directors for said executive functions. This shall consist of: a fixed amount that is appropriate for the services and responsibilities assumed; a variable supplementary amount and generalised incentive systems that are established for the Company’s senior management, which may comprise shares or share option rights or remuneration referenced to the value of shares subject to the requirements established by the legislation in force at the time; as well as a social insurance component that shall include appropriate pension and insurance schemes and social security. In any case, the remuneration of executive directors shall be determined in compliance with the provisions of the Directors’ remuneration policy approved by the General Shareholders’ Meeting.

At present, the Executive Director is linked to the company by means of a service provision contract dated 26 January 2016, in force until approval of the 2019 accounts, full-time, with remuneration by means of an annual fixed component, a variable component of 50% of the annual fixed salary (the calculation parameters of which are agreed at the start of each year by the Executive Director and the Board in line with the applicable Strategic Plan).

Compensation has been agreed in the favour of the Executive Director in the event that the contract should be extinguished by the company without due cause, and which shall come to: i) if before 28 February 2017, a total amount equivalent to nine months of the fixed annual remuneration and variable remuneration; ii) if after 1 March 2017, a total amount equivalent to three months of fixed annual remuneration and variable remuneration, all of the above after applying discounts and withholdings as applicable in accordance with current legislation in force at the time of the extinguishing. If the contract has been extinguished due to expiry, the Executive Director shall have no right to receive any compensation.

There is also a non-compete clause applicable to the period subsequent to termination of the contract of an Executive Director. This sets out that once the Senior Management contract has been terminated, and for a period of one year from the end of the contract, the Executive Director may not provide services, either directly or indirectly, on a freelance or employed basis, himself or herself or by means of third parties, to any company that operates in any country in which the Company

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is present or in which upon the termination of the contract the Company is planning to commence operations and whose activities are identical or similar to those undertaken by the ADVEO business Group.

The fixed remuneration of the Executive Director includes the financial remuneration of said post-contractual non-competition clause.

A.8 Explain any supplementary compensation paid to directors in consideration of services provided that are different from those inherent to the post.

Explain the supplementary compensationNo supplementary compensation is paid to directors in consideration of services provided that are different from those inherent to the post.

A.9 Indicate any compensation in the form of advances, credit or guarantees, indicating the rate of interest, its essential features and the amounts to be repaid, as well as the obligations assumed in this respect by way of guarantee.

Explain the advances, credit and guaranteesThere is no remuneration in the form of advances, credit or guarantees, and as a result no obligations have been assumed in this respect by way of guarantee.

A.10 Explain the main features of remuneration in kind. Explain the remuneration in kindDirectors are beneficiaries of a life insurance policy for which the premium is paid by the Company. In 2015 this totalled 3,065.40 euros. The Executive Director is a beneficiary of a life insurance policy for which the premium is paid by the Company. In 2015 this totalled 349.80 euros.

Furthermore, the chairman of the Board of Directors and the Executive Director have the right to use a company vehicle, the cost of which is assumed by the Company, which in 2015 amounted to sums of 14,005.92 euros and 4,415.76 euros, respectively.

The cost for using the company vehicle until the date of cessation by the outgoing CEO Millán Álvarez-Mirando, entailed a cost for the company of 5,519.70 euros.

The chairman of the Board of Directors also benefited from health insurance in 2015, the cost of which is assumed by the Company and which amounted to 6,573.24 euros.

A.11 Indicate the remuneration payable to the director by virtue of payments made by the listed company to a third party to which the director provides services, when these payments have the purpose of remunerating the services of the director to the company.

Explain the remuneration payable to the director by virtue of payments made by the listed company to a third party to which the director provides services.

None.

A.12 Any other item of remuneration aside from those previously mentioned, of whatever nature or fulfilled by any entity of the group whatsoever, in particular when it may be considered a related-party transaction or its issue distorts the true image of the total compensation paid to the director.

Explain the other compensation itemsThere are no other compensation items apart from those mentioned in this report.

A.13 Explain the actions adopted by the company in relation to the remuneration system to reduce exposure to excessive risk and to accommodate the company’s long-term objectives, values and interests, which if appropriate shall include reference to: measures envisaged to guarantee that the compensation policy corresponds to the company’s long-term results; measures that establish an appropriate balance between the fixed and variable components of remuneration; measures adopted in relation to those categories of personnel whose professional activities have a material repercussion on the entity’s risk profile; recovery formulas or clauses to allow a claim of repayment of variable components of the compensation based on results when these components have been paid in expectation of certain data, the inaccuracy of which has subsequently clearly been demonstrated; and measures envisaged to avoid conflicts of interest, where appropriate.

