Foreword

Corporate Governance is usually defined as the manner wherein companies are organized, managed and controlled. In this context, corporate governance is deemed to be good, where directors and officers responsible for governance proceed diligently, ethically and with transparency in the performance of their duties.

Section 5.4. of the Board of Directors’ Regulations reads as follows: “The Board of Directors shall perform its duties in accordance with the corporate interest, it being understood as the viability and the maximization of the Company’ s value in the long term for the common interest of all the shareholders, which shall not prevent taking into account also other lawful interests, whether public or private, concurring on the development of the business activity, especially those of the other “stakeholders” of the Company: employees, clients, suppliers and the civil society in general. The Board of Directors shall determine and review the business and financial strategies of the Company in the light of said criterion, seeking a reasonable balance between the proposals passed and the risks assumed.” Thus, the enhancement of the value of the company may only be understood as an ongoing process of building value for each and every stakeholder therein involved: employees, shareholders, clients, business partners, suppliers and society in general, i.e., a socially responsible business model that allows an ongoing dialogue and that serves the common interests all of groups associated with the company.

The concept of good corporate governance arises thus as a necessary instrument to meet the goal of creating net worth in the long term. It shall be necessarily embodied through a Management that must act in an ethic and transparent manner, subject to control and verification, both internal and external. This good corporate governance is an active part of the concept of corporate social responsibility, in its broadest term, which is a strategic tool to increase the effectiveness of the company, to achieve competitive advantages, together with the social responsibility strictu sensu, and environmental sustainability.

Annual Corporate Governance Report

In line with the foregoing, the Annual Corporate Governance Report for financial year 2015 (from 1 February 2015 through 31 January 2016) approved by the Board of Directors of Industria de Diseño Textil, S.A. (Inditex, S.A.) (hereinafter, Inditex, the Company or the Group) and available at the corporate website (www.inditex.com) and at CNMV’s [Spanish SEC] website (www.cnmv.es) furnishes full and reasoned information about the structure and governance practices of the company, so that the market and the stakeholders may obtain a true image and a full and grounded view of corporate governance of the Group, as well as of the degree of compliance with the recommendations of the Unified Good Governance Code of Listed Companies. During FY2015, such degree of compliance stands at 99% regarding the recommendations which apply to Inditex.

Regulations on Corporate Governance

During FY2015, Inditex has carried out the review of a large number of its internal regulations to adjust them to the latest regulatory requirements, the latest recommendations in the area of good governance and the most recent trends in the area of corporate governance.

The Inditex’s corporate governance rules are listed below, together with the date of the latest amendment:

Transparency and information

Good governance requires that stakeholders may have regular and timely access to any relevant, appropriate and reliable information, both as regards corporate governance regulations and exercise, and the results achieved.

Therefore, in order to achieve maximum transparency, in addition to including all relevant information and communications on its corporate website (www.inditex.com), Inditex has kept the market regularly posted during financial year 2015 by means of the submission of the relevant “Results releases” and proceedings with institutional investors.

A summary of the most relevant issues of the 2015 Annual Corporate Governance Report is included in this Annual Report:

1. Ownership structure
2. General Meeting of Shareholders
3. Board of Directors
4. Board of Directors’ Committees
5. Remunerations
6. Senior management
7. Related-party transactions and situations of conflict of interest
8. Transparency, independence and good governance
9. Code of Conduct and Responsible Practices and the Committee of Ethics
10. Approval of the Good Corporate Governance policies