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1. SUSTAINABLE MANAGEMENT OF THE SUPPLY CHAIN

SUPPLIER CLUSTERS - TRACEABILITY

2016 2015
SPAIN
Number of suppliers with purchase during the year 208 216
Number of garment factories associated with suppliers with purchase 167 172
Number of factories involved in other processes associated with suppliers with purchase (1) 299 212
Workers who make up the staff of manufacturers working for Inditex in Spain 10,298 8,362
PORTUGAL
Number of suppliers with purchase during the year 170 171
Number of garment factories associated with suppliers with purchase 868 887
Number of factories involved in other processes associated with suppliers with purchase (1) 489 449
Workers who make up the staff of manufacturers working for Inditex in Portugal 49,714 46,494
MOROCCO
Number of suppliers with purchase during the year 121 106
Number of garment factories associated with suppliers with purchase 207 211
Number of factories involved in other processes associated with suppliers with purchase (1) 76 42
Workers who make up the staff of manufacturers working for Inditex in Morocco 73,772 62,333
Turkey
Number of suppliers with purchase during the year 175 183
Number of garment factories associated with suppliers with purchase 732 748
Number of factories involved in other processes associated with suppliers with purchase (1) 695 640
Workers who make up the staff of manufacturers working for Inditex in Turkey 192,173 155,256
INDIA
Number of suppliers with purchase during the year 136 134
Number of garment factories associated with suppliers with purchase 224 219
Number of factories involved in other processes associated with suppliers with purchase (1) 170 110
Workers who make up the staff of manufacturers working for Inditex in India 200,139 131,435
BANGLADESH
Number of suppliers with purchase during the year 94 81
Number of garment factories associated with suppliers with purchase 151 139
Number of factories involved in other processes associated with suppliers with purchase (1) 111 87
Workers who make up the staff of manufacturers working for Inditex in Bangladesh 479,859 386,916
VIETNAM
Number of suppliers with purchase during the year 4 5
Number of garment factories associated with suppliers with purchase 132 130
Number of factories involved in other processes associated with suppliers with purchase (1) 2 7
Workers who make up the staff of manufacturers working for Inditex in Vietnam 152,101 143,206
CAMBODIA
Number of suppliers with purchase during the year 1 1
Number of garment factories associated with suppliers with purchase 99 68
Number of factories involved in other processes associated with suppliers with purchase (1) 26 33
Workers who make up the staff of manufacturers working for Inditex in Cambodia 126,843 104,695
CHINA
Number of suppliers with purchase during the year 393 340
Number of garment factories associated with suppliers with purchase 1,243 1,106
Number of factories involved in other processes associated with suppliers with purchase (1) 411 255
Workers who make up the staff of manufacturers working for Inditex in China 368,428 302,816
PAKISTAN (2)
Number of suppliers with purchase during the year 42 not available
Number of garment factories associated with suppliers with purchase 68 not available
Number of factories involved in other processes associated with suppliers with purchase (1) 39 not available
Workers who make up the staff of manufacturers working for Inditex in Pakistan 125,316 not available
ARGENTINA (3)
Number of suppliers with purchase during the year 45 64
Number of garment factories associated with suppliers with purchase 41 53
Number of factories involved in other processes associated with suppliers with purchase (1) 42 66
Workers who make up the staff of manufacturers working for Inditex in Argentina 5,099 5,505
BRAZIL (3)
Number of suppliers with purchase during the year 15 37
Number of garment factories associated with suppliers with purchase 45 103
Number of factories involved in other processes associated with suppliers with purchase (1) 20 75
Workers who make up the staff of manufacturers working for Inditex in Brazil 10,712 18,930

(1) Includes fabric, cutting, dyeing and washing, printing and finishing.
(2) Due to the creation of the new Pakistan cluster, the data shown only comprises 2016.
(3) In order to make the data representative, all the active suppliers in the region have been taken into consideration.

SUPPLY CHAIN PROGRAMMES - FEATURED actions in 2016

Freedom of association Related Human Rights Worker participation Spain Portugal Morocco Turkey India Bangladesh Vietnam Cambodia China Brazil Argentina Pakistan Right to equitable and satisfactory remuneration Living Wages Spain Portugal Morocco Turkey India Bangladesh Vietnam Cambodia China Brazil Argentina Pakistan Fair remuneration, not excessive hours of work, fair working conditions Responsible purchasing practices Spain Portugal Morocco Turkey India Bangladesh Vietnam Cambodia China Brazil Argentina Pakistan Equality and non-discrimination Women empowerment Spain Portugal Morocco Turkey India Bangladesh Vietnam Cambodia China Brazil Argentina Pakistan Right to health Occupational health and safety Spain Portugal Morocco Turkey India Bangladesh Vietnam Cambodia China Brazil Argentina Pakistan Freedom of movement Equality and non-discrimination Protection of migrants Spain Portugal Morocco Turkey India Bangladesh Vietnam Cambodia China Brazil Argentina Pakistan Right to education Training and awareness Spain Portugal Morocco Turkey India Bangladesh Vietnam Cambodia China Brazil Argentina Pakistan Human Labour Rights Strategic Plan 2014-2018 Spain Portugal Morocco Turkey India Bangladesh Vietnam Cambodia China Brazil Argentina Pakistan

Strategic Plan 2014 - 2018. 2016 Review

RATING and production volume of suppliers with purchase in 2016 (*)

