Audit and Control Committee

Composition

Antonio Abril Abadín, General Counsel and Secretary of the Board, acts as the Secretary-non-member of the Audit and Control Committee.

Regulations

The Audit and Control Committee shall be made up of a minimum of three and a maximum of seven directors appointed by the Board itself, the majority of whom must be independent directors.

The Chair of the Audit and Control Committee, who must be an independent director, shall be elected for a term that does not exceed four years and must be replaced at the expiry of the aforementioned term. He may be re-elected once a period of one year has elapsed since the date of his/her removal.

The Committee shall ordinarily meet on a quarterly basis in order to review the periodic financial information that has to be given to the Stock Market authorities, as well as the information that the Board of Directors has to approve and include in its annual public documentation. Furthermore, it shall meet each time its Chairman calls it to meet, who must do so whenever the Board of Directors or the Chairman thereof requests the issue of a report or the adoption of proposals and, in any case, whenever appropriate for the successful performance of its functions.

Members of the management team or of the staff of the Company and its group shall be bound to attend the meetings of the Committee and to collaborate with it and make available the information at their disposal when the Committee so requests. Likewise, the Committee may require the attendance of the auditors to its meetings.

For the best performance of its functions, the Audit and Control Committee may obtain the advice of external experts.

Duties

As at 31 January 2016, the duties incumbent on the Audit and Control Committee were:

To report to the General Meeting of Shareholders on those questions raised regarding matters within the remit of said Audit and Control Committee;

• To oversee the effectiveness of the internal control system of the company, the internal audit, and the risks management system, including tax risks, and to discuss with the auditor the significant weaknesses of the internal control system revealed in the course of the audit;
• To oversee the process for preparing and disclosing the mandatory financial information;
• To table to the Board of Directors the motions on selection, appointment, re-election and replacement of the external auditor, as well as the terms and conditions of the agreement to be executed with them, and to regularly gather from the external auditor information about the audit plan and its performance, in addition to preserving its independence in the performance of its duties;
• To liaise with the external auditor in order to receive information on those matters that could jeopardize its independence, so that the Committee may review them, and on any other matter related to the implementation of the audit process, as well as on those other communications envisaged by audit legislation and auditing standards. At any rate, the Committee should receive every year from the external auditor, the statement of its independence regarding the Company or those entities directly or indirectly related thereto, as well as the information on any additional services of any manner rendered and the relevant fees received from such entities by the external auditor or by the persons, natural or legal related to such external auditor, pursuant to the provisions of the prevailing audit legislation;
• To issue every year prior to the issue of the audit report, a report expressing an opinion on the independence of the auditor of the Company. Such report must address at any rate, the assessment of the provision of any additional services referred to in the foregoing paragraph, considered both separately and as a whole, other than the legal audit and regarding the independence system or the audit regulations.
• To advice previously the Board of Directors on all the topics covered by statute, by the Articles of Association and the Board of Directors’ Regulations, and namely, on (i) the financial information that the Company must disclose regularly; (ii) the creation or acquisition of interests in special purpose vehicles or entities resident in countries or territories considered tax havens, and (iii) the transactions with related parties.

Additionally, the Audit and Control Committee also discharges duties regarding the following fields:

• Process to prepare the regulated financial information
• Auditing
• Internal Audit
• Internal control and Risk Management Policy
• Corporate governance
• Compliance with internal regulations
• Corporate social responsibility
• Environmental sustainability
• Tax issues

In addition, two Committees report periodically to the Audit and Control Committee:

• The Code Compliance Supervisory Board: made up of the Executive Chairman of the company, who chairs it; the General Counsel who is also the Code Compliance Officer; the Capital Markets Director, and the Human Resources Director. The Code Compliance Supervisory Board is responsible for promoting knowledge and ensuring compliance with the Internal Regulations of Conduct regarding Transactions in Securities of Inditex and its Corporate Group in areas regarding Securities Markets, (the “IRC”).
• The Committee of Ethics: made up of the General Counsel and Code Compliance Officer, who chairs it; the Internal Audit Director; the Human Resources Director and the Corporate Social Responsibility Director. The Committee of Ethics ensures compliance with the Code of Conduct and Responsible Practices and the Code of Conduct for Manufacturers and Suppliers of the Inditex Group.

Annual activities report of the Audit and Control Committee

A report on the activities of the Audit and Control Committee is issued on a yearly basis. Said report is available in the section headed: “Audit and Control Committee” of this Annual Report and at www.inditex.com.

Nomination and Remuneration Committee

Composition

Until 14 July 2015, date on which the Nomination and Remuneration Committee was split into two Committees, the Nomination Committee and the Remuneration Committee, the composition of the Nomination and Remuneration Committee was:

Antonio Abril Abadín, General Counsel and Secretary of the Board, acted as the Secretary-non-member of the Nomination and Remuneration Committee.

Nomination Committee

Composition

Antonio Abril Abadín, General Counsel and Secretary of the Board, acts as Secretary-non-member of the Nomination Committee.

Regulations

The Nomination Committee shall be made up of a minimum of three and a maximum of seven non-executive directors appointed by the Board of Directors, a majority of whom must necessarily be independent directors.