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Explain the actions taken to reduce risks1.- Executive Director

The annual variable remuneration is linked to commercial, financial and corporate social responsibility parameter performance.

Assessment of performance is performed by the Board of Directors on the proposal of the Remunerations Committee.

The long-term remuneration was approved by the Extraordinary General Shareholders’ Meeting of 19 November 2015, linked to the increase in value of shares of ADVEO GROUP INTERNATIONAL, S.A., thereby bringing the interests of the management team into line with those of shareholders, and encouraging the temporary retention of talent in the company.

The Plan is a one-off, non-recurring extraordinary plan. The Plan shall apply as from the last quarter of 2015 and is expected to end in the last quarter of 2019; it can, if applicable, be extended until the last quarter of 2020.

2.- Non-executive directors

There is no remuneration system as there are attendance allowances both for meetings of the Board and the Committees, established by the General Shareholders’ Meeting.

The variable part is determined by the provisions of Article 40.1 (ii) of the Corporate By-Laws, which will consist of a share in profits equivalent to five percent (5%) of the profit obtained in the year by the consolidated group, within the limits established by the law, from which, once the amount of the share in the profits as may be due to the Directors has been calculated, the amount received by the Directors by way of attendance allowances in compliance with the provisions of section (i) above, will be deducted. If after carrying out this operation the result were a positive balance, this will be the amount that Directors effectively receive by way of share in profits.

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B REMUNERATION POLICY FOR FUTURE YEARS

Repealed.

C OVERALL SUMMARY OF HOW THE REMUNERATION POLICY WAS APPLIED IN THE PREVIOUS YEA

C.1 Provide a summary of the main characteristics of the structure and compensation items of the remuneration policy applied during the previous year. This leads to details of the individual remuneration paid to each of the directors as described by section D of this report, as well as a summary of the decisions made by the Board for the application of said items.

Explain the structure and compensation items of the remuneration policy applied during the year1.- Structure and Components of Executive Director remuneration

1.1.- Fixed annual monetary remuneration:

The fixed remuneration of annual income is sufficient to guarantee competitiveness in the market taking into account usual remuneration levels in similar companies listed on the stock market. The financial conditions and the remainder of the agreements between the Company and the Chief Executive Officer are detailed in the corresponding commercial service provision contract signed by both parties.

1.2.- Variable annual monetary remuneration:

The variable components of the remuneration of the Company Executive Director comprise the following:

1.- Variable incentive:

a) Short-term incentive (STI). b) Long-term incentive (LTI).

2.- Other benefits and compensation in kind.See sections A.3 and A.4.

2.- Structure and components of the remuneration of Non-Executive Directors

2.1.- Fixed component:

The amount of the fixed component of the remuneration of Non-Executive Directors consists of attendance allowances for the meetings of the Board of Directors and its committees. This amount was fixed by the General Shareholders’ Meeting on 30 May 2014 and was not amended by the General Shareholders’ Meeting in 2015.

See section A.3.

2.2.- Variable components:

The amount of the variable component of the remuneration of non-executive directors consists, in accordance with Article 40 of the Corporate By-Laws, of a share in profit equivalent to five percent (5%) of the profit obtained in the year by the consolidated group, within the limits established by the law, from which, once the amount of any share in profit due to the Directors has been calculated, the amount received by the Directors by way of attendance allowances in compliance with the provisions of section (i) above, will be deducted. If after carrying out this operation the result were a positive balance, this will be the amount that Directors effectively receive by way of share in profits.

The basis for determining the annual joint remuneration of the Directors by virtue of their status as such, consisting of a share in profits, shall be calculated as the sum of the Pre-Tax Profit (taken from the consolidated separate income statement) and the Total Income and Expenses attributed directly to Equity (taken from the global consolidated income statement).

Determining the amount of the variable component shall be the responsibility of the General Shareholders’ Meeting, following a report by the Appointments and Remuneration Committee.

.

