INDITEX
ANNUAL REPORT
2022
Index
AUDITOR´S REPORT ON THE ANNUAL ACCOUNTS ....................................................................................................
Balance sheet at 31 January 2023 and 2022 ...................................................................................................................
Income statement for the years ended 31 January 2023 and 2022 .............................................................................
Statement of changes in equity for the years ended 31 January 2023 and 2022 ......................................................
Statement of cash flows for the years ended 31 January 2023 and 2022 ...................................................................
NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 JANUARY 2023 ...............................................
1. Activity and description of the Company ...................................................................................................................
2. Basis of presentation of the annual accounts ..........................................................................................................
3. Distribution of profit .....................................................................................................................................................
4. Accounting policies ......................................................................................................................................................
5. Intangible assets ..........................................................................................................................................................
6. Property, plant and equipment ...................................................................................................................................
7. Investment property .....................................................................................................................................................
9. Cash and cash equivalents .........................................................................................................................................
10. Inventories ...................................................................................................................................................................
11. Equity .............................................................................................................................................................................
12. Long-term provisions .................................................................................................................................................
13. Non-current and current accruals and deferred income .........................................................................
14. Non-current and current liabilities ....................................................................................................................
15. Balances and transactions with Group and related companies .........................................................................
16. Taxes ............................................................................................................................................................................
17. Guarantee commitments to third parties ................................................................................................................
18. Income and expenses ................................................................................................................................................
19. Information on the nature and level of risk ..............................................................................................................
20. Other disclosures .......................................................................................................................................................
21. Explanation added for translation to English ...........................................................................................................
Annex I. List of Company of investments in Group companies at 31 January 2023 ............................................
Annex II. Direct and indirect investments of the members of the Board of Directors in the share capital
of the Company at 31 January 2023 ...............................................................................................................................
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 JANUARY 2023 .............................................................................
Report on Internal Control Systems (ICFR) ...................................................................................................................
Annual Corporate Governance Report (ACGR) ............................................................................................................
Annual Report on Remuneration (ARR) ..........................................................................................................................
Inditex Annual Report 2022
2
Statement by the Directors
about the Contents
of the Financial Annual Report
3
We, the members of the Board of Directors, hereby state that, to the best of our knowledge and belief, the separate annual accounts
for fiscal year 2022 (1 February 2022 – 31 January 2023), stated by the Board of Directors in the meeting held on 14 March 2023,
drafted pursuant to the applicable accounting principles, give the true and fair view of the assets, the financial situation and the results
of  Industria de Diseño Textil, S.A. (Inditex, S.A.) and that the individual financial report includes a true review of the evolution and the
corporate results, as well as of the position of Industria de Diseño Textil, S.A. (Inditex, S.A.), together with the description of the main
risks and uncertainties it faces up to.
In Arteixo (A Coruña), on 14 March 2023.
Ms Marta Ortega Pérez
Chair
Mr Amancio Ortega Gaona
Mr José Arnau Sierra
Ordinary Member
Deputy Chairman
Mr Oscar García Maceiras
Pontegadea Inversiones, S.L.
CEO
Ordinary Member
Ms Flora Pérez Marcote
Bns Denise Patricia Kingsmill
Ms Pilar López Álvarez
Ordinary Member
Ordinary Member
Ms Anne Lange
Mr José Luis Durán Schulz
Ordinary Member
Ordinary Member
Mr Rodrigo Echenique Gordillo
Mr Emilio Saracho Rodríguez de Torres
Ordinary Member
Ordinary Member
Inditex Annual Report 2022
4
Auditor´s Report
on the Annual Accounts
Inditex Annual Report 2022 / Auditor´s Report on the Annual Accounts
5
Translation of  annual accounts originally issued in Spanish and prepared in
accordance with the regulatory financial reporting framework applicable to the
Company in Spain (see Notes 2 and 21). In the event of a discrepancy,
the Spanish-language version prevails..
ANNUAL ACCOUNTS
2022
For the year ended 31 January 2023
Balance sheet as at 31 January 2023 and 2022
(Amounts in millions of euros)
Notes
31/01/2023
31/01/2022
ASSETS
NON-CURRENT ASSETS
16,370
16,951
Intangible assets
(5)
348
250
Patents and similar intangibles
4
4
Computer software
331
239
Intangible assets in progress and advances
13
7
Property, plant and equipment
(6)
617
591
Land and buildings
252
246
Plant and other items of property, plant and equipment
273
294
Property, plant and equipment in the course of construction and advances
92
51
Investment property
(7)
485
503
Land
104
104
Buildings
381
399
Non-current investments in Group companies, jointly controlled entities and associates
(8)
14,693
15,342
Equity instruments
14,693
11,218
Loans to companies
(15)
-
4,124
Non-current financial assets
(8)
62
99
Equity instruments
5
2
Other financial assets
57
97
Deferred tax assets
(16)
160
163
Non-current prepayments and accrued income
5
3
CURRENT ASSETS
7,271
7,796
Non-current assets held for sale
(8)
183
-
Inventories
(10)
1,209
1,167
Goods held for resale
1,022
1,007
Raw materials and other supplies
187
160
Trade and other receivables
709
748
Trade receivables for sales and services
144
150
Trade receivables from Group companies and associates
(15)
395
408
Personnel
10
-
Current tax assets
113
87
Other accounts receivable from public authorities
47
103
Current investments in Group companies, jointly controlled entities and associates
(8 & 15)
1,667
1,298
Loans to companies
1,667
1,298
Current financial assets
(8)
6
7
Loans to companies
4
-
Derivatives
2
7
Current prepayments and accrued income
14
13
Cash and cash equivalents
(9)
3,483
4,563
Cash
3,483
4,563
TOTAL ASSETS
23,642
24,747
The accompanying Notes 1 to 21 and Annex I and II are an integral part of the balance sheet as at 31 January 2023.
15
(Amounts in millions of euros)
Notes
31/01/2023
31/01/2022
EQUITY AND LIABILITIES
EQUITY
20,009
21,019
SHAREHOLDERS' EQUITY
(11)
20,012
21,016
Share capital
94
94
Share capital
94
94
Share premium
20
20
Reserves
18,122
19,552
Legal and bylaw reserves
19
19
Other reserves
18,103
19,533
Treasury shares
(130)
(122)
Profit for the year
1,906
1,472
VALUATION ADJUSTMENTS
(4)
2
Hedges
(4)
2
GRANTS, DONATIONS AND BEQUESTS RECEIVED
1
1
NON-CURRENT LIABILITIES
203
348
Long-term provisions
(12)
50
72
Other provisions
50
72
Non-current payables
(14)
-
1
Obligations under finance leases
-
1
Non-current payables to Group companies, jointly controlled entities and associates
(15)
18
16
Deferred tax liabilities
(16)
7
7
Non-current accruals and deferred income
(13)
128
252
CURRENT LIABILITIES
3,430
3,380
Current payables
(14)
70
37
Obligations under finance leases
1
1
Derivatives
(8)
10
-
Other financial liabilities
59
36
Current payables to Group companies, jointly controlled entities and associates
(15)
1,031
982
Trade and other payables
2,205
2,237
Payable to suppliers
367
524
Payable to suppliers - Group companies and associates
(15)
1,430
1,332
Sundry accounts payable
242
241
Remuneration payable
151
131
Other accounts payable to public authorities
15
9
Current accruals and deferred income
(13)
124
124
TOTAL EQUITY AND LIABILITIES
23,642
24,747
The accompanying Notes 1 to 21 and Annex I and II are an integral part of the balance sheet as at 31 January 2023.
Inditex Annual Report 2022 / Annual Accounts
16
Income statement for the years ended
31 January 2023 and 2022
(Amounts in millions of euros)
Notes
2022
2021
CONTINUING OPERATIONS
Revenue
(18.1)
15,659
11,129
Sales
11,638
9,566
Services
149
142
Dividends
(15)
3,872
1,421
In-house work on non-current assets
13
12
Procurements
(18.2)
(8,719)
(7,290)
Cost of goods held for resale sold
(7,852)
(6,567)
Cost of raw materials and other consumables used
(772)
(640)
Work performed by other companies
(95)
(83)
Other operating income
239
222
Non-core and other current operating income
(7, 13 & 15)
238
221
Income-related grants transferred to profit or loss
1
1
Personnel expenses
(482)
(441)
Wages, salaries and similar expenses
(428)
(398)
Employee benefits
(18.3)
(54)
(43)
Other operating expenses
(2,424)
(2,078)
Outsourced services
(18.4)
(2,351)
(2,003)
Taxes other than income tax
(4)
(4)
Losses, impairment and changes in provisions for commercial transactions
(1)
(4)
Other current operating expenses
(68)
(67)
Amortisation and depreciation of non-current assets and investment property
(5, 6 & 7)
(123)
(125)
Impairment and gains or losses on disposals of fixed assets
-
(5)
Impairment and gains or losses on disposals of Group investments
(2,211)
49
INCOME FROM OPERATIONS
1,952
1,473
Finance income
52
24
From marketable securities and other financial instruments
52
24
  Group companies and associates
(15)
31
24
  Third parties
21
-
Finance costs
(2)
(16)
  On debts to Group companies and associates
(15)
(1)
(1)
  Third parties
(1)
(15)
Exchange differences
(24)
7
FINANCIAL RESULTS
26
15
INCOME BEFORE TAXES
1,978
1,488
Income tax
(16)
(72)
(16)
INCOME FOR THE YEAR
1,906
1,472
The accompanying Notes 1 to 21 and Annex I and II are an integral part of the income statement for the year ended 31 January 2023.
17
Statement of changes in equity for the years
ended 31 January 2023 and 2022
Statement of recognised income and expense
(Amounts in millions of euros)
2022
2021
PROFIT PER STATEMENT OF PROFIT OR LOSS (I)
1,906
1,472
Income and expense recognised directly in equity
Cash flow hedges (Note 8)
(5)
3
Tax effect (Note 16)
1
(1)
TOTAL INCOME AND EXPENSE RECOGNISED DIRECTLY IN EQUITY (II)
(4)
2
Transfers to profit or loss
Cash flow hedges (Note 8)
(3)
1
Tax effect (Note 16)
1
-
TOTAL TRANSFERS TO PROFIT OR LOSS (III)
(2)
1
TOTAL RECOGNISED INCOME AND EXPENSE (I+II+III)
1,900
1,475
The accompanying Notes 1 to 21 and Annex I and II are an integral part of the statement of recognised income and expense for the
year ended 31 January 2023.
Inditex Annual Report 2022 / Annual Accounts
18
Statement of changes in total equity
(Amounts in millions of euros)
Share
capital
Share
premium
Reserves
Treasury
shares
Profit for
the year
Valuation
adjustments
Grants, donations
and bequests
received
Total
2021 OPENING BALANCE
94
20
18,732
(51)
2,923
(1)
1
21,718
Total recognised income
and expense
-
-
-
-
1,472
3
-
1,475
Transactions with
shareholders or owners
Transfers
-
-
743
-
(743)
-
-
-
Dividends paid
-
-
-
-
(2,180)
-
-
(2,180)
Other changes
-
-
77
-
-
-
-
77
Treasury shares
-
-
-
(71)
-
-
-
(71)
2021 CLOSING BALANCE
94
20
19,552
(122)
1,472
2
1
21,019
2022 OPENING BALANCE
94
20
19,552
(122)
1,472
2
1
21,019
Total recognised income
and expense
-
-
-
-
1,906
(6)
-
1,900
Transactions with
shareholders or owners
Transfers
-
-
24
-
(24)
-
-
-
Dividends paid
-
-
(1,447)
-
(1,448)
-
-
(2,895)
Other changes
-
-
(7)
-
-
-
-
(7)
Treasury shares
-
-
-
(8)
-
-
-
(8)
2022 CLOSING BALANCE
94
20
18,122
(130)
1,906
(4)
1
20,009
The accompanying Notes 1 to 21 and Annex I and II are an integral part of the statement of changes in total equity for the year ended
31 January 2023.
19
Statement of cash flows for the years ended
31 January 2023 and 2022
(Amounts in millions of euros)
Notes
2022
2021
CASH FLOWS FROM OPERATING ACTIVITIES (I)
INCOME BEFORE TAXES
1,978
1,488
Adjustments to profit
Amortisation and depreciation
(5, 6 & 7)
123
125
Impairment losses
(8)
2,206
(49)
Changes in provisions
40
37
Gains/Losses on derecognition and disposal of fixed assets
(5, 6 & 7)
-
5
Gains/Losses on derecognition and disposal of financial instruments
5
-
Finance income
(52)
(24)
Finance costs
2
16
Exchange differences
(36)
14
Other income and expenses
(98)
(87)
Dividends from investments in equity instruments of Group companies
(15)
(3,872)
(1,421)
Changes in working capital
Inventories
(42)
(373)
Trade and other receivables
(112)
(423)
Trade and other payables
(53)
771
Other current liabilities
16
(7)
Other cash flows from operating activities
Interest paid
(2)
(16)
Dividends received
3,985
1,519
Interest received
45
23
Income tax paid
(53)
(43)
Other collections (payments)
-
25
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES
4,080
1,580
CASH FLOWS FROM INVESTING ACTIVITIES (II)
Payments relating to investment
Group companies and associates
(8)
(6,231)
(2,351)
Intangible assets
(5)
(131)
(104)
Property, plant and equipment
(6)
(60)
(91)
Investment property
(7)
(5)
(8)
Other financial assets
(6)
-
Collections relating to divestments
Group companies and associates
(8)
4,186
2,264
Property, plant and equipment
-
1
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES
(2,247)
(289)
CASH FLOWS FROM FINANCING ACTIVITIES (III)
Collections and payments relating to equity instruments
Purchase of equity instruments
(61)
(71)
Collections and payments relating to financial liability instruments
Repayment of borrowings from Group companies and associates
43
399
Dividends and returns on other equity instruments paid
Dividends
(2,895)
(2,180)
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES
(2,913)
(1,852)
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS (I+II+III)
(1,080)
(561)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
4,563
5,124
CASH AND CASH EQUIVALENTS AT END OF YEAR
3,483
4,563
The accompanying Notes 1 to 21 and Annex I and II are an integral part of the statement of cash flows for the year ended 31 January
2023.
Inditex Annual Report 2022 / Annual Accounts
20
NOTES TO THE
ANNUAL ACCOUNTS
2022
For the year ended at 31 January 2023
1. Activity and description of the Company
Industria de Diseño Textil, S.A. (‘Inditex’ or ‘the Company’) was
incorporated as a public limited liability company on 12 June
1985. Its current registered office is located at Avenida
Diputación, s/n ‘Edificio Inditex’, Arteixo, A Coruña.
Industria de Diseño Textil, S.A. is the parent of a group of
companies (the "Group), whose main activity is the distribution
of fashion items, particularly clothing, footwear, accessories and
household textile products. The Group carries out its activity
through various retail concepts such as Zara, Pull & Bear,
Massimo Dutti, Bershka, Stradivarius, Oysho, and Zara Home.
Inditex is listed on all four Spanish stock exchanges and,
together with its subsidiary companies, comprises the Inditex
Group.
Each concept is carried out through a store and online
integrated model, managed directly by companies over which
Inditex exercises control through the ownership of all or the
majority of the share capital and of the voting rights, with the
exception of certain countries where, for various reasons, the
activity is performed through franchises. Certain franchise
agreements entered into by the Group include purchase options
which, if exercised, would essentially enable the Group to have
access to the lease rights over the premises in which the
franchised stores operate and the assets associated with these
stores. These options may be exercised after a certain period of
time has elapsed since the signing of the franchise agreement.
The information relating to Inditex's ownership interests in
Group companies and jointly controlled entities is detailed in
Annex I hereto.
The Company engages mainly in:
•The purchase and procurement of fashion items, particularly
clothing and accessories, and the distribution and sale thereof
to the companies that market the ZARA concept. Part of this
activity is carried out through a permanent establishment in
the Netherlands.
•The provision of corporate services to the other Group
companies.
•The management of the ownership interests in its subsidiaries,
from which it receives income in the form of dividends.
Pursuant to corporate law, the Company’s Directors prepared
separately consolidated annual accounts in accordance with
International Financial Reporting Standards as adopted by the
European Union, which reflected a consolidated profit
attributable to the Parent of 4,130 million euros (2021: 3,243
million euros) and consolidated equity attributable to the Parent
of 17,008 million euros (2021: 15,733 million euros).
The Group’s consolidated annual accounts for 2021 were
prepared by the Directors of Industria de Diseño Textil, S.A. at
the Board of Directors meeting held on 15 March 2022 and were
filed at the A Coruña Mercantile Registry, while the consolidated
annual accounts of the Inditex Group for 2022 were prepared on
14 March 2023.
As indicated in Note 15, a significant portion of the Company's
operations are carried on with companies in the Group to which
it belongs.
The Company, together with other companies, belongs to a
group which, in turn, is controlled by the same individual, who
has control over other companies. The company with the most
assets in this group of companies, Pontegadea Inversiones, S.L.,
files its annual accounts at the A Coruña Mercantile Registry.
Industria de Diseño Textil, S.A. and Pontegadea Inversiones, S.L.
are managed independently.
Inditex Annual Report 2022 / Annual Accounts
22
2. Basis of presentation
of the annual accounts
2.1. Regulatory financial reporting
framework applicable to the Company
These annual accounts were formally prepared by the Directors
in accordance with the regulatory financial reporting framework
applicable to the Company, which consists of:
•The Spanish Commercial Code and all other Spanish
Corporate Law.
•The Consolidated Spanish Companies Act.
•The General Accounting Plan (approved by Royal Decree
1514/2007, of 16 November) and its subsequent amendments.
•The mandatory rules approved by the Spanish Accounting
and Auditing Institute in order to implement the General
Accounting Plan and the relevant secondary legislation.
•All other applicable Spanish accounting legislation.
2.2. Fair presentation
The annual accounts for the year ended 31 January 2023
(‘2022’), which were obtained from the Company's accounting
records, are presented in accordance with the regulatory
financial reporting framework applicable to the Company and, in
particular, with the accounting principles and rules contained
therein (see Note 2.1), so that they present fairly the Company's
equity, financial position, results of operations and cash flows for
that year.
These annual accounts, which were formally prepared by the
Company's Directors, will be submitted for approval by the
Annual General Meeting, and it is considered that they will be
approved without any changes. The annual accounts for the
year ended 31 January 2022 (hereinafter, ‘2021’) were approved
by shareholders at the Annual General Meeting held on 12 July 
2022.
Unless otherwise stated, the amounts shown in these annual
accounts are expressed in millions of euros.
2.3. Accounting principles
The Company’s Directors formally prepared these annual
accounts taking into account all the obligatory accounting
principles and standards. In particular, the annual accounts for
2022 were prepared on the basis of the ‘going concern’
accounting principle, in the absence of doubts as to the
Company’s ability to continue its operations. The assessment
that there are no material uncertainties affecting the Company’s
capacity to continue with its operations was based on the
following information:
•The performance of the Company, which has posted positive
results in 2022.
•Performance forecasts for spring/summer 2023.
•The capacity to adapt the supply chain to changing
conditions.
•The flexibility of the model based on sales channel integration.
•The capacity to manage the financial risks to which the
Company is exposed (see Note 19).
•The positive net financial position and the existence of
sufficient undrawn financing facilities to fund the Company’s
activities.
All obligatory accounting principles were applied.
2.4. Key issues in relation to the
measurement and estimation of
uncertainty
2.4.1. Impacts of COVID-19
The Covid-19 pandemic continued to affect business
performance in 2022, albeit more moderately, as almost all
restrictions have now been lifted and the situation in most of the
Company’s markets has normalised, boosting the economic
recovery and reinvigorating consumer spending.
The comparison of financial year 2022 with the same period of
the previous year is somewhat skewed by the pandemic, due to
the latter’s most significant impact in the first and fourth quarters
of 2021 as a result of restrictions in important markets for the
Company.
Some of the supply markets have continued to face sporadic
disruptions as a result of the pandemic, including temporary
factory closures, shipping delays, etc., but much less so than in
previous years.
23
The flexibility of the business model has enabled to soften the
impact of these disruptions. By leveraging its highly diverse
supply sources, along with its technological infrastructure,
digitalisation initiatives and integration of the physical and online
store on which the Inditex Group's integrated strategy hinges, it
was able to continue operating as normal in this context.
Business model flexibility, efficient management of the
integrated inventory, and control over operating expenses have
been and continue to be crucial to the Company's operational
and financial performance in the period.
The main judgements and estimates used to measure certain
items of the financial statements were updated to take into
account the impact of the pandemic. Moreover, the specific
impacts associated with the pandemic were recognised, in
accordance with their nature, in the income statement for the
year, as part of operating income.
The long-term business plan is still in force, as the pandemic is
considered to be a temporary situation that does not alter its
long-term expectations. Accordingly, during the year, the Inditex
Group has continued to implement the fully integrated store and
online based on key strategic lines: product proposal, customer
experience, sustainability and talent retention.
Section 6.3 Responsible risk management of the Statement on
Non-Financial Information includes a more detailed analysis of
the pandemic’s impacts on the various risks identified within the
Inditex Group.
2.4.2. Conflict in Ukraine
As a result of the conflict in Ukraine, which began on 24
February 2022, the Group temporarily suspended operations in
both Ukraine (from that very moment) and the Russian
Federation (from 5 March), as the conflict prevented normal
operations throughout the region. The operations in Ukraine
remain suspended to date and in the Russian Federation
operations have been terminated (Note 8).
2.4.3. Macroeconomic environment
The uncertain and challenging macroeconomic and geopolitical
environment were hallmarks of the year. Numerous markets
have seen a widespread increase in interest rates, as well as a
significant rise in inflation, affecting the cost of many of the
goods and services in our value chain. In particular, commodity
markets, especially energy and certain textile fibres,
experienced a generalised uptick in the year. Energy costs, both
in the sales markets and in supplying countries linked to the
transformation processes in our value chain, have risen sharply.
The situation in the transportation market tended to normalise in
the final months of the year, although it has not yet returned to
pre-pandemic conditions. Restrictions on commercial traffic and
rising fossil fuel prices, mainly as a result of geopolitical
tensions, have added complexity to an already stressed
environment.
In this very challenging context, once again the flexibility of our
business model has come to the fore. Spending has been
systematically and rigorously controlled. In addition, in
anticipation of potential supply chain stress, and harnessing the
flexibility of our business model, during the year the Company
brought inventory inflows forward, a situation that normalised
throughout the year.
2.4.4. Material estimates and measurement of
uncertainty
In preparing the accompanying annual accounts estimates
were occasionally made in order to quantify certain of the
assets, liabilities, income, expenses and obligations reported
herein. Below are the estimates and assumptions most exposed
to uncertainty:
•The assessment of possible impairment losses on
investments in Group companies. In determining the
recoverable value of non-current assets (in accordance with
the methodology described in note 4.4), estimates are made of
the cash flows at cash-generating units for which purpose
assumptions are made such as estimated sales growth, the
performance of operating expenses and the gross margin of
each of the CGUs. These estimates are based on the
Company’s prior experience and on macroeconomic
indicators, and the costs incurred in relation to implementing
the sustainability strategy are also considered. Accordingly,
these estimates are affected by uncertainty to the extent that
they depend on the future performance of each cash-
generating unit and on the possibility of there being events
outside the Company’s control in relation to the Covid-19 
pandemic (such as mandatory temporary closures of physical
stores for health reasons), the evolution of the conflict in
Ukraine itself or a general decline in the economic
environment that worsens revenue forecasts, as well as the
costs increase.
•The determination of inventory costs and its net realizable
value. In establishing the recoverable value of inventories (in
accordance with the methodology described in Note 4.7),
estimates of net realisable value are used, based on
assumptions linked primarily to the success of the collections,
which determines sales performance, stock rotation, the
volume of discounted units and the percentage discount.
These estimates are affected by uncertainty to the extent that
they depend on future events associated with the collections’
commercial success.
•Assessment of counterparty credit risk of financial institutions
in which the Company holds Cash and cash equivalents and
Current financial investments.
The remaining estimates, judgements and assumptions
considered in preparing these annual financial statements are
as follows:
•The useful life of property, plant and equipment, intangible
assets and investment property.
•The fair value of certain assets, mainly financial instruments.
•The assumptions used in the actuarial calculation of liabilities
for pensions and other obligations with employees.
Inditex Annual Report 2022 / Annual Accounts
24
•The calculation of the provisions required for contingencies
relating to litigation in progress and doubtful debts.
•The recovery of deferred tax assets on the basis of the
existences of future taxable profits.
The estimates used took into account the risks deriving from
climate change. The costs linked to the Sustainability Strategy
are factored into the budgets and business plans which
generally cover a 3-year period, and are used to test the
impairment of the investments in Group companies (Note 4.4).
However, given the nature of the assets and the mitigation
measures that the Company is implementing as part of its
Sustainability strategy, the risk deriving from climate change is
not considered to have a material impact on the estimates of the
useful lives of assets, the realisable value of inventories or the
analyses in the impairment testing of non-financial assets. 
Although these estimates were made using the best information
available at the time of preparation of this annual accounts,
events that take place in the future might make it necessary to
change these estimates (upwards or downwards) in coming
years. Changes in accounting estimates would be applied
prospectively, recognising the effects of the change in estimates
in the income statements for the years affected.
2.5. Comparative information
The information relating to 2021 included in these notes to the
annual accounts is presented solely for comparison purposes
with that relating to 2022.
2.6. Grouping of items
Certain items in the balance sheet, income statement, statement
of changes in equity and statement of cash flows are grouped
together to facilitate their understanding; however, whenever the
amounts involved are material, the information is broken down
in the related notes to the annual accounts.
2.7. Correction of errors
In preparing these annual accounts no significant errors were
detected that would have made it necessary to restate the
amounts included in the annual accounts for 2021.
2.8. Changes in accounting policies
In the year ended 31 January 2023 there were no significant
changes in accounting policies with respect to those applied in
2021.
2.9. Materiality
In preparing these annual accounts the Company omitted any
information or disclosure which, not requiring disclosure due to
their qualitative importance, was considered not to be material.
25
3. Distribution of profit
The proposed appropriation of the Company´s profit in 2022 in
the amount of 1,906 million euros made by the Board of
Directors consists of distributing dividends in a maximum
amount of 1,870 million euros and allocate at least 36 million
euros to voluntary reserves.
The Board of Directors will propose to shareholders at the
Annual General Meeting to pay shares with a right to dividend, a
dividend of 1.20 euros per share, being comprised of a 0.796
euros per share ordinary dividend and a 0.404 euros per share
bonus dividend.
Out of the total amount of 1.20 euros per share, 0.60 euros per
share will be paid on 2 May 2023 as ordinary dividend against
2022 results, and 0.60 euros per share will be distributed against
the Company’s unrestricted reserves, payable on 2 November
2023 as ordinary and bonus dividend.
The proposal covers a dividend distribution in the maximum
amount of 3,740 million euros, corresponding to 1.20 (gross)
euros per share for the entire stake of the Company
(3,116,652,000 shares). Since the Company income in 2022 has
reached 1,906 million euros, the difference between the interim
dividend and the full dividend will be charged against the
Company’s unrestricted reserve.
At 31 January 2022 the restricted reserves amounted to 565
million euros (570 million euros in 2021).
Inditex Annual Report 2022 / Annual Accounts
26
4. Accounting policies
The principal accounting policies used by the Company in
preparing these annual accounts for 2022 were as follows:
4.1. Intangible assets
Intangible assets are recognised initially at acquisition or
production cost and this initial measurement is subsequently
adjusted for any accumulated amortisation and any
accumulated impairment losses on the assets. Whenever there
are signs of impairment, the Company tests the intangible
assets for impairment (see Note 4.4) to determine whether the
recoverable amount of the assets has been reduced to below
their carrying amount.
In-house work performed by the Company to develop certain
items of computer software that is capitalised to intangible
assets is measured at accumulated cost (external costs plus in-
house costs and, as the case may be, in-house personnel costs
incurred in the development of this software).
Intangible assets with finite useful lives are amortised
systematically over the years of useful life of the assets, as
follows:
Useful life (years)
Patents and similar intangibles
10
Computer software
5 to 10
The Company reviews the residual values and useful lives of its
intangible assets at each reporting date. Any change in the
initially established estimates would be accounted for as a
change in an accounting estimate.
4.2. Property, plant and equipment
Property, plant and equipment are initially recognised at
acquisition or production cost revalued pursuant to various laws
(including Law 16/2012, of 27 December) (see Notes 6, 7 and 11)
and this initial measurement is subsequently adjusted for any
accumulated depreciation and any accumulated impairment
losses on the assets. Whenever there are signs of impairment,
the Company tests the property, plant and equipment for
impairment (see Note 4.4) to determine whether the recoverable
amount of the assets has been reduced to below their carrying
amount.
Periodic maintenance, upkeep and repair expenses are
recognised in profit or loss as they are incurred. However, the
costs of expansion, modernisation or improvements leading to a
lengthening of the useful lives of the assets are capitalised. After
initial recognition of an asset, only those costs that it is probable
will give rise to future economic benefits and that can be
measured reliably are capitalised.
The balances of assets retired as a result of modernisation or for
any other reason are derecognised from the related cost,
accumulated depreciation and, if appropriate, impairment loss
accounts.
The Company transfers items of property, plant and equipment
in the course of construction to property, plant and equipment in
use when they are ready for their intended use, at which time
they start to be depreciated.
The property, plant and equipment in use is depreciated using
the straight-line method, on the basis of the acquisition or
production cost (revalued, if appropriate) of the assets less their
residual value; the land on which the buildings and other
structures stand has an indefinite useful life and, accordingly, is
not depreciated.
The annual depreciation charge on property, plant and
equipment is recognised under ‘Amortisation and depreciation
of fixed assets and investment property’ in the income
statement, based on the years of estimated useful life of the
assets, and corresponds to the following depreciation
percentages:
Useful life (years)
Buildings
25 to 50
Plant and machinery
8 to 20
Other fixtures, tools and furniture
10 to 20
Other items of property, plant and
equipment
4 to 10
The Company reviews the residual values and useful lives of its
property, plant and equipment at each financial year-end. Any
change in the initially established estimates is accounted for as
a change in an accounting estimate.
4.3. Investment property
The assets included under ‘Investment property’ in the balance
sheet correspond to assets leased, mainly, to Group companies.
This investment property is measured as described in Note 4.2
on ‘Property, plant and equipment’.
27
4.4. Impairment of non-current assets
The Company periodically assesses whether there are any
indications that its non-current assets might have become
impaired, for the purpose of determining whether their
recoverable amount is lower than their carrying amount
(impairment loss).
In this regard, whenever there are signs of impairment, the
Company tests these assets for impairment to determine
whether the recoverable amount of the assets has been
reduced to below their carrying amount. Recoverable amount is
the higher of fair value less costs to sell and value in use.
Similarly, if there is an indication of a recovery in the value of an
impaired item of property, plant and equipment (because the
internal or external factors that initially led to the recognition of
the impairment adjustments no longer exist or have been
partially mitigated), the Company recognises the reversal of the
impairment loss recognised in prior periods, with a credit to the
income statement, and adjusts the future depreciation charges
accordingly. In no circumstances the reversal of an impairment
loss on an asset may raise its carrying amount above that which
it would have if no impairment losses had been recognised in
prior years.
Also, the Company has developed a general, systematic
procedure for carrying out these impairment tests, based on the
monitoring of certain events or circumstances which indicate
that the value of an asset may not be recovered in full. This
method is applied mainly to investments in Group companies
and associates, non-current financial investments and other
assets.
Calculation of the recoverable amount
The recoverable amount of assets is the higher of fair value less
costs to sell and value in use. Value in use is established on the
basis of the expected future cash flows for the period in which
these assets are expected to generate revenue, expectations
about possible variations in the amount or timing of those future
cash flows, the time value of money, the price for bearing the
uncertainty inherent in the asset, and other factors that market
participants would consider in pricing the future cash flows to
be derived from the asset.
Recoverable amount is determined for each individual asset,
unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. In
the case of assets that do not generate cash flows
independently, the recoverable amount is determined for the
CGU to which the asset belongs.
In the case of investments in Group companies, recoverable
amount is the higher of fair value less costs to sell and the
present value of the future cash flows from the investment.
Unless there is better evidence, the recoverable amount of the
investment is taken to be the value of the equity of the investee,
adjusted by the amount of the unrealised gains existing at the
date of measurement (including any goodwill). Impairment
losses recognised and reversed are charged and credited,
respectively, to the income statement.
The Company has defined each of the investees as basic cash-
generating units. The cash flows were based on the budgets
and business plans of the various companies, which generally
cover a three-year period. The key assumptions on which the
budgets and business plans are based are estimated sales
growth and the evolution of the operating expenses and gross
profit of the cash-generating units, based on experience and
knowledge of the trends in each of the markets in which the
investees operate and on the macroeconomic indicators that
reflect the current and foreseeable economic situation for each
market.
Estimated cash flows for the period not covered by the business
plan are determined based on a long-term growth rate for the
sector in each market that reflects the Company’s best
estimates regarding the business performance, based on its
understanding of each market.
The discount rate applied is usually an after-tax measure based
on the risk-free rate for 30-year bonds issued by the
governments in the relevant markets (or similar bonds, if there
are no 30-year bonds), adjusted by a risk premium to reflect the
risk increase.
The average discount rate, resulting from those applied by the
Company in the various markets, used for the purpose of
calculating the present value of the estimated cash flows was as
follows:
2022 Average
2021 Average
Spain
8.41%
7.29%
Rest of Europe
8.95%
8.34%
Americas
12.29%
12.17%
Asia and rest of the world
7.47%
7.17%
The recoverable value of the assets calculated with pre-tax
discount rates would not differ, as they are at an average of 
8.55% for Spain, 9.06% for the rest of Europe, 12.51% for
Americas and 7.58% for Asia and rest of the world.
Although the various subsidiaries’ business and profits for the
years 2021 and, to a lesser extent, 2022 have been affected by
the pandemic, their long-term business plans remain in effect as
the pandemic is considered to be a temporary situation that
does not alter their long-term expectations.
In impairment testing, the key assumptions on which the
budgets and business plans are built have been updated with
the most recent information available, which factors in the
uncertainty generated by the current macroeconomic and
geopolitical environment, the Covid-19 pandemic, the demand
for the products sold by the Company and other considerations
affecting the estimated operating margin of each of the cash-
generating units.
In addition, considering the current macroeconomic context
and the upward trend in interest rates, the Company has
performed a sensitivity analysis on the result of the impairment
test in the light of the following assumptions:
•200 basis point increase in the discount rate.
•10% reduction on future flows.
Inditex Annual Report 2022 / Annual Accounts
28
These sensitivity analyses, performed separately for each of the
aforementioned assumptions, did not disclose the potential
existence of any additional significant impairment of the assets.
4.5. Leases
Leases are classified as ‘finance leases’ whenever the terms of
the lease transfer substantially all the risks and rewards
incidental to ownership of the leased asset to the lessee. All
other leases are classified as ‘operating leases’.
4.5.1. Finance leases
At the commencement of the lease term, the Company
recognises an asset and a liability for the lower of the fair value
of the leased asset or the present value of the minimum lease
payments, including the price of the purchase option when it is
reasonably certain that it will be exercised. The initial direct costs
are added to the amount recognised as an asset. The minimum
lease payments are apportioned between the finance charge
and the reduction of the outstanding liability.
Contingent rents are recognised as an expense when it is
probable that they will be incurred.
The accounting policies applied to the assets used by the
Company under finance leases are the same as those
described in Note 4.2 (Property, plant and equipment). However,
if there is no reasonable certainty that the Company will obtain
ownership of the assets at the end of the lease term, they are
amortised over the shorter of their useful life and the lease term.
4.5.2. Operating leases
In operating leases, the ownership of the leased asset and
substantially all the risks and rewards relating to the leased
asset remain with the lessor.
Both when the Company acts as the lessor and when it acts as
the lessee, lease income and expenses are recognised in the
income statement in the year in which they accrue.
Fixed quotas derived from operating leases are recognised as
an expense on a straight-line basis over the lease term. The
effect of the difference between the recognition of the lease
expense on a straight-line basis during the duration of the
contracts and the lease payments made, is recognised in the
balance in long-term and short-term accrual accounts.
4.6. Financial instruments
A ‘financial instrument’ is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.
An ‘equity instrument’ is a contract that evidences a residual
interest in the assets of the issuing entity after deducting all of its
liabilities.
4.6.1. Financial assets
Classification
The financial assets held by the Company are classified in the
following categories:
(a)Financial assets at amortised cost: includes financial assets
for which the Company holds the investment with the aim of
collecting contractual cash flows, and the contractual terms
of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on
the principal amount outstanding.
Generally included in this category are:
i. Trade receivables: arising from the sale of goods or the
provision of services in connection with transactions for
which payment is deferred; and
ii. Non-trade receivables: derive from loans or credit
operations granted by the Company for which collections
are or may be determined.
(b)Financial assets at cost: includes the following investments:
a) equity instruments of Group companies; and b) equity
instruments whose fair value cannot be reliably measured.
Group companies are considered to be those linked to the
Company by means of a controlling relationship.
Initial measurement
Financial assets are generally recognised initially at the fair value
of the consideration given plus directly attributable transaction
costs.
Likewise, in the case of equity investments in Group companies
that grant control over the subsidiary, fees paid to legal advisors
or other professionals in connection with the acquisition of the
investment are taken directly to income.
Subsequent measurement
Financial assets at amortised cost are thus recognised, taking to
income the interest accrued using the effective interest method.
29
Investments classified in category b) above are measured at
acquisition cost, net, where appropriate, of any accumulated
impairment losses. These losses are calculated as the
difference between the carrying amount of the investments and
their recoverable amount. The recoverable amount is the higher
of fair value less costs to sell and the present value of the future
cash flows from the investment. In the absence of better
evidence of the recoverable amount of investments in equity
instruments, the equity of the investee, adjusted for unrealised
gains existing at the measurement date, net of tax, is taken into
account.
Impairment losses
At least every year-end the Company performs an impairment
test for financial assets. Objective evidence of impairment is
considered to exist if the recoverable amount of the financial
asset is less than its carrying amount.
The Company derecognises financial assets when the rights to
the related cash flows expire or are transferred and substantially
all the risks and rewards of ownership have been transferred.
Conversely, the Company does not derecognise financial
assets, and recognises a financial liability for an amount equal to
the consideration received, in transfers of financial assets in
which substantially all the risks and rewards of ownership are
retained.
4.6.2. Financial liabilities
Financial liabilities assumed or incurred by the Company are
classified as financial liabilities at amortised cost: they are debits
and payables of the Company arising from the purchase of
goods and services in the Company's ordinary course of
business, or those that, while not commercial in origin and not
being derivative instruments, arise from loans or credits
received by the Company.
These liabilities are initially recognised at the fair value of the
consideration received, adjusted by the directly attributable
transaction costs. These liabilities are subsequently measured at
amortised cost.
The Company derecognises financial liabilities when the
obligations giving rise to them cease to exist.
Assets and liabilities are presented separately from each other
in the balance sheet and are only presented at their net amount
when the Company has the enforceable right to offset the
recognised amounts and, in addition, intends to settle the
amounts on a net basis or to realise the asset and settle the
liability simultaneously.
4.6.3. Equity instruments
Equity instruments issued by the Company are recognised in
‘Equity’ in the balance sheet at the proceeds received, net of
issue costs.
Treasury shares acquired by the Company are presented
separately at cost as a reduction of shareholders' equity in the
balance sheet. No gain or loss is recognised in the income
statement on treasury share transactions.
The related transaction costs are recognised as a reduction of
reserves, after consideration of any tax effect.
4.6.4. Derivative financial instruments
Financial instruments acquired by the Company to hedge
forecast transactions in foreign currencies are recognised at fair
value.
Foreign currency hedges relating to forecast transactions are
treated as cash flow hedges, and therefore any gains or losses
derived from measuring the hedging instrument at fair value
which correspond to the effective portion of the hedge are
recognised in equity. The ineffective portion is charged to
finance costs or credited to finance income, as appropriate.
Amounts recognised in equity are taken to income when the
forecast transaction takes place with a charge or credit to the
income statement in which it was recognised. Also, gains or
losses recognised in equity are reclassified to finance income or
costs when the forecast transaction is no longer expected to
occur. The fair value of the hedges is recognised, depending on
whether it is positive or negative, under ‘Current financial assets’
or ‘Current payables’ in the accompanying balance sheet.
In order for these financial instruments to qualify for hedge
accounting, they are initially designated as hedging instruments
and the hedging relationship is documented. Also, the Company
verifies, both at inception and periodically over the term of the
hedge, using ‘effectiveness tests’, that the hedging relationship
is effective, i.e. that it is prospectively foreseeable that the
changes in the fair value or cash flows of the hedged item
(attributable to the hedged risk) will be almost fully offset by
those of the hedging instrument. In addition, the ineffective
portion of the hedging instrument is recognised immediately in
the income statement.
Any gains or losses from changes in the fair value of financial
instruments that are not considered to be accounting hedges
are recognised directly in the income statement.
The fair value of the hedging instruments was calculated using
valuation techniques based on the spot exchange rate and yield
curves according to the fair value hierarchy shown below:
Inditex Annual Report 2022 / Annual Accounts
30
Level 1
Fair value is calculated on the basis of quoted prices
(unadjusted) in active markets for identical assets or liabilities
that the Company can access at the measurement date.
Level 2
Fair value is calculated on the basis of inputs other than quoted
prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly.
Level 3
A fair value measurement in which some significant variable is
based on unobservable inputs for the asset or liability.
The measurement methodology, based on the aforementioned
hierarchy, is as follows:
Level 2 instruments
The Company assigns the assets and liabilities associated with
its OTC derivative positions to this level and measures them
using observable market inputs.
Level 3 instruments
The Company allocates assets and liabilities related to its
derivative positions where there are no observable market
inputs. They are estimated through implicit market forward
curves and extrapolations of observable market data. In the
case of options, pricing models based on Black & Scholes
formulas are used.
The Company does not have financial instruments included in
Level 1.
Accordingly, the fair value of the hedging instruments arranged
by the Company is calculated as follows:
Foreign currency forwards
Fair value measurement:
Foreign currency forwards are basically measured by
comparing the contract strike price (agreed delivery price) with
the market forward rate for the maturity of the contract. Once
the estimated future settlement of the contract has been
obtained based on the aforementioned comparison (in euros),
the settlement is discounted using the risk free zero coupon
yield curve (or the interbank yield curve). This risk free valuation
is subsequently adjusted to include each party’s credit risk, both
the risk corresponding to the counterparty (Credit Value
Adjustment or ‘CVA’, or counterparty default risk) and own risk
(Debit Value Adjustment or ‘DVA’, or own default risk).
The CVA and the DVA are calculated by multiplying the
estimated exposure by the probability of default and the loss
severity (which measures the loss given default). Where
possible, the probability of default and the assumed recoverable
amount in the event of default are obtained from quoted CDSs
or from other observable market inputs. The CVA and the DVA
calculations are netted for each counterparty with which the
entity has an ISDA master agreement providing for the netting of
the derivative positions in the event of default.
Options purchased
Fair value measurement:
The determination of the fair value of the (plain vanilla) options is
based on a modified version of the Black-Scholes formula
(Garman-Kohlhagen). Fair value is a function of the price of the
underlying, the strike price, the time to maturity and the volatility
of the underlying. The credit adjustment is carried out by direct
discounting with credit spread method curves.
