Authorities

The Board of Directors will directly exercise the following authorities:

Composition

The Board of Directors is made up of 9 members: 5 non-executive independent directors, 3 non-executive proprietary directors and one executive director.

As at 31 January 2014 the Board of Directors is comprised of the following members:

No changes have occurred regarding the composition of the Board of Directors during the fiscal year.

Profile of Directors

Mr Pablo Isla Álvarez de Tejera

Chairman and CEO of Inditex since 2011. He has been the Deputy Chairman and CEO since 2005. He is a graduate in Law from the Complutense University of Madrid and Abogado del Estado (State lawyer).

From 1992 to 1996 he was Director of Legal Services for Banco Popular. He went on to be appointed General Director of State Assets at the Ministry of Economy and Finances.

From July 2000 to 2005 he was Chairman of Altadis group.

Desde julio de 2000 hasta 2005 fue Presidente del grupo Altadis.

Likewise, he sits on the Board of Directors of Telefónica, S.A.

Mr Amancio Ortega Gaona

He is the founding shareholder of Inditex. He began his textile manufacturing operations in 1963. In 1972 he founded Confecciones Goa, S.A., the first garment-making factory of Inditex and three years later he founded Zara España, S.A. the first distribution and retailing company..

He was re-elected to the Board of Directors by the AGM held on 30 June 1990, 31 July 1995, 20 July 2000, 15 July 2005 and 13 July 2010.

Mr José Arnau Sierra

A Law graduate from the University of Santiago de Compostela and State Tax Inspector, Mr Arnau has been the first executive of Grupo Pontegadea since 2001, a Director at GARTLER, S.L. since 1997 and member of the Board of Trustees of the Fundación Amancio Ortega Gaona since 2001. He was the director of Inditex’s Tax Department and member of its Steering Committee from 1993 through 2001 and he also served on the Board of Directors of the company from 1997 through 2000. Previously, he held different positions in the Tax administration. He has also been a member of the Board of Directors of Banco Pastor (from 2005 through 2012) and Profesor asociado (part-time instructor) of Tax Law at the University of Corunna from 1993 through 1996.

GARTLER, S.L.

The company Gartler, S.L. is represented in the Board of Directors of Inditex by Ms. Flora Pérez Marcote, and directly holds 311,727,598 shares in the Company, which represents 50.01% in the share capital.

This company was appointed to the Board of Directors in December 2006, ratified by the AGM held on 17 July 2007, and re-elected by the AGM held on 17 July 2012.

Ms Irene R. Miller.

She has been an independent director since April 2001. She is a graduate of the University of Toronto with a Bachelor of Science and of Cornell University with a Master of Science in chemistry. She began her career at General Foods Corporation and later worked as an investment banker for Rothschild Inc. and Morgan Stanley & Co. In 1991 she joined Barnes & Noble Inc. as Senior Vice President of Corporate Finance and in 1993, before the flotation of Barnes & Noble, became Chief Financial Officer. In 1995, she was appointed Director and Vice-Chairman of the Board of Directors of Barnes & Noble. At the present time, she is CEO of Akim, Inc., an American investment and consulting firm, which she joined in 1997. She is also a member of the Boards of Directors of Coach Inc., and the Toronto-Dominion Bank Financial Group. Previously, she served on the Board of Directors of Oakley Inc., Benckiser N.V., The Body Shop International Plc and Barnes & Noble, Inc.

Mr Nils S. Andersen.

He has been an independent director since June 2010. He is a graduate in Business and Economics from the University of Aarhus in Denmark. He joined Carlsberg in 1983 and became Group Vice President in 1988. From 1990 to 1997 Nils Andersen worked abroad as CEO of Carlsberg Spain and later of Carlsberg German Brewery group. Nils Andersen left Carlsberg in 1997 to become CEO of Hero’s drinks division based in Switzerland until his return to Carlsberg in 1999 as member of the Executive Board with responsibility for European drinks operations. In 2001 he became CEO of Carlsberg A/S and led the group through a period of acquisitions and international growth until 2007 when he left Carlsberg to become Partner & Group CEO of A.P. Moller – Maersk. Nils Andersen is a member of the European Round Table of Industrialists (ERT) since 2001 and since 2007 member of the EU-Russia Industrialists’ Round Table (IRT). Within the A.P. Moller – Maersk Group he is Chairman of the Executive Board, Chairman of Maersk Oil & Gas A/S and Chairman of Danish Supermarket A/S. In 2010 he was awarded “Knight of the Dannebrog”.

