Annual Corporate Governance

In this Annual Corporate Governance Report, the Board of Directors of INDUSTRIA DE DISEÑO TEXTIL, S.A. (INDITEX, S.A.), (hereinafter, “INDITEX” or the “Company”) has included all the relevant information corresponding to fiscal year 2012 which commenced on 1 February 2012 and closed on 31 January 2013, excepting those cases in which other dates of reference are specifically mentioned. In Spain, Act 26/2003 of 17 July (hereinafter, the “Transparency Act”), which amended the [Spanish] Stock Exchange Act and the then prevailing Revised Text of the [Spanish] Corporation Act with the purpose of reinforcing the transparency of listed companies, developed the series of reflections on the principles and practices that should govern the corporate governance of listed companies that were contained in the Report of the Olivencia Commission and, subsequently, in the Report of the Special Commission for the Promotion of Transparency and Security in Financial Markets and Listed Companies (hereinafter, the “Aldama Report”), giving regulatory support to the findings and recommendations contained therein as regards the promotion of transparency. Finally, on 22 May 2006, the Board of the Comisión Nacional del Mercado de Valores (Spanish Stock Exchange Commission, hereinafter the “CNMV”), resolved to approve as a single document which encompasses the recommendations on corporate governance, the Unified Good Governance Code prepared by the Special Work Group set up further to a resolution of the Spanish Government with the goal of assisting the CNMV with the harmonisation and update of the recommendations included in the Olivencia and Aldama Reports.

The contents and structure of this Report adjust to the model laid down by Circular 4/2007 dated 27 December of CNMV, whereby the model of the annual corporate governance report of listed companies is amended, and to the new requirements set out in Act 2/2011 of 4 March on Sustainable Economy which adds on its fifth Additional Provision a new chapter VI to Part IV of Act 24/1988, of 28 July, on the Stock Exchange which governs the additional information to be provided on the model of annual corporate governance report currently in force.

This Annual Corporate Governance Report is subject to publication as a relevant fact and is available on the corporate web site: www.inditex.com.

Corporate governance rules of INDITEX are established in its Articles of Association, Board of Directors’ Regulations, Regulations of the General Meeting of Shareholders, the Internal Regulations of Conduct regarding Transactions in Securities, the Code of Conduct and Responsible Practices and the Regulations of the Social Advisory Board, as it is explained in more detail below:

Articles of Association

These were approved by the General Meeting of Shareholders in July 2000. The Annual General Meeting held in April 2001 introduced an amendment consisting of a reduction in the number of shares required to attend the General Meeting, while the one held in July 2003 resolved new amendments, mostly on account of the new duties of transparency, information and protection of the shareholder, which were introduced by Act 44/2002 of 22 November, on Measures for the Reform of the Financial System (hereinafter, the ”Financial Law”) and by the recommendations and findings regarding corporate governance, and specifically those included in the Aldama Report. Subsequently, the AGM passed several amendments regarding the full adaptation to the Transparency Act and the inclusion of recommendations on corporate governance, underscoring the following ones: (i) the requirement to hold at least 50 shares in the Company to be eligible to attend Annual General Meetings was suppressed; (ii) the possibility for shareholders to grant proxy and to issue votes by mail or electronic means was included in the regulations of the company; (iii) some rules were laid down for those cases where a shareholders’ proxy is in conflict of interest; (iv) the change in the composition of the Audit and Control Committee; (v) a new article regarding the Nomination and Remuneration Committee, and (vi) a new article on the web page of the company. Subsequent amendments were added to adjust the Articles of Association to the amendments introduced by Act 3/2009 of 3 April on Structural Amendments of Companies and to extend the maximum number of members sitting on the Supervision and Control Committees of the Board of Directors (the Audit and Control Committee and the Nomination and Remuneration Committee) to better meet the requirements of the Company and to mirror the composition of the Board of Directors, further to the resolution passed by the AGM held on 13 July 2010 regarding the appointment of two new independent directors. The Annual General Meeting of Shareholders held on 19 July 2011 resolved the adjustment of the Articles of Association to the Revised Text of the Act on Capital Companies, approved by Real Decreto Legislativo 1/2010 of 2 July. The amendment consisted of replacing any references to the “Spanish Corporation Act” or any other express reference to any given statute, with a generic reference to the “Law” or the “applicable regulations”, for the purposes of preventing that any successive regulatory change might entail the relevant amendment to the Articles of Association. Likewise, certain amendments were introduced regarding the form and contents of the notice calling the Annual General Meeting of Shareholders, in order to adjust the duties of the Audit and Control Committee to the new wording of 18th Additional provision of the Act on the Stock Exchange and the contents of the web page regarding information to the shareholders.