Options sold 
Fair value measurement:
The determination of the fair value of the options is based on a
modified version of the Black-Scholes formula (Black 76 Model).
Fair value is a function of the price of the underlying, the strike
price, the time to maturity and the volatility of the underlying.
31
4.7. Inventories
Inventories are measured at the lower of acquisition cost and
net realisable value.
The cost of inventories comprises all costs of purchase and
costs of conversion, as well as design, logistics and transport
costs and any directly allocable costs incurred in bringing the
inventories to their present location and condition.
Cost is calculated on a FIFO basis.
At each accounting close, the Company calculates the provision
corresponding to the inventories that are estimated to be sold
below their acquisition price. This provision is made for each
campaign.
Net realisable value is understood to be:
•Raw materials and other supplies: replacement cost. However,
raw materials and other supplies are not written down below
cost if the finished goods in which they will be incorporated
are expected to be disposed of at or above production cost.
•Finished goods for sale: estimated selling price in the normal
course of business. In this regard, the Company sale goods of
Zara concept to other Group companies and, to a very limited
extent, goods not sold that are sold via third parties.
The Company does not have notable direct and specific cost
linked to the sale of provisioned items. However, the Company
has indirect selling costs such as staff that consider that should
not be taken into account in the determination of the net
realisable value provision, as they are not considered direct and
specific costs.
The Company´s methodology for estimating the net realisable
value is based on historical information and the actual
performance, up to the date on which the aforementioned
estimates are made, i.e. not only the performance of the
different commercial variables of similar campaigns in previous
years but also the actual data and forecasts of how the current
campaign will develop in order to assess and consider the
impacts associated with possible deviations from historical
performance.
4.8. Grants, donations and bequests
received
Grants, donations and bequests received are recognised as
income in equity when they are officially granted, as the case
may be, and when the conditions attached to them have been
complied with and there is reasonable assurance that they will
be received.
Grants related to assets are recognised in profit or loss in
proportion to the depreciation taken on the assets financed with
them or, where applicable, when the assets are disposed of,
derecognised or an impairment loss is recognised.
4.9. Provisions and contingent liabilities
Provisions are recognised when the Company has a present
obligation (legal, contractual, constructive or tacit) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of
the obligation.
Provisions are quantified on the basis of the best information
available at the date of preparation of the annual accounts and
are reviewed at the end of each reporting period.
If it is no longer probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation, provisions are reversed.
There are no risks that might give rise to significant future
contingencies affecting the Company that have not already
been taken into account in these annual accounts.
Contingent liabilities are possible obligations that arise from past
events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more future events not
wholly within the Company’s control. Unlike provisions,
contingent liabilities are not recognised in the balance sheet, but
are disclosed in the accompanying Notes to the annual
accounts, unless the possibility of an outflow in settlement is
considered to be remote.
4.10. Employee benefits
The provisions for long-term incentives are recognised at year-
end at the present value of the estimated future payments to be
made in order to meet the obligations acquired (see Note 20).
The expense accrued during the year is determined based on
the best estimate of the degree to which the conditions giving
entitlement to payment have been met, with a charge to
personnel costs and finance costs. Any change in the estimates
made are recognised with a charge or credit to the income
statement for the year, based on their nature.
4.11. Income tax
The Company files consolidated income tax returns as part of a
tax group of which it is the parent.
Tax expense (tax income) comprises current tax expense
(current tax income) and deferred tax expense (deferred tax
income).
Inditex Annual Report 2022 / Annual Accounts
32
The current income tax expense is the amount payable by the
Company as a result of income tax settlements for a given year.
Tax credits and other tax benefits, excluding tax withholdings
and pre-payments, and tax loss carryforwards from prior years
effectively offset in the current year reduce the current income
tax expense. These tax benefits are measured at face value
unless the period for recovery is more than one year, in which
case they are measured at present value, provided that this
differs significantly from face value.
The deferred tax expense or income relates to the recognition
and derecognition of deferred tax assets and liabilities. These
include temporary differences measured at the amount
expected to be payable or recoverable on differences between
the carrying amounts of assets and liabilities and their tax bases,
and tax loss and tax credit carryforwards. These amounts are
measured at the tax rates that are expected to apply in the
period when the asset is realised or the liability is settled.
Deferred tax liabilities are recognised for all taxable temporary
differences, except for those arising from the initial recognition
of goodwill or of other assets and liabilities in a transaction that
is not a business combination and affects neither accounting
profit (loss) nor taxable profit (tax loss).
Deferred tax assets are recognised to the extent that it is
considered probable that the Company will have taxable profits
in the future against which the deferred tax assets can be
utilised, provided that they will be utilised within a maximum of
ten years, unless there is clear evidence that they will be
recovered within a period of more than ten years or there are
deferred tax liabilities with an identical period of reversal.
Deferred tax assets and liabilities arising from transactions
charged or credited directly to equity are also recognised in
equity.
The deferred tax assets recognised are reassessed at the end
of each reporting period and the appropriate adjustments are
made to the extent that there are doubts as to their future
recoverability. Also, unrecognised deferred tax assets are
reassessed at the end of each reporting period and are
recognised to the extent that it has become probable that they
will be recovered through future taxable profits.
As required by the Spanish Accounting and Auditing Institute,
the Group’s policies establish that for each of the companies
that belongs to the consolidated tax group, the income tax
expense or benefit for the year is calculated on the basis of
accounting profit before tax, increased or decreased, as
appropriate, by the permanent differences from the taxable
profit, net of the tax relief and tax credits corresponding to each
company in the tax group under the consolidated tax regime.
4.12. Revenue and expense recognition
Revenue and expenses are recognised when the actual flow of
the related goods and services occurs, regardless of when the
resulting monetary or financial flow arises. 
Revenue from sales is recognised when the commitment
obligations with the customer have been satisfied, in general
when control of the goods is transferred to the customer.
Revenue is recognised for the value of the consideration
received. Refunds of sales, whether actual or forecast, are
considered part of the total price of each sales transaction.
Revenue from the rendering of services is recognised by
reference to the stage of completion of the transaction at the
end of the reporting period, provided the outcome of the
transaction can be estimated reliably.
Interest income from financial assets is recognised using the
effective interest method and dividend income, which is
recognised under ‘Revenue’ since it forms part of the ordinary
business of the Company, is recognised when the shareholders'
right to receive payment has been established. Interest and
dividends from financial assets accrued after the date of
acquisition are recognised as income in the income statement.
4.13. Current / non-current classification
The Company classifies assets and liabilities as current and
non-current items in the balance sheet based on the expected
timing of collection or payment. Assets and liabilities are
classified as current when they are expected to be realised or
settled within twelve months of the balance sheet date, and are
otherwise classified as non-current liabilities.
4.14. Foreign currency transactions
The Company's functional currency is the euro. Assets whose
acquisition cost is denominated in a foreign currency are
translated to euros at the exchange rate prevailing at the date of
each acquisition or at the date on which the related items are
included in assets.
Accounts receivable and payable denominated in foreign
currency are translated to euros at the exchange rates
prevailing at the transaction date and are subsequently
translated at the end of the reporting period using the closing
exchange rates. Any resulting gains or losses are recognised
directly in profit or loss in the year in which they arise.
33
4.15. Related party transactions
The Company performs its transactions with Group companies
and related parties on an arm’s length basis. Also, the transfer
pricings are adequately supported and, therefore, the
Company's directors consider that there are no material risks in
this connection that might give rise to significant liabilities in the
future.
4.16. Statement of cash flows
The following terms are used in the statement of cash flows:
•Cash flows: inflows and outflows of cash and cash equivalents,
which are short-term, highly liquid investments that are subject
to an insignificant risk of changes in value.
•Operating activities: the principal revenue-producing activities
of the Company and other activities that are not investing or
financing activities.
•Investing activities: the acquisition and disposal of long-term
assets and other investments not included in cash and cash
equivalents.
•Financing activities: activities that result in changes in the size
and composition of the equity and borrowings of the
Company that are not operating activities.
4.17. Statement of changes in equity
The statement of changes in equity presented in these annual
accounts shows the total changes in equity in the year. This
information is in turn presented in two statements: the statement
of recognised income and expense and the statement of
changes in total equity. The main characteristics of the
information contained in the two parts of the statement are
explained below:
4.17.1. Statement of recognised income and
expense
This part of the statement of changes in equity presents the
income and expenses generated by the Company as a result of
its business activity in the year, and a distinction is made
between the income and expenses recognised in the income
statement for the year and the other income and expenses
recognised, in accordance with current regulations, directly in
equity.
Accordingly, this statement presents:
•Profit for the year.
•The net amount of income and expenses recognised directly
in equity (the income, net of the expenses arising during the
year, recognised directly in equity, which remains under this
line item even if in the same year it is transferred to profit or
loss, to the initial carrying amount of other assets or liabilities,
or is reclassified to another line item).
•The amount transferred to profit or loss from equity (the
amount of the revaluation gains and losses and the asset-
related grants previously recognise in equity, albeit in the
same year, which are recognised in the income statement).
•The total recognised income and expense, calculated as the
sum of above.
The amounts of these items are presented gross and the related
tax effect is recognised under ‘Tax effect’ in this statement.
4.17.2. Statement of changes in total equity
This part of the statement of changes in equity presents all the
changes in equity, including those arising from changes in
accounting policies and from the correction of misstatements.
Accordingly, this statement presents a reconciliation of the
carrying amount at the beginning and end of the year of all the
equity items, and the changes are grouped together on the
basis of their nature into the following items:
•Adjustments due to changes in accounting policies and to
errors: include the changes in equity arising as a result of the
retrospective restatement of the balances in the annual
accounts due to changes in accounting policies or to the
correction of misstatements.
•Income and expense recognised in the year: includes, in
aggregate form, the total of the aforementioned items
recognised in the statement of recognised income and
expense.
•Other changes in equity: includes the remaining items
recognised in equity, including, inter alia, increases and
decreases in the Company's share capital, distribution of
profit, transactions involving own equity instruments, share-
based payments, transfers between equity items and any
other increases or decreases in equity.
4.18. Permanent establishment
As indicated in Note 1, the Company carries out procurement
and distribution activity through a Permanent Establishment in
the Netherlands.
The annual accounts include the effects of the integration of
said Permanent Establishment, through the integration in the
balance sheet and in the profit and loss account of the balances
of the balance sheet items and the profit and loss account of the
same.
Said integration has been carried out eliminating the
transactions carried out between the Company and the
Permanent Establishment, as well as the reciprocal asset and
liability balances.
The main effect revealed in 2022 by the integration of the
Permanent Establishment has been the integration of assets
amounting to 193 million euros (178 million euros in 2021).
Inditex Annual Report 2022 / Annual Accounts
34
4.19. Non-current assets held for sale
The Company classifies non-current assets as held for sale if
their carrying amount will be recovered mainly through their sale
rather than through continuing use, and provided that the sale is
considered highly probable because there is a plan to sell the
asset that allows a reasonable expectation of completing the
transaction in a period of less than one year.
These assets are measured upon their classification at the lower
of the two following amounts: their carrying amount or their fair
value deducting the necessary costs for sale, and are presented
in the balance sheet under 'Non-current assets held for sale' in
Current assets.
Non-current assets held for sale are not depreciated, but at
each balance sheet date the corresponding impairment losses
are recognised.
35
5. Intangible assets
The changes in 2022 and 2021 in the intangible asset accounts
and in the related accumulated amortisation were as follows:
2022
Opening
balance
Additions (charge
for the year)
Disposals
Transfers
Closing
balance
Patents and similar items intangibles
17
1
-
-
18
Computer software
433
132
(1)
6
570
Intangible assets in progress and advances
7
12
-
(6)
13
Cost
457
145
(1)
-
601
Patents and similar items intangibles
(13)
(1)
-
-
(14)
Computer software
(194)
(45)
-
-
(239)
Accumulated amortisation
(207)
(46)
-
-
(253)
Net carrying amount
250
348
2021
Opening
balance
Additions (charge
for the year)
Disposals
Transfers
Closing
balance
Patents and similar items intangibles
16
1
-
-
17
Computer software
333
108
(9)
1
433
Intangible assets in progress and advances
1
7
-
(1)
7
Cost
350
116
(9)
-
457
Patents and similar items intangibles
(12)
(1)
-
-
(13)
Computer software
(154)
(48)
8
-
(194)
Accumulated amortisation
(166)
(49)
8
-
(207)
Net carrying amount
184
250
5.1. Additions
The main additions in 2022 and in 2021 relate to the amount
paid for the investment in new IT developments, which was
recognised under ‘Computer software’ and ‘Assets in progress
and advances’.
5.2. Fully amortised intangible assets
The Company's intangible assets include certain items which
had been fully amortised at 31 January 2023 and 2022, the total
cost and accumulated amortisation of which were as follows:
31/01/2023
31/01/2022
Patents and similar
items intangibles
10
9
Computer software
26
26
Total
36
35
Inditex Annual Report 2022 / Annual Accounts
36
6. Property, plant and equipment
The changes in 2022 and 2021 in the property, plant and
equipment accounts and in the related accumulated
depreciation were as follows:
2022
Opening
balance
Additions
(charge for
the year)
Disposals
Transfers
(Note 7)
Closing
balance
Land
27
-
-
4
31
Buildings
257
8
-
2
267
Plant and machinery
234
8
-
-
242
Other fixtures, tools and furniture
75
12
-
-
87
Other items of property, plant and equipment
231
4
(1)
2
236
Property, plant and equipment in the course of
construction and advances
51
52
-
(11)
92
Cost
875
84
(1)
(3)
955
Buildings
(38)
(8)
-
-
(46)
Plant and machinery
(100)
(20)
-
-
(120)
Other fixtures, tools and furniture
(35)
(4)
-
-
(39)
Other items of property, plant and equipment
(111)
(22)
-
-
(133)
Accumulated depreciation
(284)
(54)
-
-
(338)
Net carrying amount
591
617
2021
Opening
balance
Additions
(charge for
the year)
Disposals
Transfers
Closing
balance
Land
27
-
-
-
27
Buildings
206
13
-
38
257
Plant and machinery
174
-
-
60
234
Other fixtures, tools and furniture
55
19
(1)
2
75
Other items of property, plant and equipment
220
14
(4)
1
231
Property, plant and equipment in the course of
construction and advances
125
27
-
(101)
51
Cost
807
73
(5)
-
875
Buildings
(32)
(6)
-
-
(38)
Plant and machinery
(83)
(17)
-
-
(100)
Other fixtures, tools and furniture
(32)
(3)
-
-
(35)
Other items of property, plant and equipment
(90)
(25)
4
-
(111)
Accumulated depreciation
(237)
(51)
4
-
(284)
Net carrying amount
570
591
6.1. Additions
The main additions in 2022 and 2021 relate to expansion
projects carried out at the Company’s head office in Arteixo (A
Coruña).
6.2. Asset revaluation
On 1 February 2013, the items of property, plant and equipment
were revalued pursuant to Law 16/2012, of 27 December; this
had an effect on equity, net of tax, of 9 million euros. The impact
of this update on the amortisation and depreciation allowance in
2022 and 2021 amounted to 0.1 million euros each year.
37
6.3. Fully depreciated property, plant and
equipment
At 31 January 2023 and 2022, the property, plant and equipment
and the investment property described in Note 6 included
certain fully depreciated assets still in operation, the total cost
and accumulated depreciation of which were as follows:
31/01/2023
31/01/2022
Buildings
149
137
Plant and machinery
41
38
Other fixtures, tools and furniture
12
12
Other items of property, plant and
equipment
39
24
Total
241
211
6.4. Property, plant and equipment
acquired from the Group
The detail of the property, plant and equipment and investment
property acquired from Group companies at 31 January 2023
and 2022 is as follows:
At 31 January 2023
Cost
Accumulated
depreciation
Total
Land and buildings
946
(373)
573
Plant and machinery
218
(99)
119
Other items of property,
plant and equipment
9
(6)
3
Total
1,173
(478)
695
At 31 January 2022
Cost
Accumulated
depreciation
Total
Land and buildings
929
(354)
575
Plant and machinery
212
(82)
130
Other items of property,
plant and equipment
8
(5)
3
Total
1,149
(441)
708
6.5. Insurance
The Company takes out insurance policies to cover the possible
risks to which its property, plant and equipment are exposed.
The Company's Directors consider that the policies arranged at
31 January 2023 are sufficient to cover the risks inherent to its
business activities.
Inditex Annual Report 2022 / Annual Accounts
38
7. Investment property
The changes in 2022 and 2021 in ‘Investment property’ were as
follows:
2022
Opening balance
Additions (charge for
the year)
Transfers (Note 6)
Closing balance
Land
104
-
-
104
Buildings
774
2
3
779
Cost
878
2
3
883
Buildings
(375)
(23)
-
(398)
Accumulated depreciation
(375)
(23)
-
(398)
Net carrying amount
503
485
2021
Opening balance
Additions (charge for
the year)
Disposals
Closing balance
Land
104
-
-
104
Buildings
777
8
(11)
774
Cost
881
8
(11)
878
Buildings
(358)
(25)
8
(375)
Accumulated depreciation
(358)
(25)
8
(375)
Net carrying amount
523
503
Investment property relates mainly to land and buildings leased
by the Company to Group companies whose corporate purpose
is the provision of logistics services.
Revenues from leasing the Company's property investments for
the financial year 2022 amounted to 39 million euros (38 million
euros in 2021)  and are recorded under the heading ‘Other
operating income - Non-core and other current operating
income’ in the attached income statement (see Note 15).
Operating expenses related to the investment properties owned
by the Company amounted to 4 million euros in 2022 (3 million
euros in 2021).
7.1. Additions
The additions for the year 2022 correspond mainly to several
expansion and improvement projects carried out in the different
logistics centres that the Company has in Tordera (Barcelona), A
Laracha (A Coruña), Arteixo (A Coruña) and Zaragoza.
7.2. Asset revaluation
On 1 February 2013, the items of property, plant and equipment
were revalued pursuant to Law 16/2012, of 27 December; this
had an effect on equity, net of tax, of 35 million euros. The
impact of this revaluation on the depreciation charge for 2022
and 2021 was 1 million euros each year.
7.3. Insurance
The Company takes out insurance policies to cover the possible
risks to which its investment property is exposed. The
Company’s Directors consider that the insurance coverage
arranged is adequate.
39
8. Investments in Group companies
and financial assets (current and non-current)
The detail of these headings at 31 January 2023 and 2022 is as
follows:
31/01/2023
31/01/2022
Non-current investments in Group
companies, jointly controlled entities
and associates
Equity investments
16,088
11,249
Impairment losses
(1,395)
(31)
Loans to companies (Note 15)
-
4,124
Total
14,693
15,342
Non-current financial assets
Equity instruments
  Cost
17
14
  Impairment losses
(12)
(12)
Other financial assets
57
97
Total
62
99
Non-current assets held for sale
183
-
Total
183
-
Current investments in Group
companies, jointly controlled entities
and associates (Note 15)
Loans to companies
1,667
1,298
Total
1,667
1,298
Current financial assets
Loans to companies
4
-
Derivatives
2
7
Total
6
7
8.1. Non-current investments in Group
companies, jointly controlled entities and
associates. Equity instruments and Non-
current assets held for sale
The most significant information in relation to Group companies,
jointly controlled entities and associates at 31 January 2023 is
detailed in Annex I.
The changes in 2022 and 2021 in Investments in Group
companies and financial assets  were as follows:
2022
Opening balance
Additions / charge for
the year
Decreases /
Reversals
Reclassification to
Non-current assets
held for sale
Closing balance
Equity investments
11,249
6,056
(194)
(1,023)
16,088
Impairment losses
(31)
(2,208)
4
840
(1,395)
Net carrying amount
11,218
3,848
(190)
(183)
14,693
2021
Opening balance
Additions / charge for the
year
Decreases / Reversals
Closing balance
Equity investments
9,203
2,052
(6)
11,249
Impairment losses
(82)
(10)
61
(31)
Net carrying amount
9,121
2,042
55
11,218
Inditex Annual Report 2022 / Annual Accounts
40
Investments and variations in Investments in Group companies
are due to the simplification process of the corporate structure
that the Inditex Group has been carrying out in recent years.
New items for the 2022 financial year correspond to cash
contributions amounting to 225 million euros and intragroup
acquisitions of equity interests amounting to 5,831 million euros
(4 million euros and 2,048 million euros, respectively in 2021).
Acquisitions are measured at fair value as determined by an
independent expert.
Decreases for the 2022 financial year correspond to liquidations
of companies amounting to 45 million euros, which were
provisioned for 2 million euros (liquidations in 2021 amounted to
5 million euros and were provisioned for 2 million euros), capital
reductions amounting to 24 million euros and investment
reductions amounting to 125 million euros, as a result of
dividends from profit generated prior to the date of acquisition
of the investees by the Company (1 million euros in 2021). 
Based on the criteria detailed in Note 4.4, the Company
recognised impairment losses for a net charge of 2,206 million
euros (a net reversal of 49 million euros in 2021) under
“Impairment and gains/losses on disposal of financial
instruments of group companies and associates” in the income
statement, without any impact on the consolidated income
statement.
On 25 October 2022, Inditex reached a preliminary agreement
to sell the business in the Russian Federation to the Daher
Group. At the date of preparation of these annual accounts,
negotiations are being finalised, estimating that the conditions of
the final agreement will not differ substantially from the
agreement signed on 25 October 2022.
The agreement considers, through the sale of all of the shares of
the company Joint Stock Company New Fashion (previously
known as JSC Zara CIS), the transfer of the assets and rights
associated with 245 stores of the 514 that the Group had in
Russia. Once the sales agreement is completed, the transferred
premises will house points of sale of brands belonging to the
Daher Group, totally unrelated to the Inditex Group. The
agreement therefore considers Inditex Group’s right to provide a
franchise agreement to the Daher Group if new circumstances
arise which, in Inditex’s opinion, allowed the return of the
Group’s brands to this market. The transaction is subject to the
obtaining of the relevant administrative authorisations from the
Russian authorities, which at the date are in progress.
The amount of the net assets classified as held for sale have
been adjusted to their realisable value.
None of the investees of Industria de Diseño Textil, S.A. are
listed on the stock exchange.
8.2. Current investments in Group
companies, jointly controlled entities and
associates. Loans to companies
At the close of 2021 the loans to Group companies recognized
under non-current assets in the balance sheet relate to the
financing of their activities and the purchase of property, plant
and equipment. These loans bear interest at a market rate which
is settled on a quarterly basis and they have been reimbursed
during 2022.
In order to optimise the financial resources generated, the
Company has implemented a centralised cash system among
certain Group companies by setting up current accounts, the
balances of which can be receivable or payable, depending on
the particular circumstances of each company and which, in
practice, are settled depending on each company's needs.
These balances bear interest at a market rate which is settled on
an annual basis. In this connection, the balances receivable
included under “Current investments in Group companies,
jointly controlled entities and associates” correspond to these
current accounts. When the related balances are payable, they
are recognised under “Current payables to Group companies,
jointly controlled entities and associates” (see  Note 15). The
balances arising on tax consolidation are also recognised under
this heading (see Notes 15 and 16).
8.3. Non-current financial assets
At 31 January 2023, the balance of ‘Non-current financial assets
- other financial assets’ included mainly advances made as a
result of future payment obligations.
8.4. Derivative financial instruments
At 31 January 2023 and 2022, the Company had open derivative
positions (basically forward US dollar purchases), which are
shown under ‘Current financial assets’ or ‘Current payables’ in
the accompanying balance sheet, depending on their balance.
On 16 January 2023, the Company entered into a VPPA (Virtual
Power Purchase Agreement) for the supply of 100%-renewable
electricity over a period of 10 years. The related projects are in
the development phase, pending final approval, and will come
on stream in 2025. This contract has been booked as a Level 3
financial instrument for which changes in the fair value of the
option sold are recognised in the income statement. 
The detail of the fair value of these hedging instruments for 2022
and 2021 is as follows:
41
2022
CURRENT FINANCIAL ASSETS
Description
Level
Fair value at
beginning of year
Amount taken to
profit or loss
Amount transferred to
profit or loss from equity
Fair value at end of
year
Foreign currency forwards
2
7
(2)
(3)
2
Energy options
3
-
-
-
-
Total
7
(2)
(3)
2
CURRENT PAYABLES
Description
Level
Fair value at
beginning of year
Amount taken to
profit or loss
Gain or loss
recognised
directly in equity
Fair value at end
of year
Foreign currency forwards
2
-
5
5
10
Energy options
3
-
-
-
-
Total
-
5
5
10
2021
CURRENT FINANCIAL ASSETS
Description
Level
Fair value at
beginning of year
Amount taken to
profit or loss
Gain or loss recognised
directly in equity
Fair value at end of
year
Foreign currency forwards
2
-
4
3
7
Total
-
4
3
7
CURRENT PAYABLES
Description
Level
Fair value at
beginning of year
Amount taken to
profit or loss
Amount transferred to
profit or loss from equity
Fair value at end of
year
Foreign currency forwards
2
5
(4)
(1)
-
Total
5
(4)
(1)
-
There have been no transfers between the different levels.
Inditex Annual Report 2022 / Annual Accounts
42
9. Cash and cash equivalents
The cash balances include cash in hand and demand deposits
at banks.
All the balances under these line are unrestricted as to their use
and there are no guarantees or pledges attached to them.
43
10. Inventories
The detail of this line item at 31 January 2023 and 2022 is as
follows:
31/01/2023
31/01/2022
Goods held for resale
1,022
1,007
Raw materials and other supplies
187
160
Total
1,209
1,167
The Company takes out insurance policies to cover the possible
risks to which its inventories are exposed. The Company’s
Directors consider that the insurance coverage arranged is
adequate.
Inditex Annual Report 2022 / Annual Accounts
44
11. Equity
11.1. Shareholders’ equity
11.1.1. Share capital
At 31 January 2023 and 2022, the Company’s share capital was
represented by 3,116,652,000 fully subscribed and paid-up
shares of a single class and series, each with a par value of 0.03
euros, which confer the same economic and voting rights upon
their holders.
Inditex shares are listed on the four Spanish stock exchanges.
Although its shares are represented by book entries, pursuant to
Section 497 of the Spanish Companies Act, Inditex has a
engaged the services of Sociedad de Gestión de Sistemas de
Registro, Compensación y Liquidación de Valores, S.A.
(Iberclear) to provide the daily share ownership notification
service.
As per the Company’s Shareholder Register, the Company’s
significant shareholders at 31 January 2023 and 2022 were as
follows:
31/01/2023
31/01/2022
Shareholder
Number of shares
Ownership %
Number of shares
Ownership %
Pontegadea Inversiones, S.L.
1,558,637,990
50.010%
1,558,637,990
50.010%
Partler Participaciones, S.L.U.
289,362,325
9.284%
289,362,325
9.284%
Rosp Corunna Participaciones
Empresariales, S.L.
157,474,030
5.053%
157,474,030
5.053%
Total
2,005,474,345
64.347%
2,005,474,345
64.347%
At 31 January 2023 and 2022, the members of the Board of
Directors or their related companies controlled 59.298% and
59.375%, respectively, of the Company’s share capital, as
detailed in Annex II.
11.1.2. Legal reserve
Under the Spanish Companies Act, the Company must transfer
10% of net profit for each year to the legal reserve until the
balance of this reserve reaches at least 20% of the share capital.
At 31 January 2023 and 2022, the legal reserve had reached the
legally required minimum.
Any amount of reserves over and above the required 10% of the
share capital, as already increased can be used to further
increase the capital. Otherwise, as long as the legal reserve
does not exceed 20% of share capital, it can only be used to
offset losses, provided that sufficient other reserves are not
available for this purpose.
11.1.3. Revaluation reserve
Pursuant to Act 16/2012, of 27 December, in 2013 the Company
revalued its property, plant and equipment and investment
property assets. The amount of the revaluation, net of the 5% tax
charge, was 44 million euros (see Notes 6 and 7).
11.1.4. Capitalisation reserve
In accordance with the provisions of article 25.1.b) of Law
27/2014, at 31/01/2023 the Company has recorded a reserve
amounting to 440 million euros.
11.1.5. Dividends
The dividends paid by the Company in 2022 and 2021
amounted to 2,895 million euros and 2,180 million euros,
respectively. These amounts correspond to payments of 0.93
euros per share and 0.70 euros per share, respectively.
The distribution of profit for 2022 proposed by the Board of
Directors is shown in Note 3.
11.1.6. Treasury shares
The Annual General Meeting held on 16 July 2019 approved the
2019-2023 Long-Term Incentive Plan (see Note 20) and
authorised the Board of Directors to derivatively acquire
treasury shares to cater for this Plan. Likewise, the Annual
General Meeting held on 13 July 2021 approved a new
2021-2025 Long-Term Incentive Plan (see Note 20).
As at 31 January 2022, the Company owned a total of 4,226,305
treasury shares, representing 0.136% of the share capital.
During the first half of 2022, the first cycle (2019-2022) of the
2019-2023 Long Term Incentive Plan was settled. The part of the
incentive in shares was delivered to the beneficiaries of the Plan
charged to treasury shares already owned by the Company on
the delivery date. 1,793,791 shares, representing 0.058% of the
share capital were delivered.
45
On 12 July 2022, pursuant to a new Temporary Share Buy-back
Programme and under the authorisation in force granted by the
Annual General Meeting, 2,500,000 treasury shares were
acquired, in order to enable the Company to fulfil the
requirements of shares delivery to the beneficiaries of the
second cycle of the 2019-2023 Long-Term Incentive Plan as
well as to the beneficiaries of the first cycle, and as the case may
be, the second cycle of the 2021-2025 Long-Term Incentive
Plan.
Consequently, at 31 January 2023, the Company owned a total
of 4,932,514 treasury shares, representing 0.158% of the share
capital.
Inditex Annual Report 2022 / Annual Accounts
46
12. Long-term provisions
The detail of ‘Long-term provisions’ at 31 January 2023 and
2022 and of the changes therein in 2022 is as follows:
Balances at
31/01/2022
Charge for the
year and
transfers to
short term
Balances at
31/01/2023
Long-term
provisions
Other provisions
  Provisions for
third-party liability
57
(36)
21
  Provision for
pensions and
similar
obligations to
personnel
15
14
29
Total
72
(22)
50
12.1. Provisions for third-party liability
The balances of this line item relate to provisions recognised to
cover any risks that might arise for the Company in the
performance of its ordinary activities. An analysis is performed
each year of the portion that will foreseeably have to be settled
the following year, and the related amount is reclassified to
current liabilities.
In estimating the amounts provisioned at year-end, the
Company used the following hypotheses and assumptions:
•Maximum amount of the contingency
•Foreseeable evolution and factors on which the contingency
depends
As a result of the extraordinary circumstances unleashed by the
Covid-19 pandemic, in the year 2020 the Company received a
trade discount from a supplier, which may be reversed within
three years if certain conditions apply. Consequently, the
Company allocated a provision in 2020 for liabilities in this
regard. In 2022 and 2021 part of this provision was reversed in
each of the years as the agreed conditions were met.
The Company's directors consider that the provisions
recognised in the balance sheet adequately cover the risks
relating to litigation, arbitration and other contingencies and do
not expect any liabilities additional to those recognised to arise
therefrom.
12.2. Provision for pensions and similar
obligations to personnel
The Company has undertaken to settle specific obligations to
personnel. The Company has recorded a provision to cover the
liability corresponding to the estimated vested portion of these
obligations at 31 January 2023.
47
13. Non-current and current accruals
and deferred income
These line items include mainly the amount not yet recognised
in profit or loss of the income arising from transfers of assets
between Group companies, which were paid in full in 2013. The
amount transferred to profit or loss in 2022 and 2021 in this
connection was 123 million euros, which was recognised under
‘Other operating income - Non-core and other current operating
income’ (See Note 15).
Inditex Annual Report 2022 / Annual Accounts
48
14. Non-current and current liabilities
The breakdown of the balances of ‘Non-current payables’ and
‘Current payables’ in the accompanying balance sheets as at 31
January 2023 and 2022 is as follows:
31/01/2023
31/01/2022
Current
liabilities
Non-current
liabilities
Total
Current
liabilities
Non-current
liabilities
Total
Obligations under finance leases
1
-
1
1
1
2
Derivatives (Note 8)
10
-
10
-
-
-
Other financial liabilities
  Payable to non-current asset suppliers
17
-
17
15
-
15
  Other payables
42
-
42
21
-
21
Total
70
-
70
37
1
38
The heading ‘Other payables’ includes mainly deposits received
from franchises and other counterparties to secure the payment
for the supply of finished goods and other transactions. Also
included are payables deriving from cross call and put options
between the Company and the owners of part of the shares of
certain subsidiaries, as they are considered to be a deferred
acquisition of the shares constituting the underlying. At the end
of the year, Inditex holds a call option on 20% of the share
capital of Zara Retail Korea, Ltd. This shareholding belongs to
Lotte Shopping Co., Ltd., which in turn has a put option to sell
the entire holding to Industria de Diseño Textil, S.A.  The strike
price is set on the basis of the non-controlling shareholder’s
share of the equity of the investee when the call option is
exercised.
The Company had been granted credit facilities with a limit of
520 million euros at 31 January 2023 (617 million euros at 31
January 2022). At 31 January 2023 and 2022, no balances had
been drawn down.
49
15. Balances and transactions with Group
and related companies
15.1. Balances
The detail of the Company´s balances with Group companies,
jointly controlled entities and related companies at 31 January
2023 and 2022 is as follows:
31/01/2023
31/01/2022
Short term
Long term
Total
Short term
Long term
Total
Trade receivables for sales and services
395
-
395
408
-
408
Loans to companies (Note 8)
1,481
-
1,481
1,140
4,124
5,264
Receivables arising from filing of consolidated tax returns
(Notes 8 & 16)
186
-
186
158
-
158
Total
2,063
-
2,063
1,706
4,124
5,830
Suppliers and creditors
1,430
-
1,430
1,332
-
1,332
Payables to companies
1,029
18
1,047
978
16
994
Payables arising from filing of consolidated tax returns (Note
16)
2
-
2
4
-
4
Total
2,461
18
2,478
2,314
16
2,330
15.2. Transactions
The detail of the transactions with Group and related companies
in 2022 and 2021 is as follows:
2022
Group
Companies
Jointly controlled
entities
Total
Purchases
5,718
2
5,720
Other expenses
1,534
-
1,534
Finance costs
1
-
1
Total Expenses
7,253
2
7,255
Net Sales
9,031
-
9,031
Dividends
3,845
27
3,872
Operating lease
income (Note 7)
39
-
39
Other income
187
1
188
Finance income
30
1
31
Total Income
13,132
29
13,161
2021
Group
Companies
Jointly controlled
entities
Total
Purchases
5,727
2
5,729
Other expenses
1,406
-
1,406
Finance costs
1
-
1
Total Expenses
7,134
2
7,136
Net Sales
8,503
-
8,503
Dividends
1,396
25
1,421
Operating lease
income (Note 7)
38
-
38
Other income
175
1
176
Finance income
23
1
24
Total Income
10,135
27
10,162
The main transactions relate to the sales of products to
subsidiaries worldwide and the services provided thereto, such
as those relating to franchise fees or rentals and the transfer of
assets (see Note 13) -all of which are performed through the
agreements entered into by the Company with the companies in
its Group in order to carry on the activities described in Note 1,
as well as the dividends received from subsidiaries. ‘Other
expenses’ includes mainly logistics and design services
provided by Group companies. The finance costs and finance
income arise from the financial balances held by the Company
with the Group companies described above.
Inditex Annual Report 2022 / Annual Accounts
50
16. Taxes
16.1. Income tax
Industria de Diseño Textil, S.A. files consolidated tax returns as
the parent of a tax group formed by the following subsidiaries:
Bershka BSK España, S.A.
Inditex, S.A.
Plataforma Logística Meco, S.A.
Zara Home Logística, S.A.
Bershka Diseño, S.L.
Inditex Logística, S.A.
Pull & Bear Diseño, S.L.
Zara Logística, S.A.
Bershka Logística, S.A.
Lefties España, S.A.
Pull & Bear España, S.A.
Zara, S.A.
Choolet, S.A.
Massimo Dutti Diseño, S.L.
Pull & Bear Logística, S.A.
Zintura, S.A.
Comditel, S.A.
Massimo Dutti Logística, S.A.
Inditex Renovables S.L.
Born S.A. (*)
Confecciones Fíos, S.A.
Massimo Dutti, S.A.
Stear, S.A.
Hampton S.A. (*)
Confecciones Goa, S.A.
Nikole, S.A.
Stradivarius Diseño, S.L.
Kiddys Class España S.A. (*)
Denllo, S.A.
Nikole Diseño, S.L.
Stradivarius España, S.A.
Lefties Logística S.A. (*)
Fashion Logistics Forwarders, S.A.
Oysho Diseño, S.L.
Stradivarius Logística, S.A.
Zara Home España, S.A.
Fashion Retail, S.A.
Oysho España, S.A.
Trisko, S.A.
Plataforma Logística León, S.A.
Glencare, S.A.
Oysho Logística, S.A.
Zara Diseño, S.L.
Indipunt, S.L.
Goa-Invest, S.A.
Plataforma Cabanillas, S.A.
Zara España, S.A.
Grupo Massimo Dutti, S.A.
Plataforma Europa, S.A.
Zara Home Diseño, S.L.
(*) Liquidated or merged companies during the exercise.
The reconciliation of the accounting profit for 2022 and 2021 to
the taxable profit for income tax purposes is as follows:
2022
Increase
Decrease
Total
Income and expense for the year
1,906
Income tax
72
Profit before taxes
1,978
Permanent differences
-
  Individual company
2,516
(3,829)
(1,313)
Temporary differences
    Of the individual company
arising in the year
83
-
83
    Of the individual company
arising in prior years
-
(93)
(93)
Taxable profit
656
2021
Increase
Decrease
Total
Income and expense for the year
1,472
Income tax
16
Profit before taxes
1,488
Permanent differences
  Individual company
246
(1,282)
(1,036)
Temporary differences
    Of the individual company
arising in the year
79
-
79
    Of the individual company
arising in prior years
-
(47)
(47)
Taxable profit
484
The most significant permanent differences of the Company
correspond to expenses which are not considered as tax
deductible amounting to 229 million euros (105 million euros in
2021), 3,051 million euros due to the application of the exemption
from international double taxation on dividends and capital
gains (547 million euros in 2021), 581 million euros due to the
application of the exemption from internal double taxation on
dividends, including that relating to dividends of companies in
the tax group (530 million euros in 2021), 2,208 million euros due
to impairment of group companies portfolio (12 million euros in
2021), 139 million euros due to the application of the
capitalisation reserve (129 million euros in 2021) and 79 million
euros due to the inclusion in the Spanish taxable income of the
foreign corporate income taxes corresponding to the profits
which give rise to certain dividends distributed by the
subsidiaries (141 million euros in 2021).
51
16.2. Income tax expense
The calculation of the income tax expense for 2022 and 2021 is
as follows:
2022
Profit or loss
Income and expense for the year before
income tax
1,978
Tax charge at 25%
495
Non-deductible expenses
559
Exemption from double taxation on
dividends and capital gains
(924)
Other reductions in taxable income
(35)
Tax relief and tax credits in the current
year
(8)
Other adjustments
(15)
Income tax expense
72
2021
Profit or loss
Income and expense for the year before
income tax
1,488
Tax charge at 25%
372
Non-deductible expenses
13
Exemption from double taxation on
dividends and capital gains
(344)
Other reductions in taxable income
(32)
Tax relief and tax credits in the current
year
(22)
Other adjustments
29
Income tax expense
16
16.3. Deferred taxes
The detail of deferred tax assets and of the changes therein at
31 January 2023 and 31 January 2022 is as follows:
2022
31/01/2022
Profit or loss
Equity
31/01/2023
Foreign currency hedges
-
-
1
1
Other provisions
15
(3)
-
12
Provisions for obligations to personnel
19
-
-
19
Limitation on deductibility of depreciation and amortisation - Law
16/2012
2
-
-
2
Tax credits pending to be applied
80
(30)
-
50
Provisions for long-term assets
3
-
-
3
Assets tax group
43
29
-
72
Unused tax credits relating to the reversal of temporary measures -
Law 16/2012
1
-
-
1
Total
163
(4)
1
160
2021
31/01/2021
Profit or loss
Equity
31/01/2022
Other provisions
21
(6)
-
15
Provisions for obligations to personnel
5
14
-
19
Limitation on deductibility of depreciation and
amortisation - Law 16/2012
2
-
-
2
Tax credits pending to be applied
59
21
-
80
Provisions for long-term assets
3
-
-
3
Assets tax group
76
(33)
-
43
Unused tax credits relating to the reversal of
temporary measures - Law 16/2012
1
-
-
1
Total
167
(4)
-
163
Inditex Annual Report 2022 / Annual Accounts
52
The detail of deferred tax liabilities and of the changes therein at
31 January 2023 and 2022 is as follows:
2022
31/01/2022
Profit or loss
Equity
31/01/2023
Non current assets of the tax group
(2)
-
-
(2)
Foreign currency hedges
(1)
-
1
-
Inventories of companies in the tax group
(4)
(1)
-
(5)
Total
(7)
(1)
1
(7)
2021
31/01/2021
Profit or loss
Equity
31/01/2022
Non current assets of the tax group
(2)
-
-
(2)
Foreign currency hedges
-
-
(1)
(1)
Inventories of companies in the tax group
(5)
1
-
(4)
Total
(7)
1
(1)
(7)
The balance of deferred tax assets includes accrued tax
deductions resulting from Group investments in Group
companies.
The deferred tax liabilities include those corresponding to intra-
group transactions, as a result of the application of the
consolidated tax regime.
Of the change in the net balance of deferred tax assets and
liabilities, 5 million euros were recognised and charged to
income statement (3 million euros charged to income statement
in 2021).
The income tax expense for the year includes withholdings
borne abroad and not deducted in the Spanish taxable income
relating to income received from foreign subsidiaries,
amounting to 12 million euros (9 million euros in 2021). The
income tax expense also includes the application of Spanish tax
credits arising from juridical and economic double taxation on
dividends repatriated from abroad, amounting respectively to 8
million euros and 109 million euros (10 million euros and 105
million euros in 2021).
As a result of the transactions described, the breakdown of the
income tax expense for 2022 and 2021 is as follows:
2022
2021
Current tax
67
13
Deferred tax
5
3
Total income tax expense
72
16
16.4. Other tax disclosures
At the date of preparation of  the annual accounts of financial
year 2022, the tax audit on the tax group of which Industria de
Diseño Textil, SA is the parent company, in relation to corporate
income tax for the financial years 2017 through 2021, has
concluded. The result of such tax audit is included in the annual
accounts of financial year 2022 and its impact is not relevant for
the company.
With respect to the rest of tax obligations, at the date of
preparation of the annual accounts, the statute of limitations
corresponding to settlement periods 2019 and onwards had not
expired.
The company does not expect that significant additional tax
liabilities may arise as a result of future tax audits it has to face in
the future.
53
17. Guarantee commitments to third parties
At 31 January 2023 and 2022, the Company had provided third
parties with certain guarantees to various public authorities and
entities, for the following amounts drawn down:
31/01/2023
31/01/2022
Customs authorities
30
30
Other public administrations
-
19
Other entities
2
5
Total
32
54
The Company's directors consider that any losses or liabilities
not foreseen at 31 January 2023 that might arise from the
aforementioned guarantees provided would not in any event be
material.