Mr Carlos Espinosa de los Monteros Bernaldo de Quirós

He has been an independent director since May 1997. He is a graduate in Law and Business Studies from ICADE and a Commercial Expert and State Economist. He has been the Chairman of the Board of Directors of Mercedes Benz España, Deputy Chairman of the Instituto Nacional de Industria, Chairman of the Board of Directors of Iberia and Aviaco, member of the Executive Committee of the International Air Transport Association and Chairman of the Círculo de Empresarios, of the Spanish Association of Car and Truck Manufacturers and of the International Organisation of Motor-Vehicle Manufacturers. At the present time he chairs Fraternidad-Muprespa and sits on the board of Acciona, S.A., Schindler España, and the Yell Group. He has been awarded the Grandes Cruces del Mérito Civil and Mérito Aeronáutico. He was appointed Alto Comisionado del Gobierno para la Marca España [High Commissioner for the Brand “Spain”] in July 2012.

Mr Emilio Saracho Rodríguez de Torres.

He has been an independent director since June 2010. A Graduate in Economics from the Complutense University in Madrid, he has an MBA from the University of California in Los Angeles (UCLA), awarded in 1980. He was also a Fulbright scholar. Mr Saracho began his career in 1980 in Chase Manhattan Bank, where he was responsible for operations in different sectors such as Oil and Gas, Telecommunications and Capital goods. In1985, he took part in the launching and implementation of Banco Santander de Negocios, where he led the Investment Banking division. In 1989, he was appointed head of the Division of Large Companies of Grupo Santander and Deputy General Director. He has been a director of FISEAT, Santander de Pensiones and Santander de Leasing. In 1990, he worked for Goldman Sachs in London as co-head of Spanish and Portuguese operations. In 1995, he returned to Santander Investment as General Director in charge for the Investment Banking area worldwide. From 1996 to 1998, he was responsible for the Banking operations in Asia. Mr Saracho joined J.P. Morgan in 1998 as Chairman for Spain and Portugal and head of business for the Iberian Peninsula and member of the European Management Committee. From early 2006 to January 1st 2008, he was Chief Executive Officer of J.P. Morgan Private Bank for Europe, the Middle East and Africa, based in London. He also sat on the Operating Committee and on the European Management Committee, while chairing at the same time J.P. Morgan in Spain and Portugal. He is in charge of Investment Banking operations of J.P. Morgan in Europe, the Middle East and Africa. He sits on the Executive Committee of the Investment Bank and on the Executive Committee of JPMorgan Chase. He is Deputy CEO for EMEA since December 2012.

Mr Juan Manuel Urgoiti López de Ocaña.

He has been an independent director since January 1993. He is a graduate in Law from the University of Madrid, beginning his career in the Banco de Vizcaya in 1962. After holding many executive positions, he was appointed General Manager in 1978, director in 1984 and CEO in 1986. In 1988, after its merger with the Banco Bilbao he was appointed CEO of the Banco Bilbao Vizcaya. He has been President of Ahorrobank, Banco de Crédito Canario, Banco Occidental, Instituto de Biología y Sueroterapia and Laboratorios Delagrange and Board member of Antibióticos, S.A. At the present time he is the Chairman of Pescanova, S.A.. He is President of the Fundación Gaiás-Cidade da Cultura and of private foundation Fundación José Antonio de Castro, and is a member of other foundations and institutions. He holds the Gran Cruz de Mérito Civil and has been awarded the honour of Commander of the Order of the British Empire (C.B.E.).

Chairman and Chief Executive Officer

Mr Pablo Isla Álvarez de Tejera has been the Chief Executive Officer of the Company since 9 June 2005 and the Chairman of the Board of Directors since 19 July 2011.

Balanced management is ensured through the following measures:

• Some of the powers delegated to the Chairman and CEO are subject to certain restrictions. Namely, those that involve the disposal of funds in excess of a certain amount expressly require that the Chairman and CEO acts jointly with another person who in virtue of any legal title is also empowered with the power in question as well as those that involve the alienation or encumbrance of real property of the Company, for which a prior resolution of the Board of Directors or its Executive Committee, shall be required.
• Mr Amancio Ortega Gaona, the founder and controlling shareholder of the Company and Chairman of the Board of Directors until 19 July 2011, remains on such Board and its Executive Committee as non-executive proprietary director.
• Mr José Arnau Sierra, non-executive proprietary director since 12 June 2012, has been Deputy Chairman of the Board of Directors since 17 July 2012. He sits on the Executive Committee, the Audit Committee and the Nomination and Remuneration Committee.
• Mr Carlos Espinosa de los Monteros Bernaldo de Quirós is the Lead independent Director; and he is entitled, among other things: i) to call the meeting of the Board of Directors and request the addition of new items on the agenda, the Chairman being bound to comply with these requests and, ii) to coordinate and echo the concerns of external directors.