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D DETAILS OF INDIVIDUAL REMUNERATION PAID TO EACH OF THE DIRECTORS

NAME TYPE 2015 INCOME PERIODMILLÁN ÁLVAREZ-MIRANDA NAVARRO Executive From 1/01/2015 to 5/06/2015.XABIER ARRATIBEL IMAZ Proprietary From 1/01/2015 to 17/10/2015.FRANCISCO JAVIER DIAZ MARROQUÍN Proprietary From 1/01/2015 to 17/10/2015.PABLO IGARTUA MORENO Proprietary From 1/01/2015 to 26/06/2015.JUAN ANTONIO HERNÁNDEZ-RUBIO MUÑOYERRO Proprietary From 1/01/2015 to 31/12/2015.ELADIO BEZARES MUNILLA Proprietary From 1/01/2015 to 31/12/2015.JAIME CARBÓ FERNÁNDEZ Executive From 19/11/2015 to 31/12/2015.ALBERTO MORENO DE TEJADA CLEMENTE DE DIEGO Proprietary From 26/06/2015 to 31/12/2015.GESTIÓN DE INVERSIONES RIMUSA, S.L. Proprietary From 1/01/2015 to 31/12/2015.QMC DIRECTORSHIPS, S.L. Proprietary From 1/01/2015 to 31/12/2015.ABEL LINARES PALACIOS Independent From 26/06/2015 to 31/12/2015.IRENE CANO PIQUERO Independent From 19/11/2015 to 31/12/2015.ALVARO VIDEGAIN MURO Independent From 1/01/2015 to 31/12/2015.

D.1 Complete the following tables on the individual remuneration of each director (including remuneration for the exercise of executive functions) earned during the year.

a) Remuneration earned with the company that is the subject of this report:

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i) Remuneration in cash (in thousands of euros)

NAME SALARYFIXED

REMUNERATION ALLOWANCES

SHORT-TERM VARIABLE

REMUNERATION

LONG-TERM VARIABLE

REMUNERATION

REMUNERATION FOR MEMBERSHIP

OF BOARD COMMITTEES COMPENSATIONS OTHER ITEMS TOTAL FOR 2015 TOTAL FOR 2014

JUAN ANTONIO HERNÁNDEZ-RUBIO MUÑOYERRO 0 0 147 0 0 0 0 0 147 83ELADIO BEZARES MUNILLA 0 0 90 0 0 0 0 0 90 55ALBERTO MORENO DE TEJADA CLEMENTE DE DIEGO 0 0 20 0 0 0 0 0 20 0QMC DIRECTORSHIPS, S.L. 0 0 92 0 0 0 0 0 92 62GESTION DE INVERSIONES RIMUSA, S.L. 0 0 110 0 0 0 0 0 110 72IRENE CANO PIQUERO 0 0 6 0 0 0 0 0 6 0ABEL LINARES PALACIOS 0 0 29 0 0 0 0 0 29 0ALVARO VIDEGAIN MURO 0 0 76 0 0 0 0 0 76 38XABIER ARRATIBEL IMAZ 0 0 45 0 0 0 0 0 45 29FRANCISCO JAVIER DIAZ MARROQUÍN 0 0 49 0 0 0 0 0 49 33PABLO IGARTUA MORENO 0 0 34 0 0 0 0 0 34 29MILLÁN ÁLVAREZ-MIRANDA NAVARRO 0 181 0 0 0 0 0 0 181 435JAIME CARBÓ FERNÁNDEZ 0 150 0 75 0 0 0 0 225 0

ii) Share-based remuneration systems

iii) Long-term saving systems

NAME

COMPANY’S CONTRIBUTION FOR THE PERIOD (IN THOUSANDS OF EUROS)

AMOUNT OF ACCRUED FUNDS (IN THOUSANDS OF EUROS)

FINANCIAL YEAR 2015

FINANCIAL YEAR 2014

FINANCIAL YEAR 2015

FINANCIAL YEAR 2014

ELADIO BEZARES MUNILLA 0 0 0 0JAIME CARBÓ FERNÁNDEZ 0 0 0 0ALBERTO MORENO DE TEJADA CLEMENTE DE DIEGO 0 0 0 0GESTIÓN DE INVERSIONES RIMUSA, S.L. 0 0 0 0QMC DIRECTORSHIPS, S.L. 0 0 0 0ALVARO VIDEGAIN MURO 0 0 0 0ABEL LINARES PALACIOS 0 0 0 0IRENE CANO PIQUERO 0 0 0 0JUAN ANTONIO HERNÁNDEZ-RUBIO MUÑOYERRO 0 0 0 0FRANCISCO JAVIER DIAZ MARROQUÍN 0 0 0 0XABIER ARRATIBEL IMAZ 0 0 0 0PABLO IGARTUA MORENO 0 0 0 0MILLÁN ÁLVAREZ-MIRANDA NAVARRO 45 0 45 0

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iv) Other benefits (in thousands of euros)

JUAN ANTONIO HERNÁNDEZ-RUBIO MUNOYERRO

Remuneration in the form of advances, credits

Interest rate of the operation Essential features of the operation Any amounts repaid

0.00 None None

Life insurance premiums Guarantees established by the company in favour of directors

Financial Year 2015

Financial Year 2014 Financial Year 2015 Financial Year 2014

1 0 None None

ELADIO BEZARES MUNILLA



0.00 None None


Financial Year 2015


0 0 None None

JAIME CARBÓ FERNÁNDEZ



0.00 None None


Financial Year 2015


0 0 None None

ALBERTO MORENO DE TEJADA CLEMENTE DE DIEGO



0.00 None None


Financial Year 2015


0 0 None None

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GESTIÓN DE INVERSIONES RIMUSA, S.L.