2016 2015 2016 2015
Number of Suppliers % Suppliers NºSuppliers % Suppliers % production % production
A 694 38% 724 42% 40% 41%
B 917 51% 794 46% 55% 54%
C 83 5% 116 7% 1% 3%
CAP 61 3% 35 2% 3% 1%
PR 50 3% 56 3% 1% 1%
General total 1,805 100% 1,725 100% 100% 100%

(*) Supplier A: complies with the Code of Conduct.
Supplier B: breaches a non-material aspect of the Code of Conduct.
Supplier C: breaches a sensitive aspect of the Code of Conduct.
Supplier subject to Corrective Action Plan (CAP): breaches of the Code of Conduct that trigger the immediate implementation of a Corrective Action Plan.
PR supplier: Undergoing an auditing process.

RATING AND PRODUCTION VOLUME of suppliers with purchase in 2016 by region (*)

2016 2015 2016 2015
Africa Suppliers % Suppliers Suppliers % Suppliers % production % production
A 63 45% 67 52% 45% 54%
B 59 42% 52 40% 42% 38%
C 6 4% 7 5% 4% 5%
CAP 10 7% 3 2% 8% 2%
PR 3 2% 1 1% 1% 1%
Total 141 100% 130 100% 100% 100%
America Suppliers % Suppliers Suppliers % Suppliers % production % production
A 44 68% 52 70% 40% 44%
B 17 26% 17 23% 58% 44%
C 1 1% 4 5% 1% 11%
CAP 3 5% 1 1% 1% 1%
PR 0 0% 0 0% 0% 0%
Total 65 100% 74 100% 100% 100%
Asia Suppliers % Suppliers Suppliers % Suppliers % production % production
A 253 27% 225 27% 28% 24%
B 598 64% 507 61% 67% 71%
C 57 6% 82 10% 2% 4%
CAP 21 2% 18 2% 3% 1%
PR 9 1% 4 0% 0% 0%
Total 938 100% 836 100% 100% 100%
Europe (non-EU) Suppliers % Suppliers Suppliers % Suppliers % production % production
A 84 47% 93 50% 57% 60%
B 70 39% 71 38% 38% 38%
C 5 3% 6 3% 1% 1%
CAP 15 8% 7 4% 3% 0%
PR 5 3% 8 4% 1% 1%
Total 179 100% 185 100% 100% 100%
European Union Suppliers % Suppliers Suppliers % Suppliers % production % production
A 250 52% 287 57% 54% 59%
B 173 36% 147 29% 43% 37%
C 14 3% 17 3% 0% 1%
CAP 12 2% 6 1% 1% 0%
PR 33 7% 43 9% 2% 3%
Total 482 100% 500 100% 100% 100%

(*) Supplier A: complies with the Code of Conduct Audited at most every two years.
Supplier B: breaches a non-material aspect of the Code of Conduct Audited at most every 18 months.
Supplier C: breaches a sensitive aspect of the Code of Conduct Audited at most every 12 months.
Supplier subject to Corrective Action Plan (CAP): breaches of the Code of Conduct that trigger the immediate implementation of a Corrective Action Plan.
Maximum duration of six months.
PR supplier: Undergoing an auditing process.

Evolution of supplier RATING OVER THE last three years

Total Audits by Region 2016

Geographic area Pre-Assessment Social Special (*) Traceability Total
Africa 71 191 127 388 777
America 19 288 26 1,313 1,646
Asia 1,510 2,022 1,418 617 5,567
Europe (non-EU) 350 685 141 418 1,594
European Union 352 825 82 40 1,299
TOTAL 2,302 4,011 1,794 2,776 10,883

Internal and external audits 2016

Pre-Assessment Social Special (*) Traceability Total
Internal 90 537 1,140 1,871 3,638
External 2,212 3,474 654 905 7,245
TOTAL 2,302 4,011 1,794 2,776 10,883

Evolution of audits in the last three years

Geographic area Pre-Assessment Social Special (*) Traceability Total
2016 2015 2014 2016 2015 2014 2016 2015 2014 2016 2015 2014 2016 2015 2014
Africa 71 79 74 191 178 145 127 375 462 388 542 163 777 1,174 844
America 19 113 154 288 460 404 26 57 2 1,313 1,642 1,751 1,646 2,272 2,311
Asia 1,510 1,420 1,199 2,022 1,876 1,723 1,418 1,069 1,030 617 609 488 5,567 4,974 4,440
Europe (non-EU) 350 594 441 685 508 736 141 20 24 418 40 57 1,594 1,162 1,258
European Union 352 497 499 825 802 885 82 63 33 40 33 4 1,299 1,395 1,421
GENERAL TOTAL 2,302 2,703 2,367 4,011 3,824 3,893 1,794 1,584 1,551 2,776 2,866 2,463 10,883 10,977 10,274

Corrective Action Plans 2016

Geographic area Factories that initiated an improvement process Factories that improved their compliance Factories in the process of improvement Percentage of CAPs completed successfully
Africa 40 12 26 86%
America 5 1 2 33%
Asia 161 43 97 67%
Europe (non-EU) 160 38 56 37%
European Union 87 30 36 59%
GENERAL TOTAL 453 124 217 53%

(*) Special audits include, among others, health and safety verification and competence visits to verify the degree of compliance with Corrective Action Plans.