Finally, certain articles of the Articles of Association were amended during the AGM held on 17 July 2012 in order to meet the regulatory changes introduced by Act 25/2011 of 1 August, whereby portions of the Act on Capital Companies were amended, and by Directive 2007/36/EC of the European Parliament and of the Council, of 11 July, on the exercise of certain rights of shareholders in listed companies, which has entailed certain amendments to the regulations of listed corporations.

Board of Directors’ Regulations

These were approved by the Board of Directors in July 2000. Their purpose is to determine the principles of operation of the Board, the basic rules for its organisation and proceedings and the rules governing the conduct of its members; they include, among other matters, rules regarding the appointment and removal of directors, their rights and duties and the relationship of the Board with the shareholders, the markets and the external auditors, all this with the aim of achieving the highest possible degree of efficiency. The Board of Directors’ Regulations were already subject to a major reform, as resolved by the Board of Directors on 20 March 2003, in order to adapt them to the new obligations introduced by the Financial Act, and to the recommendations of the Aldama Report. Said reform, however, did not take into account all the mandates of the Transparency Act, which was published after such resolution. For such reason, a new amendment to the internal rules on governance of the Board of Directors was approved by the meeting it held on 10 June 2004 to fully include the provisions of the Transparency Act and the implementing regulations thereof, and to undertake other reforms, which although not mandatory, aimed at reviewing and updating the contents of the Board of Directors’ Regulations in light of the most recent trends on the issue of good corporate governance, harmonising the terminology used. Then, the Board of Directors approved certain amendments to the Regulations in order to adjust them to the new recommendations of the Unified Good Governance Code. The reform of the Board of Directors’ Regulations approved by said body on 13 July 2010 aimed at adjusting the wording of certain sections of the Board´s Regulation to the amendments introduced to the Articles of Association, including the extension of the maximum number of members sitting on the Supervision and Control Committees (the Audit and Control Committee and the Nomination and Remuneration Committee), in order to adjust them to the requirements of the Company and to the new composition of the Board of Directors, further to the resolution passed by the AGM held on that same date, regarding the appointment of two new independent directors.

Finally, the Board of Directors held last 12 June 2012 resolved to amend the Board of Directors’ Regulations in order to: (i) encompass the regulatory changes introduced by Act 25/2011 of 1 August, and Act 2/2011 of 4 March, on Sustainable Economy; among such changes, apart from those made to adjust such Regulations to the new wording of the Articles of Association, the following should be underscored: the change in section 17 to include the possibility that a third of Directors may call the Board of Directors under certain circumstances, as provided in section 246 of the Act on Capital Companies, as amended, and the amendment of paragraphs 3 and 4 of section 28 and paragraph 2 of section 39, to adjust their contents to sections 61 bis and 61 ter of Act 24/1988 of 28 July, on the Stock Exchange, as amended, which govern the requirement for listed companies to issue on an annual basis a report on corporate governance and another on the remuneration of Directors; (ii) include recommendations 44 and 54 of the Unified Good Governance Code of Listed Companies; (iii) extend the powers of the Audit and Control Committee and of the Nomination and Remuneration Committee; and (iv) remove any references to the repealed Spanish Corporation Act, and replacing them with the relevant references to the Act on Capital Companies and introducing technical and editorial improvements.