Inditex Annual Report 2022 / Annual Accounts
54
18. Income and expenses
18.1. Revenue
The breakdown, by geographical markets, of the Company's
revenue for 2022 and 2021 is as follows:
2022
2021
Revenue from the sale of goods
Spain
2,008
1,528
Rest of Europe
5,601
4,589
Americas
1,932
1,521
Asia and Rest of the world
2,097
1,928
Revenue from the rendering of services
Spain
117
114
Rest of Europe
30
27
Americas
2
1
Dividends and other income
Spain
581
530
Rest of Europe
3,041
668
Americas
225
204
Asia and Rest of the world
25
19
Total
15,659
11,129
18.2. Procurements
The detail of ‘Procurements’ in the accompanying income
statements for 2022 and 2021 is as follows:
2022
2021
Purchases of goods held for resale, raw
materials and other supplies
8,668
7,571
Changes in inventories of raw materials,
goods held for resale and other supplies
(51)
(369)
Changes in provisions
7
5
Work performed by other companies
95
83
Total
8,719
7,290
The detail of the purchases made by the Company in 2022 and
2021 based on the geographical location of suppliers, is as
follows:
2022
2021
Purchases of goods held for resale
Spain
2,375
2,137
Rest of Europe
5,314
4,535
Rest of the world
156
172
Purchases of raw materials
Spain
244
218
Rest of Europe
410
402
Rest of the world
169
107
Total
8,668
7,571
18.3. Employee benefits
The detail of ‘Employee benefits’ in the income statements for
2022 and 2021 is as follows:
2022
2021
Employer social security costs
42
36
Other employee benefit costs
12
7
Total
54
43
The number of employees at 31 January 2023 and 2022, by
professional category and gender, was as follows:
2022
Gender
Men
Women
Total
Corporate central services
767
583
1,350
Commercial central services
568
1,049
1,617
Total
1,335
1,632
2,967
2021
Gender
Men
Women
Total
Corporate central services
533
672
1,205
Commercial central services
657
828
1,485
Total
1,190
1,500
2,690
In 2022 the average number of employees at the Company was
1,293 in corporate central services and 1,561 in commercial
central services. In 2021 the average number of employees was
1,122 in corporate central services and 1,414 in commercial
central services.
At 31 January 2023 there were 36 employees with a disability
greater than or equal to thirty three percent (2021: 20 such
employees). The average number of such employees in 2022
was 29 (2021: 19 such employees).
For its part, the Board of Directors has been formed in 2022 and
2021, and at 31 January 2023 and 2022, by 6 men and 5 women
(7 men and 4 women in the 2021 financial year and at 31 January
2022).
55
18.4. Outsourced services
‘Other operating expenses - Outsourced services’ includes
mainly logistics and design services provided by other Group
companies amounting to 984 million euros (2021: 863 million
euros), other indirect selling costs amounting to 975 million
euros (2021: 847 million euros) and donations amounting to 29
million euros (2021: 26 million euros). This line item also includes
software licenses and all the audit and consultancy services
received, insurance premiums, travel expenses and utilities.
18.5. Foreign currency balances and
transactions
The Company’s revenue includes 4,757 million euros (2021: 4,321
million euros) relating mainly to sales made in currencies other
than the euro, including US dollars for the amount of 1,222
million euros (2021: 1,279 million euros), British pounds for the
amount of 640 million euros (2021: 547 million euros), Turkish lira
for the amount of 427 million euros (2021: 219 million euros),
Mexican pesos for the amount of 290 million euros (2021: 216
million euros), Japanese yen for the amount of 255 million euros
(2021: 270 million euros), and other currencies.
“Procurements” includes purchases made mainly in US dollars
amounting to 2,975 million euros (2021: 2,185 million euros).
As a result of these transactions, the Company’s balance sheet
includes accounts receivable in currencies other than the euro,
mainly in US dollars, amounting to 144 million euros at 31
January 2023 (31 January 2022: 150 million euros), and accounts
payable amounting to 486 million euros at 31 January 2023,
mainly in US dollars (31 January 2022: 606 million euros).
Inditex Annual Report 2022 / Annual Accounts
56
19. Information on the nature
and level of risk
The Company’s activities are exposed to various financial risks:
market risk (foreign currency risk, raw materials risk and interest
rate risk) and other risks (credit risk, liquidity risk and country
risk. The Company's risk management focuses on uncertainty in
the financial markets and aims to minimise the potential adverse
effects on the profitability of its business.
This Note provides information on the Company's exposure to
each of the aforementioned risks, the Company's objectives,
policies and processes for managing risk, the methods used to
measure these risks, any changes from the previous year and
the financial instruments used to mitigate the risks.
Foreign currency risk
The Company operates in an international environment and,
accordingly, is exposed to foreign currency risk on transactions
in currencies, in particular the US dollar. Foreign currency risk
arises on future commercial transactions, recognized assets
and liabilities and net investments in foreign operations.
Foreign currency risk is managed in line with the corporate risk
management model guidelines, which establish the ongoing
monitoring of exchange rate fluctuations and other measures
designed to mitigate this risk, mainly through the optimisation of
the Company’s operations, including centralisation, in order to
minimise the impact, using natural hedges, the benefits of
diversification and the arrangement of financial hedges.
Merchandise and goods for resale are acquired partly through
orders placed with foreign suppliers in US dollars. In
accordance with prevailing foreign currency risk management
policies, the Company's management arranges derivatives,
mainly foreign currency forwards (see Note 8), to hedge
fluctuations in cash flows relating to the EUR-USD exchange
rate.  The Company also uses non-derivative financial
instruments as hedges (e.g. deposits held in currencies other
than the euro).
The Company supplies its subsidiaries with finished goods for
sale to the end customers. With a view to reducing the
fluctuations in value of the expected foreign currency cash flows
arising from these intercompany transactions (denominated in
currencies other than the euro), the Company occasionally uses
financial derivatives such as purchased options and foreign
currency forwards.
As described in Note 4.6, the Company applies hedge
accounting to mitigate the volatility that would arise in the
income statement as a result of the existence of significant
foreign currency transactions. Hedge accounting has been used
because the Company complies with the requirements detailed
in Note 4.6 on accounting policies in order to be able to classify
financial instruments as hedges for accounting purposes.
The Company applies the hedge accounting rules established in
the applicable accounting standards. As a result, certain
financial instruments were formally designated as hedging
instruments and the Company verified that the hedges are
highly effective. The maturity dates of the hedging instruments
were negotiated so that they coincide with those of the hedged
items. In 2022, using hedge accounting, no significant amounts
were recognised in profit or loss either as a result of
transactions that ultimately did not occur or as a result of the
ineffectiveness of the hedges. Approximately 71% of the cash
flows associated with hedges in US dollars are expected to
occur in the six months subsequent to the year-end, while the
remaining 29% are expected to fall due between six months and
one year. Also, the impact on the income statement will
foreseeably occur in those periods. The derivatives hedging the
cash flows from intra-Group transactions to supply finished
goods for sale to end customers have short-term time horizons
aligned with the expected cash flows.
The fair value of the hedging instruments was calculated as
described in Note 4.6.
Raw Material Risk
As a result of its business model, the Company is also exposed
to potential cost volatility and inflation related to the impact
resulting from price increases of the many raw materials (both
textile and non-textile) consumed directly and indirectly in its
operation and its procurement of goods (garments, footwear
and accessories), and services, especially in terms of supply
and distribution transport, as well as energy consumption. This
risk is measured using 'at risk' methodologies from a portfolio of
exposures standpoint.
Risk quantification methodology
The Company uses the Cash-Flow-at-Risk (CFaR) methodology
in order to estimate the potential impact of exchange rate and
raw material price changes on profit before tax and, if
applicable, determine the relevant mitigation strategies. CFaR is
a methodology widely used in risk management. It is an
evolution of the Value-at-Risk (VaR) method focused on the
possible loss related to future cash flows. Given a portfolio,
exposed to one or more risks, the CFaR represents the
maximum expected loss for a defined time horizon with a given
confidence interval. The CFaR measures risk in aggregate
terms, considering the potential diversification benefit resulting
from the correlations between the components of the portfolio
of exposures.
57
The underlying portfolio used in the CFaR calculation is
composed of future flows denominated in the currency and/or
raw material in which the underlying risk is expressed for up to
one year. It is estimated that this portfolio represents
substantially all of the Company's exposure to foreign currency
and raw material risks and that the possible adverse changes in
exchange rates and raw material price would affect the following
year’s profit. The main parameters and assumptions used in the
CFaR calculation relate to the horizon of the estimated flows, the
scenario simulation technique and the selected confidence
interval. The cash flows considered have a duration of up to one
year, taking as a time horizon the maturity date of each cash
flow. Distributions are simulated using the Monte Carlo method
by generating random scenarios based on market changes
over the previous three years. A 95% confidence interval is
selected. In addition, using the same methodology, the portfolio
performance is analysed periodically and repeatedly under
highly stressed scenarios based on market movements during
historical periods of high volatility.
As regards the limitations of the calculation, it should be noted
that the actual maximum loss could be higher than the
estimated loss, since when opting for a 95% confidence level
there are 5% of scenarios in which the expected loss is higher.
In addition, future market changes do not necessarily coincide
with the behaviour of the previous three years. It may also be the
case that the estimated flows, i.e. the portfolio used for the
calculation, differ from the actual flows. In addition, the Company
uses the Value-at-Risk (VaR) method to manage foreign
exchange risk in relation to the most relevant accounting items.
In accordance with the risk management framework, risk
appetite and tolerance levels are set and residual risk is
quantified. Furthermore, limits are set and monitored to ensure
that residual risk is within the risk appetite and is also compliant
with the established risk tolerance level.
It is estimated that the resulting negative impact on the 12-
month expected cash flows, attributable to an adverse change
in the exchange rate and raw material prices resulting from the
CFaR calculation, could be 389 million euros at 31 January 2023
(262 million euros at 31 January 2022).
This figure represents 65% of the Group’s total CFaR.
Credit risk
The Company´s main financial assets are trade and other
receivables and loans to Group companies, which represent the
Company’s principal exposure to credit risk.
At 31 January 2023, the accounts receivable from franchises
were secured by deposits and by guarantees provided by banks
of recognised solvency of which Industria de Diseño Textil, S.A.
is the beneficiary.
The Financial Risk Management Policy ensures the
measurement, assessment, quantification and mitigation of the
credit risk of investment products and the counterparty risk of
financial institutions by establishing very detailed analysis criteria
and Value-at-Risk (VaR) methodologies.
The VaR methodology implemented takes into account the
counterparty’s probability of default as estimated by the market,
the time horizon of the investments, and the percentage of risk
exposure that is not expected to be recovered in the event of
default (loss given default). VaR represents the maximum
expected loss for a defined time horizon with a given confidence
interval. The exposures used are up to one year. Distributions
are simulated using the Monte Carlo method by generating
random scenarios based on market changes over the previous
year. A 95% confidence interval is selected.
As regards the limitations of the calculation, it should be noted
that the actual maximum loss could be higher than the
estimated loss, since when opting for a 95% confidence level
there are 5% of scenarios in which the expected loss is higher.
In addition, future market changes do not necessarily coincide
with the behaviour of the previous year.
In accordance with the risk management framework, risk
appetite and target risk are set and residual risk is quantified. In
addition, limits are set and monitored to ensure that residual risk
is within the risk appetite and is also compliant with target risk.
Although credit risk increased as a result of the market
conditions initially caused by Covid-19, credit risk in the market
has since moderated. This, together with active management,
allowed for its mitigation, thus returning the Company's residual
risk to pre-pandemic levels.
The credit risk resulting from the arrangement of financial
derivatives is mitigated by the requirement that such
instruments be subject to an ISDA master agreement.
Occasionally, where deemed necessary, the Company requests
that additional security be provided in the form of pledged
collateral.
In relation to credit risk arising from commercial transactions,
impairment losses are recognised for trade receivables when
objective evidence exists that the Company will be unable to
recover all the outstanding amounts in accordance with the
original contractual conditions of the receivables. The amount of
the impairment loss is the difference between the carrying
amount of the asset and the present value of the estimated cash
flows, discounted at the effective interest rate. The amount of
the provision is recognised in the income statement. During
2022 and 2021 were no significant additions to or applications in
this connection.
Liquidity risk
The Company is not exposed to significant liquidity risk, as it
maintains sufficient cash and cash equivalents to meet the
outflows required in its normal operations. If the Company has a
specific financing requirement, either in euros or in other
currencies, it resorts to loans, credit facilities or other types of
financial instruments (see Note 14).
Note 14 contains a detail of the financial liabilities, along with
their scheduled maturities.
Inditex Annual Report 2022 / Annual Accounts
58
Interest rate risk
The Company’s exposure to interest rate risk, which in no case
is significant, arises principally in relation to the following items:
•Cash and cash equivalents: given the Company’s investment
policy in the negative interest rate environment in the Euro
zone, with the Euro as the main currency, there is a risk of
negative returns on the financial position.
•Financial debt: given the amount of the Company’s external
financing, any change in interest rates at year-end would not
significantly affect profits.
•Discount rates: used in the calculation of the impairment
losses on non-current assets (property, plant and equipment,
intangible assets and equity instruments) (see Note 4.4).
•Derivatives: given the type of hedging instruments arranged,
the interest rate risk is not material.
The Company does not have any financial assets or liabilities
designated as at fair value through profit or loss. A potential
change in fair value would not imply significant impact.
Country risk
The international presence of the Company's subsidiaries and
permanent establishment exposes it to the country risk of
multiple geographical regions, in both its supply and its sales
and distribution activities. The Company adapts its
administrative and business processes in order to minimise
country risk and take advantage of the benefits of geographical
diversification.
The conflict in Ukraine has forced the suspension of the Inditex
Group´s operations in Ukraine and in the Russian Federation.
Operations in Ukraine remain temporarily suspended. The
Company continues to track the unfolding conflict and its
complex repercussions closely, and to put in place plans to
mitigate its impact.
One of the most significant manifestations of country risk is
foreign currency risk and the possibility of exposure to limits or
controls on the free circulation of cash flows due to a lack of
currency convertibility, in current or capital account terms, or to
unexpected restrictions on the movement of capital. The
Company manages cash at corporate level based on a highly
active repatriation policy aimed at reducing the aforementioned
risks to a minimum. 
At 31 January 2023, there was no significant risk in relation to the
repatriation of funds or any material cash surpluses not available
for use by the Company or its subsidiaries. Similarly, there are
no significant restrictions on the Company's ability to access the
assets and settle the liabilities of its subsidiaries.
At 31 January 2023, the Company was not operating in markets
in which there was more than one exchange rate.
Capital management
The Company’s capital management objectives are to
safeguard its ability to continue operating as a going concern,
so that it can continue to generate returns for shareholders and
benefit other stakeholders, and to maintain an optimum capital
structure to reduce the cost of capital.
The Company manages its capital structure and makes
adjustments thereto in response to changes in economic
conditions. The current capital management policy is based on
self-financing through funds generated by operations.
There were no significant changes to capital management in the
year.
59
20. Other disclosures
2019-2023 Long-Term Incentive Plan
The Annual General Meeting held on 16 July 2019 approved the
2019-2023 Long-Term Incentive Plan for members of the
management team and other personnel of Inditex and its Group
of Companies (hereinafter referred to as the (‘2019-2023 Plan’).
Under this Plan, each of the beneficiaries will be entitled,
provided the terms and conditions established therein are
fulfilled, to receive up to a maximum amount of the incentive
allocated.
The 2019-2023 Plan combined a multi-year cash bonus and a
promise to deliver shares which, after a specified period of time
has elapsed and the achievement of the specific objectives has
been verified, would be paid to the Plan beneficiaries, either in
full or at the percentage applicable in each case.
The 2019-2023 Plan had a total duration of four years and was
structured into two mutually independent time cycles. The first
cycle (2019-2022) of the 2019-2023 Plan ran from February 1,
2019 to January 31, 2022 and was settled in the first quarter of
2022. The second cycle runs from 1 february 2020 to 31 January
2023, and is scheduled to be settled in the first quarter of 2023.
The 2019-2023 Plan was linked to critical business targets and
the creation of shareholder value. Furthermore, also linked long-
term variable remuneration to objectives related to sustainability
and the environment, with this index having a maximum weight
of 10% over the whole.
The 2019-2023 Plan did not expose the Company to any
material risks.
To cater for this 2019-2023 Plan, the Company has, as a plan
asset, a sufficient number of treasury shares to be able to settle
the future obligations (see Note 11).
The incentive to be received will be calculated as provided for in
the resolution ninth of the Annual General Meeting held on 16
July 2019.
2021-2025 Long-Term Incentive Plan
The Annual General Meeting held on 13 July 2021 approved the
2021-2025 Long-Term Incentive Plan for members of the
management team and other personnel of Inditex and its Group
of Companies (hereinafter referred to as the ‘2021-2025 Plan’).
Under this Plan, each of the beneficiaries will be entitled,
provided the terms and conditions established therein are
fulfilled, to receive up to a maximum amount of the incentive
allocated.
The 2021-2025 Plan combines a multi-year cash bonus and a
promise to deliver shares which, after a specified period of time
and verified compliance with the specific objectives, will be paid
to the Plan beneficiaries, either in full or at the percentage
applicable in each case.
The 2021-2025 Plan has a total duration of four years and is
structured into two mutually independent time cycles. The first
cycle of the 2021-2024 Plan runs from 1 February 2021 to 31
January 2024. The second cycle (2022-2025) spans the period
from 1 February 2022 to 31 January 2025.
The 2021-2025 Plan is linked to critical business, sustainability
and shareholder value creation targets. The most significant
development is that the share of sustainability- and
environment-linked goals has increased to 25% of the overall
Plan, with respect to the 2019-2023 Plan.
The 2021-2025 Plan does not expose the Company to any
material risks.
The liability related to the plans in cash is shown registered in
the ‘Long-Term Provisions’ and ‘Remuneration Payable’ items of
the balance sheet, and its annual allocation is included in the
‘Personnel expenses’ item of the income account.
The amount relating to the equity-settled component of the
plans is recognised under ‘Net Equity’ in the balance sheet and
the related period charge is reflected under ‘Personnel
expenses’ in the income statement.
The impact of these obligations on the income statement and
the balance sheet is not significant.
Remuneration and other benefits paid to
the Company's Directors and Senior
Management
The amounts included in the following tables and paragraphs
are expressed in thousands of euros.
The total remuneration earned by the Directors and Senior
Management of Inditex in 2022 was as follows:
Thousands of euros
Directors
Senior Management
Remuneration
15,708
58,464
Termination benefits
22,990
12,761
Total
38,698
71,225
The aforementioned remuneration for 2022 includes fixed
remuneration and short-term and long-term variable
remuneration accrued by members of Inditex Senior
Management in office at 31 January 2023, as well as by those
who have performed duties as senior managers at any time
during the reporting period, including the corresponding
compensation.
The directors' remuneration for the 2022 financial year includes
the fixed terms of the remuneration paid to Directors in their
status as such and the fixed remuneration and the short-term
and long-term variable remuneration earned by the CEO, Mr
Óscar García Maceiras, and by the former Executive Chairman,
Mr Pablo Isla Álvarez Tejera, for the performance of their
Inditex Annual Report 2022 / Annual Accounts
60
executive functions. In particular, it includes:
The amount of the remuneration earned by: (i) Mr García as
director and for the performance of executive functions from 1
February 2022 through 31 January 2023 and by (ii) Mr Isla, in his
capacity as director, and the part of his fixed remuneration
(wage) earned for the performance of executive functions, both
of them for the period running from 1 February 2022 through 31
March 2022, date of economic effects of his resignation.
Also included in the above referred global remuneration are the
amounts accrued and paid in 2022 to the former Executive
Chairman itemized as follows:
(i) The following amounts as early settlement of current
incentives and other items of fixed remuneration:
–Of the incentive for the second cycle (2020-2023) of the
2019-2023 Plan: the incentive - determined by the board of
directors to be for a level of achievement on target -,
prorated for the time between the cycle commencement
and the date of his departure, amounted to 980 thousand
euros and 46,859 shares.
–Of the incentive for the first cycle (2021-2024) of the
2021-2025 Plan: the incentive - determined by the board of
directors to be for a level of achievement on target -,
prorated for the time between the cycle commencement
and the date of his departure, amounted to 421 thousand
euros and 24,418 shares.
–Of the annual variable remuneration for the financial year
2022: the incentive prorated for the time between the
beginning of the year and the date of his departure -
estimated by the Board of Directors at maximum level of
achievement -, amounted to 788 thousand euros.
–Of the portion of the fixed remuneration for financial year
2022 (February and March 2022) he had earned as extra
wage payments (July and December) the amount of 132
thousand euros.
(ii) As severance pay:
–Severance pay for termination amounted to 3,250 thousand
euros, and
–The consideration for his post-contractual non-compete
obligation amounted to 19,740 thousand euros.
With regard to the long-term variable remuneration, included
therein is the amount accrued for the second cycle (2020-2023)
of the 2019-2023 LTIP. The incentive accrued in 2022 in this
regard has amounted to 2,483 thousand euros for the CEO and
24,194 thousand euros for Senior Manages, which has
materialized as follows:
•CEO: (i) an incentive in cash in the aggregate gross amount of
1,035 thousand euros and (ii) incentive in shares equivalent to
a total number of 49,477 shares corresponding to the gross
amount of 1,448 thousand euros.
•Senior Managers: (i) an incentive in cash in the aggregate
gross amount of 11,173 thousand euros and (ii) incentive in
shares equivalent to a total number of 444,841 shares
corresponding to the gross amount of 13,020 thousand euros.
It bears mention that for the purposes of quantifying the part of
such incentive to be delivered in shares, the closing price of
Inditex share on the last business day of the week before the
board meeting when the board of directors assessed and
approved the level of target achievement for the second cycle of
the 2019-2023 Plan (i.e. 10 March 2023) was considered.
The incentive in cash and in shares will be delivered within the
month following the publication of the annual accounts for 2022.
The total remuneration earned by the Directors and Senior
Management of Inditex in 2021 was as follows:
Thousands of euros
Directors
Senior Management
Remuneration
21,232
36,821
Termination
benefits
-
10,083
Total
21,232
46,904
The remuneration for 2021 includes fixed remuneration and
short-term and long-term variable remuneration accrued by
members of Inditex Senior Management in office at 31 January
2022, as well as by those who have performed duties as senior
managers at any time during the reporting period, including the
corresponding compensation.
The directors' remuneration for the 2021 financial year includes
fixed items of remuneration of directors in their capacity as
such, as well as the short- and long-term fixed and variable
remuneration accrued by the former Executive Chairman, Mr
Pablo Isla Álvarez Tejera, the new CEO, Mr Óscar García
Maceiras, and the outgoing CEO, Mr Carlos Crespo González,
for the performance of their executive duties. In particular, it
includes:
The amounts corresponding to the remunerations accrued by:
(i) Mr Pablo Isla Álvarez Tejera, as a director and for the
performance of his executive duties, from 1 February 2021
through 31 January 2022; (ii) Mr Óscar García Maceiras, as a
director and for the performance of his executive duties, from 1
December 2021, the date of economic effects of his
appointment, through 31 January 2022; and (iii) Mr Carlos
Crespo González, as a director and for the performance of his
executive duties, from 1 February 2021 through 30 November
2021, the date of economic effects of his resignation.
With regard to the long-term variable remuneration, included
therein is the amount accrued for the first cycle (2019-2022) of
the 2019-2023 Long-Term Incentive Plan. The incentive accrued
in 2021 by the executive directors in terms of this incentive was
6,921 thousand euros. In turn, the sum of 17,181 thousand euros
was accrued by the Senior Managers. This incentive
materialised as follows:
61
•Executive directors: (i) an incentive in cash in the aggregate
gross amount of 1,760 thousand euros for the former
Executive Chairman, 36 thousand euros for the incoming CEO,
and 1,099 thousand euros for the outgoing CEO; and, (ii) an
incentive in shares equivalent to a total of 112,953 shares for
the former Executive Chairman, corresponding to the gross
amount of 2,458 thousand euros, 1,552 shares for the
incoming CEO, corresponding to the gross amount of 34
thousand euros, and 70,499 shares for the outgoing CEO,
corresponding to a gross amount of 1,534 thousand euros.
•Senior Managers: (i) an incentive in cash in the aggregate
gross amount of 8,046 thousand euros, and (ii) an incentive in
shares equivalent to 419,792 shares, equivalent to the gross
amount of 9,135 thousand euros.
It bears mention that for the purposes of quantifying the part of
such incentive to be delivered in shares, the closing price of
Inditex share on the last business day of the week before the
board meeting when the board of directors assessed and
approved the level of target achievement for the first cycle of the
2019-2023 Plan was assessed and approved (i.e. 11 March
2022).
The incentive in cash and in shares was delivered within the
month following the publication of the annual accounts for 2021.
During 2022 and in 2021 no contributions were made to the
Pension Scheme Plan.
The Company has taken out a third-party civil liability insurance
that covers its Directors, Senior Management and other Officers
and employees. The insurance premium for 2022 and 2021
amounted to 698 and 753 thousand euros, respectively.
In 2022 and 2021 the Company did not pay any remuneration to
natural persons representing it on the governing bodies of any
other companies.
Disclosures required pursuant to Article
229 of Legislative Royal Decree 1/2010, of
2 July, approving the Consolidated Text of
the Spanish Companies Act
Pursuant to section 229 of the Spanish Companies Act,
amended by Act 31/2014, of 3 December, it is hereby disclosed
that none of the Directors of Inditex has communicated any
situation that, directly and/or indirectly, through persons related
to them, could place them in a potential conflict of interest with
the Parent.
Notwithstanding the foregoing, Mr Rodrigo Echenique Gordillo
and Ms Pilar López Álvarez, hold positions on the Boards of
Directors of Grupo Santander and Microsoft Western Europe,
respectively, and perform their duties as independent directors
of the Parent, without prejudice to the commercial relationships
that Inditex has maintained with these companies for years. In
any case, the Board of Directors ensures, through the Audit and
Compliance Committee that the transactions with significant
directors, significant shareholders and/or Senior Management,
or with their respective related persons, are carried out under
market conditions and respecting the principle of equal
treatment to shareholders.
Furthermore, when the Board of Directors deliberated on the
appointment and re-election of one position, the compensation
or any other agreement referred to a director or to a person or
company related to a director, the affected party was absent
from the Company meeting during the deliberation and voting of
the corresponding resolution.
Disclosures on the average period of
payment to suppliers
Set out below are the disclosures required by Additional
Provision Three of Act 15/2010, of 5 July (as amended by 2nd
Final Provision of Act 31/2014, of 3 December), prepared in
accordance with the Spanish Accounting and Auditing Institute
(ICAC) Resolution of 29 January 2016 on the disclosures to be
included in notes to annual accounts in relation to the average
period of payment to suppliers in commercial transactions.
2022
2021
      Days
Average period of payment to suppliers
49.18
48.08
Ratio of transactions settled
50.17
49.29
Ratio of transactions not yet settled
40.50
37.39
Amount
(Millions of euros)
Total payments made
1,679
1,461
Total payments outstanding
192
166
2022
2021
No. of invoices paid
within the legal
term
56
53
% of total subject
invoices
97%
97%
Amount of invoices
paid within the
legal term
(Millions of euros)
1,653
1,433
% of total subject
invoices
98%
98%
These balances relate to suppliers that qualify as trade creditors
for the supply of goods and services and, therefore, they include
the numbers relating to ‘Payable to suppliers’, ‘Payable to
suppliers – Group companies and associates’ and ‘Sundry
accounts payable’ under ‘Current liabilities’ in the accompanying
balance sheet at 31 January 2023 and 2022.
‘Average period of payment to suppliers’ is taken to be the
period that elapses from the delivery of the goods or the
provision of the services by the supplier to the effective payment
of the transaction.
In addition, if for any reason the quality of the goods or services
once received is lower than expected or agreed upon, it is the
Company's policy not to make payments until the situation is
rectified.
Inditex Annual Report 2022 / Annual Accounts
62
Fees paid to auditors
In 2022 and 2021, the fees for financial audit services provided
by the auditor of the Company’s annual accounts, Ernst & Young
in 2022 and Deloitte in 2021, or by any firms related to these
auditors as a result of a relationship of control, common
ownership or common management, amounted to 0.3 million
euros for each year.
Additionally, Ernst & Young has invoiced the Company for other
services amounting to 0.2 million euros during 2022 (0.3 million
euros invoiced by Deloitte in 2021).
Information on environmental activities
Inditex has developed a flexible and integrated business model,
with a strong customer focus and a clear approach in
sustainability. In this regard, the bases of Inditex’s sustainability
strategy (which includes both the environmental and social
areas) is outlined in its Sustainability Policy, which sets out,
among other aspects, the environmental principles, which are
applied transversally across all its business areas and
throughout its entire value chain.
These principles are embodied by three environmental
strategies: Global Energy Strategy, Global Water Strategy and
Biodiversity Strategy, as well as the commitments in respect of
forest products, set forth in the Forest Product Policy.
Inditex has diverse sustainability objectives such as the use of
100% renewable electricity at its own facilities, the use of
preferred fibres in its products (100% cotton and cellulosic fibres
in 2023 and 100% polyester and linen in 2025) and a 25%
reduction in water consumption in the supply chain by 2025,
among others.
At the year-end, Inditex has no environmental liabilities,
expenses, assets, provisions or contingencies that might be
material with respect to its equity, financial position and profits
(losses). Climate change has been assessed as part of the
estimates and judgements made in the preparation of the
annual accounts (Note 2) and is not considered to have a
material impact thereupon.
The Non-Financial Information Statement of the Group includes
information on Inditex’s Commitment to Sustainability mainly in
the following sections: 5.3 Our products, 5.5 Environment, 5.6
Suppliers, y 5.7 Communities, as well as information on the risks
and opportunities of climate change in section 6.3.4 Climate
Change: risks and opportunities.
Events after the reporting period
Turkey is under the effects of the catastrophic earthquakes that
have been occurring since February 6, 2023. Despite the fact
that some of the factories of the Turkish supplier cluster are
concentrated in the area affected by the earthquakes, the
impact on the Company's global supply chain is not relevant,
and both our and our supplier´s operations in the affected area
tend to normalize.
21. Explanation added for translation to English
These annual accounts are presented on the basis of the
regulatory financial reporting framework applicable to the
Company in Spain (see Note 2.1). Certain accounting practices
applied by the Company that conform with that regulatory
framework may not conform with other generally accepted
accounting principles and rules.
63
Annex I. List of Company of investments in
Group companies at 31 January 2023
Company
Effective
% of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Bershka Bsk España, S.A.
100.00%
Direct
Barcelona -
Spain
31-jan
Retail sales
165
47
-
30
Bershka Cis Limited Liability
Company
(*)
100.00%
Direct
Moscow -
Russia
31-dec
Retail sales
-
263
(263)
-
Bershka Commercial (Beijing)
Co. Ltd.
100.00%
Direct
Beijing - China
31-dec
Retail sales
2
-
-
-
Bershka Commercial
(Shanghai) Co., Ltd.
100.00%
Direct
Shanghai -
China
31-dec
Retail sales
1
-
-
-
Bershka Diseño, S.L.
100.00%
Direct
Barcelona -
Spain
31-jan
Design
32
359
-
14
Bershka France, S.A.R.L.
100.00%
Direct
Paris - France
31-jan
Retail sales
69
-
-
-
Bershka Hong Kong, Ltd.
100.00%
Direct
Hong Kong SAR
31-jan
Retail sales
(4)
-
-
-
Bershka Korea, Ltd.
100.00%
Direct
Seoul - South
Korea
31-jan
Retail sales
(7)
-
-
-
Bershka Logística, S.A.
100.00%
Direct
Barcelona -
Spain
31-jan
Logistics
5
4
-
-
Bershka Polska, Sp. Z O.O.
100.00%
Direct
Warsaw -
Poland
31-jan
Retail sales
2
94
-
2
Bershka Usa, Inc
100.00%
Direct
New York - USA
31-jan
Retail sales
-
-
-
-
Best Retail Kazakhstan, Llp
100.00%
Direct
Almaty -
Kazakhstan
31-dec
Retail sales
2
-
-
-
Bske, Gmbh
100.00%
Direct
Hamburg -
Germany
31-jan
Holding
company
17
97
-
-
Itx Taiwan B.V. Bershka
Taiwan Branch
100.00%
Direct
Taipei - Taiwan
31-jan
Dormant
-
-
-
-
Kg Bershka Deutschland, B.V.
& Co.
100.00%
Direct
Hamburg -
Germany
31-jan
Retail sales
14
-
-
-
Limited Liability Company "Bk
Garments Blr"
100.00%
Direct
Minsk - Belarus
31-dec
Retail sales
3
-
-
-
Grupo Massimo Dutti, S.A.
100.00%
Inditect
Barcelona -
Spain
31-jan
Retail sales
141
127
-
17
Itx Taiwan B.V. Massimo Dutti
Taiwan Branch
100.00%
Direct
Taipei - Taiwan
31-jan
Dormant
-
-
-
-
Kg Massimo Dutti
Deutschland, B.V. & Co.
100.00%
Inditect
Hamburg -
Germany
31-jan
Retail sales
13
-
-
-
Limited Liability Company
"Massimo Dutti Blr"
100.00%
Inditect
Minsk - Belarus
31-dec
Retail sales
3
-
-
-
Massimo Dutti Belux, S.A.
100.00%
Inditect
Bruges -
Belgium
31-jan
Retail sales
8
32
-
-
Massimo Dutti Commercial
(Beijing) Co. Ltd.
100.00%
Direct
Beijing - China
31-dec
Retail sales
5
-
-
-
Massimo Dutti Commercial
(Shanghai) Co. Ltd.
100.00%
Inditect
Shanghai -
China
31-dec
Retail sales
13
-
-
-
Massimo Dutti Deutschland,
Gmbh
100.00%
Direct
Hamburg -
Germany
31-jan
Holding
company
11
65
-
-
Massimo Dutti Diseño, S.L.
100.00%
Direct
Barcelona -
Spain
31-jan
Design
31
199
-
5
Massimo Dutti France,
S.A.R.L.
100.00%
Direct
Paris - France
31-jan
Retail sales
33
-
-
-
Massimo Dutti Hong Kong,
Ltd.
100.00%
Direct
Hong Kong SAR
31-jan
Retail sales
-
-
-
-
Massimo Dutti India Private
Limited
51.00%
Direct
Gurgaon - India
31-mar.
Retail sales
6
-
-
-
Massimo Dutti Korea, Ltd.
100.00%
Direct
Seoul - South
Korea
31-jan
Retail sales
20
-
-
-
Massimo Dutti Limited
Liability Company
(*)
100.00%
Direct
Moscow -
Russia
31-dec
Retail sales
(3)
483
(483)
-
Massimo Dutti Logística, S.A.
100.00%
Inditect
Barcelona -
Spain
31-jan
Logistics
1
1
-
-
Inditex Annual Report 2022 / Annual Accounts
64
Company
Effective
% of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Massimo Dutti Macau
Limitada
100.00%
Direct
Macao SAR
31-dec
Retail sales
4
-
-
-
Massimo Dutti Polska, Sp. Z
O.O.
100.00%
Direct
Warsaw -
Poland
31-jan
Retail sales
4
56
-
2
Massimo Dutti Uk, Ltd.
100.00%
Inditect
London - UK
31-jan
Dormant
-
-
-
-
Massimo Dutti Usa, Inc.
100.00%
Inditect
New York - USA
31-jan
Retail sales
12
-
-
-
Massimo Dutti, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Dormant
1
-
-
-
Master Retail Kazakhstan, Llp
100.00%
Direct
Almaty -
Kazakhstan
31-dec
Retail sales
10
-
-
-
"Itx Albania" Shpk
100.00%
Direct
Tirana - Albania
31-dec
Retail sales
11
-
-
-
"Itx Kosovo" L.L.C.
100.00%
Direct
Pristina
31-dec
Retail sales
6
-
-
-
Cdc Trading (Shanghai) Co.
Ltd.
100.00%
Direct
Shanghai -
China
31-dec
Buyer
2
-
-
-
Corporacion De Servicios Xxi,
S.A. De C.V.
100.00%
Direct
Mexico City -
Mexico
31-dec
Services
9
-
-
-
Fashion Logistics
Forwarders, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Logistics
2
-
-
-
Fashion Retail, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Retail sales
38
-
-
29
Fgi Gestión Mex, S.A. De C.V.
100.00%
Direct
Mexico City -
Mexico
31-dec
Construction
8
-
-
-
G.Zara Uruguay, S.A.
(*)
100.00%
Direct
Montevideo -
Uruguay
31-jan
Retail sales
17
18
-
6
Goa-Invest Deutschland,
Gmbh
100.00%
Direct
Hamburg -
Germany
31-jan
Construction
2
-
-
-
Goa-Invest, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Construction
17
3
-
3
Indipunt, S.L.
100.00%
Direct
A Coruña -
Spain
31-jan
Logistics
7
26
(17)
-
Inditex Belgique S.A.
100.00%
Inditect
Brussels -
Belgium
31-jan
Retail sales
68
66
-
-
Inditex Ceská Republika,
S.R.O.
100.00%
Direct
Prague - Czech
Republic
31-jan
Retail sales
10
52
-
6
Inditex Danmark A/S
100.00%
Inditect
Copenhaguen -
Denmark
31-jan
Retail sales
7
35
-
7
Inditex France, S.A.R.L.
100.00%
Direct
Paris - France
31-jan
Dormant
-
-
-
-
Inditex Montenegro, D.O.O.
Podgorica
100.00%
Direct
Podgorica -
Montenegro
31-dec
Retail sales
3
-
-
-
Inditex Norge As
100.00%
Direct
Oslo - Norway
31-jan
Retail sales
19
12
-
-
Inditex Österreich Gmbh
(*)
100.00%
Direct
Vienna - Austria
31-jan
Retail sales
31
18
-
-
Inditex Renovables, S.L.
(*)
100.00%
Inditect
A Coruña -
Spain
31-jan
Services
-
1
-
-
Inditex Romania, S.R.L.
100.00%
Inditect
Bucharest -
Romania
31-dec
Retail sales
105
446
-
29
Inditex Slovakia, S.R.O.
100.00%
Bratislava -
Slovakia
31-jan
Retail sales
6
40
-
4
Inditex Ukraine Llc
100.00%
Inditect
Kiev - Ukraine
31-dec
Retail sales
2
-
-
-
Inditex Usa, Llc
(*)
100.00%
Inditect
New York - USA
31-jan
Holding
company
445
418
-
119
Itx Asia Pacific Enterprise
Management, Co., Ltd.
100.00%
Inditect
Shanghai -
China
31-dec
Buyer
39
-
-
-
Itx Bh D.O.O.
100.00%
Direct
Sarajevo -
Bosnia
Herzegovina
31-dec
Retail sales
10
43
-
7
Itx Bulgaria Eood
(*)
100.00%
Inditect
Sofia - Bulgaria
31-dec
Retail sales
10
98
-
5
Itx Canada, Ltd
100.00%
Inditect
Montreal -
Canada
31-jan
Retail sales
49
-
-
-
Itx Croatia, Ltd.
100.00%
Inditect
Zagreb - Croatia
31-jan
Retail sales
14
104
-
13
Itx E-Commerce (Shanghai)
Co., Ltd.
100.00%
Direct
Shanghai -
China
31-dec
Retail sales
9
-
-
-
Itx Financien III, B.V.
100.00%
Direct
Amsterdam -
Netherlands
31-jan
Financial
services
460
-
-
-
Itx Financiën, B.V.
(*)
100.00%
Direct
Amsterdam -
Netherlands
31-jan
Financial
services
2,562
5,831
-
-
65
Company
Effective
% of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Itx Finland Oy
100.00%
Inditect
Helsinki -
Finland
31-jan
Retail sales
2
-
-
-
Itx Global Solutions Limited
100.00%
Direct
Hong Kong SAR
31-jan
Services
11
-
-
-
Itx Hellas Single Member S.A.
100.00%
Direct
Athens - Greece
31-jan
Retail sales
95
-
-
-
Itx Italia Srl
100.00%
Direct
Milan - Italy
31-jan
Retail sales
434
-
-
-
Itx Japan Corporation
100.00%
Inditect
Tokyo - Japan
31-jan
Retail sales
140
-
-
-
Itx Korea Limited
100.00%
Inditect
Seoul - South
Korea
31-jan
Retail sales
20
-
-
-
Itx Luxembourg S.A.
100.00%
Inditect
Luxembourg -
Luxembourg
31-jan
Retail sales
13
32
-
-
Itx Magyarország Kft.
(*)
100.00%
Inditect
Budapest -
Hungary
31-jan
Retail sales
13
117
-
5
Itx Merken, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Services
1,295
-
-
-
Itx Nederland Bv
100.00%
Direct
Amsterdam -
Netherlands
31-jan
Retail sales
37
232
-
10
Itx Portugal - Confecções,
S.A.
100.00%
Inditect
Lisbon -
Portugal
31-jan
Retail sales
613
-
-
-
Itx Re Designated Activity
Company
100.00%
Direct
Dublin - Ireland
31-jan
Insurance
136
-
-
-
Itx Retail Ireland Limited
100.00%
Direct
Dublin - Ireland
31-jan
Retail sales
38
66
-
17
Itx Retail Mexico, S.A. De C.V.
100.00%
Direct
Mexico City -
Mexico
31-dec
Retail sales
143
-
-
-
Itx Retail Suisse Sarl
(*)
100.00%
Inditect
Fribourg -
Switzerland
31-jan
Retail sales
109
99
-
12
Itx Rs Doo Beograd
100.00%
Direct
Belgrade -
Serbia
31-jan
Retail sales
19
52
-
-
Itx S, D.O.O
100.00%
Direct
Ljubljana -
Slovenia
31-jan
Retail sales
4
-
-
-
Itx Services India Private
Limited
100.00%
Direct
Gurgaon - India
31-mar
Buyer
1
-
-
-
Itx Sverige Ab
100.00%
Inditect
Stockholm -
Sweden
31-jan
Retail sales
6
39
-
16
Itx Taiwan B.V. Taiwan
Branch
100.00%
Inditect
Taipei - Taiwan
31-jan
Retail sales
18
-
-
-
Itx Trading, S.A.
100.00%
Inditect
Fribourg -
Switzerland
31-jan
Buyer
1,193
-
-
-
Itx Tryfin B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Financial
services
40
-
-
-
Itx Turkey Perakende Ithalat
Ihracat Ve Ticaret Limited
Sirketi
(*)
100.00%
Inditect
Istanbul - Turkey
31-jan
Retail sales
58
217
-
76
Itx Uk Ltd.
100.00%
Direct
London - UK
31-jan
Retail sales
142
-
-
-
Itx Usa, Llc
100.00%
Inditect
New York - USA
31-jan
Retail sales
13
4
-
11
Itxr Macedonia Dooel Skopje
100.00%
Direct
Skopje - North
Macedonia Rep.
31-dec
Retail sales
7
-
-
-
Lelystad Platform, B.V.
100.00%
Direct
Amsterdam -
Netherlands
31-jan
Logistics
189
-
-
-
Nueva Comercializadora
Global Xxi, S.A. De C.V.
100.00%
Direct
Mexico City -
Mexico
31-dec
Logistics
-
-
-
-
Plataforma Logística Meco,
S.A.
