Galapagos NV — Audit Report / Information 2013

Mar 28, 2014

Deloitte.

Deloitte Bedrijfsrevisoren / Reviseurs d'Entreprises President Kennedypark 8 8500 Kortrijk Belgium Tel. + 32 56 59 45 40
Fax + 32 56 59 45 41 www.deloitte.be

Galapagos NV

Statutory auditor's report to the shareholders' meeting on the annual accounts for the year ended 31 December 2013

The original text of this report is in Dutch

Deloitte Bedrijfsrevisoren / Reviseurs d'Entreprises President Kennedvpark 8 8500 Kortrijk Belaium Tel. + 32 56 59 45 40 Fax + 32 56 59 45 41 www.deloitte.be

Galapagos NV

Statutory auditor's report to the shareholders' meeting on the annual accounts for the year ended 31 December 2013

To the shareholders

As required by law and the company's articles of association, we report to you in the context of our appointment as the company's statutory auditor. This report includes our report on the annual accounts together with our report on other legal and regulatory requirements. These annual accounts comprise the balance sheet as at 31 December 2013 and the income statement for the year then ended, as well as the summary of accounting policies and other disclosures.

Report on the annual accounts - Unqualified opinion

We have audited the annual accounts of Galapagos NV ("the company"), prepared in accordance with the financial reporting framework applicable in Belgium, which show total assets of 366,075 (000) EUR and a loss for the year of 16,427 (000) EUR.

Board of directors' responsibility for the preparation of the annual accounts

The board of directors is responsible for the preparation and fair presentation of annual accounts in accordance with the financial-reporting framework applicable in Belgium, and for such internal control as the board of directors determines is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error.

Statutory auditor's responsibility

Our responsibility is to express an opinion on these annual accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts. The procedures selected depend on the statutory auditor's judgment, including the assessment of the risks of material misstatement of the annual accounts, whether due to fraud or error. In making those risk assessments, the statutory auditor considers internal control relevant to the company's preparation and fair presentation of the annual accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the board of directors, as well as evaluating the overall presentation of the annual accounts. We have obtained from the company's officials and the board of directors the explanations and information necessary for performing our audit.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Deloitte.

Unqualified opinion

In our opinion, the annual accounts of Galapagos NV give a true and fair view of the company's net equity and financial position as of 31 December 2013 and of its results for the year then ended, in accordance with the financial reporting framework applicable in Belgium.

Report on other legal and regulatory requirements

The board of directors is responsible for the preparation and the content of the directors' report on the annual accounts, as well as for maintaining the company's accounting records in compliance with the legal and regulatory requirements applicable in Belgium and for the company's compliance with the Companies Code and the company's articles of association.

As part of our mandate and in accordance with the Belgian standard which is complementary to the International Standards on Auditing as applicable in Belgium, our responsibility is to verify, in all material respects, compliance with certain legal and regulatory requirements. On this basis, we make the following additional statements, which do not modify the scope of our opinion on the annual accounts:

• The directors' report includes the information required by law, is consistent with the annual accounts and is free $\bullet$ from material inconsistencies with the information that we became aware of during the performance of our mandate.
• Without prejudice to certain formal aspects of minor importance, the accounting records are maintained in accordance with the legal and regulatory requirements applicable in Belgium.
• The appropriation of results proposed to the general meeting is in accordance with the relevant requirements of the law and the company's articles of association.
• There are no transactions undertaken or decisions taken in violation of the company's articles of association or the Companies Code that we have to report to you.
• We draw your attention to note 5.2.1 and 7 of the statutory financial statements and paragraph 2 of the director's report, in which the capitalization of the research and development expenses is described and justified.
• In accordance with article 523 of the Companies Code, we are required to report on the following operations which have taken place since your last annual general meeting:
• In connection with the board decision of 12 March 2013 to make a recommendation to the general shareholders' meeting to grant warrants to the CEO and other members of the board under a proposed warrant plan 2013 detailed as follows: Mr Onno van de Stolpe 100,000 warrants, Ms. Bosley 7,500 warrants, Dr. Parekh 5,400 warrants, Dr. Cautreels 3,780 warrants, Dr. van Barlingen, Mr. Rowe and Dr. Sato, each 2,520 warrants, the procedure of article 523 of the Companies Code has been followed relating to Mr. Onno van de Stolpe concerning the proposed award of 100,000 warrants to him. It has been explained to the board that the said warrant offer is proposed upon recommendation of the remuneration committee and is a justified reward for the results achieved by Mr van de Stolpe. The award of this benefit will have no material impact on the financial position of the company. The board shares the opinion of the remuneration committee that the proposed benefit is justified and reasonable. Furthermore, as a warrant offer is proposed to each Director, the same procedure has been followed for each Director individually.

Deloitte.

• In connection with the board decision of 24 September 2013 including the allocation of the aggregate annual remuneration of 200 (000) EUR (plus expenses) for directors (other than Dr. Parekh and Mr. van de Stolpe) for the exercise of their mandate as director and in connection with the recommendation of the remuneration committee further to the resolution of the general shareholders' meeting of 30 April 2013, the procedure of article 523 of the Companies' Code has been followed. It has been explained to the board that the proposed remuneration for each director is a continuation of the level of the fees as paid in previous years, without increase. The level of these remunerations will have no material impact on the financial position of the company. The impact on the financial position of the Company has been sufficiently and accurately disclosed in the annual report.
• In connection with the board decision of 24 September 2013 on the general possibility of an exceptional special bonus (if and when applicable) under Galapagos' remuneration policy for the executive director Mr. Onno van de Stolpe; the procedure of article 523 of the Companies Code has been followed. It has been explained to the board that such exceptional (special) bonus can only apply in the event of an exceptional achievement and that the award of this benefit should not have a material impact on the financial position of the company.
• In connection with the board decision of 17 December 2013 on the proposed salary increase of 3 per cent and bonus of 325,741 EUR for the CEO, Mr Onno van de Stolpe, the procedure of article 523 of the Companies Code has been followed. It has been explained to the board that said awards are proposed upon recommendation of the remuneration committee and are a justified reward for the results achieved by Mr van de Stolpe in 2013. These awards will have no material impact on the financial position of the company. The impact on the financial position of the Company has been sufficiently and accurately disclosed in the annual report. The board shares the opinion of the remuneration committee that the proposed benefits are justified and reasonable.

Kortrijk, 28 March 2014

The statutory auditor

DELOITTE Bedrijfsrevisoren / Reviseurs d'Entreprises BV o.v.v.e. CVBA / SC s.f.d. SCRL Represented by Gino Desmet