General Counsel and Secretary of the Board of Directors

Mr Antonio Abril Abadín is the General Counsel and Secretary of the Board of Directors. Likewise, he is the Secretary of all Board Committees.

The appointment and removal of the Secretary of the Board shall be approved by the Board of Directors in plenary session, after report of the Nomination and Remuneration Committee, The Secretary needs not be a director.

The Secretary shall support the Chairman in his duties and must provide for the smooth running of the Board by taking particular care to provide directors with the necessary advice and information, keep the documents of the Company, enter the proceedings in the minutes books and certify the Board’s resolutions. When directors or the Secretary himself/herself should express concern about some proposal or, in the case of directors, about the company’s performance, and such concerns are not resolved by the Board, they will be acknowledged in the minutes at the request of the person expressing them. Likewise, the Secretary shall devote particular attention to the formal and material legality of the Board’s actions and ensure that the corporate governance principles and the Company’s internal rules and regulations, are observed.

Gender diversity

The Nomination and Remuneration Committee shall ensure that, when filling up any new vacancies and when appointing new directors, the selection process does conform to the prohibition of any manner of discrimination.

As at 31 January 2014, two female directors sat on the Board of Directors: Ms Flora Pérez Marcote (representing GARTLER, S.L., non-executive proprietary director) and Ms Irene R. Miller (non-executive independent director); such presence represents 22.22 % on the aggregate number of Directors, versus the average 13.5% percentage of female directors sitting on the boards of IBEX35 companies, according to the information disclosed by CNMV with regard to fiscal year 2012.

Additionally, Ms Irene R. Miller chairs the Audit and Control Committee and sits on the Nomination and Remuneration Committee, which represents a percentage of 16.7% female directors versus the aggregate number of members of such Board Committees.

Membership of Directors on Board of Directors of other listed companies

The Board of Directors may not propose or appoint any persons to fill up a vacancy on the Board who already perform the duties of Directors at the same time, in more than four listed companies other than the Company.

As at 31 January 2014, Directors who hold offices in listed companies in Spain other than Inditex are shown below:

Selection, appointment, re-election and removal of directors

The system for the selection, appointment and re-election of members of the Board of Directors constitutes a formal and transparent procedure, expressly regulated in the Articles of Association and the Board of Directors’ Regulations.

Directors shall be appointed by the General Meeting, and shall hold their office during the period established to this end by the Articles of Association, which at present is of five years.

Directors may be re-elected indefinitely, for periods of equal duration, by the General Meeting, which may likewise resolve on the removal of any of these at any time.

The Board of Directors may fill up the vacancies that arise on said Board, temporarily, appointing from among the shareholders the persons who will have to fill the vacancies until the first General Meeting thereafter.

The proposals for the election of directors that the Board of Directors submits to be considered by the Annual General Meeting, and the election resolutions that said body passes by virtue of those powers to co-opt that are legally reserved to it, must be preceded by the relevant report from the Nomination and Remuneration Committee, and regarding independent directors, by the relevant proposal of the Nomination and Remuneration Committee.

The Nomination and Remuneration Committee shall ensure that, when filling up any new vacancies and when appointing new directors, the selection processes conform to the prohibition of any manner of discrimination..

Where the Board departs from the Nomination and Remuneration Committee’s suggestions, it must state the reasons for its actions and place them on the record.

The Board of Directors and the Nomination and Remuneration Committee, shall, within the scope of their competences, endeavour for the choice of candidates to fall on persons of well-known ability, qualifications and experience, and must maximize their care in relation to such person called to discharge the office of independent director.

The Board of Directors may not propose or appoint to fill up a director’s position any persons who hold the office of director simultaneously in more than four listed companies other than the Company. Where the vacancy which needs to be filled up is that of an independent director, the Board may not propose or appoint any persons who do not meet the independence criteria established in the applicable regulations.

The proposals for re-election of directors that the Board of Directors would submit to the Annual General Meeting will have to be subject to a formal process of preparation, which shall include, necessarily, a report issued by the Nomination and Remuneration Committee in which the quality of work and the dedication to office of the proposed directors during their previous mandate shall be assessed, and regarding independent directors, the relevant proposal for re-election of the Nomination and Remuneration Committee.

With regard to the process of selection, appointment and re-election of Directors, the Nomination and Remuneration Committee has, among others, the following responsibilities:

Requests for information addressed to the Nomination and Remuneration Committee shall be made by the Board of Directors or its Chairman. Likewise, the Committee must consider the suggestions presented by the Chairman, the members of the Board of Directors, the officers or the shareholders of the Company.