100.00%
Inditect
Madrid - Spain
31-jan
Logistics
4
-
-
-
Zara Chile, S.A.
100.00%
Inditect
Santiago de
Chile - Chile
31-dec
Retail sales
35
2
-
13
Zara Holding II, B.V.
100.00%
Direct
Amsterdam -
Netherlands
31-jan
Holding
company
1,439
-
-
-
Zara Holding, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Holding
company
7,876
3,682
-
2,790
Limited Liability Company
"Oysho Blr"
100.00%
Direct
Minsk - Belarus
31-dec
Retail sales
1
-
-
-
Oysho Cis Limited Liability
Company
(*)
100.00%
Direct
Moscow -
Russia
31-dec
Retail sales
(2)
151
(151)
-
Oysho Commercial & Trading
(Shanghai) Co. Ltd.
100.00%
Inditect
Shanghai -
China
31-dec
Retail sales
7
-
-
-
Inditex Annual Report 2022 / Annual Accounts
66
Company
Effective
% of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Oysho Diseño, S.L.
100.00%
Inditect
Barcelona -
Spain
31-jan
Design
10
41
-
2
Oysho España, S.A.
100.00%
Inditect
Barcelona -
Spain
31-jan
Retail sales
52
30
-
14
Oysho France, S.A.R.L.
100.00%
Direct
Paris - France
31-jan
Retail sales
7
-
-
-
Oysho Hong Kong Limited
100.00%
Inditect
Hong Kong SAR
31-jan
Retail sales
(3)
-
-
-
Oysho Kazakhstan, Llp
100.00%
Inditect
Almaty -
Kazakhstan
31-dec
Retail sales
3
-
-
-
Oysho Korea, Ltd.
100.00%
Direct
Seoul - South
Korea
31-jan
Retail sales
1
-
-
-
Oysho Logística, S.A.
100.00%
Inditect
Barcelona -
Spain
31-jan
Logistics
2
1
-
-
Oysho Macau Limitada
100.00%
Direct
Macao SAR
31-dec
Retail sales
2
-
-
-
Oysho Polska, Sp. Z O.O.
100.00%
Inditect
Warsaw -
Poland
31-jan
Retail sales
3
23
-
1
Itx Taiwan B.V. Pull & Bear
Taiwan Branch
100.00%
Direct
Taipei - Taiwan
31-jan
Dormant
1
-
-
-
Limited Liability Company
"Pull And Bear Blr"
100.00%
Inditect
Minsk - Belarus
31-dec
Retail sales
2
-
-
-
P&Be, Gmbh
100.00%
Inditect
Hamburg -
Germany
31-jan
Holding
company
4
25
-
-
Plataforma Cabanillas, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Logistics
2
-
-
-
Pro Retail Kazakhstan, Llp
100.00%
Inditect
Almaty -
Kazakhstan
31-dec
Retail sales
2
-
-
-
Pull & Bear Belgique, S.A.
100.00%
Direct
Brussels -
Belgium
31-jan
Retail sales
8
22
-
-
Pull & Bear Commercial
(Beijing) Co. Ltd.
100.00%
Inditect
Beijing - China
31-dec
Retail sales
2
-
-
-
Pull & Bear Deutschland, B.V.
& Co. Kg
100.00%
Inditect
Hamburg -
Germany
31-jan
Retail sales
9
-
-
-
Pull & Bear Diseño, S.L.
100.00%
Direct
A Coruña -
Spain
31-jan
Design
28
284
-
11
Pull & Bear España, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Retail sales
162
15
-
45
Pull & Bear France, S.A.R.L.
100.00%
Direct
Paris - France
31-jan
Retail sales
40
-
-
-
Pull & Bear Korea, Ltd.
100.00%
Direct
Seoul - South
Korea
31-jan
Retail sales
-
-
-
-
Pull & Bear Logística, S.A.
100.00%
Inditect
A Coruña -
Spain
31-jan
Logistics
4
2
-
-
Pull & Bear Polska, Sp. Z O.O.
100.00%
Direct
Warsaw -
Poland
31-jan
Retail sales
3
67
-
3
Pull And Bear Cis Limited
Liability Company
(*)
100.00%
Direct
Moscow -
Russia
31-dec
Retail sales
(1)
198
(198)
-
Pull And Bear Hong Kong,
Ltd.
100.00%
Direct
Hong Kong SAR
31-jan
Retail sales
2
-
-
-
Limited Liability Company
"Stradivarius Blr"
100.00%
Inditect
Minsk - Belarus
31-dec
Retail sales
2
-
-
-
Spanish Retail Kazakhstan,
Llp
100.00%
Inditect
Almaty -
Kazakhstan
31-dec
Retail sales
1
-
-
-
Stradivarius Belgique, S.A.
100.00%
Direct
Brussels -
Belgium
31-jan
Retail sales
2
16
-
-
Stradivarius Cis Limited
Liability Company
(*)
100.00%
Inditect
Moscow -
Russia
31-dec
Retail sales
1
132
(132)
-
Stradivarius Commercial
(Shanghai) Co. Ltd
100.00%
Direct
Shanghai -
China
31-dec
Retail sales
3
-
-
-
Stradivarius Diseño, S.L.
100.00%
Direct
Barcelona -
Spain
31-jan
Design
26
224
-
11
Stradivarius España, S.A.
100.00%
Inditect
Barcelona -
Spain
31-jan
Retail sales
151
120
-
48
Stradivarius France, S.A.R.L.
100.00%
Inditect
Paris - France
31-jan
Retail sales
34
-
-
-
Stradivarius Hong Kong, Ltd.
100.00%
Inditect
Hong Kong SAR
31-jan
Retail sales
(1)
-
-
-
Stradivarius Korea, Ltd.
100.00%
Direct
Seoul - South
Korea
31-jan
Retail sales
-
-
-
-
67
Company
Effective
% of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Stradivarius Logística, S.A.
100.00%
Direct
Barcelona -
Spain
31-jan
Logistics
2
1
-
-
Stradivarius Polska, Sp. Z
O.O.
100.00%
Inditect
Warsaw -
Poland
31-jan
Retail sales
1
79
-
6
Uterqüe Giyim Ithalat Ihracat
Ve Ticaret Limited Sirketi
100.00%
Inditect
Istanbul - Turkey
31-jan
Dormant
-
-
-
-
Uterqüe Kazakhstan Llp
100.00%
Direct
Almaty -
Kazakhstan
31-dec
Dormant
-
-
-
-
Uterqüe Mexico, S.A. De C.V.
100.00%
Direct
Mexico City -
Mexico
31-dec
Dormant
1
-
-
-
Uterqüe Polska Sp. Z O.O.
100.00%
Direct
Warsaw -
Poland
31-jan
Dormant
(1)
1
(1)
-
Choolet, S.A.
(*)
100.00%
Inditect
A Coruña -
Spain
31-jan
Textile
Manufacturing
1
6
(2)
-
Comditel, S.A.
100.00%
Inditect
Barcelona -
Spain
31-jan
Buyer
3
1
-
-
Confecciones Fios, S.A.
(*)
100.00%
Inditect
A Coruña -
Spain
31-jan
Textile
Manufacturing
4
2
-
-
Confecciones Goa, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Textile
Manufacturing
1
4
(3)
-
Denllo, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Textile
Manufacturing
11
6
-
-
Fsf New York, Llc.
100.00%
Inditect
New York - USA
31-jan
Real estate
255
-
-
-
Fsf Soho, Llc
100.00%
Direct
New York - USA
31-jan
Real estate
272
-
-
-
Glencare, S.A.
100.00%
Inditect
A Coruña -
Spain
31-jan
Textile
Manufacturing
2
-
-
-
Inditex Australia Pty Ltd
100.00%
Direct
Sydney -
Australia
31-jan
Retail sales
47
-
-
-
Inditex Logistica, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Logistics
11
-
-
24
Inditex Trent Retail India
Private, Ltd.
51.00%
Inditect
Gurgaon - India
31-mar.
Retail sales
37
5
-
18
Inditex Vastgoed Korea, Ltd.
100.00%
Direct
Seoul - South
Korea
31-jan
Real estate
1
1
-
-
Inditex, S.A.
100.00%
Inditect
A Coruña -
Spain
31-jan
Dormant
-
-
-
-
Itx Hong Kong Limited
100.00%
Direct
Hong Kong SAR
31-jan
Retail sales
59
-
-
-
Itx Taiwan, B.V.
100.00%
Direct
Amsterdam -
Netherlands
31-jan
Holding
company
5
-
-
-
Joint Stock Company New
Fashion
(*)
100.00%
Direct
Moscow -
Russia
31-dec
Retail sales
77
1,023
(840)
-
Kg Zara Deutschland B.V. &
Co.
100.00%
Direct
Hamburg -
Germany
31-jan
Retail sales
144
-
-
-
Lefties España, S.A.
100.00%
Inditect
A Coruña -
Spain
31-jan
Real estate
-
1
(1)
-
Limited Liability Company
"Zara Blr"
100.00%
Inditect
Minsk - Belarus
31-dec
Retail sales
9
-
-
-
Nikole Diseño, S.L.
100.00%
Direct
A Coruña -
Spain
31-jan
Design
17
44
-
5
Nikole, S.A.
100.00%
Inditect
A Coruña -
Spain
31-jan
Buyer
6
1
-
-
Plataforma Europa, S.A.
100.00%
Direct
Zaragoza -
Spain
31-jan
Logistics
6
2
-
-
Plataforma Logística León,
S.A.
100.00%
Direct
León - Spain
31-jan
Logistics
11
6
-
-
Retail Group Kazakhstan, Llp
100.00%
Inditect
Almaty -
Kazakhstan
31-dec
Retail sales
34
-
-
-
Sci Vastgoed Ferreol P03302
100.00%
Inditect
Paris - France
31-dec
Real estate
15
-
-
-
Sci Vastgoed France P03301
100.00%
Inditect
Paris - France
31-dec
Real estate
60
-
-
-
Sci Vastgoed General
Leclerc P03303
100.00%
Inditect
Paris - France
31-dec
Real estate
14
-
-
-
Sci Vastgoed Nancy P03304
100.00%
Inditect
Paris - France
31-dec
Real estate
13
-
-
-
Snc Zara France Immobilière
100.00%
Inditect
Paris - France
31-dec
Real estate
(7)
-
-
-
Stear, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Textile
Manufacturing
8
-
-
-
Inditex Annual Report 2022 / Annual Accounts
68
Company
Effective
% of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Trisko, S.A.
100.00%
Inditect
A Coruña -
Spain
31-jan
Textile
Manufacturing
3
1
-
-
Zara Argentina, S.A.
(*)
100.00%
Direct
Buenos Aires -
Argentina
31-jan
Retail sales
36
71
-
18
Zara Brasil, Ltda.
100.00%
Direct
Sao Paulo -
Brazil
31-dec
Retail sales
83
84
-
56
Zara Commercial (Beijing)
Co., Ltd
100.00%
Direct
Beijing - China
31-dec
Retail sales
19
8
-
-
Zara Commercial (Shanghai)
Co. Ltd.
100.00%
Inditect
Shanghai -
China
31-dec
Retail sales
77
26
-
-
Zara Deutschland, Gmbh
100.00%
Direct
Hamburg -
Germany
31-jan
Holding
company
114
114
-
-
Zara Diseño, S.L.
100.00%
Inditect
A Coruña -
Spain
31-jan
Design
226
-
-
210
Zara España, S.A.
(*)
100.00%
Direct
A Coruña -
Spain
31-jan
Retail sales
3
103
-
82
Zara Fashion (Shanghai) Co.,
Ltd.
100.00%
Direct
Shanghai -
China
31-dec
Retail sales
-
-
-
-
Zara France, S.A.R.L.
100.00%
Inditect
Paris - France
31-jan
Retail sales
352
230
-
18
Zara Home Retail South
Africa (Pty) Ltd.
100.00%
Inditect
Johannesburg -
South Africa
31-jan
Retail sales
1
-
-
-
Zara Logística, S.A.
100.00%
Inditect
A Coruña -
Spain
31-jan
Logistics
3
1
-
-
Zara Macau Limitada
100.00%
Inditect
Macao SAR
31-dec
Retail sales
11
-
-
-
Zara Management, B.V.
100.00%
Direct
Amsterdam -
Netherlands
31-jan
Holding
company
-
-
-
-
Zara Mexico, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Holding
company
(5)
-
-
-
Zara Mexico, S.A. De C.V.
100.00%
Inditect
Mexico City -
Mexico
31-dec
Retail sales
16
-
-
-
Zara Monaco, Sam.
100.00%
Inditect
Monte Carlo -
Monaco
31-jan
Retail sales
18
-
-
-
Zara Polska, Sp. Z O.O.
100.00%
Direct
Warsaw -
Poland
31-jan
Retail sales
(9)
40
-
1
Zara Puerto Rico, Inc.
100.00%
Inditect
San Juan -
Puerto Rico
31-jan
Retail sales
10
3
-
1
Zara Retail Korea, Co. Ltd.
80.00%
Inditect
Seoul - South
Korea
31-jan
Retail sales
83
45
-
6
Zara Retail Nz Limited
100.00%
Direct
Auckland - New
Zealand
31-jan
Retail sales
3
-
-
-
Zara Retail South Africa
(Proprietary), Ltd.
90.00%
Inditect
Johannesburg -
South Africa
31-jan
Retail sales
9
-
-
-
Zara Usa, Inc.
100.00%
Direct
New York - USA
31-jan
Retail sales
928
-
-
-
Zara Vastgoed, B.V.
100.00%
Direct
Amsterdam -
Netherlands
31-jan
Real estate
420
-
-
-
Zara, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Dormant
-
-
-
-
Zara, S.A.
100.00%
Inditect
Buenos Aires -
Argentina
31-jan
Dormant
-
-
-
-
Zintura, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Textile
Manufacturing
3
-
-
-
Itx Finance Asia Limited
100.00%
Direct
Hong Kong SAR
31-jan
Financial
services
-
-
-
-
Itx Taiwan B.V. Zara Home
Taiwan Branch
100.00%
Direct
Taipei - Taiwan
31-jan
Dormant
-
-
-
-
Limited Liability Company
"Zara Home Blr"
100.00%
Inditect
Minsk - Belarus
31-dec
Retail sales
1
-
-
-
Zara Home Australia Pty
Limited
100.00%
Inditect
Sydney -
Australia
31-jan
Retail sales
-
-
-
-
Zara Home Belgique, S.A.
100.00%
Inditect
Brussels -
Belgium
31-jan
Retail sales
10
18
-
-
Zara Home Brasil Produtos
Para O Lar, Ltda.
100.00%
Inditect
Sao Paulo -
Brazil
31-dec
Retail sales
(1)
2
-
-
Zara Home Cis Limited
Liability Company
(*)
100.00%
Direct
Moscow -
Russia
31-dec
Retail sales
1
144
(144)
-
69
Company
Effective
% of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Zara Home Commercial &
Trading (Shanghai), Co. Ltd
100.00%
Direct
Shanghai -
China
31-dec
Retail sales
10
-
-
-
Zara Home Deutschland, B.V.
& Co. Kg
100.00%
Inditect
Hamburg -
Germany
31-jan
Retail sales
15
-
-
-
Zara Home Diseño, S.L.
100.00%
Inditect
A Coruña -
Spain
31-jan
Design
16
43
-
4
Zara Home España, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Retail sales
43
34
-
-
Zara Home France, S.A.R.L.
100.00%
Inditect
Paris - France
31-jan
Retail sales
24
-
-
-
Zara Home Hong Kong
Limited
100.00%
Direct
Hong Kong SAR
31-jan
Dormant
-
-
-
-
Zara Home Kazakhstan, Llp
100.00%
Inditect
Almaty -
Kazakhstan
31-dec
Retail sales
2
-
-
-
Zara Home Korea Limited
100.00%
Inditect
Seoul - South
Korea
31-jan
Retail sales
(1)
-
-
-
Zara Home Logística, S.A.
100.00%
Direct
A Coruña -
Spain
31-jan
Logistics
3
1
-
-
Zara Home Macau
Sociedade Unipessoal
Limitada
100.00%
Direct
Macao SAR
31-dec
Retail sales
(1)
-
-
-
Zara Home Mexico, S.A. De
C.V.
100.00%
Direct
Mexico City -
Mexico
31-dec
Retail sales
13
-
-
-
Zara Home Polska, Sp. Z.O.O.
100.00%
Direct
Warsaw -
Poland
31-jan
Retail sales
3
13
-
3
Zara Home Uk, Ltd.
100.00%
Direct
London - UK
31-jan
Dormant
-
-
-
-
Zhe, Gmbh
100.00%
Direct
Hamburg -
Germany
31-jan
Holding
company
14
16
-
-
(*) Net investment variation by merger, acquisition, cash contribution or reduction in 2022 (Note 8.1).
Inditex Annual Report 2022 / Annual Accounts
70
List of Company of investments in Group
companies at 31 January 2022
Company
Effective %
of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Comditel, S.A.
100.00%
Direct
Barcelona - Spain
31-jan
Buyer
2
1
-
-
Zara Asia, Ltd.
100.00%
Inditect
Hong Kong SAR
31-jan
Retail sales
-
-
-
-
Choolet, S.A.
(*)
100.00%
Direct
A Coruña - Spain
31-jan
Textile
Manufacturing
-
2
(1)
-
Confecciones Fíos, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Textile
Manufacturing
1
2
-
-
Confecciones Goa, S.A.
(*)
100.00%
Direct
A Coruña - Spain
31-jan
Textile
Manufacturing
1
4
(3)
-
Denllo, S.A.
(*)
100.00%
Direct
A Coruña - Spain
31-jan
Textile
Manufacturing
7
6
-
-
Hampton, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Textile
Manufacturing
-
1
-
-
Nikole, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Buyer
3
1
-
-
Stear, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Textile
Manufacturing
4
-
-
-
Trisko, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Textile
Manufacturing
2
1
-
-
Zintura, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Textile
Manufacturing
3
-
-
-
Glencare, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Textile
Manufacturing
2
-
-
-
Indipunt, S.L.
100.00%
Direct
A Coruña - Spain
31-jan
Logistics
7
26
(14)
-
Zara España, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Retail sales
54
89
-
20
Zara Argentina, S.A.
100.00%
Direct
Buenos Aires -
Argentina
31-jan
Retail sales
54
95
-
-
Zara Belgique, S.A.
(*)
100.00%
Direct
Brussels - Belgium
31-jan
Retail sales
44
66
-
-
Zara Chile, S.A.
100.00%
Direct
Santiago de Chile - Chile
31-dec
Retail sales
16
2
-
32
Zara USA, Inc.
100.00%
Inditect
New York - USA
31-jan
Retail sales
-
-
-
-
Zara France, S.A.R.L.
100.00%
Direct
Paris - France
31-jan
Retail sales
309
230
-
19
ITX UK LTD.
100.00%
Inditect
London - UK
31-jan
Retail sales
-
-
-
-
Zara Mexico, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Holding
company
-
-
-
-
ITX HELLAS SINGLE
MEMBER S.A.
100.00%
Inditect
Athens - Greece
31-jan
Retail sales
-
-
-
-
Zara México, S.A. de
C.V.
100.00%
Direct
Mexico City - Mexico
31-dec
Retail sales
14
-
-
-
ITX PORTUGAL -
CONFECÇÕES, S.A.
100.00%
Inditect
Lisbon - Portugal
31-jan
Retail sales
-
-
-
-
G.Zara Uruguay, S.A.
100.00%
Direct
Montevideo - Uruguay
31-jan
Retail sales
12
10
-
-
Zara Brasil, LTDA.
100.00%
Direct
Sao Paulo - Brazil
31-dec
Retail sales
70
84
-
-
ITX NEDERLAND BV
(*)
100.00%
Direct
Amsterdam -
Netherlands
31-jan
Retail sales
30
232
-
-
Zara Österreich
Clothing, GmbH
100.00%
Direct
Vienna - Austria
31-jan
Retail sales
10
8
-
-
Inditex Danmark, AS.
100.00%
Direct
Copenhaguen -
Denmark
31-jan
Retail sales
12
35
-
-
ITX SVERIGE AB
100.00%
Direct
Stockholm - Sweden
31-jan
Retail sales
17
39
-
4
Inditex Norge, AS.
100.00%
Direct
Oslo - Norway
31-jan
Retail sales
13
12
-
-
ITX CANADA, LTD
100.00%
Inditect
Montreal - Canada
31-jan
Retail sales
-
-
-
-
Zara Suisse, S.A.R.L.
100.00%
Direct
Fribourg - Switzerland
31-jan
Retail sales
23
6
-
-
Za Giyim Ithalat Ihracat
Ve Ticaret Ltd.
100.00%
Direct
Istanbul - Turkey
31-jan
Retail sales
22
44
-
8
ITX ITALIA SRL
100.00%
Inditect
Milan - Italy
31-jan
Retail sales
-
-
-
-
ITX Japan Corp.
100.00%
Inditect
Tokyo - Japan
31-jan
Retail sales
-
-
-
-
INDITEX CESKÁ
REPUBLIKA, S.R.O
(*)
100.00%
Direct
Prague - Czech
Republic
31-jan
Retail sales
10
52
-
-
Zara Puerto Rico, Inc.
100.00%
Direct
San Juan - Puerto Rico
31-jan
Retail sales
5
3
-
8
71
Company
Effective %
of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
ITX RETAIL IRELAND
LIMITED
(*)
100.00%
Direct
Dublin - Ireland
31-jan
Retail sales
42
66
-
-
Zara Magyarorszag,
KFT.
100.00%
Direct
Budapest - Hungary
31-jan
Retail sales
6
7
-
-
Zara Holding, B.V.
100.00%
Direct
Amsterdam -
Netherlands
31-jan
Holding
company
4,525
3,682
-
570
Zara Monaco, SAM
100.00%
Direct
Monte Carlo - Monaco
31-jan
Retail sales
17
-
-
-
Zara Commercial
(Shanghai), Co Ltd.
100.00%
Direct
Shanghai - China
31-dec
Retail sales
80
26
-
-
Zara Commercial
(Beijing), Co Ltd.
100.00%
Direct
Beijing - China
31-dec
Retail sales
21
8
-
6
Zara Macau, Ltd.
100.00%
Direct
Macao SAR
31-dec
Retail sales
12
-
-
-
Zara Polska, Sp. Zo.o.
100.00%
Direct
Warsaw - Poland
31-jan
Retail sales
(8)
40
-
(1)
JSC "Zara CIS"
(*)
100.00%
Direct
Moscow - Russia
31-dec
Retail sales
11
898
-
8
Zara Deutschland,
GmbH
100.00%
Direct
Hamburg - Germany
31-jan
Holding
company
121
114
-
-
INDITEX ROMANIA,
S.R.L.
(*)
100.00%
Direct
Bucharest - Romania
31-dec
Retail sales
75
446
-
14
INDITEX UKRAINE LLC
100.00%
Inditect
Kiev - Ukraine
31-dec
Retail sales
-
-
-
-
INDITEX SLOVAKIA,
S.R.O.
(*)
100.00%
Direct
Bratislava - Slovakia
31-jan
Retail sales
7
40
-
-
ITX Taiwan B.V. Zara 
Taiwan Branch
100.00%
Inditect
Taipei - Taiwan
31-jan
Retail sales
-
-
-
-
ITX Croatia, Ltd.
100.00%
Direct
Zagreb - Croatia
31-jan
Retail sales
22
104
-
-
Zara Retail Korea, Co
Ltd.
80.00%
Direct
Seoul - South Korea
31-jan
Retail sales
72
45
-
-
Zara Bulgaria Ltd
100.00%
Direct
Sofia - Bulgaria
31-dec
Retail sales
2
3
-
3
Zara Diseño, S.L.
100.00%
Direct
A Coruña - Spain
31-jan
Design
135
-
-
160
Zara Management, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Holding
company
-
-
-
-
Zara Retail NZ Limited
100.00%
Inditect
Auckland - New Zealand
31-jan
Retail sales
-
-
-
-
KG ZARA Deutschland
B.V. & Co.
100.00%
Inditect
Hamburg - Germany
31-jan
Retail sales
-
-
-
-
Zara Retail South Africa
(Propietary), LTD.
90.00%
Inditect
Johannesburg - South
Africa
31-jan
Retail sales
-
-
-
-
Group Zara Australia Pty.
Ltd.
100.00%
Inditect
Sydney - Australia
31-jan
Retail sales
-
-
-
-
Limited Liability
Company "ZARA BLR"
100.00%
Direct
Minsk - Belarus
31-dec
Retail sales
3
-
-
-
ITX S, D.O.O
100.00%
Inditect
Ljubljana - Slovenia
31-jan
Retail sales
-
-
-
-
ITX Financien, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Financial
services
-
-
-
-
ITX Taiwan, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Holding
company
-
-
-
-
ITX BH D.O.O.
100.00%
Direct
Sarajevo - Bosnia
Herzegovina
31-dec
Retail sales
8
43
-
10
ITX RS DOO BEOGRAD
(*)
100.00%
Direct
Belgrade - Serbia
31-jan
Retail sales
10
52
-
4
Nikole Diseño, S.L.
100.00%
Direct
A Coruña - Spain
31-jan
Design
12
44
-
-
Inditex Montenegro,
D.O.O. Podgorica
100.00%
Inditect
Podgorica - Montenegro
31-dec
Retail sales
-
-
-
-
Inditex Vastgoed Korea,
Ltd.
100.00%
Direct
Seoul - South Korea
31-jan
Real estate
1
1
-
-
Inditex Trent Retail India
Private Ltd
51.00%
Direct
Gurgaon - India
31-mar.
Retail sales
44
5
-
13
Kiddy´s Class España,
S.A.
(*)
100.00%
Direct
A Coruña - Spain
31-jan
Retail sales
1
4
-
-
ITX Finland, OY
100.00%
Inditect
Helsinki - Finland
31-jan
Retail sales
-
-
-
-
Retail Group
Kazakhstan, LLP
100.00%
Inditect
Almaty - Kazakhstan
31-dec
Retail sales
-
-
-
-
ITX Financien III, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Financial
services
-
-
-
-
ITX Albania SHPK
100.00%
Inditect
Tirana - Albania
31-dec
Retail sales
-
-
-
-
Zara Fashion (Shanghai)
CO., Ltd.
100.00%
Inditect
Shanghai - China
31-dec
Retail sales
-
-
-
-
Inditex Annual Report 2022 / Annual Accounts
72
Company
Effective %
of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Oysho España, S.A.
100.00%
Direct
Barcelona - Spain
31-jan
Retail sales
53
30
-
-
Oysho Mexico, S.A. de
C.V.
100.00%
Inditect
Mexico City - Mexico
31-dec
Retail sales
-
-
-
-
Oysho Giyim Ithalat
Ihracat Ve Ticaret Ltd.
100.00%
Direct
Istanbul - Turkey
31-jan
Retail sales
6
36
-
8
Oysho Polska, Sp zo.o
100.00%
Direct
Warsaw - Poland
31-jan
Retail sales
4
23
-
-
Oysho CIS, Ltd.
(*)
100.00%
Direct
Moscow - Russia
31-dec
Retail sales
5
149
(3)
1
Oysho France, S.A.R.L.
100.00%
Inditect
Paris - France
31-jan
Retail sales
-
-
-
-
Oysho
MAGYARORSZAG, KFT
100.00%
Direct
Budapest - Hungary
31-jan
Retail sales
1
7
-
-
Oysho Diseño, S.L.
100.00%
Direct
Barcelona - Spain
31-jan
Design
6
41
-
-
Oysho Bulgaria, Ltd
100.00%
Direct
Sofia - Bulgaria
31-dec
Retail sales
1
16
-
1
Oysho Commercial &
Trading (Shangai) Co.,
Ltd.
100.00%
Inditect
Shanghai - China
31-dec
Retail sales
-
-
-
-
Oysho Korea, Ltd
100.00%
Inditect
Seoul - South Korea
31-jan
Retail sales
-
-
-
-
Oysho Macau, Ltd
100.00%
Inditect
Macao SAR
31-dec
Retail sales
-
-
-
-
Oysho Kazakhstan, LLP
100.00%
Inditect
Almaty - Kazakhstan
31-dec
Retail sales
-
-
-
-
Oysho Hong Kong Ltd
100.00%
Inditect
Hong Kong SAR
31-jan
Retail sales
-
-
-
-
Oysho Belgique, S.A.
100.00%
Direct
Brussels - Belgium
31-jan
Retail sales
2
11
(2)
-
Limited Liability
Company "OYSHO BLR"
100.00%
Inditect
Minsk - Belarus
31-dec
Retail sales
-
-
-
-
Oysho Suisse SÀRL
100.00%
Direct
Fribourg - Switzerland
31-jan
Retail sales
2
7
-
-
Grupo Massimo Dutti,
S.A.
(*)
100.00%
Direct
Barcelona - Spain
31-jan
Retail sales
105
127
-
40
Massimo Dutti Giyim
Ithalat Ih.Ve Tic. Ltd.
100.00%
Direct
Istanbul - Turkey
31-jan
Retail sales
8
28
-
-
Massimo Dutti France,
S.A.R.L.
100.00%
Inditect
Paris - France
31-jan
Retail sales
-
-
-
-
Massimo Dutti UK, Ltd.
100.00%
Inditect
London - UK
31-jan
Dormant
-
-
-
-
Massimo Dutti Suisse,
S.A.R.L.
100.00%
Direct
Fribourg - Switzerland
31-jan
Retail sales
7
9
-
-
Massimo Dutti USA, INC.
100.00%
Inditect
New York - USA
31-jan
Retail sales
-
-
-
-
LLC Massimo Dutti
(*)
100.00%
Direct
Moscow - Russia
31-dec
Retail sales
17
466
-
3
Massimo Dutti
Deutschland, GmbH
100.00%
Direct
Hamburg - Germany
31-jan
Holding
company
11
65
-
-
Massimo Dutti Mexico,
S.A. de C.V.
100.00%
Inditect
Mexico City - Mexico
31-dec
Retail sales
-
-
-
-
Massimo Dutti, S.A.
100.00%
Inditect
A Coruña - Spain
31-jan
Dormant
-
-
-
-
Massimo Dutti Hong
Kong, Ltd.
100.00%
Inditect
Hong Kong SAR
31-jan
Retail sales
-
-
-
-
Massimo Dutti Polska,
Sp z.o.o.
100.00%
Direct
Warsaw - Poland
31-jan
Retail sales
4
56
-
-
Massimo Dutti Macau
Ltd.
100.00%
Inditect
Macao SAR
31-dec
Retail sales
-
-
-
-
Massimo Dutti
Commercial Beijing Co,
Ltd.
100.00%
Inditect
Beijing - China
31-dec
Retail sales
-
-
-
-
Massimo Dutti Bulgaria,
Ltd
100.00%
Direct
Sofia - Bulgaria
31-dec
Retail sales
2
32
-
1
Massimo Dutti Korea,
Ltd
100.00%
Inditect
Seoul - South Korea
31-jan
Retail sales
-
-
-
-
Massimo Dutti Diseño,
S.L.
100.00%
Direct
Barcelona - Spain
31-jan
Design
19
199
-
-
Massimo Dutti
Commercial Shangai
CO, Ltd
100.00%
Inditect
Shanghai - China
31-dec
Retail sales
-
-
-
-
Massimo Dutti
Österreich Clothing,
GMBH
(*)
100.00%
Direct
Vienna - Austria
31-jan
Retail sales
3
2
-
-
Limited Liability
Company "MASSIMO
DUTTI BLR"
100.00%
Inditect
Minsk - Belarus
31-dec
Retail sales
-
-
-
-
ITX Taiwan B.V.
Massimo Dutti Taiwan
Branch
100.00%
Inditect
Taipei - Taiwan
31-jan
Retail sales
-
-
-
-
73
Company
Effective %
of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
MD Benelux, SA
100.00%
Direct
Bruges - Belgium
31-jan
Retail sales
8
32
-
-
KG Massimo Dutti
Deutschland, B.V. & CO.
100.00%
Inditect
Hamburg - Germany
31-jan
Retail sales
-
-
-
-
Massimo Dutti
Magyarorxzág KFT
100.00%
Direct
Budapest - Hungary
31-jan
Retail sales
-
12
-
-
Master Retail
Kazakhstan, LLP
100.00%
Inditect
Almaty - Kazakhstan
31-dec
Retail sales
-
-
-
-
Massimo DuttiI India
Private Ltd
51.00%
Inditect
Gurgaon - India
31-mar.
Retail sales
-
-
-
-
Pull & Bear España, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Retail sales
116
15
-
45
Pull & Bear Giyim Ith.
Ihrac.Ve Tic. Ltd.
100.00%
Direct
Istanbul - Turkey
31-jan
Retail sales
6
27
-
1
Pull & Bear Mexico, S.A.
de C.V.
100.00%
Direct
Mexico City - Mexico
31-dec
Retail sales
20
-
-
-
Pull & Bear Belgique,
S.A.
100.00%
Direct
Brussels - Belgium
31-jan
Retail sales
7
22
-
-
Pull & Bear France,
S.A.R.L.
100.00%
Inditect
Paris - France
31-jan
Retail sales
-
-
-
-
Pull & Bear
Magyarország Kft.
100.00%
Direct
Budapest - Hungary
31-jan
Retail sales
2
41
-
-
Pull & Bear Polska, Sp
zo.o
100.00%
Direct
Warsaw - Poland
31-jan
Retail sales
5
67
-
-
Pull & Bear CIS, Ltd.
(*)
100.00%
Direct
Moscow - Russia
31-dec
Retail sales
4
182
-
1
Pull & Bear Uk Limited
100.00%
Inditect
London - UK
31-jan
Dormant
-
-
-
-
Pull & Bear Commercial
Beijing Co, Ltd.
100.00%
Inditect
Beijing - China
31-dec
Retail sales
-
-
-
-
Pull & Bear Bulgaria, Ltd
100.00%
Direct
Sofia - Bulgaria
31-dec
Retail sales
2
12
-
-
Pull & Bear Hong Kong
Ltd
100.00%
Inditect
Hong Kong SAR
31-jan
Retail sales
-
-
-
-
Pull & Bear Diseño, S.L.
100.00%
Direct
A Coruña - Spain
31-jan
Design
11
284
-
20
Pull & Bear Österreich
Clothing, Gmbh
100.00%
Direct
Vienna - Austria
31-jan
Retail sales
3
1
-
-
Pull & Bear Korea, Ltd
100.00%
Inditect
Seoul - South Korea
31-jan
Retail sales
-
-
-
-
Limited Liability
Company "PULL AND
BEAR BLR"
100.00%
Inditect
Minsk - Belarus
31-dec
Retail sales
-
-
-
-
ITX Taiwan B.V. Pull &
Bear Taiwan Branch
100.00%
Inditect
Taipei - Taiwan
31-jan
Retail sales
-
-
-
-
Plataforma Cabanillas,
S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Logistics
1
-
-
-
P&B Gmbh
100.00%
Direct
Hamburg - Germany
31-jan
Holding
company
5
26
-
-
Pull & Bear Deutschland
BV& CO
100.00%
Inditect
Hamburg - Germany
31-jan
Retail sales
-
-
-
-
Pro Retail Kazakhstan,
LLP
100.00%
Inditect
Almaty - Kazakhstan
31-dec
Retail sales
-
-
-
-
Pull & Bear Suisse, SÁRL
100.00%
Direct
Fribourg - Switzerland
31-jan
Retail sales
5
32
-
2
Uterqüe Cis, Ltd
(*)
100.00%
Direct
Moscow - Russia
31-dec
Retail sales
-
2
(2)
-
Uterqüe Giyim Limited
100.00%
Direct
Istanbul - Turkey
31-jan
Retail sales
-
-
-
-
Uterqüe México S.A. de
C.V.
100.00%
Inditect
Mexico City - Mexico
31-dec
Retail sales
-
-
-
-
"ITX KOSOVO" L.L.C.
100.00%
Inditect
Pristina
31-dec
Retail sales
-
-
-
-
ITX Finance  Asia, LTD
100.00%
Inditect
Hong Kong SAR
31-jan
Financial
services
-
-
-
-
Inditex USA, LLC
100.00%
Direct
New York - USA
31-jan
Holding
company
559
542
-
153
Uterqüe Polska SP. Z
O.O.
100.00%
Direct
Warsaw - Poland
31-jan
Retail sales
-
1
(1)
-
Uterqüe Kazakhstan LLP
100.00%
Inditect
Almaty - Kazakhstan
31-dec
Retail sales
-
-
-
-
Bershka BSK España,
S.A.
100.00%
Direct
Barcelona - Spain
31-jan
Retail sales
96
47
-
50
Bershka Mexico, S.A. de
CV
100.00%
Inditect
Mexico City - Mexico
31-dec
Retail sales
-
-
-
-
Inditex Annual Report 2022 / Annual Accounts
74
Company
Effective %
of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Bershka Giyim Ithalat
Ihracat Ve Tic.Ltd.
100.00%
Direct
Istanbul - Turkey
31-jan
Retail sales
5
36
-
1
Bershka Belgique, S.A.
100.00%
Direct
Brussels - Belgium
31-jan
Retail sales
13
34
-
-
Bershka France, S.A.R.L.
100.00%
Inditect
Paris - France
31-jan
Retail sales
-
-
-
-
Bershka Suisse, S.A.R.L.
100.00%
Direct
Fribourg - Switzerland
31-jan
Retail sales
7
30
-
2
Bershka U.K., Ltd.
100.00%
Inditect
London - UK
31-jan
Dormant
-
-
-
-
Bershka Polska Sp Z
O.O.
100.00%
Direct
Warsaw - Poland
31-jan
Retail sales
4
94
-
1
Bershka Magyaroszag
Kft.
100.00%
Direct
Budapest - Hungary
31-jan
Retail sales
2
26
-
-
Bershka Cis, Ltd
(*)
100.00%
Direct
Moscow - Russia
31-dec
Retail sales
6
238
(2)
2
Bershka Osterreich
Clothing GmbH
100.00%
Direct
Vienna - Austria
31-jan
Retail sales
3
5
-
-
Bershka Hong Kong
Limited
100.00%
Inditect
Hong Kong SAR
31-jan
Retail sales
-
-
-
-
Bershka Commercial
Beijing Co, Ltd
100.00%
Inditect
Beijing - China
31-dec
Retail sales
-
-
-
-
Bershka Bulgaria, Ltd
100.00%
Direct
Sofia - Bulgaria
31-dec
Retail sales
2
18
-
1
Bershka Korea, Ltd
100.00%
Inditect
Seoul - South Korea
31-jan
Retail sales
-
-
-
-
Bershka Diseño, S.L.
100.00%
Direct
Barcelona - Spain
31-jan
Design
13
359
-
20
BSKE, GMBH
100.00%
Direct
Hamburg - Germany
31-jan
Holding
company
17
97
-
-
Bershka Deutschland
B.V. & CO. KG
100.00%
Inditect
Hamburg - Germany
31-jan
Retail sales
-
-
-
-
Best Retail Kazakhstan,
LLP
100.00%
Inditect
Almaty - Kazakhstan
31-dec
Retail sales
-
-
-
-
Bershka Commercial
(Shanghai) Co, Ltd
100.00%
Inditect
Shanghai - China
31-dec
Retail sales
-
-
-
-
Bershka USA INC
100.00%
Inditect
New York - USA
31-jan
Retail sales
-
-
-
-
Limited Liability
Company "BK
GARMENTS BLR"
100.00%
Inditect
Minsk - Belarus
31-dec
Retail sales
-
-
-
-
ITX Taiwan B.V. Bershka
Taiwan Branch
100.00%
Inditect
Taipei - Taiwan
31-jan
Retail sales
-
-
-
-
Stradivarius España, S.A.
100.00%
Direct
Barcelona - Spain
31-jan
Retail sales
94
120
-
90
ITX RE DAC
100.00%
Inditect
Dublin - Ireland
31-jan
Insurance
-
-
-
-
Stradivarius Giyim Ithalat
Ih. Ve Tic. Ltd.
100.00%
Direct
Istanbul - Turkey
31-jan
Retail sales
5
30
-
1
Stradivarius Polska, Sp
zo.o
100.00%
Direct
Warsaw - Poland
31-jan
Retail sales
6
79
-
-
Stradivarius CIS, Ltd.
(*)
100.00%
Direct
Moscow - Russia
31-dec
Retail sales
1
115
-
1
Stradivarius France,
S.A.R.L.
100.00%
Inditect
Paris - France
31-jan
Retail sales
-
-
-
-
Stradivarius
Magyaroszag Kft.
100.00%
Direct
Budapest - Hungary
31-jan
Retail sales
4
17
-
-
Stradivarius Commercial
Shangai CO, Ltd
100.00%
Inditect
Shanghai - China
31-dec
Retail sales
-
-
-
-
Stradivarius Bulgaria,
Ltd
100.00%
Direct
Sofia - Bulgaria
31-dec
Retail sales
1
6
-
-
Stradivarius Diseño, S.L.
100.00%
Direct
Barcelona - Spain
31-jan
Design
11
224
-
15
Stradivarius Korea, Ltd
100.00%
Inditect
Seoul - South Korea
31-jan
Retail sales
-
-
-
-
Stradivarius Hong Kong,
Ltd
100.00%
Inditect
Hong Kong SAR
31-jan
Retail sales
-
-
-
-
Stradivarius México, S.A.
de C.V.
100.00%
Inditect
Mexico City - Mexico
31-dec
Retail sales
-
-
-
-
Stradivarius UK LIMITED
100.00%
Inditect
London - UK
31-jan
Dormant
-
-
-
-
Stradivarius Belgique,
S.A.
(*)
100.00%
Direct
Brussels - Belgium
31-jan
Retail sales
2
17
-
-
Limited Liability
Company
"STRADIVARIUS BLR"
100.00%
Inditect
Minsk - Belarus
31-dec
Retail sales
-
-
-
-
Spanish Retail
Kazakhstan, LLP
100.00%
Inditect
Almaty - Kazakhstan
31-dec
Retail sales
-
-
-
-
ITX Trading, S.A.
100.00%
Inditect
Fribourg - Switzerland
31-jan
Buyer
-
-
-
-
75
Company
Effective %
of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Zara Home España, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Retail sales
39
34
-
-
Zara Home U.K., Ltd.
100.00%
Inditect
London - UK
31-jan
Dormant
-
-
-
-
Zara Home Mexico, S.A.
de C.V.
100.00%
Inditect
Mexico City - Mexico
31-dec
Retail sales
-
-
-
-
Zara Home Giyim Ithalat
Ihracat Ve Ticaret Ltd.
100.00%
Direct
Istanbul - Turkey
31-jan
Retail sales
2
16
-
1
Zara Home Francia,
S.A.R.L.
100.00%
Inditect
Paris - France
31-jan
Retail sales
-
-
-
-
Zara Home CIS, Ltd.
(*)
100.00%
Direct
Moscow - Russia
31-dec
Retail sales
6
133
-
1
Zara Home Polska,  Sp
zo.o
100.00%
Direct
Warsaw - Poland
31-jan
Retail sales
4
13
-
-
Zara Home Diseño, S.L.
100.00%
Direct
A Coruña - Spain
31-jan
Design
11
43
-
-
Zara Home Deutschland
B.V. & Co. KG
100.00%
Inditect
Hamburg - Germany
31-jan
Retail sales
-
-
-
-
ZHE, Gmbh
100.00%
Direct
Hamburg - Germany
31-jan
Holding
company
15
16
-
-
Zara Home Brasil
Produtos para o Lar,
Ltda.