The Nomination Committee shall meet at least once a year, and each time that the Board of Directors or the Chairman thereof calls it; the Chairman of the Board of Directors shall call the Nomination Committee each time that the Board or its Chairman requests the issuing of a report or the adoption of proposals within its remit and, in any case, whenever this is suitable for the successful performance of its functions.

Ordinary meetings shall be called by letter, fax, telegram or e-mail and the call shall be authorized by the signature of the Chair or the Secretary. A valid quorum for Committee meetings shall be established when at least half plus one of its members, present or represented, are in attendance. The Committee may also pass resolutions in writing, without holding a meeting, pursuant to statutory provisions.

Duties

As at 31 January 2016, the duties incumbent on the Nomination Committee are:

• To evaluate the responsibilities, knowledge and experience required on the Board of Directors. For such purposes, to define the functions and qualifications required from candidates who must fill each vacancy, and evaluate the time and contribution required for them to effectively discharge their duties.
• To set a representation target for the least represented gender on the Board of Directors and to provide guidance on how to reach such target.
• To table to the Board of Directors the motions on the appointment of independent directors to be appointed through the co-option procedure, or to be submitted to the General Meeting of Shareholders, as well as the motion for the re-election or removal of said directors by the General Meeting of Shareholders.
• To report on the motions to appoint the remaining directors prior to their appointment through the co-option procedure or to be submitted to the General Meeting of Shareholders, as well as the motions for their re-election or removal by the General Meeting of Shareholder.
• To report on the motions to appoint and to remove senior executives.
• To review and arrange for the succession of the Chairman of the Board of Directors and of the chief executive of the Company and, where appropriate, to raise motions to the Board of Directors in order for such succession to take place in an orderly and arranged manner.

Annual activities report of the Nomination Committee

The Nomination Committee issues a report on its activities during the year on an annual basis. Such report is available in the “Nomination Committee” section of this Annual Report or at www.inditex.com.

Remuneration Committee

Composition

Antonio Abril Abadín, General Counsel and Secretary of the Board, acts as Secretary-non-member of the Nomination Committee.

Regulations

The Remuneration Committee shall be made up of a minimum of three and a maximum of seven non-executive directors appointed by the Board of Directors, a majority of whom shall be independent directors.

The Remuneration Committee shall meet at least once a year, and each time that the Board of Directors or the Chairman thereof calls it; the Chairman of the Board of Directors shall call the Remuneration Committee each time that the Board or its Chairman requests the issuing of a report or the adoption of proposals within its remit and, in any case, whenever this is suitable for the successful performance of its functions. /p>

Ordinary meetings shall be called by letter, fax, telegram or e-mail and the call shall be authorized by the signature of the Chair or the Secretary. A valid quorum for Committee meetings shall be established when at least half plus one of its members, present or represented, are in attendance. The Committee may also pass resolutions in writing, without holding a meeting, pursuant to statutory provisions.

Duties

As at 31 January 2016, the duties incumbent on the Remuneration Committee are:

• To propose to the Board of Directors the remuneration policy for directors and general managers or those who carry out senior management duties directly reporting to the Board, the executive committees or the chief executive officers.
• To propose to the Board of Directors the individual remuneration and the remaining terms and conditions of the employment agreements of executive directors, ensuring that they are observed.
• To propose the basic terms and conditions of the contracts with senior executives.
• To propose to the Board of Directors the system and amount of annual remunerations of directors and the individual remuneration of executive directors and the remaining essential terms of their agreements, including any eventual compensation or indemnity which might be determined in case of removal, pursuant to the provisions of the corporate governance system and of the remuneration policy of directors approved by the General Meeting of Shareholders.
• To prepare and submit to the Board of Directors for approval, the Annual Report on Remuneration of Directors and verify the information on remuneration of directors and senior executives included in the corporate documents.
• To verify that the remuneration policy fixed by the Company is observed.
• To ensure that no eventual conflict of interest situation would affect the independence of the external advice given to the Committee.
• Additionally, and with regard to the remuneration policy for directors and senior executives, the Remuneration Committee is charged with proposing to the Board of Directors the cancellation of payment or, if appropriate, the refund of variable items which make up the remuneration of directors based upon results, where such items have been paid on the basis of information later shown clearly to be inaccurate; likewise, to propose the termination of the relation with the relevant supervisor(s) and the filing of the relevant claims.

Annual activities report of the Remuneration Committee

The Remuneration Committee issues a report on its activities during the year on an annual basis. Such report is available in the “Remuneration Committee” section of this Annual Report or at www.inditex.com.

Executive Committee

Composition

Antonio Abril Abadín, General Counsel and Secretary of the Board, acts as the Secretary-non-member of the Executive Committee

All categories of directors sitting on the Board of Directors also sit on the Executive Committee.

Regulations

The Executive Committee holds in delegation all the powers of the Board, except for those that cannot be delegated by law or by its Articles of Association and those that are necessary for the responsible exercise of the general supervisory function that is incumbent on the Board of Directors.

The Chairman of the Board of Directors acts as Chair of the Executive Committee and the Secretary of the Board, who may also be assisted by the Deputy Secretary, performs the duties of secretary. The office of Deputy Chair of the Executive Committee is held by the Deputy Chairman of the Board of Directors.

The permanent delegation of powers by the Board of Directors to the Executive Committee shall require two-thirds of the members of the Board to vote in favour and may include, at the Board’s discretion, all or a part of the powers of the Board itself.