Likewise, the Board of Directors shall explain to the Annual General Meeting in charge of appointing or ratifying the appointment of directors the nature thereof, and said nature shall be confirmed or, where appropriate, reviewed in the Annual Corporate Governance Report, after verification by the Nomination and Remuneration Committee.

As regards the removal of directors, the Nomination and Remuneration Committee is expressly entrusted with the duties of advising on the proposal, if any, of early dismissal of an independent director.

During FY2013 no director was appointed to the Board.

Resignation of Directors

Directors must resign in such scenarios which could have a negative impact on the proceedings of the Board of Directors or the credit and reputation of Inditex.

Additionally, Directors must place their office at the disposal of the Board of Directors and, should this latter deem it appropriate, tender their resignation in the following cases:

For their part, proprietary directors must resign when the shareholders they represent dispose of their ownership interest in its entirety or reduce it up to a limit which requires the reduction of the number of proprietary directors.

During the fiscal year, no director has stepped down or placed his/her office at the disposal of the Board of Directors.

Proceedings of the Board of Directors

Quórum

Any Board meeting will be validly held when it is attended by at least half plus one of its members (or the whole number of directors immediately above half, should the Board be comprised of an odd number), whether in person or by proxy. Directors shall do their best to attend the meetings of the Board of Directors, and, when they cannot do so in person, they shall endeavour to grant a proxy to another member of the Board giving instructions as to its use and communicating the same to the Chairman of the Board of Directors.

Attendance to meetings

Attendance data of Directors to meetings held during FY2013 are shown below:

Passing of resolutions

For resolutions to be passed, an absolute majority of votes for by the directors attending the meeting shall be required.

Notwithstanding the above, it shall be necessary that two-thirds of the members of the Board vote for in order to permanently delegate any power of the Board of Directors to the Executive Committee or to the Chief Executive Officer, should there be one, and to appoint the directors who have to fill such positions.

Likewise, in order to amend the Board of Directors’ Regulations, the resolution must be passed by a majority of two-thirds of the directors present.

The Chairman of the Board of Directors has a casting vote in the event of equality of votes between the directors attending the meeting.

Proxy granting

Any director can grant proxy to another director in writing to be represented, such proxy having to be granted specifically for each meeting, communicating this in writing to the Chairman.

External advice

In order to be aided in the performance of their duties, the non-executive directors may request that legal, accounting, financial or other experts be engaged at the company’s expense. The commissioned task must of necessity deal with particular problems of a certain importance and complexity which may arise in the performance of the office.

The decision to engage external experts must be notified to the Chairman of the Company and it may be open to veto by the Board of Directors if it proves that: a) such engagement is not necessary for the proper performance of the duties entrusted to the non-executive directors; b) the cost thereof is not reasonable in view of the importance of the problem and of the assets and income of the Company; c) the technical assistance obtained may be adequately provided by in-house experts and technicians or; d) the confidentiality of the information to be provided to the expert may be jeopardised.

Information

The notice for the ordinary meetings of the Board of Directors shall be given at least three days in advance of the meeting, and the notice shall always include the agenda of the meeting and shall be accompanied by the duly summarised and prepared relevant information.

Likewise, Directors have the widest powers to: obtain information on any issue of the Company (and its subsidiary companies); examine its books, registers, documents and other records of the company’s operations and inspect all its facilities, likewise it is also provided that the exercise of the powers of information shall be channelled through the Chairman, the Deputy Chairman or any of the Deputy Chairmen, where appropriate, or the Secretary of the Board of Directors, who will attend to the requests of directors by providing them with the information directly, offering appropriate spokespersons at the appropriate level in the organisation or establishing such measures so as to enable them to conduct the desired examinations and inspections in situ.

Meanwhile, Directors are bound to diligently gather information on the course of business of the Company and prepare suitably for the Board meetings and for any committees they belong to.

Assessment proceedings

Pursuant to the provisions of article 32.3.e) of the Articles of Association and section 15.2.f) of the Board of Directors’ Regulations and the Recommendations of the Unified Good Governance Code of Listed Companies, the performance of the Board of Directors, the Audit and Control Committee, the Nomination and Remuneration Committee, and the Chairman and Chief Executive Officer is assessed on an annual basis. Additionally, during FY2013 the individual performance of Independent Directors and of the Deputy Chairman has been assessed.

The result of the assessment carried out in FY2013 has been very positive in respect of the assessed topics. Mention should be made, among others, of the qualifications and structure, the duties, readiness and effectiveness and the planning and organization of the meetings of the Board of Directors, the Audit and Control Committee and the Nomination and Remuneration Committee, as well as the contribution and performance of the Chairman and Chief Executive Officer, the Deputy Chairman and Non-executive Independent Directors.