100.00%
Direct
Sao Paulo - Brazil
31-dec
Retail sales
(3)
2
(2)
-
Zara Home Belgique,
S.A.
100.00%
Direct
Brussels - Belgium
31-jan
Retail sales
8
18
-
-
Zara Home Commercial
& Trading (Shangai) Co.,
Ltd.
100.00%
Inditect
Shanghai - China
31-dec
Retail sales
-
-
-
-
Zara Home Macao SUL
100.00%
Inditect
Macao SAR
31-dec
Retail sales
-
-
-
-
Zara Home Kazakhstan,
LLP
100.00%
Inditect
Almaty - Kazakhstan
31-dec
Retail sales
-
-
-
-
Zara Home Hong Kong 
Ltd
100.00%
Inditect
Hong Kong SAR
31-jan
Dormant
-
-
-
-
G. Zara Home Uruguay,
S.A.
100.00%
Direct
Montevideo - Uruguay
31-jan
Retail sales
2
8
-
-
Zara Home Suisse SÀRL
100.00%
Direct
Fribourg - Switzerland
31-jan
Retail sales
12
15
-
-
Zara Home Chile SPA
100.00%
Inditect
Santiago de Chile - Chile
31-dec
Retail sales
-
-
-
-
Zara Home Australia Pty
Ltd
100.00%
Inditect
Sydney - Australia
31-jan
Retail sales
-
-
-
-
Zara Home
Magyarorszag KFT.
100.00%
Direct
Budapest - Hungary
31-jan
Retail sales
1
6
-
-
Zara Home Korea
LIMITED
100.00%
Inditect
Seoul - South Korea
31-jan
Retail sales
-
-
-
-
Zara Home Bulgaria
EOOD
100.00%
Direct
Sofia - Bulgaria
31-dec
Retail sales
1
11
-
-
Limited Liability
Company "ZARA HOME
BLR"
100.00%
Inditect
Minsk - Belarus
31-dec
Retail sales
-
-
-
-
ITX Taiwan B.V. Zara
Home Taiwan Branch
100.00%
Inditect
Taipei - Taiwan
31-jan
Retail sales
-
-
-
-
Zara Logística, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Logistics
3
1
-
-
Plataforma Europa, S.A.
100.00%
Direct
Zaragoza - Spain
31-jan
Logistics
6
2
-
-
Plataforma Logística
León, S.A.
100.00%
Direct
León - Spain
31-jan
Logistics
9
6
-
-
Plataforma Logística
Meco, S.A.
100.00%
Direct
Madrid - Spain
31-jan
Logistics
4
-
-
-
Pull & Bear Logística,
S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Logistics
2
2
-
-
Massimo Dutti Logística,
S.A.
100.00%
Direct
Barcelona - Spain
31-jan
Logistics
1
1
-
-
Bershka Logística, S.A.
100.00%
Direct
Barcelona - Spain
31-jan
Logistics
3
4
-
-
Oysho Logística, S.A.
100.00%
Direct
Barcelona - Spain
31-jan
Logistics
1
1
-
-
Stradivarius Logística,
S.A.
100.00%
Direct
Barcelona - Spain
31-jan
Logistics
2
1
-
-
Zara Home Logística,
S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Logistics
3
1
-
-
Inditex Logística, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Logistics
17
-
-
-
Nueva comercializadora
global XXI, S.A. DE C.V.
100.00%
Direct
Mexico City - Mexico
31-dec
Logistics
-
-
-
-
Inditex Annual Report 2022 / Annual Accounts
76
Company
Effective %
of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
Corporación de
Servicios XXI, S.A. de
C.V.
100.00%
Direct
Mexico City - Mexico
31-dec
Services
8
-
-
-
Goa-Invest, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Construction
11
3
-
-
Goa-Invest Deutschland
GMBH
100.00%
Inditect
Hamburg - Germany
31-jan
Construction
-
-
-
-
Zara Vastgoed, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Real estate
-
-
-
-
ITX Global  Solutions
LIMITED
100.00%
Inditect
Hong Kong SAR
31-jan
Services
-
-
-
-
SNC Zara France
Immobiliere
100.00%
Inditect
Paris - France
31-dec
Real estate
-
-
-
-
SCI Vastgoed Ferreol
P03302
100.00%
Inditect
Paris - France
31-dec
Real estate
-
-
-
-
SCI Vastgoed France
P03301
100.00%
Inditect
Paris - France
31-dec
Real estate
-
-
-
-
SCI Vastgoed General
Leclerc P03303
100.00%
Inditect
Paris - France
31-dec
Real estate
-
-
-
-
SCI Vastgoed Nancy
P03304
100.00%
Inditect
Paris - France
31-dec
Real estate
-
-
-
-
Lefties España, S,A,
100.00%
Direct
A Coruña - Spain
31-jan
Real estate
-
1
(1)
-
Born, S.A.
100.00%
Inditect
Palma de Mallorca -
Spain
31-jan
Real estate
-
-
-
-
LFT RUS Ltd
(*)
100.00%
Direct
Moscow - Russia
31-dec
Retail sales
1
-
-
-
Lelystad Platform, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Logistics
-
-
-
-
Robustae Mexico, S.A
DE C.V.
100.00%
Inditect
Mexico City - Mexico
31-dec
Retail sales
-
-
-
-
Inditex, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Dormant
-
-
-
-
Zara Holding II, B.V
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Holding
company
-
-
-
-
Zara, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Dormant
-
-
-
-
Zara, S.A.
100.00%
Direct
Buenos Aires -
Argentina
31-jan
Dormant
-
-
-
-
Fashion Logistic
Forwarders, S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Logistics
2
-
-
-
ITX Asia Pacific
Enterprise Management,
Co., Ltd
100.00%
Inditect
Shanghai - China
31-dec
Buyer
-
-
-
-
FSF New York, LLC
100.00%
Inditect
New York - USA
31-jan
Real estate
-
-
-
-
FSF Soho, LLC
100.00%
Inditect
New York - USA
31-jan
Real estate
-
-
-
-
ITX USA, LLC
100.00%
Direct
New York - USA
31-jan
Retail sales
14
4
-
11
Fashion Retail , S.A.
100.00%
Direct
A Coruña - Spain
31-jan
Retail sales
11
-
-
45
ITXR Macedonaia Dooel
Skopje
100.00%
Inditect
Skopje - North
Macedonia Rep.
31-dec
Retail sales
-
-
-
-
ITX E-commerce
(Shanghai) Co. Ltd
100.00%
Inditect
Shanghai - China
31-dec
Retail sales
-
-
-
-
ITX TRYFIN B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Financial
services
-
-
-
-
ITX RUBFIN, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Financial
services
-
-
-
-
ITX Korea LIMITED
100.00%
Inditect
Seoul - South Korea
31-jan
Retail sales
-
-
-
-
ITX Services India
Private Ltd
100.00%
Inditect
Gurgaon - India
31-mar
Buyer
-
-
-
-
Inditex France, S.A.R.L.
100.00%
Direct
Paris - France
31-jan
Dormant
-
-
-
-
ITX Merken, B.V.
100.00%
Inditect
Amsterdam -
Netherlands
31-jan
Services
-
-
-
-
Zara Home Österreich
Clothing GMBH
100.00%
Direct
Vienna - Austria
31-jan
Retail sales
-
2
-
-
ITX LUXEMBOURG S.A.
(*)
100.00%
Direct
Luxembourg -
Luxembourg
31-jan
Retail sales
11
32
-
-
CDC Trading (Shangai)
Co. LTD.
100.00%
Inditect
Shanghai - China
31-dec
Buyer
-
-
-
-
Zara Home Retail South
Africa (PTY) LTD.
100.00%
Inditect
Johannesburg - South
Africa
31-jan
Retail sales
-
-
-
-
77
Company
Effective %
of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders’
equity
Investment
Impairment
Dividends
FGI Gestión Mex, S.A. de
C.V.
100.00%
Inditect
Mexico City - Mexico
31-dec
Construction
-
-
-
-
INDITEX RENOVABLES,
S.L.
(*)
100.00%
Direct
A Coruña - Spain
31-jan
Services
-
-
-
-
(*) Net investment variation by merger, acquisition, cash contribution or reduction in 2021 (Note 8.1).
Inditex Annual Report 2022 / Annual Accounts
78
List of Company investments in jointly controlled
entities at 31 January 2023
Company
Effective % of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders
’ equity
Investment
Impairment
Dividends
Tempe, S.A.
50.00%
Direct
Alicante -
Spain
31-jan
Marketing of
footwear
585
-
-
27
Tempe México,
S.A. de C.V.
50.00%
Inditect
Mexico
City -
Mexico
31-dec
Dormant
3
-
-
-
Tempe Logística,
S.A.
50.00%
Inditect
Alicante -
Spain
31-jan
Logistics
-
-
-
-
Tempe Diseño,
S.L.
50.00%
Inditect
Alicante -
Spain
31-jan
Design
33
-
-
-
Tempe Trading
Asia Limited
50.00%
Inditect
Hong Kong
SAR
31-jan
Marketing of
footwear
94
-
-
-
TMP Trading
(Shanghai) Co.
Ltd
50.00%
Inditect
Shanghai -
China
31-dec
Marketing of
footwear
10
-
-
-
Tempe Giyim,
Ltd.
50.00%
Inditect
Istanbul -
Turkey
31-jan
Dormant
-
-
-
-
List of Company investments in jointly controlled
entities at 31 January 2022
Company
Effective % of
ownership
Types of
holding
Location
Reporting
date
Line of
business
Shareholders
’ equity
Investment
Impairment
Dividends
Tempe, S.A.
50.00%
Direct
Alicante -
Spain
31-jan
Marketing of
footwear
530
-
-
25
Tempe México,
S.A. de C.V.
50.00%
Inditect
Mexico City
- Mexico
31-dec
Dormant
3
-
-
-
Tempe Logística,
S.A.
50.00%
Inditect
Alicante -
Spain
31-jan
Logistics
-
-
-
-
Tempe Brasil,
Ltda.
50.00%
Inditect
Sao Paulo -
Brazil
31-dec
Dormant
-
-
-
-
Tempe Diseño,
S.L.
50.00%
Inditect
Alicante -
Spain
31-jan
Design
38
-
-
-
Tempe Trading
Asia Limited
50.00%
Inditect
Hong Kong
SAR
31-jan
Marketing of
footwear
95
-
-
-
TMP Trading
(Shanghai) Co.
Ltd
50.00%
Inditect
Shanghai -
China
31-dec
Marketing of
footwear
13
-
-
-
Tempe Giyim,
Ltd.
50.00%
Inditect
Istanbul -
Turkey
31-jan
Dormant
-
-
-
-
79
Annex II. Direct and indirect investments of the
members of the Board of Directors in the share
capital of the Company at 31 January 2023
Name or company name of director
% Voting rights attributed to
the shares
% Voting rights through
financial instruments
% Total
voting rights
From the total number of
voting rights attributed to
the shares, indicate,
where appropriate, the
additional votes attributed
corresponding to the
shares with a loyalty vote
Direct
Indirect
Direct
Indirect
Direct
Indirect
Ms Marta Ortega Pérez
0.0014%
-
-
-
0.0014%
-
-
Mr Amancio Ortega Gaona 1
-
59.2940%
-
-
59.2940%
-
-
Mr Óscar García Maceiras
0.0004%
-
-
-
0.0004%
-
-
Mr José Arnau Sierra
0.0010%
-
-
-
0.0010%
-
-
Pontegadea Inversiones, S.L. 2
50.0100%
-
-
-
50.0100%
-
-
Bns Denise Patricia Kingsmill
-
-
-
-
-
-
-
Ms Anne Lange
-
-
-
-
-
-
-
Ms Pilar López Álvarez
0.0001%
-
-
-
0.0001%
-
-
Mr José Luis Durán Schulz
0.0001%
-
-
-
0.0001%
-
-
Mr  Rodrigo Echenique Gordillo
0.0006%
-
-
-
0.0006%
-
-
Mr Emilio Saracho Rodríguez de
Torres
-
-
-
-
-
-
-
Total
59.298%
¹ Through Pontegadea Inversiones, SL and Partler Participaciones, S.LU. (Partler 2006, S.L. holds 100% of its stake and its is controlled by Mr Ortega Gaona)
² Represented by Ms Flora Pérez Marcote
Inditex Annual Report 2022 / Annual Accounts
80
Direct and indirect investments of the members
of the Board of Directors in the share capital of
the Company at 31 January 2022
Name or company
name of director
% Voting rights attributed to the
shares
% Voting rights through financial
instruments
% Total voting
rights
% Voting rights that
can be sell through
financial instruments
Direct
Indirect
Direct
Indirect
Direct
Indirect
Mr Pablo Isla Álvarez de
Tejera ¹
0.0680%
-
0.0070%
-
0.0750%
-
-
Mr Amancio Ortega
Gaona ²
-
59.2940%
-
-
59.2940%
-
-
Mr Óscar García
Maceiras ³
0.0004%
-
0.0050%
-
0.0050%
-
-
Mr José Arnau Sierra
0.0010%
-
-
-
0.0010%
-
-
Pontegadea
Inversiones, S.L. ⁴
50.0100%
-
-
-
50.0100%
-
-
Bns Denise Patricia
Kingsmill
-
-
-
-
-
-
-
Ms Anne Lange
-
-
-
-
-
-
-
Ms Pilar López Álvarez
0.0001%
-
-
-
0.0001%
-
-
Mr José Luis Durán
Schulz
0.0001%
-
-
-
0.0001%
-
-
Mr  Rodrigo Echenique
Gordillo
-
-
-
-
-
-
-
Mr Emilio Saracho
Rodríguez de Torres
-
-
-
-
-
-
-
Total
59.375%
¹ With regard to the second cycle (2020-2023) of the 2019-2023 Long-Term Incentive Plan, the Executive Chairman may receive up to a maximum number of 120,174
shares (i.e. 0.0038%). Likewise, with regard to the first cycle (2021-2024) of the new 2021-2025 Long-Term Incentive Plan, the Executive Chairman may receive up to a
maximum of 116,569 shares (i.e. 0.0037%).
² Through Pontegadea Inversiones, SL and Partler Participaciones, S.L. (Partler 2006, S.L. holds 100% of its stake)
³ With regard to the second cycle (2020-2023) of the 2019-2023 Long-term Incentive Plan, Mr Óscar García Maceiras, the new CEO of the company since 29 November
2021, may receive up to a maximum number of 61,854 shares. (i.e. 0.002%) for the duties performed as General Counsel and Secretary of the Board of Directors in 2021
and taking into account the amount he has been assigned as CEO pursuant to the Remuneration Policy approved at the Annual General Meeting held in 2021. Likewise,
with regard to the first cycle (2021-2024) of the new 2021-2025 Long-Term Incentive Plan, the CEO may receive up to a maximum of 68,562 shares. (i.e. 0.002 %).
⁴ Represented by Ms Flora Pérez Marcote
This Annex forms an integral part of Note 11 of the accompanying Notes to the annual accounts, and must be read in conjunction with
this.
81
DIRECTOR’S REPORT
2022
For the year ended 31 January 2023
Directors’ report for the year ended
31 January 2023
Company situation and business
performance
Industria de Diseño Textil, S.A. as parent of the Inditex Group
owns the shareholdings of the main companies of the Group
and performs the activities of a holding company, whereby its
results derive largely from dividends received from its
subsidiaries. Likewise, the company provides different kinds of
corporate services to its subsidiaries, both domestic and
foreign, and supplies clothing and accessories of the Zara
concept to subsequently be responsible for their distribution
and sale to other Group companies engaged in retail marketing.
For a detailed analysis of the evolution of the Group’s
businesses, as well as the forecast for 2023, it is necessary to
refer to the Consolidated Directors’ Report of the Inditex Group.
Financial risk management policy
The Company’s activities are exposed to various financial risks:
market risk (including foreign currency risk), credit risk, liquidity
risk and cash flow interest rate risk. The Company's risk
management focuses on the uncertainty of financial markets
and aims to minimise the potential adverse effects on the
Company's profitability, for which purpose it uses certain
financial instruments described below.
Foreign currency risk
The Company operates in an international environment and,
accordingly, is exposed to foreign currency on transactions in
foreign currencies, in particular the US dollar. The foreign
currency risk arises from future commercial transactions and
from assets and liabilities recognised in currencies other than
the euro.
The Company uses currency forwards to hedge the foreign
currency risk. The Company manages the net position in each
foreign currency by using external currency forwards or other
financial instruments.
Raw material risk
The Company is also exposed to potential cost volatility and
inflation related to the impact resulting from price increases of
the many raw materials (both textile and non-textile) consumed
directly and indirectly in its operation and its procurement of
goods (garments, footwear and accessories), and services,
especially in terms of supply and distribution transport, as well
as energy consumption. This risk is measured using 'at risk'
methodologies from a portfolio of exposures standpoint.
Credit risk
The Company is not exposed to significant concentrations of
credit risk as policies are in place to cover sales to franchises.
Liquidity and interest rate risk
The Company is not exposed to significant liquidity risk, as it
maintains sufficient cash and cash equivalents to meet the
outflows required in its normal operations. If the Company has a
specific financing requirement, either in euros or in other
currencies, it resorts to loans, credit facilities or other types of
financial instruments.
Interest rate fluctuations change the fair value of assets and
liabilities that bear a fixed interest rate and the future flows from
assets and liabilities bearing interest at a floating rate. The
Company's exposure to this risk is not significant.
Country risk
The international presence of the Company's subsidiaries and
permanent establishment exposes it to the country risk of
numerous geographical regions.
As a result of the conflict in Ukraine, which began on 24
February 2022, the Group temporarily suspended operations in
both Ukraine (from that very moment) and the Russian
Federation (from 5 March), as the conflict prevented normal
operations throughout the region. The operations in Ukraine
remain suspended to date and in the Russian Federation
operations have been terminated.
On 25 October 2022, Inditex reached a preliminary agreement
to sell the business in the Russian Federation to the Daher
Group. At the date of preparation of these annual accounts,
negotiations are being finalised, estimating that the conditions of
the final agreement will not differ substantially from the
agreement signed on 25 October 2022.
The agreement considers, through the sale of all of the shares of
the company Joint Stock Company New Fashion (previously
known as JSC Zara CIS), the transfer of the assets and rights
associated with 245 stores of the 514 that the Group had in
Russia. Once the sales agreement is completed, the transferred
premises will house points of sale of brands belonging to the
Daher Group, totally unrelated to the Inditex Group. The
agreement therefore considers Inditex Group’s right to provide a
franchise agreement to the Daher Group if new circumstances
arise which, in Inditex’s opinion, allowed the return of the
Group’s brands to this market. The transaction is subject to the
obtaining of the relevant administrative authorisations from the
Russian authorities, which at the date are in progress.
83
One of the most significant manifestations of country risk is
foreign currency risk and the possibility of exposure to limits or
controls on the free circulation of cash flows due to a lack of
currency convertibility, in current or capital account terms, or to
unexpected restrictions on the movement of capital.
The Company manages cash at corporate level based on a
highly active repatriation policy aimed at reducing the
aforementioned risks to a minimum.  At 31 January 2023, there
was no significant risk in relation to the repatriation of funds or
any material cash surpluses not available for use by the
Company or its subsidiaries. Similarly, there are no significant
restrictions on the Company's ability to access the assets and
settle the liabilities of its subsidiaries.
Capital management
The Company's capital management objectives are to
safeguard its ability to continue operating as a going concern,
so that it can continue to generate returns for shareholders and
benefit other stakeholders, and to maintain an optimum capital
structure to reduce the cost of capital.
Significant events after the reporting
period
Turkey is under the effects of the catastrophic earthquakes that
have been occurring since February 6, 2023. Despite the fact
that some of the factories of the Turkish supplier cluster are
concentrated in the area affected by the earthquakes, the
impact on the Company's global supply chain is not relevant,
and both our and our supplier´s operations in the affected area
tend to normalize.
R&D activities
Inditex carries out research, development and innovation
activities in all areas of its activity in order to improve
manufacturing and distribution processes and to develop, with
its own means or with the help of third parties, technologies that
facilitate business management. In particular, it highlights the
technology linked to POS terminals, inventory management and
management systems, distribution systems in distribution
centers, communication with stores, clothing labelling and, lastly,
digital transformation of the business.
Treasury shares
The Annual General Meeting held on 16 July 2019 approved the
2019-2023 Long-Term Incentive Plan (Note 20) and authorised
the Board of Directors to derivatively acquire treasury shares to
cater for this Plan. Likewise, the Annual General Meeting, at its
meeting held on 13 July 2021, approved the 2021-2025 Long-
Term Incentive Plan (Note 20).
As at 31 January 2022, the Company owned 4,226,305 treasury
shares, representing 0.136% of the share capital.
During the first half of 2022, the first cycle (2019-2022) of the
2019-2023 Long Term Incentive was settled. The part of the
incentive in shares was delivered to the beneficiaries of the Plan
charged to Treasury shares owned by the company at the
delivery date. The total of Treasury shares delivered was
1,793,791 shares, representing the 0.058% of the share capital.
On 12 July 2022, pursuant to a new Temporary Share Buy-back
Programme and under the authorisation in force granted by the
Annual General Meeting, 2,500,000 treasury shares were
acquired, in order to enable the Company to fulfil the
requirements of shares delivery to the beneficiaries of the
second cycle of the 2019-2023 Long-Term Incentive Plan as
well as to the beneficiaries of the first cycle, and as the case may
be, the second cycle of the 2021-2025 Long-Term Incentive
Plan.
Consequently, as at 31 January 2023, the Company owned
4,932,514 treasury shares, representing 0.158% of the share
capital.
Financial instruments
Foreign currency risk is managed in line with the corporate risk
management model guidelines, which establish the ongoing
monitoring of exchange rate fluctuations and other measures
designed to mitigate this risk, mainly through the optimisation of
the Company’s operations, including centralisation, in order to
minimise the impact, using natural hedges, the benefits of
diversification and the arrangement of financial hedges.
Occasionally, the Company uses financial derivatives like
options purchased and currency forwards.
On 16 January 2023, the Company entered into a VPPA (Virtual
Power Purchase Agreement) for the supply of 100%-renewable
electricity over a period of 10 years. The related projects are in
the development phase, pending final approval, and will come
on stream in 2025. 
Dividends policy
The Board of Directors will propose to shareholders at the
Annual General Meeting to pay shares with a right to dividend, a
dividend of 1.20 euros per share, being comprised of a 0.796
euros per share ordinary dividend and a 0.404 euros per share
bonus dividend.
Out of the total amount of 1.20 euros per share, 0.60 euros per
share will be paid on 2 May 2023 as ordinary dividend against
2022 results, and 0.60 euros per share will be distributed against
the Company’s unrestricted reserves, payable on 2 November
2023 as ordinary and bonus dividend.
The proposal covers a dividend distribution in the maximum
amount of 3.740 million euros, corresponding to 1.20 (gross)
euros per share for the entire stake of the Company
(3,116,652,000 shares). Since the Company income in 2022 has
reached 1.906 million euros, the difference between the interim
dividend and the full dividend will be charged against the
Company’s unrestricted reserve.
Inditex Annual Report 2022 / Directors' Report
84
The dividends paid by the Company in 2022 and 2021
amounted to 2,895 million euros and 2,180 million euros,
respectively. These amounts correspond to payments of 0.93
euros per share and 0.70 euros per share, respectively.
Other disclosures
In general the Group's payment policy complies with the periods
for payment to trade suppliers set in the late payment legislation
in force. The Company is currently implementing measures to
try to reduce the payment period in those rare cases in which
the established maximum payment period is exceeded. The
aforementioned measures will focus on reducing the length of
the processes involved in the receipt, verification, acceptance
and accounting of invoices (enhancing use of electronic and
technological methods) and improving the procedure for
incident resolution in this connection.
Annual corporate governance report
The Annual Corporate Governance Report for 2022 is available
at www.inditex.com and was published in the section on
Relevant Event Communications of the CNMV (Spanish National
Securities Market Commission) website (www.cnmv.es) on 15
March 2023.
Non-financial and diversity information:
sustainability and compliance with
equality, diversity, non-discrimination and
disability standards.
Information regarding the Statement of Non-Financial
Information of the Company is included in the Consolidated
Directors’ Report of the Inditex Group whose parent is Industria
de Diseño Textil, S.A. and which will be deposited, together with
the Consolidated Annual Accounts, with the Mercantile Registry
of A Coruña.
Lastly, as at 31 January 2023, the Company was compliant with
the regulatory framework established by Royal Decree-Law
6/2019, of 1 March, on urgent measures to guarantee equal
treatment and opportunities for women and men in employment
and work.
85
Report on Internal
Control Systems (ICFR)
Inditex Annual Report 2022 / Report on Internal Control Systems
86
ANNUAL CORPORATE
GOVERNANCE REPORT (ACGR)
2022
Issuer identification details
Year End-Date:
31/01/2023
Tax ID (CIF):
A15075062
Company name:
INDUSTRIA DE DISEÑO TEXTIL, (INDITEX, S.A.)
Registered office:
Avda. de la Diputación, Edificio Inditex, Arteixo (A Coruña)
91
In this Annual Corporate Governance Report, the board of
directors of INDUSTRIA DE DISEÑO TEXTIL, S.A. (INDITEX, S.A.)
(“Inditex” or the “Company”) has included all the relevant
information for financial year 2022, which commenced on 1
February 2022 and ended on 31 January 2023, excepting those
cases in which other dates of reference are specifically
mentioned.
The revised text of the Ley de Sociedades de Capital [Spanish
Companies Act] approved by Real Decreto Legislativo 1/2010 of
2 July (the “Companies Act” or “LSC” [Spanish acronym]),
substantially amended by Act 31/2014 of 3 December to
improve corporate governance and by Act 5/2021 of 12 April as
regards encouragement of long-term shareholder engagement
in listed companies (“Act 5/2021”), represents the basic legal
framework of corporate governance in Spain.
In addition, the Good Governance Code of Listed Companies
(“GGC” or “Good Governance Code”), approved by the
Comisión Nacional del Mercado de Valores [Spanish National
Securities Market Commission] (“CNMV”) in February 2015 and
amended in part by CNMV’s board on 25 June 2020, lists a set
of principles and practices that must govern corporate
governance in listed companies.
This Annual Corporate Governance Report has been drawn up
by the Audit and Compliance Committee in free format pursuant
to the provision of CNMV’s Circular 3/2021 of 28 September
amending Circular 5/2013, that sets forth the standard forms of
the annual corporate governance report of directors for listed
public limited companies, saving banks and other entities that
issue securities admitted to trading on regulated markets.
Notwithstanding the foregoing, the contents of this Report meet
the minimum requirements set forth in applicable regulations, as
provided in section 540 LSC and in Order ECC/461/2013 of 20
March and is accompanied by the relevant statistical Appendix.
It bears mentioning that for reasons beyond the Company’s
control and on account of CNMV’s own systems, certain
information shown in the standardised statistical appendix for
financial year 2023 actually refers to Inditex’s financial year 2022,
and so on and so forth for all the previous years.
This Annual Corporate Governance Report shall be released as
other relevant information (OIR [Spanish acronym])
contemporaneously with the release of the Annual Report on
Remuneration of Directors and shall be made available on
Inditex’s corporate website and on CNMV’s website.
Inditex’s corporate governance rules are established in the
Articles of Association, the Board of Directors’ Regulations, the
Regulations of the General Meeting of Shareholders, the terms
of reference of board committees, the Internal Regulations of
Conduct in the Securities Markets (IRC), the Code of Conduct
and Responsible Practices and the Regulations of the Social
Advisory Board, as explained in greater detail below:
Articles of Association: Approved by the Annual General
Meeting in July 2000 and subsequently amended several times.
They were last amended on 13 July 2021 for the purposes of
encompassing the regulatory development introduced by Act
5/2021 and aligning its language with the correlative
amendments to the Board of Directors’ Regulations and the
terms of reference of the Audit and Compliance, Nomination
and Sustainability Committees made throughout 2020 to bring
them into line with the provisions of the revised GGC, amended
in part further to a resolution passed by CNMV’s board on 25
June 2020.
Board of Directors’ Regulations: Approved by the Board of
Directors in July 2000. This set of rules seeks to determine the
principles of operation of the Board of Directors, the basic rules
for its organisation and proceedings and the rules governing the
conduct of its members. It provides, inter alia, rules regarding
the appointment and removal of Directors, their rights and
duties and the relations of the Board of Directors with the
shareholders, the markets and the external auditor, all with the
aim of achieving the highest possible degree of efficiency. This
Regulation has been amended several times. The last
amendment to this set of rules was approved by the board of
directors on 12 May 2022. All said amendments are addressed
in greater detail in section C.1.15 below.
Regulations of board committees (Audit and Compliance
Committee, Nomination Committee, Remuneration Committee
and Sustainability Committee, jointly “board committees”):
The terms of reference of the Audit and Compliance Committee,
the Nomination Committee, and the Remuneration Committee
were approved by the Board of Directors in the meeting held on
9 June 2015. The board of directors approved the Sustainability
Committee’s Regulations in the meeting held on 16 July 2019
following the committee’s formation.
These terms of reference seek to govern the proceedings of
board committees as regards their powers, composition, calling,
quorum, decision-making and relationship with the remaining
governing bodies of the Company.
The latest amendments to the terms of reference of board
committees were approved by the board in the meeting held on
12 May 2022 so that the separation of duties of the Chair and the
CEO as chief executive of the company is clearly reflected
therein.     
Regulations of the General Meeting of Shareholders: This set of
rules was approved by the Annual General Meeting on 18 July
2003. Its aim is to govern the proceedings of the General
Meeting of Shareholders as regards notices, meetings’
preparation, information, attendance, proceedings and exercise
of voting rights, and to inform shareholders of their rights and
duties relating to said body. Said Regulations have been
amended on various occasions, to adapt their provisions to the
successive updates of the Articles of Association, the latest of
which dated 13 July 2021. As was the case with the amendment
to the Articles of Association, approved on the same date, said
amendment seeks to encompass the regulatory development
introduced by Act 5/2021. In particular, the possibility of holding
virtual-only general meetings was covered, in accordance with
the provisions of new section 182bis LSC.
Inditex Annual Report 2022 / Annual Corporate Governance Report
92
Internal Regulations of Conduct in the Securities Markets (the
“Internal Regulations of Conduct” or “IRC”): It was originally
approved by the board of directors in July 2000. This document
provides, inter alia, the rules for processing, safeguarding and
disclosing inside information and other relevant Company
information, the system that governs transactions in Inditex
securities and financial instruments carried out by the persons
included in its scope, the provisions on prohibition of market
manipulation and Inditex’s policy on treasury shares.
The new IRC was approved by the board of directors on 19 July
2016 for the purposes of adapting its contents to the European
regulatory framework to fight market abuse, made up of
Regulation (EU) No 596/2014 of 16 April 2014 on market abuse,
Directive 2014/57/EU of 16 April 2014, and their respective
implementing regulations, that seek to reinforce the integrity of
the financial markets and to set up mechanisms for a
streamlined implementation and supervision in the various
Member States of the European Union.
Its latest amendment was approved by the board of directors on
3 November 2022, primarily to cover the new name of the
Transparency Market Committee (formerly known as the
“Compliance Supervisory Board”), specify who are deemed to
be Senior Managers for the purposes of the IRC and indicate
that the blackout period that applies to the remaining IRC
groups will hereinafter apply to Directors and Senior Managers,
in line with market practice.
Inditex Group's Code of Conduct and Responsible Practices:
approved by the Board of Directors on 17 July 2012, it provides
the lines of action that must be followed by the Group in the
performance of its professional duties. Its goal consists of
exacting an ethical and responsible professional behaviour from
Inditex and its entire workforce in the conduct of their business
anywhere in the world, as the foundation of its corporate culture
upon which the training and the personal and career
development of its employees is based. For these purposes, the
principles and values that shall govern relations between the
Group and its stakeholders (employees, customers,
shareholders, business partners, suppliers and the societies
where its business model is implemented) are defined therein.
The Code of Conduct and Responsible Practices is based upon
a number of overarching principles. These include, inter alia,
that: (i) the Inditex Group shall carry out all its transactions under
an ethical and responsible perspective; (ii) 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; (iii) all Inditex activities shall be carried out in the manner
that most respects the environment, promoting biodiversity
preservation and sustainable management of natural resources.
The current full text of all the aforementioned documents is
available on the corporate website: (i) under the “Investors” tab
“Corporate Governance” section “Reports & Regulations” sub-
section, and (ii) under the “Group” tab “Ethical commitment”
section.
Regulations of the Social Advisory Board: The Social Board is
Inditex’s advisory body in the field of social and environmental
sustainability. 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 proceedings and the rules of conduct of its
members.
The Regulations of the Social Advisory Board have been
amended several times, and for the last time on 16 July 2019 for
the purposes of establishing its functional reporting line to the
Sustainability Committee.
93
A. Ownership structure
A.1. Complete the following table on share
capital and voting rights attached to
shares, including those corresponding to
shares with a loyalty vote as of year-end,
where appropriate:
Indicate whether articles of association contain the provision
of double loyalty voting:
Yes        No x
Indicate whether the company has awarded votes for loyalty:
Yes        No x
Date of the last
share capital
change
Share capital (€)
Number of shares
Number of voting rights
(not including additional
votes for loyalty)
Number of additional
voting rights attached to
shares with a loyalty vote
Total number of voting rights,
including additional votes
attached to loyalty shares
20/07/2000:
AGM
resolution
€93,499,560
3,116,652,000
shares
3,116,652,000
-
3,116,652,000
Indicate whether there are different classes of shares with
different rights attached:
Yes        No x
Class
Number of shares
Par value
Number of voting rights
Rights and obligations conferred
-
-
-
-
-
All shares are of the same class and series, represented by the
book-entry method and are fully paid-up and subscribed.
INDITEX has been listed on the four different Spanish Stock
Exchanges since 23 May 2001 and has been part of the
selective IBEX35 index since July 2001. In addition, it has been
part of the Euro Stoxx 50 index since September 2011, the MSCI
index since November 2001, the Dow Jones Sustainability index
since September 2002 and the FTSE4Good index since
October 2002.
Inditex Annual Report 2022 / Annual Corporate Governance Report
94
A.2. List the company’s significant direct
and indirect shareholders as of year-end,
including directors with a significant
shareholding:
The Company issues shares represented by the book-entry
method. In addition, pursuant to the provisions of section 497
LSC, Inditex has a contract with Sociedad de Gestión de
Sistemas de Registro, Compensación y Liquidación de Valores,
S.A. (Iberclear) [Spanish Central Securities Depositary in charge
of the Register of Securities, and the Clearing and Settlement of
all trades] for the daily share ownership notification service.
According to the Company’s Shareholders Register, the
significant direct and indirect shareholders as of 31 January
2023, including directors with a significant shareholding, were
those shown below:
Name or
company name
of shareholder
% of voting rights attached
to the shares (including
votes for loyalty)
% of voting rights
through financial
instruments
% of total
voting
rights
From the total number of voting rights attributed to the
shares, indicate, where appropriate, the additional votes
attributed corresponding to the shares with a loyalty vote
Direct
Indirect
Direct
Indirect
Direct
Indirect
Mr Amancio
Ortega Gaona
-%
59.294%
-%
-%
59.294%
-%
-%
Ms Sandra
Ortega Mera
-%
5.053%
-%
-%
5.053%
Breakdown of the indirect shareholding:
Name or
company
name of the
indirect owner
Name or company
name of the direct
owner
% of voting rights
attached to the shares
(including votes attached
to loyalty shares)
% of voting rights
through financial
instruments
% of total
voting rights
From the total number of voting rights
attached to the shares, indicate,
where appropriate, the additional
votes attached to loyalty shares
Mr Amancio
Ortega
Gaona
Pontegadea
Inversiones, S.L. (*)
50.010%
-%
50.010%
-
-
Partler Participaciones,
S.L.U.
9.284%
-%
9.284%
-
-
Ms Sandra
Ortega Mera
ROSP CORUNNA
PARTICIPACIONES
EMPRESARIALES, S.L.
5.053%
-%
5.053%
-
-
Remarks
(*) Mr Amancio Ortega Gaona owns a 59.294% stake in
Inditex’s share capital through the companies styled
Pontegadea Inversiones, S.L. and Partler Participaciones,
S.L.U.
Mr Amancio Ortega Gaona and Pontegadea Inversiones, S.L.,
represented by Ms Flora Pérez Marcote, sit on Inditex’s board
of directors as proprietary directors.
Indicate the most significant changes in the shareholder
structure during the year:
The Company has not received any notices regarding any
significant movements in shareholder structure over the year.
95
A.3. Give details of the stake at financial
year-end, of the members of the board of
directors who are holders of voting rights
attached to shares of the company or
through financial instruments, irrespective
of the percentage, excluding the directors
who have been identified in Section A.2
above:
As at 31 January 2023, the following directors had a stake in the
Company:
Name or company name of
director
% of voting rights
attached to shares
(including loyalty votes)
% of voting rights
through financial
instruments
% of total
voting
rights
From the total % of voting rights attached to shares,
indicate, where appropriate, the % of the additional
votes attached to shares with a loyalty vote
Direct
Indirect
Direct
Indirect
Direct
Indirect
Ms Marta Ortega Pérez
0.0014%
-%
-%
-%
0.0014%
-%
-%
Mr Óscar García
Maceiras
0.0004%
-%
-%
-%
0.0004%
-%
-%
Mr José Arnau Sierra
0.0010%
-%
-%
-%
0.0010%
-%
-%
Bns. Denise Patricia
Kingsmill
-%
-%
-%
-%
-%
-%
-%
Ms Anne Lange
-%
-%
-%
-%
-%
-%
-%
Ms Pilar López Álvarez
0.0001%
-%
-%
-%
0.0001%
-%
-%
Mr José Luis Durán
Schulz
0.0001%
-%
-%
-%
0.0001%
-%
-%
Mr Rodrigo Echenique
Gordillo
0.0006%
-%
-%
-%
0.0006%
-%
-%
Mr Emilio Saracho
Rodríguez de Torres
-%
-%
-%
-%
-%
-%
-%
TOTAL
0.0036
0.0036
Total % of voting rights held by the board of directors
59.298%
Total % of voting rights represented on the board of directors
59.298%
Inditex Annual Report 2022 / Annual Corporate Governance Report
96
A.4. Where applicable, indicate any family,
commercial, contractual or corporate
relationships that exist among significant
shareholders to the extent that they are
known to the company, unless they are
insignificant or arise in the ordinary
course of business, with the exception of
those reported in section A.6:
Name or company name of related party
Type of relationship
Brief description
- Ms Sandra and Mr Marcos Ortega
Mera.
Family
Ms Sandra and Mr Marcos Ortega Mera are the offspring of Mr Amancio
Ortega Gaona, director and indirect shareholder.
- Mr Amancio Ortega Gaona
Mr Amancio Ortega Gaona is an indirect shareholder and beneficial owner of
Inditex via significant shareholders Pontegadea Inversiones, S.L. and Partler
Participaciones, S.L.U. and Ms Sandra and Mr Marcos Ortega Mera are
indirect shareholders of the Company via significant shareholder Rosp
Corunna Participaciones Empresariales, S.L. (where Mr Ortega Mera has a
minority shareholding).
The Company has not received notice of any family,
commercial, contractual or corporate relationships existing
between the owners of significant holdings that are of a relevant
nature or that do not arise from the ordinary course of business.
A.5. Where applicable, indicate any
commercial, contractual or corporate
relationships that exist between significant
shareholders and the company and/or its
group, unless they are of little relevance
or arise in the ordinary course of
business:
There have been no commercial, contractual or corporate
relationships between significant shareholders and the
company that are of a relevant nature or that do not arise from
the ordinary course of business, without prejudice to the
information provided, for transparency's sake, under section D
below regarding “Related party and Intra-group transactions”.
97
A.6. Describe the relationships, unless of
little relevance to both parties, existing
between significant shareholders or
shareholders represented on the Board
and directors, or their representatives in
the case of directors that are legal
persons.
Explain, where applicable, how the significant shareholders
are represented. Specifically, indicate the directors appointed
to represent significant shareholders, those whose
appointment was proposed by significant shareholders, or
who are linked to significant shareholders and/or companies
in their group, specifying the nature of those relationships or
ties. In particular, mention the existence, identity and position
of any directors of the listed company, or their
representatives, who are in turn members or representatives
of members of the Board of Directors of companies that hold
significant shareholdings in the listed company or in group
companies of these significant shareholders.
Name or company name of related
director or representative
Name or company name of related
significant shareholder
Company name of the group company
of the significant shareholder
Description of
relationship/position
Mr Amancio Ortega Gaona
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA INVERSIONES, S.L.
Chair of the Board
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA INMOBILIARIA, S.L.U.
Chair of the Board
PARTLER 2006, S.L.
PARTLER 2006, S.L.
Chair of the Board
PARTLER 2006, S.L..
PARTLER PARTICIPACIONES, S.L.U.
Chair of the Board
Ms Marta Ortega Pérez
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA INVERSIONES, S.L.
Ordinary member
PARTLER 2006, S.L.
PARTLER 2006, S.L.
1st Deputy Chair
PARTLER 2006, S.L.
PARTLER PARTICIPACIONES, S.L.U.
1st Deputy Chair
Mrs Flora Pérez Marcote
(Legal representative of
PONTEGADEA INVERSIONES S.L.)
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA INVERSIONES, S.L.
1st Deputy Chair
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA INMOBILIARIA, S.L.U.
1st Deputy Chair
Mr José Arnau Sierra
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA INVERSIONES, S.L.
2nd Deputy Chair
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA INMOBILIARIA, S.L.U.
2nd Deputy Chair
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA ESPAÑA, S.L.U.
Joint Director
PONTEGADEA INVERSIONES, S.L.
ESPARELLE 2016, S.L.
Sole Director
(Legal representative of
PONTEGADEA
INMOBILIARIA, S.L.U.)
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA DIECIOCHO, S.L.
Sole Director
(Legal representative of
PONTEGADEA
INVERSIONES, S.L.)
PONTEGADEA INVERSIONES, S.L.
SOBRADO FORESTAL 2014, S.L.
Sole Director
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA FRANCE S.A.S.
Legal representative of the
Chair of the Company,
PONTEGADEA
INMOBILIARIA, S.L.U.
PONTEGADEA INVERSIONES, S.L.
PRIMA CINQUE S.p.A.
Chair
PONTEGADEA INVERSIONES, S.L.
PG REAL ESTATE INTEREST Ltd.
Ordinary member
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA INMOBILIARIA S.A. de
C.V.
Chair
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA CANADA Inc.
Chair
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA KOREA Inc.
Ordinary member
PONTEGADEA INVERSIONES, S.L.
PONTEGADEA USA Inc.
Chair
PARTLER 2006, S.L.
PARTLER 2006, S.L.
2nd Deputy Chair
PARTLER 2006, S.L.
PARTLER PARTICIPACIONES, S.L.U.
2nd Deputy Chair
PARTLER 2006, S.L.
PONTE GADEA PORTUGAL -
INVESTIMENTOS IMOBILIARIOS E
HOTELEIROS S.A.
Chair
PARTLER 2006, S.L.
ALMACK Ltd.
