2. GENERAL MEETING OF SHAREHOLDERS

The General Meeting of Shareholders duly convened in accordance with all legal formalities and those of the Articles of Association and its own Inditex Regulations, is the supreme and sovereign body of expression of the will of the company. Its resolutions are binding on all its shareholders, including absent or dissenting shareholders, without prejudice to any remedies they may have in law.

AUTHORITIES

The General Meeting of Shareholders duly convened and established in accordance with all statutory requirements and those provided in the Articles of Association and Inditex’s own Regulations, is the supreme and sovereign body of expression of the will of the company. Its resolutions are binding on all shareholders, including absent or dissenting ones, without prejudice to any remedies they may have in law.

In accordance with the Articles of Association and the Regulations of the General Meeting of Shareholders, the General Meeting is authorized to pass all kinds of resolutions concerning the Company and, subject to any other powers vested by the applicable regulations, the exercise of the following powers is reserved to such body:

1. To determine the individual annual accounts of the Company and, where appropriate, the consolidated accounts of the Company and its Group, as well as on the distribution of its income or loss.
2. To appoint, re-elect and remove directors, as well as, confirm or revoke interim appointments of directors made by the Board of Directors, and to review their management.
3. To approve the adoption of remuneration systems consisting of the grant either of shares or stock options, as well as any other remuneration system linked to the value of the shares, for the benefit of directors.
4. To approve the directors’ remuneration policy pursuant to statutory terms.
5. To conduct, as a separate item on the agenda, an advisory say-on-pay vote on the Annual Report on the Remuneration of Directors.
6. To authorize the release of the directors from the duty of preventing conflicts of interest and of the prohibitions arising from the duty of loyalty, when the authorization to release them is attributed by statute to the General Meeting of Shareholders, as well as from the obligation not to compete with the Company.
7. To authorize the Board of Directors to increase the Company’s share capital, or to proceed to the issue of bonds convertible into Company’s shares.
8. To resolve the issue of bonds convertible into Company’s shares or which allow bondholders to participate in the company’s earnings, the increase or the reduction of the share capital, the exclusion or restriction of the pre-emptive right, the transformation, merger, split-off or winding-up of the Company, the global assignment of assets and liabilities, the approval of the final balance sheet of liquidation, the transfer of the registered office abroad, as well as any other amendment whatsoever of the Articles of Association.
9. To authorize the derivative acquisition of own shares.
10. To approve such transactions which entail a structural amendment in the Company, and namely: (i) the transformation of listed companies into holding companies, through “subsidiarisation” or the assignment to dependent entities of core activities theretofore carried out by the Company, even though the Company retains full control of such entities; (ii) the acquisition, disposal or contribution to another company of essential assets; and, (iii) such transactions which entail an effective amendment of the corporate objects and those having an effect equivalent to the liquidation of the Company.
11. To appoint, re-elect and remove the financial auditors.
12. To appoint and remove, where appropriate, the Company’s liquidators.
13. To approve the Regulations of the General Meeting of Shareholders and any subsequent amendment thereof.
14. To resolve on the matters submitted to it by a resolution of the Board of Directors.
15. To give directions to the Board of Director or to submit to its prior authorization the passing by the Board of Directors of decisions or resolutions on certain management matters; and
16. To grant to the Board of Directors such powers it may deem fit to deal with unforeseen issues.

PROCEEDINGS

The Board of Directors must call the Annual General Meeting once a year; within the first six months of the closing of each financial year in order to review the company’s management, approve, where appropriate, the accounts of the previous year and decide upon the distribution of income or loss.

The Extraordinary General Meeting shall meet when the Board of Directors so resolves or when a number of shareholders representing at least 3% of the share capital so request, expressing in the request the business at issue. In this latter case, the General Meeting of Shareholders must be convened to be held within the deadline provided in the applicable regulations and the agenda of the meeting must necessarily include the matters that were the subject of the request.

In the resolutions to call the General Meeting of Shareholders, the Board of Directors shall require the presence of a notary to draw up the minutes of the General Meeting.

General Meetings must be convened by the Board of Directors through notice published in the Official Gazette of the Companies Register or in one of the newspapers with the largest circulation in Spain, on the Company’s website (www.inditex.com) and on CNMV’s website (www.cnmv.es), at least one month in advance of the day scheduled for the meeting to be held, or within any longer period required by statute, where appropriate, due to the scope of the resolutions submitted for deliberation. The notice must state the name of the Company, the day, time and place of the meeting, as well as the date on which, if appropriate, the General Meeting shall be held on second call. There must be at least a 24-hour period between the first and the second call. The notice shall likewise state, clearly and precisely, all the business to be transacted therein.

