A. Periodic financial information, financial statements and audit report

The Audit and Control Committee reviews the economic and financial information of Inditex prior to the approval thereof by the Board of Directors.

To this end, before drafting the quarterly, half-yearly or annual financial statements, the Audit and Control Committee also meets with the Management of the Company to review the application of the accounting principles, the estimates made while preparing the financial statements, etc.,

Likewise, the Committee, fully comprised of non-executive directors, meets with the external auditors, before they meet the Board of Directors does, in order to review the financial statements of the Company and certain periodic financial information, ensuring that the legal requirements are met and that the generally accepted accounting standards are correctly applied.

The Audit and Control Committee reviewed the results for the full financial year 2014 in the meeting held on 16 March 2015, and in the meetings held on 8 June, 14 September and 9 December 2015, the results for the first three quarters of financial year 2015 that the Board of Directors must provide quarterly to the market and to its supervisory bodies, in accordance with the format of the Public Periodic Information (“PPI”), and the pertaining Results Release and Press Release.

Likewise, the individual and consolidated Annual Accounts and Management Report and the Auditors’ Report for FY2014 were reviewed, it being verified by the Committee that the latter was unqualified.

B. Effectiveness and Independence of the Financial Auditors

The Audit and Control Committee reviewed the financial audit carried out during FY2014 in its meeting held on 16 March 2015. External auditors attended such meeting, having previously been called to do so.

The Audit and Control Committee reviewed the financial audit carried out during FY2014 in its meeting held on 16 March 2015. External auditors attended such meeting, having previously been called to do so.

Additionally, different main issues were reviewed: international, domestic levels, accounting issues and other less important subjects.

The Audit and Control Committee approved on 16 March 2015 the report on the Independence of the external auditors of the Company, which also covered the provision of additional services other than auditing.

C. Internal Audit

The Chief Audit Officer attended the meetings of the Audit and Control Committee held throughout FY2015, where he took an active part.

Internal Audit apprised the Committee in its different meetings about different issues within its remit, and it supervised the work plan of the Internal Audit Department, approved its Budget as well as the activities report of the Internal Audit Department.

D. External auditors

Following best practices on corporate governance, the members of the Audit and Control Committee met on 16 March, 8 June and 14 September 2015 with the external auditors, in the absence of the management of the Company, to transact different issues of its remit.

Additionally, external auditors attended the meeting held on 9 December 2015, upon special invitation of the Audit and Control Committee, to address in detail the audit plan for financial year 2016.

E. Good corporate governance

The Audit and Control Committee held on 9 December 2015 gave a favourable report to a number of policies, to meet the recommendations of CBG, other regulatory developments, and other recommendations in the regulatory scopes of reference, and to the internal regulations of Inditex.

Such policies, which will be explained in detail in the respective chapter of this Annual Report, are listed below:

1. External Financing Policy.
2. Financial Risk Management Policy.
3. Enterprise Risk Management Policy.
4. Policy on Communication and Contact with Shareholders, Institutional Investors and Proxy Advisors.
5. Corporate Social Responsibility Policy.
6. Environmental Sustainability Policy.
7. Tax Strategy and Policy.

The Committee tabled such policies to the Board of Directors, which approved them in the meeting held on 9 December 2015.

F. Risk Map

The Audit and Control Committee acknowledged the Risk Map in the meeting held on 14 September 2015.

G. Annual Corporate Governance Report

The Audit and Control Committee held on 16 March 2015 approved the Annual Corporate Governance Report for FY2014, drawn up as regards its format, contents and structure, pursuant to the provisions of Circular 5/2013 of 12 June of CNMV.

Such report was submitted by the Committee to the Board of Directors, which approved it on 17 March 2015 and was subsequently sent to CNMV as a relevant fact.

H. Annual Report (Integrated Report)

The Committee gave a favourable report to the Annual Report, also known as Integrated Report, for financial year 2014 in the meeting held on 8 June 2015. Such Report provides information about the activities of Inditex and its corporate Group over the last years and especially in financial year 2014, regarding three areas of the Group: financial, social and environmental.

The Annual Report has been drafted following the principles established in the G4 Guide to Sustainability Reporting of the Global Reporting Initiative (“GRI”), the principles established in the International Integrated Reporting Framework, and AA1000 Accountability Principles Standard 2008 (AA1000APS), and has been verified by SGS ICS Ibérica, SA, in accordance with ISO 19011. The results of such verification demonstrated that the application level (In Accordance – Exhaustive) declared for the GRI Guide (G4) is appropriate. Likewise, a number of relevant indicators has been reviewed by KMPG Asesores in accordance with ISAE 3000 standard.

I. Amendment of the internal regulations of the Company

During the meeting held on 8 June 2015, the Audit and Control Committee gave a favourable report to the amendment of the Articles of Association, the Regulations of the General Meeting of Shareholders, and the Board of Directors’ Regulations, and to the approval of the Audit and Control Committee’s Regulations.

J. Review of the reports of the Committee of Ethics

The Audit and Control Committee reviewed and approved the annual report of the Committee of Ethics for financial year 2014 in the meeting held on 16 March 2015, as well as the half-yearly report of the Committee of Ethics for the first half of financial year 2015, in the meeting held on 14 September 2015.

Such reports cover, among other things, the enforcement of the Code of Conduct and Responsible Practices and the Code for Manufacturers and Suppliers, with a breakdown of the reports received by the Committee of Ethics, the measures taken and the resolutions issued by said body; the outcome of the supervision of the Manual on Criminal Risks Prevention of the Inditex Group and the measures taken to implement the Corporate Compliance system, both at domestic and international level (disclosure and circulation of the Corporate Compliance system; proceedings regarding acceptance of the Code of Conduct and Responsible Practices and training in the area of the Corporate Compliance system).

K. Review of the reports of the Code Compliance Supervisory Board and the Code Compliance Office

The Audit and Control Committee reviewed the quarterly reports issued by the Code Compliance Office regarding the incidences arisen in respect of compliance with the Internal Regulations of Conduct regarding Transactions in Securities (IRC) pursuant to the provisions of section 10.2.4 thereof, as well as the half-yearly reports issued by the Code Compliance Supervisory Board regarding measures taken to promote knowledge and ensure compliance with the provisions of the IRC, pursuant to the provisions of section 10.1.4 thereof.

L. Related-party transaction

On 9 December 2015, the Audit and Control Committee gave a favourable report to the related-party transaction consisting of the lease of business premises in a building located in Madrid, Paseo de la Castellana, the property of Pontegadea Inmobiliaria, S.L.U. (as Lessor) and Zara España, S.A. (as Lessee). Pontegadea Inmobiliaria, S.L.U. is a Spanish company, related to three of Inditex’s directors.

This transaction was authorized by the Board of Directors in the meeting held on 9 December 2015.

M. Conflict of interest situation

Pursuant to the provisions of section 229 of the Companies Act, which was amended by Act 31/2014, of 3 December, for the purposes of improving corporate governance, directors have not communicated any conflict of interest situation, either direct or indirect, in which they or any related party to them may be involved with the parent company. One director informed the Board of Directors of a potential conflict of interest situation, which was acknowledged by the Board. Such situation has not occurred during the year.

N. Report on its activities

The Committee issued its annual activities report on 8 June 2015. Such report is included in the 2014 Annual Report and is available at www.inditex.com.