Ordinary member
Inditex Annual Report 2022 / Annual Corporate Governance Report
98
Remarks:
As stated in sections A.2 and A.4 above, Mr Amancio Ortega
Gaona is an indirect shareholder of Inditex through two
significant shareholders: Partler Participaciones, S.L.U. and
Pontegadea Inversiones, S.L. This latter is a member of Inditex’s
board of directors, with Ms Flora Pérez Marcote, the spouse of
Mr Amancio Ortega Gaona, as its legal representative. Director
and board chair, Ms Marta Ortega Pérez is the daughter of Mr
Ortega and Ms Pérez. She sits on the board of directors of
significant shareholders Pontegadea Inversiones, S.L. and
Partler Participaciones, S.L.U., as explained in the table above.
A.7. Indicate whether the company has
been notified of any shareholders’
agreements that may affect it, in
accordance with the provisions of Articles
530 and 531 of the Spanish Companies
Act (LSC). If so, describe them briefly and
list the shareholders bound by the
agreement:
Yes        No x
Indicate whether the company is aware of any concerted
actions amongst its shareholders. If so, provide a brief
description::
Yes        No x
The Company has not received any notices regarding the
making of shareholders’ agreements nor does it have any proof
of the existence of concerted actions amongst its shareholders.
A.8. Indicate whether any individual or
company exercises or may exercise
control over the company in accordance
with Article 5 of the Securities Market Act.
If so, identify them:
Yes x        No
Name or company name
Mr Amancio Ortega Gaona
Remarks:
Mr Amancio Ortega Gaona owns a 59.294% stake in Inditex’s
share capital through PONTEGADEA INVERSIONES, S.L. and
PARTLER PARTICIPACIONES, S.L.U.
A.9. Complete the following table with
details of the company’s treasury shares:
At the close of the year:
Number of direct
shares
Number of indirect
shares
Total percentage of
share capital
4,932,514
-
0.158%
Explain any significant changes during the year:
As of 31 January 2022, the Company owned 4,226,305 treasury
shares, representing 0.135% of the share capital.
The incentive for the first cycle (2019-2022) of the 2019-2023
Long-Term Incentive Plan was paid in 2022. Such Plan,
addressed to the management and other employees of the
Inditex Group and approved at the Annual General Meeting held
on 16 July 2019, is described in the Annual Report and in the
Annual Report on Remuneration of Directors (the “2019-2023
Plan”). The part of the incentive in shares was delivered to the
beneficiaries of the Plan charged against treasury stock held by
the Company as at the delivery date. 1,793,791 shares
representing 0.058% of the share capital were delivered.
On 12 July 2022 the board of directors approved, under the
current authorisation conferred at the Annual General Meeting
held on 16 July 2019, a share buy-back programme for the
Company to fulfil the requirements of shares delivery to the
beneficiaries of the second cycle of the 2019-2023 Long-Term
Incentive Plan as well as to the beneficiaries of the first cycle,
and as the case may be, the second cycle of the 2021-2025
Long-Term Incentive Plan (the “2021-2025 Plan”).
The Programme was launched in accordance with the
provisions of article 5 of Regulation (EU) No. 596/2014 on market
abuse and of Commission Delegated Regulation (EU)
2016/1052. Under this Programme, 2,500,000 treasury shares
were purchased, representing 0.08% of the company’s share
capital.
Consequently, as at 31 January 2023, the Company owned
4,932,514 treasury stock representing 0.158% of the share
capital.
A.10. Provide a detailed description of the
conditions and terms of the authority
given to the Board of Directors to issue,
buy back, or transfer treasury shares.
As of the date of this report, the authorisation granted to the
board of directors at the Annual General Meeting held on 16 July
2019 to acquire treasury shares remains in force. Said
authorisation superseded the previous authorisation approved
at the Annual General Meeting held on 19 July 2016.
The resolution passed by the aforementioned Annual General
Meeting held on 16 July 2019 regarding agenda item 10 is
transcribed below:
99
“To authorise the Board of Directors so that it may, in
accordance with the provisions of section 146 of Companies Act,
proceed with the derivative acquisition of treasury shares, either
directly or through any subsidiaries in which the Company is the
controlling company, observing the legal limits and
requirements and under the following conditions:
a)Methods of acquisition: the acquisition shall be done through
purchase and sale, exchange or dación en pago
[acceptance in lieu of payment].
b)Maximum number of treasury shares to be acquired: shares
with a nominal value that, when added to that of those
shares, directly or indirectly in the possession of the
Company, do not exceed 10% of the share capital.
c)Maximum and minimum prices: the minimum price of
acquisition of the shares shall be their nominal value and the
maximum price shall be up to 105% of their market value at
the date of purchase.
d)Duration of the authorisation: five (5) years from the date of
this resolution.
For the purposes of the provisions of section 146.1(a) of the
Companies Act, it is hereby stated that shares acquired under
this authority may be used by the Company, among other
purposes, to be delivered to employees or directors of the
Company, either directly or as result of the exercise of the option
right they may hold, under employees’ remuneration schemes in
respect of employees of the Company or its Group.
This authorisation supersedes the authorisation approved at the
Annual General Meeting held on 19 July 2016”.
As provided in section A.9 above, the board of directors
approved on 12 July 2022, under the authorisation conferred at
the Annual General Meeting as described above, a temporary
share buy-back programme for the Company to fulfil the
requirements of shares delivery to the beneficiaries of the
second cycle of the 2019-2023 Plan as well as of the first cycle,
and if appropriate, the second cycle of the 2021-2025 Plan.
A.11. Estimated free float:
%
Estimated free float
35.4914%
For these purposes, 0.0036% of the share capital owned by the Inditex directors
listed in section A.3 is not included as part of the free float.
A.12. Indicate whether there are any
restrictions (articles of association,
legislative or of any other nature) placed
on the transfer of shares and/or any
restrictions on voting rights. In particular,
indicate the existence of any type of
restriction that may impede a takeover of
the company through acquisition of its
shares on the market, as well as any
regimes for preliminary authorisation or
notification that may be applicable, under
sector regulations, to acquisitions or
transfers of the company’s financial
instruments.
Yes          No x
All Company shares carry the same voting and financial 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 LSC, according to which any
shareholder who is in arrears regarding any outstanding
payments may not exercise their voting right.
There are no restrictions either to absentee voting, as any
shareholder can exercise this right.
A.13. Indicate whether the General
Meeting of Shareholders has resolved to
adopt measures to neutralise a takeover
bid by virtue of the provisions of Act
6/2007.
Yes          No x
A.14. Indicate whether the company has
issued shares that are not traded on a
regulated EU market.
Yes          No x
Inditex Annual Report 2022 / Annual Corporate Governance Report
100
B. General Meeting of Shareholders
The General Meeting of Shareholders duly convened and with a
quorum present in accordance with all statutory requirements
and those provided in the Articles of Association and its 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 authorised to pass all kinds of resolutions
concerning the Company and, in particular, subject to any other
powers vested by the applicable regulations, the exercise of the
following powers is reserved to this body:
a)To resolve on the individual annual accounts of the
Company and, where appropriate, on the consolidated
accounts of the Company and its Group, as well as on the
distribution of the income or loss;
(b)To approve the statement on non-financial information;
(c)To appoint, re-elect and dismiss directors, as well as to
confirm or revoke the interim appointments of directors
made by the Board of Directors, and to review their
management;
(d)To approve the adoption of remuneration systems
consisting of granting either shares or stock options, as well
as any other remuneration system linked to the value of the
shares, for the benefit of directors;
(e)To approve the remuneration policy for directors pursuant to
statutory terms;
(f)To conduct, as a separate agenda item, an advisory say-on-
pay vote on the Annual Report on Remuneration of
Directors;
(g)To authorise 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 authorisation 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;
(h)To authorise the Board of Directors to increase the
Company’s share capital, or to proceed to the issue of
bonds convertible into Company’s shares;
(i)To resolve the issue of bonds convertible into Company
shares or that 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;
(j)To authorise treasury share buy-back;
(k)To approve the related-party transactions that the General
Meeting must approve pursuant to statute;
(l)To approve the transactions that entail a structural
amendment in the Company, namely: (i) the transformation
of listed companies into holding companies, through
“subsidiarisation” or the assignment to subsidiaries of core
activities theretofore carried out by the Company, even
though the Company retains full control of those entities; (ii)
the acquisition, disposal or contribution to another company
of essential assets; and, (iii) any transactions that entail an
effective amendment of the corporate objects and those
having an effect equivalent to the liquidation of the
Company;
(m)To appoint, re-elect and remove the statutory auditor;
(n)To appoint and remove, where appropriate, the Company’s
liquidators;
(o)To approve the Regulations of the General Meeting of
Shareholders and any subsequent amendment thereof;
(p)To resolve on the matters submitted to it by a resolution of
the Board of Directors;
(q)To give directions to the Board of Director or submit to the
General Meeting of Shareholders’ prior authorisation, the
passing by the Board of Directors of decisions or resolutions
on certain management matters; and
(r)To grant to the Board of Directors any powers it may deem
suitable for dealing with unforeseen issues.
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, at least to review the company’s
management, approve, where appropriate, the accounts of the
previous year and resolve on the distribution of income or loss.
Pursuant to sections 168 and 495.2(a) LSC, 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 to be transacted. In this latter case, the
General Meeting of Shareholders shall be called within the term
provided in the applicable regulations and the agenda of the
meeting must include the businesses that were the subject of
the request.
In the notice calling the General Meeting of Shareholders, the
board of directors shall require the presence of a Notary to take
up the minutes of the General Meeting.
101
General Meetings must be convened by the board of directors
by 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 and on CNMV’s website, at
least 1 month in advance of the day scheduled for the meeting
to be held, or within any longer period required by statute, where
appropriate, on account of the scope of the resolutions
submitted for deliberation. The notice must state the name of
the Company, the date, 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 calls. The notice shall likewise
state, clearly and precisely, all the business to be transacted
therein.
Where the board of directors resolves this possibility and it is
announced in the notice, attendance at the Annual General
Meeting may be in person or remotely, or even, where
circumstances so advise, a virtual-only general meeting can be
called. In any case, remote attendance shall be subject to
ensuring that the identity of shareholders and proxy holders is
duly guaranteed and that all attendees can effectively
participate at the general meeting, both to exercise, in real time,
the relevant rights to speak, to receive information, raise
proposals and vote they are entitled to, and to follow the
participation of the other attendees by the above-mentioned
means. In these cases, the board of directors shall implement in
the notice calling the meeting the procedure to exercise
shareholders' rights.
No later than the date of publication, or in any case, on the
business day that immediately follows, the Company shall send
the notice calling the meeting to CNMV, and to the Governing
Organisations 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.
Notwithstanding the above, the General Meeting shall be
deemed to have been duly called and a quorum shall be
deemed to be present to discuss any matter, whenever the
whole share capital is present and all those attending
unanimously agree to hold the meeting.
The Annual General Meeting was held on 12 July 2022 on first
call, with shareholders and proxy holders attending and
participating both in person and remotely, with means enabling
remote and real-time connection having been made available.
All of which is in accordance with article 15 and 15bis of the
Articles of Association and section 11bis of the Regulations of the
General Meeting of Shareholders.
All members of the board of directors attended the Annual
General Meeting except for Mr Amancio Ortega Gaona. Every
board member attended the AGM in person, except for Mr
Echenique and Mr Saracho, who attended remotely.
In 2022, an external facilitator was engaged to review
compliance with standards, rules and procedures laid down by
the board of directors regarding (i) the publication of the AGM
notice; (ii) shareholders’ rights management; and (iii) the
arrangement and conduct of 2022 AGM.
The facilitator conducted a number of tests at different stages:
notice, preparation and proceedings of AGM and after it was
held.
Further to such verification, the external facilitator issued an
unqualified report according to which: “no situations have been
found where the regulations defined in the company regarding
the Annual General Meeting have been deemed not to have
been reasonably applied.”
B.1. Indicate whether there are any
differences between the minimum
quorum regime established by the
Spanish Companies Act (LSC) for
General Meetings of Shareholders and
the quorum set by the company, and if so
give details.
Yes x        No         
% required for
quorum if different
than that set out in
section 193 LSC for
general matters
% required for
quorum if different
than that set out in
section 194 LSC for
special cases therein
described
Quorum required on
1st call
50% of the
subscribed voting
stock
—%
Quorum required on
2nd call
—%
—%
Description of differences:
Article 18.1 of the Articles of Association and section 16 of the
Regulations of the General Meeting provide that a quorum shall
be present at the General Meeting on first call when
shareholders who are present or represented by proxy
represent at least 50% of the subscribed voting stock. On
second call, generally, a quorum will be present at the General
Meeting irrespective of the capital attending the same. However,
if the General Meeting of Shareholders is called to decide on an
increase or a reduction of the share capital, the issue of bonds
convertible into Company shares or that entitle bondholders to
participate in the company’s earnings, the exclusion or
restriction of the pre-emptive right, the transformation of the
Company, the merger by creation of a new company or by
absorption of the Company by another entity, its spin-off in
whole or in part, the global assignment of assets and liabilities,
the substitution of the company’s objects as well as any other
amendment whatsoever to the Articles of Association, shall
require, on second call, the attendance of 25% of the subscribed
voting stock.
Inditex Annual Report 2022 / Annual Corporate Governance Report
102
Therefore, the only difference between said rules and the
provisions of the Companies Act lies in the quorum required to
hold the General Meeting on first call: under the Articles of
Association and the Regulations of the General Meeting of
Shareholders, a quorum will be present at the General Meeting
to validly pass any resolution when shareholders present or
represented by proxy represent at least 50% percent of the
subscribed voting stock, whereas in accordance with sections
193 and 194 LSC, said quorum will only be required to be
present on first call for the General Meeting to pass resolutions
on the matters described in section 194 exclusively.
This qualified quorum may not be deemed a restriction on
Company control, as it is only applicable to first calls.
This is expressly permitted by section 193 LSC, which provides
that a higher quorum may be established in the articles of
association.
B.2. Indicate whether there are any
differences between the company’s
manner of adopting corporate resolutions
and the regime provided in the Spanish
Companies Act (LSC) and, if so, give
details:
Yes          No x
B.3. Indicate the rules for amending the
company’s articles of association. In
particular, indicate the majorities required
for amendment of the articles of
association and any provisions in place to
protect shareholders’ rights in the event
of amendments to the articles of
association.
Pursuant to the provisions of sections 285 et seq. LSC, it is
incumbent on the General Meeting of Shareholders to resolve
on any amendment to the Articles of Association.
Rules applicable to the amendment of the company’s by-laws
are provided in the Articles of Association and the Regulations
of the General Meeting of Shareholders. Article 18 of the Articles
of Association and section 16 of the Regulations of the General
Meeting of Shareholders provide a special quorum for the first
call of the Annual General Meeting that is to address any
amendment to the Articles of Association. In particular, section
16 of the Regulations of the General Meeting of Shareholders
reads as follows:
“A quorum shall be present at the General Meeting of
Shareholders on first call when shareholders who are present or
represented by proxy hold at least fifty (50) percent of the
subscribed share capital with the right to vote. In general, on
second call, a quorum shall be present at the General Meeting,
regardless of the share capital attending same. However, if the
General Meeting of Shareholders is convened to decide on an
increase or a reduction of the share capital, the issue of bonds
convertible for shares in the Company, or bonds that confer on
bondholders a stake in the company’s earnings, the exclusion or
restriction of the pre-emptive right, the transformation of the
Company, the merger by establishment of a new company or by
absorption of the Company by another entity, its split-off in
whole or in part, the global assignment of assets and liabilities,
the transfer of the registered office abroad, the substitution of
the company objects as well as any other amendment
whatsoever of the Articles of Association, attendance of twenty-
five (25) percent of the subscribed share capital with the right to
vote shall be required on second call.”
In turn, section 6.(i) of the Regulations of the General Meeting of
Shareholders expressly assigns to the General Meeting of
Shareholders the power to approve any amendment to the
Articles of Association: “In accordance with the provisions of the
Articles of Association, the General Meeting of Shareholders is
authorised to pass all kinds of resolutions concerning the
Company, the following powers being namely reserved thereto,
without prejudice to any other powers vested by the applicable
regulations: [...] (i) To resolve the issue of bonds convertible into
Company’s shares or that 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”
103
B.4. Give details of attendance at General
Meetings of Shareholders held during
the reporting year and the two previous
years::
Attendance data
AGM Date
% physically present
% present by proxy
% absentee voting
Total
Electronic voting
Others
14-07-2020
0.07%
88.31%
0% (1)
0.34%(1)
88.72%
Of which float
0.07%
23.96%
0%
0.34%
24.37%
13/07/2021
0.07%
88.35%
0% (2)
0.31%(2)
88.73%
Of which float
0.07%
24.00%
0%
0.31%
24.38%
12/07/2022
0.01%
87.53%
0%(3)
0.54%(3)
88.00%
Of which float
0.01%
23.18%
0%
0.54%
23.73%
(1) 146 shareholders cast absentee vote through distance communication means, by post, or electronic vote.
(2) 187 shareholders cast absentee vote through distance communication means, by post, or electronic vote.
(3) 312 shareholders cast absentee vote through distance communication means, by post, or electronic vote.
B.5. Indicate whether there were any
items on the agenda that were not
approved by shareholders for any reason,
for all general meetings that took place in
the year.
Yes          No x
None of the agenda items subject to deliberation at the Annual
General Meeting held on 12 July 2022 was rejected or not
approved for any other reason. All agenda items were approved
with the percentages and in the manner shown in the vote
results available on the Company’s corporate website.
B.6. Indicate whether the articles of
association contain any restrictions
requiring a minimum number of shares to
attend General Meetings of Shareholders,
or to cast absentee votes:
Yes          No x
Number of shares required to attend General Meetings
1
Number of shares required to cast absentee vote
1
B.7. Indicate whether it has been
established that certain decisions, other
than those established by statute,
entailing an acquisition, disposal or
contribution to another company of
essential assets or other similar corporate
transactions must be submitted for
approval to the General Meeting of
Shareholders.
Yes          No x
The General Meeting of Shareholders has no powers other than
those established by statute.
In accordance with the Articles of Association and the
Regulations of the General Meeting of Shareholders, the latter is
authorised to pass all kinds of resolutions concerning the
Company and, in particular, subject to any other powers vested
by the applicable regulations, the exercise of the powers listed
at the beginning of section B above is reserved to this body.
Inditex Annual Report 2022 / Annual Corporate Governance Report
104
B.8. Indicate the address and manner of
accessing on the company's website
information pertaining to corporate
governance and other information
regarding General Meeting of
Shareholders that must be made
available to shareholders through the
company website.
The most relevant information on the Company’s corporate
governance system (Articles of Association, Regulations of the
General Meeting of Shareholders, Board of Directors’
Regulations, the terms of reference of each board committee,
the Internal Regulations of Conduct in the Securities Markets, as
well as the composition of the board of directors and its
committees, the Annual Corporate Governance Report and the
Annual Report on Remuneration of Directors) can be found in
the “Investors” tab, “Corporate Governance” section, “Reports &
Regulations” sub-section of the corporate website (https://
www.inditex.com/itxcomweb/en/investors/corporate-
governance/reports-and-regulations).
In that same section, information on the General Meeting is
provided in the “Annual General Meeting” sub-section, where a
tab is available for each Annual General Meeting. Shareholders
have access to all mandated or recommended information from
the date the meeting is called so that they can duly exercise
their rights to information and participation at the General
Meeting. The Annual General Meeting is webcast live, and a link
is provided for that purpose on those tabs. Once the meeting
has been held, information on the resolutions passed and the
votes results is also posted on the website.
105
C. Company Management Structure
C.1. Board of Directors
Except for any matters exclusively within the purview of the
shareholders at the General Meeting of Shareholders, the board
of directors is the highest decision-making, supervisory and
monitoring body of the Company, as it is entrusted with its
administration, management and representation, delegating as
a general rule the management of the day-to-day business of
Inditex to the executive bodies and the management team and
focusing on the general supervisory function, which includes
guiding Inditex’s policy, monitoring the management bodies,
assessing the management by the senior managers, making the
most relevant decisions for the Company and liaising with the
shareholders.
It is also incumbent on the board of directors to ensure that the
Company enforces its social and ethical duties, and its duty to
act in good faith with regard to its relationship with its
employees and with third parties, as well as to ensure that no
individuals or small groups of individuals have decision power
within the company that has not been subject to counterweights
and controls, and that no shareholder receives a more
privileged treatment than the others.
The board of directors carries out its duties in accordance with
corporate interests, which are understood to be the viability and
maximisation of the company’s value in the long term, in the
interest of all the shareholders, which shall not prevent taking
into account the rest of the legitimate interests, either public or
private, that concur in the undertaking of each business activity,
especially those of the other “stakeholders” of the Company
(employees, customers, suppliers and civil society at large),
determining and reviewing its business and financial strategies
pursuant to said criterion, striving to achieve a reasonable
balance between the proposals chosen and the risks taken.
C.1.1. Maximum and minimum number of directors
established in the articles of association and the
number set by the general meeting:
Maximum number of directors
12
Minimum number of directors
5
Number of directors set by the general meeting
11
C.1.2. Complete the following table on board
members:
Name or company name of director
Representative
Directorship type
Position on the
board
Date first
appointed to
the board
Date of last
appointment
Election
procedure
Ms Marta Ortega Pérez
Proprietary
Non-Executive
Chair
29/11/20211
12/07/2022
AGM
Mr Óscar García Maceiras González
Executive
CEO
29/11/2021
12/07/2022
AGM
Mr Amancio Ortega Gaona
Proprietary
Ordinary member
12/06/1985
16/07/2019
AGM
Mr José Arnau Sierra
Proprietary
Deputy Chair
12/06/2012
13/07/2021
AGM
PONTEGADEA INVERSIONES, S.L.
Ms Flora Pérez
Marcote
Proprietary
Ordinary member
09/12/2015
14/07/2020
AGM
Bns Denise Patricia Kingsmill
Independent
Ordinary member
19/07/2016
14/07/2020
AGM
Ms Anne Lange
Independent
Ordinary member
10/12/2019
14/07/2020
AGM
Ms Pilar López Álvarez
Independent
Ordinary member
17/07/2018
12/07/2022
AGM
Mr José Luis Durán Schulz
Independent
Ordinary member
14/07/2015
16/07/2019
AGM
Mr Rodrigo Echenique Gordillo
Independent
Lead Independent
Director
15/07/2014
12/07/2022
AGM
Mr Emilio Saracho Rodríguez de
Torres
Affiliate
Ordinary member
13/07/2010
16/07/2019
AGM
Total number of directors
11
1. Effective as of 01/04/2022
Inditex Annual Report 2022 / Annual Corporate Governance Report
106
Indicate any removals, whether through resignation or by
resolution of the general meeting, that have occurred on the
board of directors during the reporting period:
Name or company
name of director
Directorship type at
the time of removal
Date of last
appointment
Date of
termination
Specialized committees
of which he/she was a
member
Indicate whether the
director left before the end
of his or her term of office
Mr Pablo Isla
Álvarez de Tejera
Executive
16/07/2019
31/03/2022
Executive Committee
Yes (end of his term of office:
16/07/2023)
Reason for removal when this occurs before the end of the
term of office and other observations; information on whether
the director has sent a letter to the remaining members of the
board and, in the case of removal of non-executive directors,
explanation or opinion of the director dismissed by the
general meeting:
In the meeting held on 29 November 2021, the board of
directors acknowledged the resignation tendered by Mr Pablo
Isla Álvarez de Tejera, who stepped down as Chairman and
from the board and its Executive Committee, effective as of 31
March 2022. Mr Isla remained in office until such date, as he
explained in a letter addressed to the Deputy Chair of the board
of directors on 29 November 2021.
In this same context, the board of directors approved in the
meeting above referred, following a favourable report from the
Nomination Committee, the appointment to the board through
the co-option system of Ms Marta Ortega Pérez as new
proprietary director and (non-executive) Chair to fill the board
vacancy created following Mr Isla’s departure, and of Mr Óscar
García Maceiras as new executive director and CEO, effective
immediately, to fill the board vacancy created after the
resignation tendered by Mr Carlos Crespo González on 29
November 2021, already addressed in the Annual Corporate
Governance Report for FY2021.
With Mr Isla’s departure and subsequent co-option of Ms
Ortega to the board of directors, a generational handover, which
had been in the making for a certain time was completed,
piloted by Mr Isla himself and Inditex’s founder, controlling
shareholder and director, Mr Amancio Ortega Gaona, who were
in agreement to ensure that the succession of the Chair took
place in an orderly and planned manner.
C.1.3. Complete the following tables on the
members of the board and their directorship type:
The structure of the board of directors is addressed in detail in
the sections below
1) EXECUTIVE DIRECTORS
Name or company name of
the director
Position within the company’s
organization chart
Profile
Mr Óscar García
Maceiras
CEO
(1)
Total number of executive directors
1
% of all directors
9.09%
Remarks
As indicated in section C.1.2 above, the board of directors
resolved in the meeting held on 29 November 2021 following a
report of the Nomination Committee, to accept, inter alia, the
resignation tendered by Mr Pablo Isla Álvarez de Tejera, who
stepped down from the board and its Executive Committee.
Mr Isla’s departure became effective on 31 March 2022. Until
that date he remained in office as Executive Chairman.
107
2) NON-EXECUTIVE PROPRIETARY DIRECTORS
Name or company
name of director
Name or corporate name of the
significant shareholder whom they
represent or who has proposed
their appointment
Profile
PONTEGADEA
INVERSIONES, S.L.
Mr Amancio Ortega Gaona
(2)
Mr Amancio
Ortega Gaona
Mr Amancio Ortega Gaona
(2)
Mr José Arnau
Sierra
Mr Amancio Ortega Gaona
(2)
Ms Marta Ortega
Pérez
Mr Amancio Ortega Gaona
(2)
Total number of proprietary directors
4
% of all directors
36.36%
Remarks
–The board of directors resolved in the meeting held on 29
November 2021, following a favourable report from the
Nomination Committee on the proposal raised by Mr Isla
and Mr Ortega, to appoint through the co-option system
Ms Marta Ortega Pérez to the board of directors as non-
executive proprietary director. Her election, effective as of 1
April 2022 took place to fill the vacancy created on the
board following the departure of Mr Pablo Isla Álvarez de
Tejera on 31 March 2022. Such co-option to the board was
submitted to shareholders for ratification and subsequent
appointment at the Annual General Meeting held on 12 July
2022.
– Pursuant to First Transitional Provision of Act 5/2021,
Pontegadea Inversiones, S.L., represented by Ms Flora
Pérez Marcote, will remain a member of Inditex board of
directors until the end of her term of office.
– The relationship of Ms Marta Ortega Pérez, Ms Flora Pérez
Marcote, legal representative of Pontegadea Inversiones,
S.L. and Mr Amancio Ortega Gaona has been explained in
section A.6 above.
3) NON-EXECUTIVE INDEPENDENT DIRECTORS
Name of director
Profile
Mr José Luis Durán Schulz
(3)
Mr Rodrigo Echenique Gordillo
(3)
Bns Denise Patricia Kingsmill
(3)
Ms Anne Lange
(3)
Ms Pilar López Álvarez
(3)
Total number of independent directors
5
% of all directors
45.45%
State whether any independent director receives from the
company or any company in the group any amount or benefit
other than compensation as a director, or has or has had a
business relationship with the company or any company in the
group during the past year, whether in his/her own name or as
a significant shareholder, director or senior manager of a
company that has or has had said relationship.
Except as explained below, no independent director receives
any amount or benefit other than the compensation as a
director, nor has or has had during the past year any business
relationship with the Company or any company in the Group,
either in his/her own name or as significant shareholder,
director or senior manager of an entity that maintains or has
maintained said relationship.
If so, include a reasoned statement by the Board explaining
why it believes that the director in question can perform his or
her duties as an independent director.
Name or company name of director
Description of the relationship
Reasoned statement
–Ms Pilar López Álvarez
– Mr Rodrigo Echenique Gordillo
Inditex has been engaged for years in a
business relationship with Microsoft and
Banco Santander in the ordinary course of
business.
Pursuant to section 229 LSC and section 34.1(d)
of the Board of Directors’ Regulations, the board
of directors has considered that none of the
business relationships with any such companies
compromises the independence of its directors,
as none of them takes part in the negotiation
and execution of the relevant agreements, and
none of such relationships can be deemed to
be a significant or relevant business
relationship, within the meaning of section
529duodecis(4)(e)LSC.
Inditex Annual Report 2022 / Annual Corporate Governance Report
108
4) AFFILIATE DIRECTORS
Identify affiliate directors, indicate the reasons why they
cannot be considered either proprietary or independent, and
detail their ties with the company or its management or
shareholders:
Name or company
name of director
Reasons
Company, manager or
shareholder to which or
to whom the director is
related
Profile
Mr. Emilio Saracho
Rodríguez de
Torres
12 years in
office
Inditex
(4)
Total number of affiliate directors
1
% of all directors
9.09%
Indicate any changes that have occurred during the period in
each directorship type:
Name or company
name of director
Date of
change
Previous
directorship
type
Current
directorship
type
Mr Emilio Saracho
Rodríguez de Torres
12/7/2022
Non-executive
independent
director
Affiliate
Remarks
Mr Saracho’s 12 straight years of service on Inditex’s board of
directors came to an on 13 July 2022. Pursuant to applicable
internal regulations, he ceased to qualify as independent
director and had to tender his resignation to the board. Such
circumstance had been reported by Mr Saracho in a letter
addressed to the Chair on 27 May 2022.
The board of directors resolved in the meeting held on 7 June
2022 to retain Mr Saracho on the board until the end of his
tenure in 2023. Upon passing such resolution, the board
deemed it appropriate to retain him as a director in order to
ensure an adequate stability and balance for a reasonable
interim period marked by the transition at the highest level of
the company’s organisational structure. Mr Saracho became
an “affiliate” director in July 2022.
The following is a brief description of the profile of:
1) Executive directors
2) Proprietary directors
3) Independent directors
4) Affiliate directors
1) EXECUTIVE DIRECTORS
Mr Óscar García Maceiras
Chief Executive Officer since November 2021.
A law graduate from Universidade de A Coruña and Abogado
del Estado [Spanish State Attorney]. From 2001 through 2005,
he worked as State Attorney in his home town. In 2005 he joined
Banco Pastor as Head of Legal and was subsequently
appointed General Counsel and Secretary of the Board In 2012
he was elected Deputy Secretary of the Board of Directors and
Head of Institutional Service of Banco Popular Group.
That same year, he joined SAREB where he served as General
Counsel and Secretary of the Board, in addition to being Head
of Corporate Development and Legal Affairs. In 2016 he joined
Banco Santander where he was Group General Counsel and
Deputy Secretary of the Board of Directors until he was
appointed General Counsel and Secretary of Inditex’s board of
directors in 2021.
He was appointed to Inditex’s board by the Board of Directors in
the meeting held on 29 November 2021, effective immediately,
and ratified at the Annual General Meeting held on 12 July 2022.
He directly owns 12,520 shares of the Company.
2) PROPRIETARY DIRECTORS
Ms Marta Ortega Pérez
Non-executive Chair since April 2022.
Ms Ortega has built her entire career within the Inditex Group,
which she joined in 2007 after she graduated in International
Business from Regent’s University London. During her first years
at the company she carried out her professional duties in
several international branches and business areas, later joining
the Zara Woman design and product development team. In
recent years she has focused on defining Zara’s brand and
product strategy. She sits on the boards of directors of
Pontegadea Inversiones S.L. and Partler Participaciones, S.L.U.,
both significant shareholders of Inditex.
Ms Marta Ortega, daughter of Mr Amancio Ortega Gaona,
founder and majority shareholder of Inditex and of Ms Flora
Pérez Marcote –both of whom sit on this Board of Directors–,
has been a member of the Amancio Ortega Foundation Board
of Trustees since 2015.
She was appointed to Inditex’s board by the Board of Directors
in the meeting held on 29 November 2021, effective as of 1 April
2022, and ratified at the Annual General Meeting held on 12 July
2022.
She directly owns 42,511 shares of the Company.
Mr Amancio Ortega Gaona
He began his business career in the textile manufacturing sector
in 1963. In 1972 he founded Confecciones Goa, S.A., the first
garment-making factory of Inditex and 3 years later he founded
Zara España, S.A. the first retailing company of the Group. He
chaired Inditex’s board of directors until 2011. He currently chairs
the board of directors of Pontegadea Inversiones, S.L. and
Partler 2006, S.L. as well as the Board of Trustees of Fundación
Amancio Ortega.
He was re-elected to the board of directors at the Annual
General Meetings held on 30 June 1990, 31 July 1995, 20 July
2000, 15 July 2005, 13 July 2010, 14 July 2015 and 16 July 2019.
He is the controlling shareholder of the Company where he
owns 1,848,000,315 shares through Pontegadea Inversiones S.L.
and Partler Participaciones, S.L.U.
109
Pontegadea Inversiones S.L.
The company is represented on Inditex’s board of directors by
Ms Flora Pérez Marcote. It owns 1,558,637,990 shares of the
Company, which represents 50.01% of the share capital.
Ms Flora Pérez Marcote is the legal representative of
Pontegadea Inversiones S.L., where she holds the position of
First Deputy Chair. She has spent her entire career within the
Inditex Group, where she held different positions in areas
relating to both design and production. She has served as a
director at Group companies since 1992. She has been a
member of Inditex’s board of directors since 2005, representing
Pontegadea Inversiones, S.L. She has also been a member of
the Board of Trustees of Fundación Amancio Ortega since
March 2003 and its Deputy Chair since October 2005.
She was appointed to the board of directors on 9 December
2015, ratified at the Annual General Meeting on 19 July 2016 and
re-elected at the Annual General Meeting held on 14 July 2020.
Mr José Arnau Sierra
Deputy Chair since June 2012. Non-executive proprietary
director since 2012, representing the founder, Mr Amancio
Ortega Gaona.
A law graduate of the University of Santiago de Compostela and
State Tax Inspector, he has been the chief executive of the
Pontegadea Group since 2001.
He was the head of the Tax Department and a member of
Inditex’s Management Committee from 1993 to 2001 and served
on its board of directors from 1997 to 2000. He had previously
held various positions within the Tax Administration. He has
been a member of various boards of directors as legal
representative of Pontegadea Inversiones, S.L. From 1993 to
1996, he taught Tax Law at the University of A Coruña. He has
been a member of the Board of Trustees of Fundación Amancio
Ortega from inception and its Executive Deputy Chair since
2017.
He was appointed to the board of directors in June 2012, ratified
at the Annual General Meeting held on 17 July 2012 and re-
elected at the Annual General Meetings held on 18 July 2017 and
13 July 2021.
He directly owns 30,000 shares.
3) NON-EXECUTIVE INDEPENDENT DIRECTORS
Mr José Luis Durán Schulz
Independent director since July 2015.
He holds a degree in Economics and Management from ICADE.
From 1987 through 1990, he was an auditor at Arthur Andersen.
In 1991, he joined the Carrefour Group, where he held the
following positions: Head of Management Control (Spain,
Europe and Latin America) (1991-1997); Chief Financial Officer for
Spain (1997-2001); Group Chief Financial Officer (2001-2005) and
Group Chief Executive Officer (2005-2008).
In July 2009, he joined Maus Frères International Group, based
in Switzerland, where he held the following positions, until
January 2015: Chief Executive Officer of Lacoste, Executive
Chairman of Gant and Board member of Aigle, S.A. Until 4
October 2015, he was member of the Governance,
Remuneration and Nomination Committee at Unibail-Rodamco,
and member of the Board of Directors of said company. Until 30
June 2017, he was an independent director and member of the
Audit Committee of Orange. At present, he is the CEO of Value
Retail Management.
He was elected to the board of directors at the Annual General
Meeting held on 14 July 2015 and re-elected at the Annual
General Meeting held on 16 July 2019.
He directly owns 3,106 shares.
Mr Rodrigo Echenique Gordillo
Independent director since July 2014.
He is a law graduate from the Complutense University of Madrid
and Spanish State Attorney [Abogado del Estado].
At present, he is the Chair of Fundación Banco Santander and
non-executive director of Directorio Santander Chile.
He is a member of the Board of Trustees of Fundación Consejo
España-EE.UU, Deputy-Chair of the Board of Trustees of Teatro
Real, member of the Board of Trustees of Escuela Superior de
Música Reina Sofia, of Fundación Empresa y Crecimiento and
of Fundación ProCNIC y CNIC.
From 1987 through 2020, he served on the board of directors of
Banco Santander, S.A. He has been CEO, Deputy Chairman and
Executive Director of Banco Santander, S.A., and has chaired
Santander España and Banco Popular. He also served as
Deputy Chairman of Banco Banif, S.A., Chairman of Allfunds
Bank, and of SPREA. He has been a member of the board of
directors of Santander Investment. He has been an Ordinary
Member of the board of directors of various industrial and
financial companies, such as Ebro Azúcares y Alcoholes, S.A.,
Industrias Agrícolas, S.A., SABA, S.A. and Lar, S.A.
He chaired the Social Advisory Board of the University Carlos III
of Madrid. Additionally, he was first a member and then
Chairman of the Advisory Board of Accenture, S.A., Lucent
Technologies, and Quercus y Agrolimen, S.A. He has been the
Chairman of Vallehermoso, S.A., Vocento, S.A., NH Hotels
Group, Metrovacesa, S.A., and Merlin Properties SOCIMI, S.A.
He was elected to the Board of Directors at the Annual General
Meeting held on 15 July 2014 and re-elected at the Annual
General Meetings held on 17 July 2018 and 12 July 2022.
He directly owns 20,000 shares.
Bns Denise Patricia Kingsmill
Independent director since July 2016.
In 2000 Baroness Kingsmill was awarded a CBE for services to
Employment Law and Competition. In June 2006, she was
appointed to the House of Lords as a Labour Peer. She is a
member of the International Agreements Committee in the
House of Lords.
After a 20-year legal career, she became deputy chair of the
Competition Commission between 1996 and 2004. She has 5
honorary Doctorates from universities in the United Kingdom.
Baroness Kingsmill has been a Chair/member of the
Remuneration committees of many international companies. As
a lawyer, she has advised in relation to remuneration schemes.
Inditex Annual Report 2022 / Annual Corporate Governance Report
110
In 2001 she was invited by the Government to head a task force
looking at women’s employment and remuneration in the UK.
In 2003 she was appointed Chair of the Department of Trade
and Industry’s Accounting for People task force. She headed a
second Government enquiry (“Accounting for People”) into how
companies should evaluate and measure the contribution of
their work forces and specifically as to how they should
communicate their progress in this area of “Human Capital
Management” to all their stakeholders
(www.accountingforpeople.gov.uk). In 2013 she was the co-chair
of the Design Commission report into Design and Public
Services (“Re-starting Britain”).
Until May 2018, Baroness Kingsmill was the Chair of Monzo
Bank and a Member of the Supervisory Board of E.ONSE. At
present, she is a member of the International Advisory Board at
IESE Business School. She has recently been appointed a UK
representative on the NATO Parliamentary Assembly.
Baroness Kingsmill has been an adviser to a number of
international companies and has been a non-executive director
of various British, European and American boards, including
International Consolidated Airlines Group, S.A. and Telecom
Italia.
A diverse and varied career spanning fashion and design, law
and regulation, as well as politics and people have given
Baroness Kingsmill a unique perspective on the contemporary
boardroom.
She was elected as a director on 19 July 2016 at the Annual
General Meeting and re-elected at the Annual General Meeting
held on 14 July 2020.
Ms Anne Lange
Independent director since 2019.
A French citizen, Ms Anne Lange is an entrepreneur and a
sought-after C-level business advisor with over 25 years of
experience in technology innovation, in both private & public
sectors. She is a graduate of French Grandes Écoles, Institut
d’Etudes Politiques in Paris and École Nationale d’Administration
(ENA).
Her career began at the French Prime Minister's office as head
of department for state-owned broadcasting companies until
she joined Thomson, a high-tech champion, where she built up
a new generation of consumer internet access devices. She
worked in various global executive positions with Cisco since
2004, based out of France and Silicon Valley. As a C-level
executive, her engagements centred on adopting and
innovating technological, organisational and business
processes to drive business transformation. Ms Lange is the co-
founder and former CEO of Mentis Services, an IoT Data
Intelligent Software provider of urban space services. She is
currently the founder and managing partner of Adara, a
consulting company that provides senior-level advice in
transformation strategy and an investor in start-ups.
She currently serves on the executive boards of Orange (French
leading service provider), Pernod-Ricard (second largest wine
and spirits company in the world) and FFP (Peugeot’s family
holding).
She was appointed independent director by the Board of
Directors in the meeting held on 10 December 2019 and ratified
at the Annual General Meeting held on 14 July 2020.
Ms Pilar López Álvarez
Independent director since July 2018.
She has a Bachelor of Science in Business Administration and a
Major in Finance from ICADE. She has worked in a variety of
roles at J.P. Morgan in Madrid, London and New York
(1993-1999). She joined Telefónica in 1999, where she held the
following positions: Head of Management Planning and Control
(1999-2001), Financial Controller in Telefónica Móviles
(2001-2006), Strategy Director in Telefónica de España
(2006-2007), Chief Financial Officer of O2 Plc., based in the UK
(2007-2011) and for Telefónica Europa based in Madrid
(2011-2014), and Head of the Operational Simplification Program
of Grupo Telefónica (2014-2015).
She has served as Supervisory Board member of Telefónica
Czech Republic AS (2007-2014), and as Vice Chairman of the
Supervisory Board of Telefónica Deutschland Holding AG
(2012-2015). She was a member of the Board of Tuenti
Technologies and non-executive director of Ferguson Plc
(2013-2018). She was a member of the Board of Trustees of
Fundación ONCE, and a member of the board of directors of
Asociación para el Progreso de la Dirección (APD).
At present, she is Deputy Chair of Microsoft Western Europe.
She was elected as a director on 17 July 2018 at the Annual
General Meeting and re-elected at the Annual General Meeting
held on 12 July 2022.
She directly owns 4,000 shares of the Company.
4) AFFILIATE DIRECTORS
Mr Emilio Saracho Rodríguez de Torres
Affiliate director since July 2022.
He is a graduate in Economics from Complutense University of
Madrid. He has an MBA from the University of California in Los
Angeles (UCLA), awarded in 1980. He was also a Fulbright
scholar. He began his career in 1980 at Chase Manhattan Bank,
where he was responsible for operations in various sectors such
as Oil and Gas, Telecommunications and Capital goods.
In 1985, he took part in the launch and implementation of Banco
Santander de Negocios, where he led the Investment Banking
division. In 1989, he was appointed head of the Division of Large
Companies of Grupo Santander and Deputy General Director.
He has been a director of FISEAT, Santander de Pensiones and
Santander de Leasing. In 1990, he worked for Goldman Sachs in
London as co-head of Spanish and Portuguese operations. In
1995, he returned to Santander Investment as General Director
in charge for the Investment Banking area worldwide. From 1996
to 1998, he was responsible for the Banking operations in Asia.
He joined J.P. Morgan in 1998 as Chairman for Spain and
Portugal and head of business for the Iberian Peninsula and
member of the European Management Committee.
From early 2006 through 1 January 2008, he was Chief
Executive Officer of J.P. Morgan Private Bank for Europe, the
Middle East and Africa, based in London. He also sat on the
111
Operating Committee and on the European Management
Committee, while chairing at the same time J.P. Morgan in Spain
and Portugal.
He was in charge of Investment Banking operations of J.P.