0.00 None None


Financial Year 2015


0 0 None None

QMC DIRECTORSHIPS, S.L.



0.00 None None


Financial Year 2015


0 0 None None

ALVARO VIDEGAIN MURO



0.00 None None


Financial Year 2015


0 0 None None

ABEL LINARES PALACIOS



0.00 None None


Financial Year 2015


0 0 None None

IRENE CANO PIQUERO



0.00 None None


Financial Year 2015


0 0 None None

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FRANCISCO JAVIER DIAZ MARROQUÍN



0.00 None None


Financial Year 2015


0 0 None None

PABLO IGARTUA MORENO



0.00 None None


Financial Year 2015


0 0 None None

XABIER ARRATIBEL IMAZ



0.00 None None


Financial Year 2015


0 0 None None

MILLÁN ÁLVAREZ-MIRANDA NAVARRO



0.00 None None


Financial Year 2015


0 3 None None

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b) Compensation received by company directors for membership of the boards of other group companies:

i) Remuneration in cash (in thousands of euros)

NAME SALARYFIXED

REMUNERATION ALLOWANCES

SHORT-TERM VARIABLE

REMUNERATION

LONG-TERM VARIABLE

REMUNERATION

REMUNERATION FOR MEMBERSHIP

OF BOARD COMMITTEES COMPENSATIONS OTHER ITEMS TOTAL FOR 2015 TOTAL FOR 2014

JUAN ANTONIO HERNÁNDEZ-RUBIO MUÑOYERRO 0 0 0 0 0 0 0 0 0 0ELADIO BEZARES MUNILLA 0 0 0 0 0 0 0 0 0 0GESTIÓN DE INVERSIONES RIMUSA, S.L. 0 0 0 0 0 0 0 0 0 0QMC DIRECTORSHIPS, S.L. 0 0 0 0 0 0 0 0 0 0ALVARO VIDEGAIN MURO 0 0 0 0 0 0 0 0 0 0ABEL LINARES PALACIOS 0 0 0 0 0 0 0 0 0 0ALBERTO MORENO DE TEJADA CLEMENTE DE DIEGO 0 0 0 0 0 0 0 0 0 0JAIME CARBÓ FERNÁNDEZ 0 0 0 0 0 0 0 0 0 0IRENE CANO PIQUERO 0 0 0 0 0 0 0 0 0 0

ii) Share-based remuneration systems

iii) Long-term saving systems

c) Summary of remuneration (in thousands of euros):

The summary should include amounts corresponding to all remuneration items included in this report that have been paid to the director, in thousands of euros.

With regard to long-term savings schemes, contributions or allocations to this type of system will be included:

NAME

REMUNERATION PAID BY THE COMPANY REMUNERATION PAID BY GROUP COMPANIES TOTALS

TOTAL CASH REMUNERATION

AMOUNT OF SHARES GRANTED

GROSS PROFIT OF THE OPTIONS

EXERCISEDTOTAL 2015, COMPANY

TOTAL CASH REMUNERATION

AMOUNT OF SHARES DELIVERED

GROSS PROFIT OF THE OPTIONS

EXERCISEDTOTAL 2015,

GROUP TOTAL 2015 TOTAL 2014

TOTAL CONTRIBUTION MADE TO SAVINGS

SYSTEMS DURING THE FINANCIAL YEAR

JUAN ANTONIO HERNÁNDEZ-RUBIO MUÑOYERRO 147 0 0 147 0 0 0 0 147 83 0ELADIO BEZARES MUNILLA 90 0 0 90 0 0 0 0 90 55 0GESTIÓN DE INVERSIONES RIMUSA, S.L. 110 0 0 110 0 0 0 0 110 72 0QMC DIRECTORSHIPS, S.L. 92 0 0 92 0 0 0 0 92 62 0ALVARO VIDEGAIN MURO 76 0 0 76 0 0 0 0 76 38 0ABEL LINARES PALACIOS 29 0 0 29 0 0 0 0 29 0 0JAIME CARBÓ FERNÁNDEZ 225 0 0 225 0 0 0 0 225 0 0IRENE CANO PIQUERO 6 0 0 6 0 0 0 0 6 0 0ALBERTO MORENO DE TEJADA CLEMENTE DE DIEGO 20 0 0 20 0 0 0 0 20 0 0MILLÁN ÁLVAREZ-MIRANDA NAVARRO 181 0 0 181 0 0 0 0 181 435 0XABIER ARRATIBEL IMAZ 45 0 0 45 0 0 0 0 45 29 0FRANCISCO JAVIER DIAZ MARROQUÍN 49 0 0 49 0 0 0 0 49 33 0PABLO IGARTUA MORENO 34 0 0 34 0 0 0 0 34 29 0TOTAL 1,104 0 0 1,104 0 0 0 0 1,104 836 0