Regulations of the General Meeting of Shareholders

This text was approved at the Annual General Meeting held on 18 July 2003. Its aim is to govern the proceedings of the General Meeting as to calling of meetings, preparation, information, attendance, development and exercise of voting rights, and to inform the shareholders of their rights and duties relating to this. The Annual General Meeting of Shareholders held on 16 July 2004 approved the amendment to the Regulations of the General Meeting of Shareholders in order to include the provisions of the Transparency Act and the implementing regulations thereof, updating at the same time the contents of the Regulations in light of the most recent trends on the issue of good corporate governance. Subsequently, the AGM approved certain amendments to these Regulations in order to adjust their contents to the new recommendations laid down in the Unified Good Governance Code, and for the purposes of adjusting their wording to the regulatory changes introduced by the new Act on Capital Companies Additionally, in order to prevent any successive amendment based exclusively upon any changes in the name of the applicable regulations, any reference to the “Spanish Corporation Act” or any other express reference to the applicable regulations, have been replaced with a generic reference to the “Law” or the “applicable regulations”.

The latest amendment to the Regulations of the General Meeting of Shareholders, resolved by the AGM held on 17 July 2012 sought: (i) to adapt them to the new wording of the Articles of Association and encompass the regulatory changes introduced by Act 25/2011, of 1 August, which entailed several changes to the regulation of listed corporations; and, (ii) to adapt the remit of the Annual General Meeting of Shareholders concerning compensation by means of delivery of shares and the advisory say on pay vote on the annual report on Directors’ compensation.

Internal Regulations of Conduct regarding Transactions in Securities (hereinafter, the “Internal Regulations of Conduct” or “IRC”)

Approved by the Board of Directors in July 2000, this document contains, among others, the rules governing the confidentiality of relevant information, transactions involving securities of INDITEX and its group of companies by the persons included in its scope, its treasury stock policy and communication of relevant facts. In its meetings on 20 March and 11 December 2003, the Board of Directors approved revised texts of the Internal Regulations of Conduct, in order to adapt them firstly to the new obligations introduced by the Financial Act, and secondly to the recommendations contained in the Aldama Report, redefining several concepts and strengthening control over those transactions that could be carried out at some point in the future by Affected Persons with securities of the company, amongst other amendments. Finally, said revised text was amended further to a resolution of the Board of Directors dated 13 June 2006 for the purposes of adapting the contents thereof to the provisions of Real Decreto (Royal Decree) 1333/2005, of 11 November, implementing the Stock Exchange Act in the matter of market abuse.

Code of Conduct and Responsible Practices of the INDITEX Group

Approved by the Board of Directors on 16 July 2012, this Code replaces the former Code of Conduct of the INDITEX Group and the Internal Guidelines for the Responsible Practices of the Inditex Group. The Code of Conduct and Responsible Practices provides the action lines which must be followed by the Group in the performance of its professional duties. Its goal consists of exacting an ethical and responsible professional conduct from INDITEX and its entire workforce in the conduct of their business anywhere in the world, as a gist of its corporate culture upon which the training and the personal and professional career of its employees is based. For such purposes, the principles and values which shall govern the relationship between the Group and its stakeholders (employees, customers, shareholders, business partners, suppliers and the societies where its business model is implemented) are defined. The Code of Conduct and Responsible Practices is based upon a number of general principles, inter alia, that according to which the operations of the INDITEX Group shall be developed under an ethical and responsible perspective; all persons, whether natural or legal, who maintain, directly or indirectly, any kind of professional, economic, social or industrial relationships with the INDITEX Group shall be treated in a fair and honourable manner and that according to which, all the activities of the Group shall be carried out in the manner that most respects the environment, promoting biodiversity preservation and sustainable management of natural resources.

The full text of all the aforementioned documents is available on the corporate web site (www.inditex.com).

Regulations of the Social Advisory Board

The Social Advisory Board is the advisory body of INDITEX with regard to Corporate Social Responsibility. In December 2002, the Board of Directors authorised its creation and approved its Regulations, which determine the principles of action, the basic rules governing its organisation and operation and the rules of conduct of its members.