Morgan for Europe, the Middle East and Africa, and sat on the
Executive Committee of the Investment Bank and on the
Executive Committee of JPMorgan Chase. From December
2012 through April 2015, he was Deputy CEO for EMEA. From
2015 to the end of 2016, he was Vice Chairman of JPMorgan
Chase & Co and from February to June 2017, he chaired the
Board of Directors of Banco Popular.
At present, he sits on the Board of Directors of International
Consolidated Airlines Group, S.A. (IAG) and is Senior Advisor of
Altamar Capital Partners.
Mr Saracho was elected to the boardto the board of directors
on 13 July 2010 at the Annual General Meeting and re-elected at
the Annual General Meetings held on 14 July 2015 and 19 July
2019.
C.1.4. Complete the following table with information
relating to the number of female directors at the
close over the last 4 years, as well as their
directorship type:
Number of female directors
% of total director of each type
FY2022
FY2021
FY2020
FY2019
FY2018
FY 2022
FY2021
FY2020
FY2019
FY2018
Executive
0
0
0
0
0
—%
—%
—%
—%
—%
Proprietary
2
1
1
1
1
50.0%
33.3%
33.3%
33.3%
33.3%
Independent
3
3
3
3
2
60%
50%
50%
50%
40%
Affiliate
0
0
0
0
0
—%
—%
—%
—%
—%
Total
5
4
4
4
3
45%
36%
36%
36%
33%
Remarks
At the meeting held on 29 November 2021, the board of
directors resolved, following a favourable report from the
Nomination Committee on the proposal raised by Mr Isla and
Mr Ortega, to appoint Ms Marta Ortega Pérez to the board of
directors through the co-option system, effective as of 1 April
2022, as proprietary director to fill the board vacancy resulting
from Mr Isla’s resignation.
With five (5) female directors on the board, the percentage of
women out of all board members has reached 45.45%. Thus,
the Company has exceeded the 40% target for female
representation on the board, set in the company’s internal
regulations since 2020 pursuant to Recommendation 15 GGC.
C.1.5. Indicate whether the company has diversity
policies in relation to its Board of Directors on such
questions as age, gender, disability, education and
professional experience. Small and medium-sized
enterprises, in accordance with the definition set
out in the Spanish Auditing Act, will have to report
at least the policy that they have implemented in
relation to gender diversity.
Yes x    No          Partial policies
If so, describe these diversity policies, their objectives, the
measures and the way in which they have been applied and
their results over the year. Also indicate the specific measures
adopted by the Board of Directors and the nomination and
remuneration committee to achieve a balanced and diverse
board membership.
If the company does not apply a diversity policy, explain the
reasons why.
Description of the policies, objectives, measures, how they
have been enforced and the results achieved
Inditex Annual Report 2022 / Annual Corporate Governance Report
112
The Inditex Group has a Diversity of Board of Directors
Membership and Director Selection Policy (“Diversity of Board
of Directors Membership and Director Selection Policy”)
which was originally approved by the board of directors at its
meeting held on 19 December 2015 and amended in part first at
the board meeting held on 14 December 2020 primarily to align
its provisions with the language of the revised GGC approved by
CNMV’s board on 25 June 2020 and then at the board meeting
held on 8 June 2021 exclusively to align its wording with the new
section 529bis LSC introduced by Act 5/2021. Pursuant to such
section, only natural persons can serve as board members.
The Policy provides guidelines to guide the board of directors
and the Nomination Committee’s proceedings in the field of
director selection and thus (i) ensure that search and selection
processes as well as proposals on the appointment, re-election
or ratification of directors are based on a prior analysis of the
needs of the Company and the competences required by the
board; (ii) favour diversity of directors’ knowledge, skills,
experience, geographic origin, age and gender; (iii) ensure an
appropriate composition of the board and its committees,
facilitating the appropriate discharge of the duties they are
called upon to perform; and, (iv) contribute to talent attraction in
the Inditex Group, making efforts to ensure that the best
professionals serve on its governing bodies. The Policy
observes and follows both GGC Recommendations and the
overarching principles and guidelines of CNMV’s Technical
Guide 1/2019 on nomination and remuneration committees
(“Technical Guide 1/2019”).
With regard to gender diversity, the female representation target
on the board of directors provided in Recommendation 15 GGC
is covered in the Policy. The Company has thus endorsed the
commitment to ensure that the number of female directors
should account for at least 40% of all board seats by the end of
2022 and in the future. The Company had already exceeded
such percentage in April 2022, without it being lesser at any later
stage.
In line with the provisions of the Diversity of Board of Directors
Membership and Director Selection Policy, the terms of
reference of board committees also reflect the board’s
commitment to encouraging a diverse membership in terms of
professional experience, competences, personal skills, sector-
specific knowledge, international experience or origin, age and
gender, taking into account the restrictions that are a result of
their smaller size.
In accordance with section 6.1 of the above referred Policy, the
provisions of Technical Guide 1/2019 and the terms of reference
of the Nomination Committee, taking into account the significant
changes to board membership in the year, the board of
directors approved in the meeting held on 12 May 2022 the
board skills matrix prepared by such Committee, to improve the
effectiveness of the governing bodies.
The Board Skills Matrix was prepared taking into account the
then current board membership (with a non-executive Chair and
a CEO) as a tool to review the yardsticks to be followed for the
appointment and re-election of directors at the 2022 AGM, to
ensure an appropriate and diverse board membership and the
possibility of considering and recruiting other candidates.
In addition to the above-mentioned Policy and the terms of
reference of board committees, the Inditex Group also relies on
a Diversity and Inclusion (D&I) Policy, originally approved by the
Board of Directors on 12 December 2017 and amended in part at
the meeting held on 14 December 2020.
The D&I Policy seeks to fully endorse the regulatory
requirements, recommendations and best practices in the area
of diversity and inclusion, and mark Inditex’s commitment to
diversity and multiculturalism in the working environment, in all
positions and levels within the company, including on the board
of directors, and its commitment to champion a culture of
inclusion, equal treatment and respect, advocating for equitable
workplace environments within the scope of its zero tolerance
policy against any kind of discrimination. This Policy also
expressly endorses, in line with Recommendation 14 GGC, the
company’s commitment to favouring diversity among Senior
Managers and namely gender diversity, as the board of
directors and the Nomination Committee are fully committed to
encouraging the Company to have a significant number of
female senior managers.
The board of directors is the driving force behind this full
commitment, subscribed by the Group at its employees, to
diversity, and it shall ensure that action is taken to encourage
diversity within the organisation, as well as ensuring the absence
of any form of discrimination, in particular gender-based
discrimination, upon electing board members or senior
managers.
The board of directors is ultimately responsible for the
company’s management and is entrusted with guiding its
policies. Thus, being the driving force behind this high-level
commitment, it shall ensure that action is taken to ensure
compliance with the D&I Policy at all levels within the
organisation and by all employees.
The principles and action lines of the D&I Policy govern all the
proceedings of the Company, in particular in the area of human
resources: recruitment and selection of candidates,
compensation and benefits, promotions, transfers, skills
enhancement, professional development and training, etc.
Meanwhile, pursuant to the Inditex Group's Code of Conduct
and Responsible Practices, no one who is employed at Inditex
shall be discriminated against because of their gender, and all
employees shall be bound to interact with other employees
pursuant to criteria of respect, dignity and justice, taking into
account the unique cultural backgrounds of each individual,
without allowing any form of violence, harassment or abuse in
the workplace, or any form of discrimination on account of race,
religion, age, nationality, gender or any other personal or social
condition beyond qualifications and capacity.
With regard to a balanced and diverse board membership, the
Annual General Meeting held on 12 July 2022 resolved pursuant
to agenda item 5, to ratify and appoint Ms Marta Ortega Pérez
and Mr Óscar García Maceiras to the board as proprietary and
executive directors respectively, and to re-elect Ms Pilar López
Álvarez and Mr Rodrigo Echenique Gordillo to the board, both of
them as independent directors.
The ratification and appointment, or the re-election, as the case
may be, of the above referred directors was based on a prior
analysis of the needs of the company and the board of directors
itself, the findings of which were written up in an explanatory
113
report approved by the Nomination Committee on 6 June 2022,
in accordance with Recommendation 14 GGC, sections 3, 4 and
5 of Technical Guide 1/2019 and section 5 of the Diversity of
Board of Directors Membership and Director Selection Policy.
In said analysis, the Nomination Committee took into account,
inter alia: (i) the board skills matrix approved on 12 May 2022; (ii)
the findings of the annual evaluation of the performance of the
board of directors for 2021; and (iii) the commitments
undertaken by the Company, pursuant to the Diversity of Board
of Directors Membership and Director Selection Policy with
regard to: (a) diversity of background, experience, skills and
gender on the board of directors, and (b) achievement of the
representation target for the least represented gender on the
board, set in Recommendation 15 GGC.
As shown in the above referred report, further to the review of
the size, composition and effectiveness of the board of directors
at the time, the Nomination Committee considered that with
such structure and composition (with Ms Ortega and Mr García
holding the positions of Chair and CEO, respectively, pending
the ratification of their election at the AGM) ) it would highly
appreciate that the proposals on the re-election and
appointment of directors should seek to keep or reinforce within
the supreme governing body of the company: (i) the different
profiles and experiences aligned with the Company’s strategic
focal points; (ii) a high diversity in terms of professional
experience, competences, personal skills, sector-specific
knowledge, gender, age, geographic origin, race, ethnicity and/
or cultural background, among others; (iii) a balance of
directorship types on the board, ensuring a majority of non-
executive directors, most of them independent, and an
appropriate representation of proprietary directors within the
board; and (iv) a progressive board refreshment, together with
the necessary presence on the board of members with a wide
experience and knowledge about the Company, the Group, its
business, and the retail sector in general.
In line with the commitment assumed by the company, the
Nomination Committee considered that favouring gender
diversity should remain a priority for director selection, to keep
or even surpass the 40% target for female representation on
governing bodies set for 2022, without disregarding however,
that all elections should be made based upon suitability and
merit yardsticks.
The Committee further considered that although the board can
be flexible to increase or even reduce the number of its
members, its size was appropriate to facilitate dialogue and
interaction among them, as it is aligned with the Group’s
dimensions, complexity and business, and on par with that of
comparable companies.
Last, with regard to the progressive board refreshment that
needs to be observed in view of the addition of future members,
candidates with experience in other industries should be sought,
in particular, those with international experience and experience
in the retail sector and the fashion industry, as it was inferred
from the annual evaluation of performance for the last two years.
A combination of various nationalities was also appreciated;
however, given the weight of the Spanish market in the Group’s
operations and total sales, with its parent company listed on all
four Spanish Stock Exchanges, it was deemed appropriate to
keep the representation of Spanish directors on the board.
The Nomination Committee considered that, in general terms,
for the Board of Directors to duly perform its oversight role, it
should have, as a whole, accredited abilities, competences,
experience and merits: (i) about the Company itself, the Group,
and the retail sector; (ii) in economy and finances, accounting,
audit or risk management matters, including both financial and
non-financial; (iii) in sustainability, regulatory compliance and
corporate governance matters; (iv) in the digital and new
technologies sector; (v) in different geographical markets; and
(vi) in management, leadership and business strategy, as well as
(vii) the requirement for each board member to be highly
qualified and trustworthy, both as a person and as a
professional, and available for the necessary dedication to the
position.
The findings of the Nomination Committee were confirmed in an
explanatory report approved by the board of directors on 7 June
2022 covering the proposals on the ratification and appointment
of Ms Ortega and Mr García to the board, and the re-election of
Ms López and Mr Echenique as directors pursuant to section
529decies(5) LSC, section 23.1 of the Board of Directors’
Regulations and the Diversity of Board of Directors Membership
and Director Selection Policy.
Based on the foregoing, the board of directors found in such
explanatory report dated 7 June 2022, that the proposed
ratifications, appointments and re-elections of directors above
referred would contribute in terms of diversity and considered
as a whole, to maintaining and reinforcing the following skills on
the board:
(i)The high qualification and professional and personal
integrity of board members.
(ii)A balanced membership with regard to the different
directorship types: pursuant to the proposals raised, the
board of directors would be composed of independent,
proprietary and executive directors, ensuring that the
majority of its members are non-executive. In this regard:
–With the re-election of the 2 independent directors, the
majority of independent directors sitting on the board would
be ensured.
–The appointment of the proprietary director: i) would ensure
alignment of the decisions of the board of directors with the
interests of shareholders, considering that although the
company’s share capital structure is diverse, a high
percentage thereof is held by significant shareholders; and,
(ii) would act as a counterweight in the event of potential
risks of concentration of power in the executive director.
–On the other hand, the definitive separation of the roles of
board chair and chief executive of the company, with a new
non-executive Chair and a single executive director who will
have every delegated authority, reduces any potential risk of
power concentration.
The separation of the positions of chair and CEO and the
existence of a Management Committee, approved further to
a resolution passed by the Board of Directors on 29
November 2021 for the purposes of supporting the new CEO
in the performance of his duties, composed of members
from the main business and corporate areas, would
contribute to reducing a potential risk of power
Inditex Annual Report 2022 / Annual Corporate Governance Report
114
concentration in the hands of a single executive director,
and to the appropriate oversight of the corporate strategy.
(iii)A balanced presence of men and women on the board.
Further to the re-election of Ms López and the appointment
of Ms Ortega, 5 women would sit on the board of directors,
and the percentage of female representation will stand at
45.45%.
(iv)Reinforcing experience in such areas as digital
transformation, sustainability, compliance and corporate
governance, and the relationship with regulators, economic
and financial issues, audit, control and risk management
issues, as well as leadership management and commercial
strategy, in particular as regards product, design, innovation
and brand image, which are the Company’s strategic
priorities.
With this membership, an appropriate balance would have
been reached between skills and experience, that befits the
interests of the company and the group, combining
members with wide experience and knowledge of the
Group, its business and the retail sector in general, with
other profiles with education, competences, background
and experience in other fields and sectors. This contributed
to the appropriate performance of the oversight duty
entrusted to the board of directors.
(v)The progressive refreshment of the board, with the presence
of new members, combined with directors having a wide
experience and knowledge of the company, the group and
its business.
The appointment of Mr García and Ms Ortega completed the
generational handover at the same time that the values of the
company were upheld, ensuring the stability of the founder’s
project given their extensive record.
With the appointment of these 2 directors, a younger, more
diverse and plural team would be formed, with the capacity to
approach issues from a more modern perspective, in line with
the expectations and demands of the next generations of
customers and other stakeholders.
The continuance of Mr Echenique and Ms López on the board
of directors was deemed to be highly convenient to ensure the
right stability and balance of the governance structure of the
Company, as both had contributed to the smooth running of
such governing body and its committees. Thus, their sound
knowledge of the company, its group and its business models,
and of the dynamics and proceedings of its committees,
governance regulations and management and oversight
function at the highest level, even at extremely difficult times,
was considered an invaluable asset.
(vi) Consequently, such appointments would contribute to
significantly reduce the average age of directors and the
average tenure of board members.
In the view of the Nomination Committee and the board itself, all
of the above would contribute to consolidating diversity on the
governing bodies in every relevant aspect, i.e., as regards
directorship type, professional experience and education, age,
gender, etc.
Based on all the foregoing, the Nomination Committee has
considered that Inditex meets the targets and fulfils its
commitment to diversity provided in the Diversity of Board of
Directors Membership and Director Selection Policy and the
remaining internal regulations.
115
C.1.6. Describe the measures, if any, agreed upon
by the nomination committee to ensure that
selection procedures do not contain hidden biases
that impede the selection of female directors and
that the company deliberately seeks and includes
women who meet the target professional profile
amongst potential candidates, making it possible to
achieve a balance between men and women. Also
indicate whether these measures include
encouraging the company to have a significant
number of female senior managers:C.1.6. Describe
the measures, if any, agreed upon by the
nomination committee to ensure that selection
procedures do not contain hidden biases which
impede the selection of female directors and that
the company deliberately seeks and includes
women who meet the target professional profile
among potential candidates, making it possible to
achieve a balance between men and women. Also
indicate whether these measures include
encouraging the company to have a significant
number of female senior managers:
As explained in detail in section C.1.5 above, the Group relies on
the Diversity of Board of Directors Membership and Director
Selection Policy and the D&I Policy, both of which reflect the
company’s commitment to encouraging diversity, in particular
gender diversity. Notwithstanding this, the role that the
Nomination Committee plays in this area is addressed below.
Pursuant to section 529bis(2) LSC, the board of directors shall
ensure that diversity, including of age, gender and professional
experience, is encouraged in directors’ recruitment processes,
which should not suffer from any implicit bias that may entail any
discrimination and particularly, that selection of female directors
is fostered in a number that can ensure a balanced presence of
women and men on the board.
The role that the Nomination Committee plays in this field is
summarised below.
Pursuant to the provisions of section 16.2(b) of the Board of
Directors’ Regulations, and section 5.3(b) of the Nomination
Committee’s Regulations, one of the responsibilities of the
Nomination Committee shall be: “to seek an appropriate
composition and a diverse membership on the board of
directors and its committees in terms of professional
experience, competences, personal skills, sector-specific
knowledge, international experience or geographic origin, age
and, in particular, gender.”
According to the Diversity of Board of Directors Membership
and Director Selection Policy, the Nomination Committee must
set a representation target for the least represented gender on
the board and provide guidance on how to meet such target.
According to section 6(d) of its terms of reference and the
Diversity of Board of Directors Membership and Director
Selection Policy, the Nomination Committee should strive to
ensure that by the end of 2022 female directors would account
for at least 40% of board seats. Under no circumstances shall
such percentage be less than 30% at any given time before the
expiry of such term.
Likewise, section 22.1. of the Board of Directors Regulations and
section 6 (c) of the Nomination Committee’s Regulations provide
that both the board and such committee shall ensure that upon
filling new vacancies or upon appointing new directors,
selection procedures shall ensure the absence of any manner of
discrimination.
Meanwhile, pursuant to section 13.2 of the Board of Directors’
Regulations, section 5.3.(b) of the Nomination Committee’s
Regulations and the provisions of the Diversity of Board of
Directors Membership and Director Selection Policy, the
Nomination Committee is responsible for seeking an
appropriate composition and a diverse membership on the
board of directors and its committees in terms of professional
experience, competences, personal skills, sector-specific
knowledge, international experience or geographic origin, age
and in particular, gender, taking into account the restrictions that
are a result of the smaller size of the Committee.
Last, pursuant to section 16.2(f) of the Board of Directors’
Regulations and section 5.3(e) of its terms of reference, the
Nomination Committee shall be responsible for “issuing a report
regarding the proposals on the appointment and/or dismissal of
senior managers, supporting the existence of a significant
number of female senior managers in the company”.
C.1.7. Explain the conclusions of the nomination
committee regarding verification of compliance
with the policy aimed at promoting an appropriate
composition of the Board of Directors.
The Nomination Committee has reviewed the re-election and
ratification of directors’ appointments process carried out in
2022 to establish compliance with the Diversity of Board of
Directors Membership and Director Selection Policy.
This annual check has been performed considering two
different stages in 2021 and 2022:
–The election of Ms Marta Ortega Pérez and Mr Óscar García
Maceiras, co-opted to the board of directors on 29
November 2021, which represented the completion of the
orderly and planned succession of the chair process
following the departure of the former Executive Chairman,
Mr Pablo Isla Álvarez de Tejera, agreed with the company.
–The subsequent ratification of the appointment and the re-
election of directors whose term of office was about to
expire, that had to be subject to the Annual General Meeting
held on 12 July 2022.
Changes to the organisational structure approved by the board
of directors via the co-option system in 2021 have been fully
implemented in 2022, following the departure of the former
Executive Chairman and the entry into office of Ms Ortega as
non-executive Chair on 1 April 2022.
With regard to the proposed ratification of Ms Ortega and Mr
García’s co-option to the board, and the proposed re-election of
Ms López and Mr Echenique, that the board raised to
shareholders at the AGM 2022, it was established that such
proposals were based on the prior analysis of board needs
written up in a report issued by the Nomination Committee on 6
June 2022 (including the findings of the prior analysis carried
Inditex Annual Report 2022 / Annual Corporate Governance Report
116
out in respect of the proposed co-option on 29 November 2021,
which were broken down in section C.1.7.of the Annual
Corporate Governance Report for 2021). Moreover, such
analysis was carried out based on the outcome of the board
skills matrix referred to in section C.1.5. above.
The Board Skills Matrix was prepared taking into account the
then current board membership (with a non-executive Chair and
a CEO) as a tool to review the yardsticks to be followed for the
appointment and re-election of directors, to ensure an
appropriate and diverse board membership and the possibility
of considering and recruiting other candidates.
In its report dated June 2022, the Nomination Committee
considered (i) the competence, experience and merits of the
directors whose ratification, appointment and re-election to the
board was proposed to the 2022 AGM, and (ii) the fact that the
professional profile of each director is deemed suitable for the
Company’s description, its business and its international
dimension.
The findings of the committee’s report were ratified by the board
of directors in its explanatory report dated 7 June 2022 which
also addressed the quality of work and the dedication to the
position of the two directors whose re-election was proposed.
Both reports and their findings have been addressed in detail in
section C.1.5 above.
Considering that ratification of the co-option to the board of Ms
Ortega and Mr García as proprietary and executive directors,
respectively, and their subsequent appointment, as well as the
re-election of Ms López and Mr Echenique, both of them as
independent directors were approved at the AGM 2022, the
structure and size of the board of directors is as follows:
–Eleven (11) directors sit on the board of directors. This
number is within the limit provided in the Articles of
Association and within the 5 to 15 range set out in
Recommendation 13 GGC.
–By directorship type, the board is comprised of: one (1)
executive director, four (4) proprietary directors, five (5)
independent directors and one (1) affiliate director (further
details on the latter in section C.1.3. above).
In accordance with Recommendation 15 GGC, a large
majority of non-executive directors sit on the board.
Likewise, independent directors represent a high
percentage of board members, compared to the remaining
directorship types, higher than the Company’s free float
ratio.
Likewise, in accordance with Recommendation 16 GGC, the
ratio of proprietary to non-executive directors is below the
proportion between the capital they represent on the board
and the remainder of capital.
–The definitive separation of the roles of board chair and chief
executive of the company takes place, with a new non-
executive Chair and a single executive director who will have
delegated authorities (subject to quantitative and qualitative
restrictions).
–45.45% of all board seats are filled by female directors,
above the 40% representation target set in the Diversity of
Board of Directors Membership and Director Selection
Policy and Recommendation 15 GGC.
–The average tenure of independent directors on the board
would be 5 years.
–Current board membership is balanced, combining directors
with experience and knowledge of the Group, the retail
business and industry in general and fashion retail together
with others with education, competences, background and
experience in other fields, industries and geographies..
As part of the board refreshment process, experience in such
areas as digital transformation, sustainability, compliance and
corporate governance has been reinforced, as well as the
relationship with regulators, economic and financial issues,
audit, control and risk management issues, and leadership
management and commercial strategy, in particular as regards
product, design, innovation and brand image, which are the
Company’s strategic priorities.
This gradual board refreshment has resulted in a younger, more
diverse and plural Board, skilled to tackle issues that need to be
approached from a more modern perspective, in line with the
expectations and demands of the next generations of
customers and other stakeholders.
In short, as explained in section C.1.5 above, the Nomination
Committee found that the ratification of appointments and re-
election of directors process carried out in 2022 has contributed
to favour the diversity of board and committees’ membership -
in particular, gender diversity - seeking to ensure an appropriate
membership and contribute to talent attraction.
117
The resulting main indicators of board diversity are outlined below:
               
             
                 
Inditex Annual Report 2022 / Annual Corporate Governance Report
118
Based on all the foregoing, the Nomination Committee
considered in its report dated 13 February 2023 that the
ratification of appointments and re-election of directors process
carried out in 2022 by the Company is aligned with the
provisions of the Diversity of Board of Directors Membership
and Director Selection Policy, as such process has been based
on a report issued in November 2021 by an external facilitator on
the suitability of the co-opted directors, the Board skills matrix, a
prior analysis of the company’s needs and the explanatory
report issued by the board of directors.
It has further considered that the process has been aligned with
the principles and goals set in the Policy, having contributed to
ensuring an appropriate board and committees’ membership
and encouraging diversity of knowledge, skills, experience and
gender on the board. In particular, the 40% representation goal
set for the least represented gender has been exceeded.
C.1.8. Where applicable, explain the reasons for the
appointment of any proprietary directors at the
request of shareholders with less than a 3% equity
interest:
No proprietary directors have been appointed at the request of
shareholders with less than a 3% equity interest.
Name or company name of shareholder
Reason
—
—
Indicate whether the Board has declined any formal requests for
presence on the Board from shareholders whose equity interest
is equal to or greater than that of others at whose request
proprietary directors have been appointed. If so, explain why the
requests were not granted:
Yes          No x
Name or company name of shareholder
Explanation
—
—
C.1.9. Indicate the powers, if any, delegated by
the Board of Directors to directors or Board
committees:
Mr Óscar García Maceiras
CEO
The CEO, Mr Óscar García Maceiras has been delegated a
number of wide powers which, as a general rule, shall be
exercised individually, except for those powers that entail
undertaking in excess of a given amount or disposal of funds in
excess of a given amount. In such case, the executive director
must act jointly with another person who, by virtue of any legal
title, has also been granted the power in question.
In any case, the prior resolution of the Board of Directors or,
where delegated, of the Executive Committee, will be required in
the event of transactions, proceedings or agreements which (i)
entail the acquisition, disposal or encumbrance of real property
of the company, or of any manner of industrial or intellectual
property rights of the company, or of shares or interests held by
the Company, above a given amount; or which (ii) regardless of
their nature, entail the assumption of payment commitments in
excess of a given amount. Certain types of financial or treasury
transactions, proceedings or agreements are excepted from the
requirement of a resolution of the Board, as the joint action
mentioned above will suffice.
The requirement of joint action and/or of a prior resolution of the
Board of Directors shall not apply when it involves transactions,
proceedings or agreements which are, regardless of the
amount involved, carried out or awarded between companies
belonging to the Inditex Group, understanding as such those
companies, whether Spanish or foreign, in which Inditex holds,
whether directly or indirectly through other investee companies,
at least 50% of the share capital, in which case the CEO may act
individually, for and on behalf of the company, irrespective of the
amount involved in the matter in question.
Additionally, as described in section C.2.1 below, the Executive
Committee holds in delegation all the powers of the board of
directors, except for those that cannot be delegated by statute
or pursuant to the Articles of Association and those that are
necessary for the responsible exercise of the general
supervisory function that is incumbent on the board of directors.
119
C.1.10. Identify any members of the Board who are
also directors, representatives of directors or
managers in other companies forming part of the
listed company's group:
As at 31 January 2023, none of Inditex’s directors were
managers or sat on the governing body of Group companies.
C.1.11. List the positions of director, administrator or
representative thereof, held by directors or
representatives of directors who are members of
the company's board of directors in other entities,
whether or not they are listed companies:
Identity of the director or
representative
Company name of listed or unlisted
company
Position
Paid or unpaid
Ms Marta Ortega Pérez
Pontegadea Inversiones S.L.
Director
Paid
Partler 2006 S.L.
First Deputy Chair
Paid
Pontegadea GB2020 S.L.
Ordinary member
Paid
Partler Participaciones, S.L.U.
First Deputy Chair
Unpaid
Fundación Amancio Ortega Gaona
Ordinary member
Unpaid
Fundación MOP.- The MOP Foundation
Chair
Unpaid
Mr Amancio Ortega Gaona
Pontegadea Inversiones S.L.
Chair
Paid
Pontegadea Inmobiliaria S.L.
Chair
Paid
Partler 2006 S.L.
Chair
Paid
Pontegadea GB2020 S.L.
Chair
Paid
Partler Participaciones, S.L.U.
Chair
Unpaid
Fundación Amancio Ortega Gaona
Chair
Unpaid
Ms Flora Pérez Marcote
Pontegadea Inversiones S.L.
First Deputy Chair
Paid
Pontegadea Inmobiliaria S.L.
First Deputy Chair
Paid
Pontegadea GB2020 S.L.
First Deputy Chair
Paid
Fundación Amancio Ortega Gaona
First Deputy Chair
Unpaid
Fundación MOP.- The MOP Foundation
Ordinary member
Unpaid
Mr José Arnau Sierra
Pontegadea Inversiones S.L.
Second Deputy Chair
Paid
Pontegadea Inmobiliaria, S.L.U.
Second Deputy Chair
Paid
Partler 2006 S.L.
Second Deputy Chair
Paid
Pontegadea GB2020 S.L.
Second Deputy Chair
Paid
Pontegadea España, S.L.U.
Joint Director
Unpaid
Partler Participaciones S.L.
Second Deputy Chair
Unpaid
Esparelle 2016, S.L.
Sole Director, legal representative of
Pontegadea Inversiones S.L.U.
Unpaid
Pontegadea Dieciocho S.L.
Sole Director, legal representative of
Pontegadea Inversiones S.L.
Unpaid
Sobrado Forestal 2014, S.L.
Sole Director
Unpaid
Pontegadea France, S.A.S.
Chair, legal representative of Pontegadea
Inmobiliaria S.L.U.
Unpaid
Prima Cinque, S.p.a.
Chair
Unpaid
PG Real Estate Interests Ltd.
Ordinary member
Unpaid
Pontegadea Inmobiliaria, S.A. de CV
Chair
Unpaid
Pontegadea Canadá, Inc.
Chair
Unpaid
Pontegadea Korea, Inc.
Ordinary member
Unpaid
Ponte Gadea USA, Inc.
Chair
Unpaid
Hills Place, Sarl
Ordinary member
Unpaid
Pontegadea UK, Ltd.
Ordinary member
Unpaid
Almack Ltd.
Ordinary member
Unpaid
Inditex Annual Report 2022 / Annual Corporate Governance Report
120
Identity of the director or
representative
Company name of listed or unlisted
company
Position
Paid or unpaid
Ponte Gadea Portugal – Investimentos
Imobiliários e Hoteleiros, S.A.
Chair, appointed by Partler 2006 S.L.
Unpaid
Pontegadea Amoreiras – Sociedade
Imobiliária, S.A.
Chair, appointed by Partler 2006 S.L.
Unpaid
Proherre Internacional- Sociedade
Imobiliária, Lda
Joint and Several Director
Unpaid
Pontegadea Real Estate, S.A.S.
Chair, legal representative of Pontegadea
Inmobiliario S.L.U.
Unpaid
Montaigne Real Estate, S.A.S.
Sole Director
Unpaid
Fongadea Recoletos 7-9, S.L.
Chair
Unpaid
Daimar de Inversiones S.L.
Sole Director
Unpaid
Pontel Participaciones S.L.
Ordinary member
Unpaid
Fundación Amancio Ortega Gaona
Second Deputy Chair
Unpaid
Fundación Kertor
Trustee
Unpaid
Fundación Santiago Rey Fernández
Latorre
Trustee
Unpaid
Fundación Bal y Gay
Trustee
Unpaid
Ms Anne Lange
Pernod-Ricard, S.A.S.
Non-executive director
Paid
Peugeot Invest
Non-executive director
Paid
Orange, S.A.
Non-executive director
Paid
Mr Rodrigo Echenique Gordillo
Banco Santander Chile
Non-executive director
Paid
Fundación Banco Santander
Chair
Unpaid
Mr Emilio Saracho Rodríguez de Torres
International Consolidated Airlines
Group, S.A.
Independent director
Paid
Remarks
Indicate, where appropriate, the other remunerated activities
of the directors or directors' representatives, whatever their
nature, other than those indicated in the previous table.
Identity of the director or
representative
Other paid activities
Ms Anne Lange
Managing Partner at ADARA: a
consulting firm that provides
senior-level advice to start-ups and
in the field of innovation.
Ms Pilar López Álvarez
VP Sales, Marketing, Ops (COO) at
Microsoft Western Europe.
Mr Rodrigo Echenique
Gordillo
Advisor to Banco Santander
(Santander Group)
Mr Emilio Saracho
Rodríguez de Torres
Senior Advisor at Altamar Capital
Partners
Mr José Luis Durán Schulz
CEO at VALUE RETAIL
MANAGEMENT and consultant at
JLD Advise.
C.1.12. Indicate whether the company has
established rules on the maximum number of
company boards on which its directors may sit,
explaining, if necessary, and identifying where this
is regulated, where applicable:
Yes x    No
Explanation of the rules and identification of the document
where this is regulated
Pursuant to section 22.2 of the Board of Directors’ Regulations,
the Board of Directors may not propose or appoint in order to fill
a position of director, anyone who holds the office of director in
more than 4 listed companies other than the Company at the
same time.
121
C.1.13. Indicate the remuneration received by the
Board of Directors as a whole for the following
items:
Remuneration accruing in favour of the Board of
Directors in the financial year (thousands of euros)
38,698
Funds accumulated by current directors for long-term
savings systems with consolidated economic rights
(thousands of euros)
9,838
Funds accumulated by current directors for long-term
savings systems with unconsolidated economic rights
(thousands of euros)
-
Pension rights accumulated by former directors
(thousands of euros)
-
The amount stated as “Remuneration accruing in favour of the
Board of Directors in the financial year (thousand euro)”
corresponds to the aggregate amount shown in section C.1.c)
“Summary of remunerations (thousand euro)” of the Annual
Report on Remuneration of Directors for 2022. Included therein
are the fixed remuneration items of directors in their status as
such, and the fixed and short and long-term variable
remunerations accrued by the CEO, Mr Óscar García Maceiras,
and the former Executive Chairman, Mr Pablo Isla Álvarez de
Tejera, for the performance of executive functions. In particular,
it includes:
The amounts of the remuneration accrued by: (i) Mr Óscar
García Maceiras, as director and for the performance of
executive functions from 1 February 2022 through 31 January
2023 and (ii) Mr Pablo Isla Álvarez Tejera, as director and the
part of his fixed remuneration (wage) for the performance of
executive functions from 1 February 2022 through 31 March
2022, date of economic effect of his resignation.
With regard to long-term or multi-year variable remuneration:
included in the above referred global remuneration for directors
are the amounts of €2,483 thousand accrued by the CEO under
the second cycle (2020-2023) of the 2019-2023 Plan. The
2019-2023 Plan materialised in (i) an incentive in cash in the
aggregate gross amount of €1,035 thousand for the CEO, and (ii)
an incentive in shares equivalent to a total number of 49,477
shares corresponding to the gross amount of €1,448 thousand
for the CEO.
It bears mention that for the purposes of quantifying the part of
such incentive to be delivered in shares, the closing price of
Inditex share on the last trading day of the week before the
board meeting where it assessed and approved the level of
target achievement for the second cycle of the 2019-2023 Plan
(i.e. 10 March 2023) was considered. The incentive in cash and
in shares will be delivered within the month following the release
of the annual accounts for 2023.
Also included in the above referred global remuneration are the
amounts accrued and paid in 2022 to the former Executive
Chairman itemised as follows:
(i)The following amounts as early settlement of current
incentives and other items of fixed remuneration:
–Of the incentive for the second cycle (2020-2023) of the
2019-2023 Plan: the incentive - determined by the board of
directors to be for a level of achievement on target -,
prorated for the time between cycle commencement and
the date of his departure, amounted to €980 thousand and
46,859 shares.
–Of the incentive for the first cycle (2021-2024) of the
2021-2025 Plan: the incentive - determined by the board of
directors to be for a level of achievement on target -,
prorated for the time between cycle commencement and
the date of his departure, amounted to €421 thousand and
24,418 shares.
–Of the annual variable remuneration for FY2022: the
incentive prorated for the time between the beginning of the
year and the date of his departure - estimated by the board
of directors at maximum level of achievement -, amounted
to €788 thousand.
–Of the pro-rated part of the extraordinary payments, the
portion of the fixed remuneration accrued for FY2022
(February and March 2022) corresponding to extra
payments (July and December) amounted to €132 thousand.
(ii)As severance pay:
–Severance pay for termination amounted to €3,250
thousand, and
–The consideration for his post-contractual non-compete
obligation amounted to €19,740 thousand.
With regard to the “Funds accumulated by current directors for
long-term savings systems with consolidated economic rights
(thousand euro)”, no contributions to the long term savings
system have been made since 2015 and the amount of
accumulated funds in such system reached €9,838 thousand as
at 31 January 2023.
Mr Isla keeps 100% of the entitlement to the accumulated funds
pursuant to sections B.10 and C.1.a) iii) “Long-term saving
systems” of the Annual Report on Remuneration of Directors for
2022.
Inditex Annual Report 2022 / Annual Corporate Governance Report
122
C.1.14. Identify members of senior management
who are not also executive directors and indicate
their total remuneration accrued during the year:
Name or company name
Position
Ms Lorena Alba Castro
Chief Logistics Officer
Mr José Pablo del Bado Rivas
Director of PULL & BEAR -
Management Committee
Mr Carlos Crespo González
COO & Head of Digital and
Sustainable Transformation
Mr Miguel Díaz Miranda
Chief Financial Officer & Chief
Operating Officer of ZARA -
Management Committee
Mr Raúl Estradera Vázquez
Chief Communication Officer
Mr Ignacio Fernández
Fernández
Chief Financial Officer -
Management Committee
Mr Antonio Flórez de la Fuente
Director of BERSHKA
Mr Javier García Torralbo
Chief Digital Officer -
Management Committee
Ms Begoña López-Cano
Ibarreche
Chief People Officer -
Management Committee
Mr Abel López Cernadas
Head of Import, Export and
Transport
Mr Marcos López García
Capital Markets Director
Mr Juan José López Romero
Chief Infrastructure and Services
Officer
Mr Javier Losada Montero
Chief Sustainability Officer -
Management Committee
Mr Gabriel Moneo Marina
Chief IT Officer
Mr Javier Monteoliva Díaz
General Counsel and Secretary
of the Board
Ms María Lorena Mosquera
Martín
Director of ZARA HOME
Ms Paula Mouzo Lestón
Chief Audit Officer
Ms Beatriz Padín Santos
Director of ZARA Woman -
Management Committee
Mr Jorge Pérez Marcote
Director of MASSIMO DUTTI -
Management Committee
Mr Óscar Pérez Marcote
Director of ZARA - Management
Committee
Ms Carmen Sevillano Chaves
Director of OYSHO
Mr Jordi Triquell Valls
Director of STRADIVARIUS
Mr Jesús Echevarría
Hernández1
Chief Communication Officer
1. Mr Raúl Estradera Vázquez holds this position since 1 April 2022 when he
replaced Mr Jesús Echevarría Hernández.
Number of women in senior management
6
Percentage out of all senior managers
27.27%
Total remuneration of senior management (thousand
euros)
104,781
Included in the amount stated as “Aggregate remuneration for
senior managers” is the fixed remuneration and the variable
remuneration accrued by senior managers in financial year
2022, both short-term variable remuneration and long-term
variable remuneration for the second cycle (2020-2023) of the
2019-2023 Plan.
Under such cycle, the amount of €35,628 thousand were
accrued by senior managers as at 31 January 2023 in the
framework of the 2019-2023 Plan, materialised in: (i) an incentive
in cash in the aggregate gross amount of €17,089 thousand, and
(ii) an incentive in shares equivalent to a total number of 633,369
shares, which correspond to the gross amount of €18,539
thousand.
It bears mention that for the purposes of quantifying the part of
the incentive to be delivered in shares, the closing price of
Inditex share on the last business day of the week before the
date when the board of directors assessed and approved the
level of target achievement of the first cycle of the 2019-2023
Plan (i.e. 10 March 2023) was considered.
The incentive in cash and in shares will be delivered within the
month following the release of the annual accounts for 2022.
Likewise, included in said amount are the remunerations earned
in 2022 by senior managers in office in the year, including the
relevant compensation.
The evolution of Senior Managers' remuneration versus the
previous year is primarily due to a higher number of officers that
qualify as such and to the increase in the short-term and long-
term variable remuneration as a result of the Company's strong
operating performance in 2022. Additionally, long-term
remuneration has also been affected by a higher price of Inditex
shares compared to the one in the previous year.
C.1.15. Indicate whether the Board regulations were
amended during the year:
Yes xNo
The Board of Directors approved on 12 May 2022, following a
favourable report from the Audit and Compliance Committee,
the revised text of the Board of Directors’ Regulations as
amended in part, primarily to reflect the clear separation of
duties assigned to the Chair and those assigned to the CEO as
chief executive of the Company, thus preventing any risk of
confusion regarding the profile and role of the new non-
executive Chair.
It was also amended to adjust the composition of the Executive
Committee on the basis of the new organisational structure.
The amendments made are addressed below:
–Amendment to section 14 (“The Executive Committee or
the Chief Executive Officers”) in Chapter IV (“Structure of
the Board of Directors)
The current wording of this section was amended so that the
Executive Committee will be hereinafter chaired by the Chief
Executive Officer or the company’s chief executive, should
more than one director perform executive functions, instead
of the Chair of the Board of Directors.
–Amendment to section 16 (“The Nomination Committee”)
in Chapter IV (“Structure of the Board of Directors”)
The term “Executive” is deleted in reference to the position
of Chair.
123
C.1.16. Specify the procedures for selection,
appointment, re-election and removal of directors.
List the competent bodies, steps to follow and
criteria applied in each procedure.
The system for the selection, appointment and re-election of
members of the board of directors constitutes a formal and
transparent procedure that is expressly covered in the Articles
of Association, the Board of Directors’ Regulations and the
Nomination Committee’s Regulations.
The Diversity of Board of Directors Membership and Director
Selection Policy referred to in section C.1.5 above provided
guidance on selection of directors for the purposes of guiding
the proceedings of the Board of Directors and the Nomination
Committee in this area.
The Policy is informed by the Recommendations of the GGC
and the overarching principles and guidelines of CNMV’s
Technical Guide 1/2019. According to the Policy, the process to
appoint, ratify and re-elect directors shall be guided by the
following overarching principles: (i) favouring diversity and
search for excellence within the board of directors; (ii) the
selection process for prospective directors shall not be tainted
by any kind of discrimination and shall follow the merit-based
approach; (iii) fulfilling the corporate interest; and (iv)
transparency in the process to select prospective directors.
In this regard, the Policy sets forth that the selection,
appointment, ratification and re-election of directors shall be
based on a prior analysis of the needs of the Company and the
Group, and of the competences required by the board of
directors itself. This analysis shall be carried out by the board of
directors on the advice of the Nomination Committee. The
board of directors has its own organization and internal
proceedings, including: (i) the co-option of directors to fill board
vacancies, on the proposal or following a favourable report of
the Nomination Committee, as the case may be; and (ii) the
election, on the proposal or following report of the same
committee, of internal positions and of members of board
committees. In turn, the Nomination Committee is responsible
for the process of selecting prospective directors. Pursuant to
the Articles of Association, the Board of Directors’ Regulations,
and its own terms of reference, directors shall be appointed
either by the General Meeting of Shareholders or the board of
directors, pursuant to applicable laws and the company’
regulations on corporate governance.
The proposals on the appointment, ratification or re-election of
directors submitted by the board of directors to shareholders at
the Annual General Meeting, and the appointment resolutions
passed by the board of directors via the co-option system in use
of the powers it is entrusted by statute shall be made following:
(i) a proposal  raised by the Nomination Committee, as regards
independent directors; or, (ii) a report of the Nomination
Committee for all other directorship types.
To ensure the appropriate composition of the board of directors
at all times, its structure, size and composition as well as the
membership of its committees shall be regularly reviewed.