No later than the date of publication, or at any rate, on the business day that immediately follows, the Company shall send the notice of the meeting to CNMV, and to the Governing Organizations of the Stock Exchanges where the company’s shares are listed for its insertion in the relevant Listing Bulletins. The text of the notice shall also be available on the Company’s website (www.inditex.com).

Notwithstanding the above, the General Meeting shall be deemed to have been duly called and will be validly established to discuss any matter, whenever the whole share capital is present and all those attending unanimously agree to hold the meeting.

Quorum required to hold a valid General Meeting of Shareholders

PASSING OF RESOLUTIONS

The system regarding passing of resolutions is that provided in the Companies Act.

ATTENDANCE TO THE ANNUAL GENERAL MEETING HELD DURING FY2016

RESOLUTIONS PASSED

The full text of the resolutions passed by the Annual General Meeting held in FY2016 and the result of the votes thereof are available on www.inditex.com. All resolutions were passed by majorities of votes between 99.35% and 99.99%.

Specifically, resolutions were passed regarding the items below:

“First.- Review and approval, where appropriate, of the Annual Accounts (Balance Sheet, Profit and Loss Account, Shareholders’ Equity Statement, Cash Flow Statement and Annual Report) and Management Report of Industria de Diseño Textil, Sociedad Anónima, (Inditex, S.A.) for financial year 2015, ended 31 January 2016.

Second.- Review and approval, where appropriate, of the Annual Accounts (Balance Sheet, Profit and Loss Account, Statement of Comprehensive Income, Shareholders’ Equity Statement, Cash Flow Statement and Annual Report) and Management Report of the consolidated group (“Inditex Group”) for financial year 2015, ended 31 January 2016, and of the management of the company.

Third.- Distribution of the income or loss of the financial year and declaration of dividends.

Fourth.- Ratification and appointment of members of the Board of Directors:.

1. Ratification and appointment of Pontegadea Inversiones, S.L., as proprietary director, represented by Ms Flora Pérez Marcote:
2. Appointment of Baroness Kingsmill CBE, as independent director

Fifth.- Amendment of the Articles of Association to adjust its contents to the latest update of the Companies Act:

1. Deletion of paragraph 2 of article 4 (“Registered office”) of Chapter I (“Company name, company object, registered office and duration”).
2. Amendment of article 19 (“Panel of the General Meeting of Shareholders. Debates”), and 20 (“Passing of resolutions”), of Part I (“The General Meeting of Shareholders”) of Chapter IIII (“Governing bodies”).
3. Amendment of article 28 (“Audit and Control Committee”) and 30 (“Remuneration Committee”) of Part II (“Board of Directors”).
4. Amendment of article 36 (“Approval of the Accounts and distribution of the income or loss”) of Chapter IV (“Financial year, annual accounts: verification, approval and release. Distribution of income or loss”).
5. Approval of the revised text of the Articles of Association

Sixth.- Re-election of the Auditor of the Company and its Group for FY2016.

Seventh.- Approval, if appropriate, of a long-term cash and shares incentive plan addressed to members of the management, including the executive director, and other employees of the Inditex Group.

Eighth.- Authorization to the Board of Directors for the derivative acquisition of treasury stock, superseding the authorization approved by the Annual General Meeting in 2013.

Ninth.- Advisory vote (say on pay) on the Annual Report on the Remuneration of Directors.

Tenth.- Granting of powers to implement resolutions.

Eleventh.- Information to the Annual General Meeting on the amendment of the Board of Directors’ Regulations.”

SHAREHOLDERS’ RIGHTS

Any shareholder may attend the General Meeting of Shareholders regardless of the number of shares they hold.

All shares of the Company carry the same voting and economic rights and there are no legal or by-law restrictions on the acquisition or transfer of shares.

As regards the exercise of voting rights, the only restriction is that provided in section 83.1 of the Companies Act, according to which any shareholder who is in arrears regarding any outstanding payments may not exercise their voting right.

ENCOURAGEMENT OF INFORMED PARTICIPATION OF SHAREHOLDERS

The information on the Annual General Meeting of Shareholders is included in the section “General Meeting of Shareholders” of the Company’s web page, which encourages the participation of all shareholders pursuant to the provisions of the Companies Act.

RELATIONSHIP WITH INVESTORS

Information on Inditex relationship with investors and namely its “Policy on Communication and Contact with Shareholders, Institutional Investors and Proxy Advisors” is provided in the Section headed “Investors and Stock Market indexes” of this Annual Report.