26. Employee benefits

Defined benefit or contribution plan obligations

In general, the Group has no defined benefit or contribution plan obligations to its employees. However, in line with prevailing labor legislation or customary employment practice in certain countries, the Group assumes certain obligations related with the payment of specific amounts for accidents, illness, retirement, etc., to which employees sometimes contribute. The associated risk is partially or fully externalized through insurance policies.

Furthermore, in some countries employees receive a share of the profits generated by Group companies. The liabilities associated with these items are recognized under “Trade and other payables” and “Other non-current liabilities” in the consolidated balance sheet. The impact of these obligations on the consolidated income statement and the consolidated balance sheet is not significant.

Long-term incentive plan

In 2010 Inditex’ board of directors authorized a long-term incentive plan for members of the management team and other personnel from Inditex and its Group of companies. By complying with the terms of the plan, each beneficiary is entitled to receive an incentive up to a designated maximum.

The plan started on 1 February 2010 and ended on 31 January 2013. Incentives were divided into an initial payment for the period ended 31 January 2012 and a final payment for the period ended 31 January 2013.

The liability for long-term incentives is recognized under “Payables” in the consolidated balance sheet and under “Operating expenses” in the consolidated income statement. The impact of these obligations on the consolidated income statement and the consolidated balance sheet is not significant.