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D.2 Report on the relationship between the remuneration obtained by directors and the results and other performance measures of the entity, explaining, where appropriate, how fluctuations in the company’s performance have influenced the fluctuation of the remuneration of directors.

The remuneration of directors is governed by Article 40 of the Corporate By-Laws and Article 25 of the Regulations of the Board of Directors.

Due to the lack of a results for 2014, Non-Executive Directors did not receive any variable remuneration in 2015, their remuneration being limited to attendance allowances for the meetings of the Board and its Committees at the levels established by the Company’s General Shareholders’ Meeting.

The circumstances experienced during financial year 2015 in Company operations (cessation of the former CEO, technical and operative issues relating to the establishment of the new integrated management platform, etc.) required a greater frequency of meetings of the Board of Directors and its Commissions, meaning that both the number of meetings and the fixed remuneration (attendance allowances) of the members of said bodies have increased considerably with respect to those recorded last year (an increase of approximately 24%).

D.3 Report on the result of the consultative vote of the General Shareholders’ Meeting on the annual report on remuneration for the previous year, indicating the number of votes against, if any:

NUMBER % OF THE TOTALVotes cast 7,964,587 61.59%

NUMBER % OF THE TOTAL

Votes against 0 0,00%Votes in favour 7,964,587 61.59%Abstentions 0 0,00%

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E OTHER USEFUL INFORMATION

If there is any information that is relevant to the remuneration of directors and has not been included in the other sections of this report, but should be included in order to provide comprehensive, reasoned details of the Company’s remuneration practices and structure in relation to the directors, please provide brief details.

I.- In connection with paragraph D.1 iv) Other income obtained by Directors during financial years 2015 and 2014, below are the amounts paid by the Company for Life Insurance.

Life insurance premiums (in euros)

JUAN ANTONIO HERNÁNDEZ-RUBIO MUÑOYERRO: The amounts paid in 2015 and 2014 were, respectively, 1,097 euros and 539 euros.

ELADIO BEZARES MUNILLA: The amounts paid in 2015 and 2014 were, respectively, 206 euros and 119 euros.

JAIME CARBÓ FERNÁNDEZ: The amount paid in 2015 was 350 euros.

ALBERTO MORENO DE TEJADA CLEMENTE DE DIEGO: The amount paid in 2015 was 240 euros.

GESTIÓN DE INVERSIONES RIMUSA, S.L.: The amounts paid in 2015 and 2014 were, respectively, 169 euros and 101 euros.

QMC DIRECTORSHIPS, S.L.: The amounts paid in 2015 and 2014 were, respectively, 192 euros and 112 euros.

ALVARO VIDEGAIN MURO: The amounts paid in 2015 and 2014 were, respectively, 732 euros and 405 euros.

ABEL LINARES PALACIOS: The amount paid in 2015 was 350 euros.

IRENE CANO PIQUERO: The amount paid in 2015 was 80 euros.

FRANCISCO JAVIER DIAZ MARROQUÍN: The amount paid in 2014 was 332.39 euros.

XABIER ARRATIBEL IMAZ: The amount paid in 2014 was 96.16 euros.

PABLO IGARTUA MORENO: The amount paid in 2014 was 436.51 euros.

MILLÁN ÁLVAREZ-MIRANDA NAVARRO: The amount paid in 2014 was 3,252.92 euros.

II.- The company paid out a total of 18,751.92 euros by way of travel costs and accommodation expenses incurred to attend meetings of the Board of Directors and its various Committees.

III.- As already explained in paragraph D.2 above, the circumstances experienced during financial year 2015 in Company operations required a greater frequency of meetings of the Board of Directors and its Commissions, meaning that both the number of meetings and the fixed remuneration of the members of said bodies (attendance allowances) increased considerably with respect to those recorded last year.

This annual remuneration report was approved by the Company’s Board of Directors at its meeting of 29/03/2016.

Indicate whether there have been any directors who have voted against or abstained with regard to the approval of this report.

> Yes > No

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