To this end, efforts should be made to ensure that the board of
directors has a balanced membership with regard to the various
classes of directors, with a large majority of non-executive
directors and an appropriate mix of proprietary and
independent directors, and an appropriate balance of profiles,
knowledge, skills, careers and experiences so that multiple
viewpoints are contributed to the discussion of the business
transacted and the decision-making process is enriched. In
addition, consideration should be given to ensuring a
progressive and orderly board refreshment to achieve the
objectives set out in the Policy.
As provided in the Policy, the findings of the above-mentioned
prior analysis shall be written up in an explanatory report issued
by the Nomination Committee, to be posted on the corporate
website upon calling the General Meeting to which the
nomination, ratification or re-election of each director is
submitted.
Prospective directors of the Company shall meet at all times the
following requirements:
•Be honest, respectable persons of well-known ability,
competence, professional background and experience and
merits.
•Be law-abiding and respectful of good marketing practices
both in their lives and professional careers and observe the
provisions of applicable regulations.
•Be trustworthy professionals whose conduct and career are
aligned with the principles and duties set out in Inditex’s
internal regulations–in particular, in the Code of Conduct and
Responsible Practices–and with the views and values of the
Inditex Group.
•Be committed to their duties as directors and available to
dedicate sufficient time and efforts to meet their board
responsibilities.
In the process for the selection of prospective directors, those
individuals who meet the requirements laid down in the Policy
and who, given their profile and features favour diversity of
knowledge, skills, experiences, origin, age and gender on the
board of directors, shall be considered, and any implicit bias
which might entail any manner of discrimination and specifically
hamper selection of female directors shall be prevented.
In order to define the duties and required skills of prospective
directors, the Nomination Committee shall review the
competences, knowledge, experience and other occupations of
current directors serving on the board, and it shall prepare and
keep a board skills matrix updated, based upon which it shall
define the duties and skills required from candidates who have
to fill each vacancy and evaluate the required time and
dedication for them to effectively meet their board
responsibilities.
Those persons who are involved in any legal grounds of
disqualification to be a company director or who fail to meet the
requirements set forth by the Company’s corporate governance
rules to be a director, shall not be eligible to be a director.
In particular, neither the Committee nor the board of directors
can propose or appoint as member of the board of directors
anyone who serves as a director at the same time in more than
four listed companies other than the Company.
Inditex Annual Report 2022 / Annual Corporate Governance Report
124
The Nomination Committee shall take into account the
proposals submitted by any director, provided that the
prospective candidate meets the requirements to be eligible
and the provisions of the Diversity of Board of Directors
Membership and Director Selection Policy are observed. To do
so, it shall take all necessary measures and make all appropriate
enquiries to ensure that the candidates are not involved in any
of the scenarios described in the foregoing paragraphs.
Likewise, the Company may rely on external advisors to carry
out the prior  analysis of the needs of the company, and to
assess the competences required by the board of directors and
the Inditex Group, as well as to search or assess prospective
directors or evaluate their performance and/or suitability. It is
incumbent upon the Nomination Committee to establish and
ensure the effective independence of the above-mentioned
experts.
The proposals or reports on the appointment of directors shall
be prepared by the Nomination Committee and include the
directorship type assigned to the director- This classification
must be duly supported.
Proposal on the election of directors submitted by the board of
directors to the Annual General Meeting shall be accompanied
by an explanatory report issued by the board of directors
assessing the qualifications, experience and merits of the
proposed candidate; such report shall be attached to the
minutes of the board meeting. Additionally, with regard to the
ratification or re-election of directors, the explanatory report
shall assess the quality of the director’s work and their
dedication to office during their tenure as well as their
observance of the company’s corporate governance rules. In
any case, the Nomination Committee shall take into account the
need for progressive board refreshment.
Where the board of directors departs from the proposals and
reports of the Nomination Committee, it must state the reasons
for its actions and place them on record.
With regard to the representation target for the least
represented gender on the board and to the guidance on how
to meet it, the company has updated the female representation
target on the board of directors, in line with Recommendation 15
GGC, as provided in section 5.1.1 of the Diversity of Board of
Directors Membership and Director Selection Policy and in
section 6 (d) of the Nomination Committee's Regulations. The
company endorses the commitment to ensure that the number
of female directors should account for at least 40% of all board
seats by the end of 2022.
The Nomination Committee shall, on an annual basis, establish
compliance with the Diversity of Board of Directors Membership
and Director Selection Policy and inform the board of directors
thereof, and the board shall disclose said information in the
Annual Corporate Governance Report.
With regard to the removal and dismissal of directors, directors
shall vacate office upon expiry of their term of office, or at any
time further to a resolution of the General Meeting of
Shareholders.
The board of directors may only propose to the General
Meeting the removal of an independent director before the
expiry of his/her term of office when a just cause arises, where
the director has incurred in any grounds for dismissal or
resignation pursuant to applicable regulations or to the
Company’s corporate governance rules. Said just cause must
be considered by the board, following a favourable report from
the Nomination Committee. In particular, pursuant to section
25.3 of the Board of Directors’ Regulations, a just cause will exist
when a director holds new positions or assumes new
obligations preventing them from making sufficient time
available for board meetings and other duties inherent in the
office of director; is in breach of the duties inherent in the office
or is involved in any of the circumstances leading to them no
longer qualifying as independent directors, pursuant to the
provisions of applicable regulations. Likewise, removal of a
director may be proposed as a result of takeover, mergers or
other similar corporate transactions that entail a change in the
shareholding structure of the Company, where said change
entails in turn another in the structure of the Board of Directors
on account of the ratio of proprietary directors.
Furthermore, where a director vacates their office before the
end of their term of office through resignation or further to a
resolution of the General Meeting of Shareholders, they should
state the reasons for the resignation, or with regard to non-
executive directors, their opinion on the reasons for the
dismissal resolved by the General Meeting of Shareholders, in a
letter that must be addressed to all the members of the board of
directors. To the extent that this may be relevant for investors,
and without prejudice to reporting it in the Annual Corporate
Governance Report, the Company, shall announce their
departure in the shortest delay with sufficient reference to the
reasons or circumstances provided by the director.
In addition, the Nomination Committee must issue a report with
regard to the proposal for early dismissal of independent
directors.
When directors tender their resignation, the Nomination
Committee must ensure the transparency of the process,
gathering the information it may deem necessary to this end.
125
C.1.17. Explain to what extent the annual evaluation
of the Board has given rise to significant changes in
its internal organization and in the procedures
applicable to its activities:
The Company carries out a self-evaluation process with regard
to the performance of the board of directors and its committees,
the Chair, the CEO, the Lead Independent Director and the
Secretary of the board, as provided in its internal regulations, in
accordance with applicable regulations and GGC
recommendations.
In this regard, following each annual evaluation, a number of
recommendations are issued, where appropriate, to improve (i)
the quality and effectiveness of board proceedings; (ii) the
proceedings and composition of its committees, paying special
attention to the chairs of the different board committees; (iii) the
diversity of board membership and powers; (iv) the performance
of the Chair and the CEO; and (v) the performance and input of
the Lead Independent Director and the Secretary of the board.
In 2022, the findings of the annual evaluation for the previous
year were considered both in the various analyses of board
needs carried out by the Nomination Committee in respect of
the re-election and appointment of directors resolved in the
year, and in the suitability analysis commissioned by the
committee in 2021 and carried out by the external facilitator.
Such suitability analysis was also considered in the ratification,
re-election and appointment of directors process carried out in
2022. In particular, the following findings were established
further the evaluation:
(i)The size of the board was deemed to be appropriate.
(ii)The Committee appreciated the relevance of keeping and
reinforcing within the company’s supreme governing body:
(i) different profiles and experiences in line with the strategic
focal points marked as a priority by the Company; (ii) a highly
diverse board membership in terms of, without limitation,
professional experience, competences, personal skills,
sector-specific knowledge and age; (iii) a balanced
combination of directorship types, ensuring that the majority
of directors serving on the board are non-executive and that
the presence on the board of proprietary directors is such as
to ensure the existence of an effective counterweight; and,
(iv) a progressive board refreshment, combined with the
necessary presence of directors with proven experience and
sound knowledge of the company, the Group, its business
and generally, the retail sector.
Boosting diversity, in particular gender diversity, was identified
as a priority, in line with the commitment undertaken by the
Company.
As described in detail in section C.1.5 above, both the ratification
and appointment of Ms Ortega and Mr García to the board as
proprietary and executive director, respectively, and the re-
election of Ms López and Mr Echenique as independent
directors, have contributed, in line with the feedback received
from the directors in the annual evaluation, to: (i) consolidating
diversity of directorship types, keeping the balance of
proprietary and independent directors and increasing the
already wide majority of non-executive directors (90.9%); (ii)
reinforcing female representation, as the 40% target set for 2022
has been exceeded; (iii) ensuring the existence of appropriate
counterweights, as the positions of Chair of the Board and chief
executive are separate; (iv) reinforcing the existence of profiles
with a wide experience and knowledge of the Company, its
Group, the retail sector, as well as experience in areas such as
digital transformation, sustainability, compliance and corporate
governance and the relationship with regulators, topics such as
finance and economy, audit and control, in particular in the area
of product, design, innovation and brand image, which are the
focal points of the Company’s strategy; as well as (v) reducing
directors’ average age and average tenure.
On the other hand, with regard to the organisation and
proceedings of the board and its committees, the annual self-
evaluation process is an especially useful driver of the gradual
implementation of required changes, such as:
(i)The improvement of the internal dynamics of the board and
its committees as a result of the following:
•2022 has been marked by the rise in the number of board
meetings (10 versus 7 in 2021).
•The appropriate arrangement of board and committees’
meetings, via the relevant schedule that allows to
systematically arrange the agenda, topics and attendees.
•In terms of agenda, it has also contributed to (i) higher
dedication to strategy-related issues, and (ii) a gradual
transformation of board debates and decisions, as topics
related to sustainable management and accountability to
stakeholders are gaining momentum.
•An increasing interaction between directors and the
management team, as members of this latter are increasingly
in attendance at board and committees’ meetings.
•More frequent business updates presented to Directors via
the CEO’s reports.
•Headway has been made in providing the information earlier
in advance as well as in terms of its quality, in the context of a
continuous improvement process, via executive summaries
outlining the priority issues, allowing for a better preparation of
meetings and for dedicating more time to debate.
(ii)Significant progress regarding directors’ training schemes.
In 2022, the training plan which was designed considering
directors’ concerns and key elements pointed out in the
annual evaluation, has been boosted.
(iii)A more effective and automated process to evaluate the
performance of the board of directors and its committees,
the Chair, the CEO, the Lead Independent Director and the
Secretary of the board.
(iv)Significant headway was made in the dynamics of separate
meetings held by independent directors under the helm of
the Lead Independent Director.
(v)Separate meetings held by the Audit and Compliance
Committee with the external auditors without any member of
management being present.
Inditex Annual Report 2022 / Annual Corporate Governance Report
126
Describe the evaluation process and the areas evaluated by
the board of directors with or without the help of an external
advisor, regarding the functioning and composition of the
Board and its committees and any other area or aspect that
has been evaluated.
Pursuant to the provisions of section 7(a) of its terms of
reference, the Nomination Committee must establish and
oversee an annual programme for evaluating the performance
of the board of directors and its committees, the Chair, the CEO,
the Lead Independent Director and the Secretary of the board,
and in particular, following up on directors’ attendance at the
meetings of the board and the committees where they sit.
Therefore, considering the statutory framework and Inditex’s
own internal regulations, the evaluation system of the board of
directors and its committees, the Chair, the CEO, the Lead
Independent Director and the Secretary of the Board is carried
out as follows:
1. The Nomination Committee prepares an annual programme
for the evaluation of the performance of the duties of the board
of directors and its committees, the Chair, the CEO, the Lead
Independent Director and the Secretary of the Board.
Since the approval of the Evaluation Programme back in 2015,
its organisation and implementation as well as the
organisational structure of the company have undergone major
changes. This entailed the necessary amendment to the
programme, which was approved at the Nomination Committee
held on 12 September 2022. In particular, the main changes
were: (i) the roles of Chair and CEO are separate; (ii) the
Sustainability Committee is considered under the programme;
(iii) the duties of the Lead Independent Director are aligned with
those that they are effectively performing in practice regarding
the evaluation process; (iv) the scope of the evaluation
programme is aligned with the provisions of CNMV’s Technical
Guide 1/2019; and (v) the possibility of using different
methodologies, including questionnaires and/or interviews, is
considered.
2. The procedure is carried out by means of a number of
questionnaires that directors must complete.
The full questionnaire is reviewed and updated every year to
align the annual evaluation with best practices in the field of
good governance.
The evaluation process has undergone a formal revision in the
year, to raise more simple and consistent questions, keeping in
any case all the elements subject to assessment, pursuant to
applicable recommendations.
Other material changes were also made, such as the addition of
a new questionnaire to evaluate the performance of the non-
executive Chair.
The process has been automated through the use of a
technological platform available to the Directors that ensures
information confidentiality, traceability and security. Directors are
only granted access to the questionnaires pertaining to the
committees where they sit.
3. According to the annual programme, each committee has to
prepare its own evaluation report which must be sent to the
board of directors as detailed below:
(a) The Chair of the Nomination Committee shall prepare and
send reports on the evaluation of the board, the Lead
Independent Director and the Secretary.
(b) The Lead Independent Director shall prepare and send the
findings reports on the performance of the Chair and the CEO,
(c) The chair of each committee shall prepare their own findings
report.
The Chair of the Nomination Committee is tasked with reviewing
and integrating every report.
4. The board of directors assesses –pursuant to statute and the
Board of Directors’ Regulations– its performance and that of its
committees as well as the performance of the Chair, the CEO,
the Lead Independent Director and the Secretary of the Board,
based upon the reports issued as stated in the foregoing
section.
5. Last, on the basis of the outcome of the evaluation and the
areas for improvement reported, the Nomination Committee
prepares an action plan which it follows-up.
In accordance with Recommendation 36 GGC, Inditex has relied
on the advice of Deloitte, an external consultant, as regards the
self-evaluation process for FY2022.
127
C.1.18. Provide details, for years in which the
evaluation was carried out with the help of an
external advisor, of the business relationships that
the external advisor or company in its group
maintains with the company or any company in its
group.
In 2022, Inditex has relied on the advice of external consultant
Deloitte regarding the self-evaluation of the performance of the
board of directors and its committees, the Chair, the CEO, the
Lead Independent Director and the Secretary of the board.
Other than this engagement, Deloitte has other business
relationships with Inditex and other Group companies which do
not extend to advice on remuneration and/or selection of
directors or key staff for the Company. Therefore, none of such
business relationships could lead to a potential conflict of
interest as regards the advice given on the self-evaluation
process.
C.1.19. Indicate the cases in which directors are
required to resign.
Pursuant to section 25 of the Board of Directors’ Regulations,
directors must offer their resignation to the board of directors
and effectively resign, should this latter deem it advisable, in the
following cases:
(a)When they reach a certain age, under the terms detailed in
section C.1.22.
(b)When they cease to hold the executive positions to which
their appointment as director was associated.
(c)When they are involved in any of the incompatibility or
prohibition cases provided in applicable regulations, the
Articles of Association or these Regulations, including if they
would happen to hold the office of director in more than four
listed companies other than the Company.
(d)When they are seriously admonished by the Audit and
Compliance Committee for having breached their duties as
directors.
(e)When they are involved in any circumstances affecting them,
related or not to their actions within the Company, that may
damage the name and reputation of the Company or
otherwise jeopardise the Company’s interests. For this
purpose, they shall report to the board of directors any
criminal charges brought against them as well as any
procedural consequences.
(f)When the reasons for their appointment cease.
(g)With regard to proprietary directors, when the shareholders
they represent dispose of their ownership interest in its
entirety or reduce it up to a limit that requires the reduction
of the number of proprietary directors.
(h)With regard to independent directors, when they have
continuously held the position on the board in the Company
for 12 years.
C.1.20. Are qualified majorities other than those
established by statute required for any particular
kind of decision?
Yes xNo
If so, describe the differences.
Description of requirements
A qualified majority other than that established by statute is
exclusively required to amend the Board of Directors’
Regulations. Pursuant to section 3.4 thereof, in order for the
amendment of said Regulations to be valid, a resolution passed
by a majority of two-thirds of the directors present shall be
required.
Apart from this, the scenarios of qualified majority for the
passing of resolutions by the board of directors are addressed
in article 25.4 of the Articles of Association, which reads: “For
resolutions to be passed, an absolute majority of votes by the
directors attending the meeting shall be required, except for
those cases where a larger majority is required by statute, by
these Articles of Association or by the Board of Directors’
Regulations. In the case of an equality of votes, the Chairman
shall have a casting vote.” Likewise, article 27.2 of the Articles of
Association provides that for the permanent delegation of any
power of the board of directors other than non-delegable ones it
shall be necessary for two-thirds of those making up the board
of directors to vote for the motion, as provided in section 249.3
LSC.
C.1.21. Explain whether there are any specific
requirements, other than those relating to directors,
for being appointed as chairman of the Board of
Directors.
YesNo x
Description of requirements
—
Inditex Annual Report 2022 / Annual Corporate Governance Report
128
C.1.22. Indicate whether the articles of association
or Board regulations establish any limit as to the
age of directors:
Yes xNo
Age limit
Chair
68
CEO
65
Director
68
Section 25.2(a) of the Board of Directors’ Regulations provides
that directors must offer their resignation to the Board of
Directors and effectively resign, should this latter deem it
advisable “When they reach the age of 68. Notwithstanding this,
directors who hold the office of Chief Executive Officer or
Managing Director shall offer their resignation to the Board of
Directors upon attaining the age of 65, being able to continue as
ordinary members of the Board of Directors until the
aforementioned age of 68. As an exception, the foregoing rules
shall not apply in the case of the founder of the Company, Mr.
Amancio Ortega Gaona.”
C.1.23. Indicate whether the articles of association
or Board regulations establish any term limits for
independent directors other than those required by
law or any other additional requirements that are
stricter than those provided by law:
Yes        No x
Additional requirements and/or maximum number
of years of office
-
C.1.24. Indicate whether the articles of association
or Board of Directors’ regulations establish specific
rules for appointing other directors as proxy to vote
in Board meetings, if so the procedure for doing so
and, in particular, the maximum number of proxies
that a director may hold, as well as whether any
limit has been established regarding the categories
of director to whom votes may be delegated
beyond the limits imposed by law. If so, briefly
describe these rules.
Article 25.3 of the Articles of Association sets forth that any
director can appoint another director as proxy holder in writing,
each meeting requiring a special proxy, notifying the Chairman
of the same in writing.
Pursuant to said article and section 20.1 of the Board of
Directors’ Regulations, non-executive directors may only be
represented by another non-executive director.
No maximum number of proxies that a director can hold has
been fixed.
In line with this provision, section 20.1 of the Board of Directors’
Regulations provides that quorum shall be present on the board
of directors when at least half plus one of its members attend
either in person or by proxy (or, in case of an uneven number of
directors, when a number of directors immediately higher than
half of it is in attendance), stating further that the directors shall
do their best to attend the meetings of the board of directors,
and, when they cannot do so in person, they shall endeavour to
grant a proxy to another member of the board giving
instructions as to its use and communicating the same to the
Chairman of the Board of Directors.
C.1.25. Indicate the number of meetings held by the
Board of Directors during the year. Also indicate,
where applicable, the number of times the Board
met without the chairman being present. Meetings
where the chairman gave specific proxy
instructions are to be counted as attended.
Number of board meetings
10
Number of board meetings held without the chairman's
presence
0
FY2022 has been marked by the rise in the number of board
meetings held (10 versus 7 in 2021). The board held both in
person and hybrid meetings (with some directors attending in
person and others remotely). Videoconference or conference
call systems were used to hold these meetings, pursuant to the
provisions of section 19.4 of the Board of Directors’ Regulations.
Indicate the number of meetings held by the lead
independent director with the other directors, where there
was neither attendance nor representation of any executive
director:
Number of meetings
1
Remarks
On 5 June 2022, a separate meeting of non-executive
independent directors was held led by Mr Rodrigo Echenique
Gordillo, Lead Independent Director, for the purposes of
discussing highly relevant matters to the Company, thus
ensuring that with regard to the decision-making over such
matters, their independence within the board of directors is kept.
Indicate the number of meetings held by each board committee
during the year:
Number of meetings held by the executive committee
0
Number of meetings held by the audit committee
6
Number of meetings held by the nomination committee
5
Number of meeting held by the remuneration committee
5
Number of meetings held by the sustainability committee
6
In 2022, board committees held both in person and hybrid
meetings (with some members attending in person and others
remotely).
All of which, pursuant to sections 19.2, 15.2, 12.2 and 14.2 of the
terms of reference of the Audit and Compliance, Nomination,
Remuneration and Sustainability Committees, respectively.
129
C.1.26. Indicate the number of meetings held by the
Board of Directors during the year with member
attendance data:
Number of meetings in which at least 80% of directors
were present in person
10
Attendance in person as a % of total votes during the year
88.00%
Number of meetings with attendance in person or proxies
given with specific instructions, by all directors
9
Votes cast in person and by proxies with specific
instructions, as a % of total votes during the year
90%
C.1.27. Indicate whether the individual and
consolidated financial statements submitted to the
Board for issue are certified in advance:
Yes x    No
Identify, where applicable, the person(s) who certified the
individual and consolidated financial statements of the
company for issue by the Board:
The individual and consolidated annual accounts of the
Company that are presented to be stated by the board of
directors are previously certified by the CEO and the CFO.
Name
Position
Mr Óscar García Maceiras
CEO
Mr Ignacio Fernández Fernández
CFO
C.1.28. Explain the mechanisms, if any, established
by the Board of Directors to ensure that the
financial statements it presents to the General
Meeting of Shareholders are prepared in
accordance with accounting regulations.
The Audit and Compliance Committee, mostly made up of non-
executive independent directors, meets with external auditors in
order to review the Company’s annual accounts and certain
periodic financial information that the board of directors must
provide to the markets and their supervisory boards, overseeing
compliance with statutory requirements and the appropriate
application of generally accepted accounting principles in the
drafting of the financial statements. In the meetings held by the
Audit and Compliance Committee with external auditors without
any member of the management being present, any
disagreement or difference of opinion existing between the
Company’s Management and the external auditors is put
forward, so that the board of directors can take the necessary
steps to ensure that the annual accounts are stated in
accordance with accounting regulations, endeavouring for them
to be drafted in such a manner that they do not give rise to
qualifications on the part of the auditor.
Furthermore, before drafting the annual, half-yearly or quarterly
financial statements, the Company’s Management meets with
the Audit and Compliance Committee and is subjected by the
latter to suitable questions as to, among others, the application
of accounting standards and the estimates made in the
preparations of the financial statements, topics that are subject
to discussion with the external auditors.
In this regard, in line with Recommendation 8 GGC, section 7(d)
of the terms of reference of the Audit and Compliance
Committee includes the following among the powers of such
committee: “to review the contents of the auditor’s reports and,
where appropriate, of the reports on limited review of interim
accounts, as well as other mandatory reports to be prepared by
the statutory auditor, prior to the issue thereof, in order to avoid
qualified reports, ensuring that the annual accounts that the
Board of Directors presents to the General Meeting of
Shareholders are drawn up in accordance with accounting
standards and, that in the circumstances where the statutory
auditor includes any qualification in the auditor’s report, the
Chair of the Committee should give a clear explanation at the
General Meeting of the committee’s opinion regarding the
contents and scope of such qualifications, making a summary of
that opinion available to the shareholders at the time of the
publication of the notice calling the General Meeting of
Shareholders along with the rest of the proposals and reports of
the board of director.”
Meanwhile, section 45.5 of the Board of Directors’ Regulations
reads as follows: “The Board of Directors shall ensure that the
annual accounts are drawn up in accordance with accounting
standards, endeavouring to draft them in such a manner that
they do not give rise to qualifications on the part of the auditor.
However, in the exceptional circumstances where the auditor
expresses a qualified opinion and the Board of Directors
considers that it must stick to its position, it shall publicly explain
the contents and scope of the discrepancy. The foregoing
without prejudice to the information that the Chair of the Audit
and Compliance Committee would make available to the
shareholders at the Annual General Meeting.”
Inditex Annual Report 2022 / Annual Corporate Governance Report
130
Finally, pursuant to the provisions of section 45.2 of the Board of
Directors Regulations, the board shall meet at least once a year
with the statutory auditor to receive information on the work
done and on the evolution of the accounting and risk situation of
the Company.
C.1.29. Is the secretary of the Board also a director?
YesNo x
If the secretary is not a director, complete the following table:
Name or company name of the secretary
Representative
Mr Javier Monteoliva Díaz
—
C.1.30. Indicate the specific mechanisms
established by the company to safeguard the
independence of the external auditors, and any
mechanisms to safeguard the independence of
financial analysts, investment banks and rating
agencies, including how legal provisions have been
implemented in practice.
Section 45 of the Board of Directors’ Regulations reads:
1. “The relations of the Board of Directors with the external
auditor of the Company shall be channelled through the Audit
and Compliance Committee.
2. The Board of Directors shall meet at least once a year with the
statutory auditor to receive information on the work done and on
the evolution of the accounting and risk situation of the
Company.
3. The Audit and Compliance Committee shall refrain from
proposing to the Board of Directors, and the latter shall refrain
from putting forward to the General Meeting of Shareholders,
the appointment as statutory auditor of the Company of an audit
firm incurring in incompatibility in accordance with the legislation
on statutory audit as well as any audit firm wherein the fees that
the Company expects to pay them for all services are in excess
of the limits established in the legislation on statutory audit.
4. The Board of Directors shall publicly disclose the whole of the
fees paid by the Company to the audit firm for non-audit
services. […]”
The measures to preserve the independence of external
auditors are explained below:
•The Audit and Compliance Committee, mostly made up of
non-executive independent directors, which has as a whole
the relevant background with regard to the industry to which
Inditex belongs, proposes to the board of directors to be
subsequently raised to shareholders at the Annual General
Meeting: (i) the appointment of the statutory auditors, as such
committee is responsible for the auditors selection process
pursuant to applicable regulations; as well as (ii) the terms of
their engagement; (iii) the scope of their professional mandate;
and, where appropriate, (iv) the termination or non-renewal of
their appointment.
With regard to said process for the selection of auditors,
mentioned above, and in accordance with the provisions of
CNMV’s Technical Guide 3/2017 on audit committees at
public-interest entities, the Procedure for the Selection of the
Statutory Auditor was approved by the Audit and Compliance
Committee on 9 September 2019.
For the purposes of ensuring an unbiased, fair, transparent
and efficient and non-discriminating process, the selection
criteria to be considered are defined in the Procedure, as well
as the various proceedings both for the selection and
appointment of external auditors, and for their re-election or
replacement.
In accordance with the Procedure, the process for the
selection of auditor must begin with the issue of tender
documents for candidate firms, pursuant to a timeline and a
request for proposals previously determined. A working team
made up of members from different areas and departments
will be appointed to assist in the process. This team will be
responsible for selecting and inviting candidate firms to tender
their proposal to become the statutory auditor of the Inditex
Group. Finally, the work team will issue a report evaluating the
proposals tendered based upon the predefined criteria.
On the other hand, the criteria for the re-election or
replacement of the statutory auditors are also defined in the
Procedure, based upon an annual evaluation of the
proceedings of the statutory auditor that will take into account,
without limitation, their contribution to the quality of the audit
and to the integrity of financial and non-financial information.
•Likewise, the Audit and Compliance Committee is entrusted
with the duty of liaising with external auditors in order to
receive information on such matters that could compromise
their independence and on any other matter related to the
carrying out of the statutory audit, as well as on those other
communications envisaged by statutory audit legislation and
auditing standards. Namely, the Audit and Compliance
Committee shall:
◦Receive from the statutory auditors on an annual basis, the
statement on their independence regarding the Company or
the companies related thereto, directly or indirectly.
◦Oversee the engagement of the statutory auditor for non-
audit services as well as the terms and the performance of
the contracts entered into with the external auditor of the
Company for the rendering of such services.
In this regard, the Company relies on the Policy on statutory
auditor contracting for the provision of non-audit services
(formerly, the Procedure to Contract an Auditor for the
Provision of Additional Non-audit Services, approved by the
Audit and Compliance Committee on 18 July 2016). The
Policy, as amended, was approved by the board in the
meeting held on 15 March 2022, to align it with the new
implementing regulations of the Statutory Audit Act.
The Policy regulates the process to be followed so that the
Audit and Compliance Committee may be apprised of and
approve the contracts entered into by the Company and the
entities of its Group with the Statutory Auditor for the
provision of non-audit services.
131
As a general rule, for the purposes of maintaining as much
as possible the statutory auditor’s independence, the Inditex
Group is willing to limit as far as possible the provision of
non-audit services by the former, outlining a list of services
which they are prohibited to render. In addition, the Policy
sets forth that non-audit services shall only be provided by
the statutory auditor with the approval of the Audit and
Compliance Committee.
According to the Policy, before entering into any contract,
the external auditor shall send to the Audit and Compliance
Committee a request for approval of non-audit services.
Such request must be accompanied by a document
appropriately detailing the services requested so that the
Audit and Compliance Committee may proceed to a global
and effective review of the threats and/or impacts that their
engagement might entail to their independence, both
individually and as a whole.
To ensure a certain flexibility, as an exception, the Audit and
Compliance Committee may pre-approve on an annual
basis certain types of services which are recurrent and
uniform with regard to their purpose. To grant such pre-
approval, the potential threats and safeguards that the
services might entail to the independence of the statutory
auditor must be reviewed and assessed. Following the
engagement of such services, the detail thereof must be
provided to the Audit and Compliance Committee. Should
the terms and conditions of pre-approved services under
this system be subject to substantial amendments, this shall
be reported and they will be subject to new approval by the
Audit and Compliance Committee.
◦Additionally, for the purposes of reinforcing the duty to
oversee and establish the independence of the statutory
auditor, the engagement by Inditex’s controlling shareholder
(i.e.,Pontegadea Inversiones, S.L.) of non-audit services from
such auditor shall be subject to prior approval by Inditex’s
Audit and Compliance Committee.
◦Verify that the Company and the statutory auditor also
respect the limits on the concentration of the auditor’s
business, the rules on professional fees and, generally, all
other regulations established to ensure the independence of
the auditors.
In this regard, it shall ensure that the remuneration of the
external auditors for their work does not compromise their
quality and independence.
◦Finally, issue on an annual basis and prior to the issue of the
auditor’s report, a report setting forth its opinion on whether
the independence of the statutory auditor or of the audit firm
has been jeopardised. In any case, this report must contain
the assessment of the provision by external auditors of each
and every additional non-audit service, considered both
separately and as a whole, and its opinion regarding the
independence system of the auditor pursuant to statutory
audit regulations.
•Finally, in the event of resignation of the statutory auditor, the
Audit and Compliance Committee shall examine the
circumstances that may have given rise thereto.
As regards the mechanisms established to ensure the
independence of the financial analysts, the Company releases
information to the market following the principles of the Internal
Regulations of Conduct in the Securities Markets, especially
relating to the obligation that the information must be accurate,
clear, quantified and complete, avoiding subjective assessments
that lead or could lead to confusion or deceit.
The Company also relies on the Policy on Communication and
Contact with Shareholders, Institutional Investors and Proxy
Advisors, informed by a set of principles that it must observe
upon disclosing information: transparency, accuracy, immediacy
and symmetry. Under the policy, the Company is encouraged to
keep communication channels that ensure that clear, full,
streamlined and simultaneous information is made available to
its current and potential shareholders, to assess the
performance of the Company and its economic and financial
results. This Policy is available on the corporate website.
Likewise, in accordance with Recommendation 4 GGC, the
board of directors approved on 14 December 2020, following a
report from the Audit and Compliance Committee, the Policy on
Disclosure of Economic-Financial, Non-Financial and Corporate
Information that seeks to establish a framework for action and
define the overarching principles that will govern the disclosure
by the Company of Economic-Financial, Non-Financial and
Corporate Information via Regulated and non-Regulated
Channels.
The Policy is aligned with the provisions of the Company’s
internal regulations, in particular with the Policy on
Communication and Contacts with Shareholders, Institutional
Investors and Proxy Advisors.
As the highest supervisory body responsible for overseeing
economic-financial, non-financial and corporate information, the
board of directors shall ensure the largest circulation and the
highest quality of the information provided to the stakeholders
and to the markets at large, in accordance with a set of
principles, including transparency, objectivity, accuracy,
immediacy and symmetry in disclosure of information.
C.1.31. Indicate whether the company changed its
external auditor during the year. If so, identify the
incoming and outgoing auditors:
Yes xNo
Outgoing auditor
Incoming auditor
Deloitte, S.L.
Ernst & Young, S.L.
The appointment of Ernst & Young, S.L. as statutory auditor to
audit the individual annual accounts and directors’ report of the
Company, and the consolidated annual accounts and directors’
report of the Inditex Group for financial years 2022, 2023 and
2024, was approved at the Annual General Meeting held on 12
July 2022, on the proposal of the board of directors, after a
favourable report from the Audit and Compliance Committee.
Such proposal was drawn up following an audit tender process
conducted in FY2020 under the helm of the Audit and
Compliance Committee in accordance with applicable statutory
audit regulations, the then current Procedure (now a Policy) to
Select the Statutory Auditor for the Group, and CNMV’s
Inditex Annual Report 2022 / Annual Corporate Governance Report
132
Technical Guide 3/2017. The process has been described in
section C.1.30 above.
If there were any disagreements with the outgoing auditor,
explain their content:
YesNo x
Explanation of disagreements
—
C.1.32. Indicate whether the audit firm performs any
non-audit work for the company and/or its group
and, if so, state the amount of fees it received for
said work and express this amount as a percentage
of the total fees invoiced to the company and/or its
group for audit work:
Yes xNo
Company
Group
companies
Total
Amount invoiced for non-audit
services (thousand euros)
80
12
92
Amount invoiced for non-audit
work/Amount for audit work (in %)
17,5% 1
0.2%
1.3%
1. The count on which this percentage is calculated only includes the statutory
audit of Inditex’s individual accounts (and the verification of the relevant
statement on non-financial information).
C.1.33. Indicate whether the auditors’ report on the
financial statements for the preceding year
contains a qualified opinion. If so, indicate the
reasons given to shareholders at the general
meeting by the chairman of the audit committee to
explain the content and extent of the qualified
opinion.
Yes        No x
Explanation of the reasons and direct link to the document made
available to the shareholders at the time that the general meeting
was called in relation to this matter
-
C.1.34. Indicate the number of consecutive years for
which the current audit firm has been auditing the
company's individual and/or consolidated financial
statements. Also, indicate the number of years
audited by the current audit firm as a percentage of
the total number of years in which the financial
statements have been audited:
Individual
Consolidated
Number of consecutive years
1
1
Individual
Consolidated
Number of years audited by the current
audit firm/number of years in which the
company has been audited (in %)
3%
3%
133
C.1.35. Indicate whether there is a procedure for
directors to be sure of having the information
necessary to prepare the meetings of the
governing bodies with sufficient time; provide
details where applicable:
Yes xNo
Details of the procedure
Pursuant to section 19.2 of the Board of Directors’ Regulation,
the notice calling ordinary meetings shall be given at least 3
days in advance of the meeting, and the order shall always
include the agenda of the meeting and shall be accompanied by
the duly summarised and prepared relevant information.
In this regard, to help directors effectively prepare meetings, in
addition to the documentation relating to agenda items, an
executive summary of each of them is made available to them
ahead of each meeting, outlining the main business to be
transacted, the presentations and the minutes of the previous
meeting.
The documentation deemed appropriate to prepare the
meetings of the board and its committees, according to the
agenda, including the relevant presentations is made available
to directors in real time via a platform. Said tool gives directors
permanent access to the documentation. Additionally, other
relevant information for the appropriate performance of their
duties is added through the tool (including, without limitation,
internal conduct and corporate governance policies, updated
membership of governing bodies, information about current
resolutions on remuneration or analysts’ reports which may be
useful for directors), in a confidential and secure environment.
On the other hand, attendance at board and committees’
meetings of officers and supervisors from the different
departments and areas of the Company with a recurrent
presence is encouraged, to give their insight on certain issues
directly associated with the responsibilities of the board and its
committees so that directors have a direct understanding of
business concerns and are entitled to directly debrief them on
the business transacted at each meeting.
Additionally, any employee or officer can be called to the
meetings, even without the presence of any other officer.
Without prejudice to the foregoing, efforts are made to ensure
that the presence at committee meetings of anyone other than
its members is limited to the cases where it is necessary, and for
addressing specific agenda items for which they were called to
attend.
For the purposes of ensuring that Inditex’s board members fully
understand their duties and responsibilities as well as the
proceedings of the Company’s governing bodies, a “Directors
Handbook” which is kept updated is available to new directors
and generally, to directors upon request.
Additionally, section 27 of the Board of Directors’ Regulations,
recognises the widest powers for directors to garner information
about any topic affecting the Company (and its subsidiaries);
examine its books, registers, documents and other records of
the company’s operations and inspect all its facilities; likewise it
provides that the exercise of the powers of information shall be
channelled through the Chair, the Deputy Chair or (any of the
Deputy Chairs, where appropriate), or through the Secretary of
the board of directors, who shall attend to the requests made by
any director, and directly provide them with the information,
facilitate contacts with the appropriate spokespersons at the
appropriate level in the organisation or establish such measures
as to enable them to conduct the desired examinations on-site.
On the other hand, specific questions on the quality of the
information made available to directors and on how early in
advance it has been received, are included in the evaluation
questionnaire of the board. Additionally, the areas subject to
improvement identified in the previous year and the assessment
of the directors in respect of the improvement thereof, is subject
to annual follow-up. This entails that where directors point out
quality of information and/or how in advance they receive it as
potential areas subject to improvement, progress can be made
regarding submission of information required to prepare the
meetings of the board of directors and its committees.
Meanwhile, section 28 of the Board of Directors’ Regulations
addresses the possibility for directors to seek external advice.
C.1.36. Indicate whether the company has
established rules obliging directors to inform the
Board of any circumstances, whether or not related
to their actions in the company itself, that might
harm the company’s standing and reputation,
tendering their resignation where appropriate. If so,
provide details:
Yes xNo
Explain the rules
Pursuant to Recommendations 22 and 24 GGC and section
25.2(e) of the Board of Directors’ Regulations, directors must
submit their resignation from the position to the board of
directors and formally tender their resignation, if this latter
should consider it advisable, when they are involved in any
circumstances affecting them, related or not to their actions
within the Company, that may harm the name and reputation of
the Company or otherwise jeopardise its interests. For this
purpose, they shall report to the board of directors any criminal
cases in which they are accused as well as how the legal
proceedings subsequently unfold.
Meanwhile, pursuant to section 39.3 of the Board of Directors’
Regulations, directors shall inform the Board of Directors of any
circumstance which might compromise the credit and
reputation of the Company or jeopardise its interest.
Inditex Annual Report 2022 / Annual Corporate Governance Report
134
C.1.37. Indicate whether, apart from any special
circumstances that may have arisen and been duly
noted in the minutes, the Board of Directors has
been notified or has otherwise become aware of
any situation affecting a director, whether or not
related to his or her actions in the company itself,
that might harm the company’s standing and
reputation:
Yes xNo
Remarks
The board of directors has not been notified in the year nor
has it been made aware of any situation affecting a director,
that might harm the company’s standing and reputation.
C.1.38. Detail any material agreements entered into
by the company that come into force, are modified
or are terminated in the event of a change in
control of the company following a public takeover
bid, and their effects.
Not applicable.
C.1.39. Identify individually as regards directors, and
in aggregate form in other cases, and provide
details of any agreements between the company
and its directors, executives or employees
containing indemnity or golden parachute clauses
in the event of resignation or dismissal without due
cause or termination of employment as a result of a
takeover bid or any other type of transaction.
Number of beneficiaries
23
Type of beneficiary
Description of agreement
CEO
The executive director will be entitled to
severance pay in a gross amount equivalent to
the remuneration of 2 years calculated based
upon his annual fixed and variable remuneration
for the current year, where his contract is
terminated by unilateral decision of the
Company, as well as in case of resignation
tendered by the CEO under certain premises
(including the succession in the company or a
change in control in the Company that affects
more than 50% of the share capital or of the
voting rights, provided that a significant
refreshment of the governing bodies of the
Company or a change in the purpose of the
main activity of the Company takes place at the
same time, if such request for termination is
made within 6 months of the occurrence of
such succession or change. For this purpose,
no succession or change in control shall be
deemed to have taken place in the event of
direct or indirect family succession in the
ownership of the Company).
Senior managers
and officers
Golden parachute clauses are written in the
contracts executed with 22 senior managers in
the event that their contract, whether ordinary or
for executive service, is terminated further to
withdrawal by Inditex, wrongful or unreasonable
dismissal, or resignation based upon certain
grounds, pursuant to the terms and conditions
of their contracts. In such cases, the senior
manager shall be entitled to severance pay in a
gross amount equivalent to the remuneration of
2 years, calculated based upon the fixed and
variable remuneration determined for the
current year.
On the occasion of the departure of the former Executive
Chairman, Mr Isla, the Annual General Meeting held in 2022
approved in accordance with the substantiated proposal from
the Remuneration Committee, for the purposes of better
protecting the legitimate interests of the Company: (i) the
extension of the scope of the post-contractual non-compete
obligation and the resulting increase in his compensation, and
(ii) the amendment to the Directors’ Remuneration Policy for
FY2021, FY2022 and FY2023, approved at the AGM held on 13
July 2021, for the purposes, inter alia, of covering the new terms
of the contract with Mr García, as CEO with regard to the golden
parachute clause and the post-contractual non-compete
obligation (as indicated in the table above).
In any case, the maximum termination payment amounts for
executive directors pursuant to the provisions of the above
referred recommendations GGC, are respected in said non-
compete clause.
Indicate whether, beyond the cases established by law, these
agreements have to be communicated and/or authorised by
the governing bodies of the company or its group. If so,
specify the procedures, the cases concerned and the nature
of the bodies responsible for their approval or
communication:
Board of Directors
General Meeting
of Shareholders
Governing body authorizing
the clauses
x
135
Yes
No
Are these clauses notified to the General Meeting
of Shareholders?
x
The internal system regarding approval of the terms and
conditions of the contracts entered into by the Company or any
Group company with senior managers and directors, set forth in
the Articles of Association, the Board of Directors’ Regulations
and the specific sets of regulations of each board committee, is
similar to the statutory system provided in the Companies Act.
The clauses included in contracts with senior managers are
approved by the board of directors, following a favourable report
of the Remuneration Committee.
Information about such terms, included in the contract entered
into with the CEO, can be found in the Annual Report on
Remuneration of Directors for 2022, which will be put to an
advisory say-on-pay vote at the following Annual General
Meeting as a separate agenda item.
C.2. Committees of the Board of Directors
C.2.1. Provide details of all committees of the Board
of Directors, their members, and the proportion of
executive, proprietary, independent and other
external directors forming them:
EXECUTIVE COMMITTEE
In accordance with the provisions of article 27 of the Articles of
Association, an Executive Committee was set up by the Board of
Directors on 28 February 1997, which holds in delegation all the
powers of the Board, except for those that cannot be delegated
by statute or pursuant to the Articles of Association and those
that are necessary for the responsible exercise of the general
supervisory function that is incumbent on the board of directors.
Composition of the Executive Committee as of 31 January 2023:
Name
Position
Directorship type
Mr Óscar García
Maceiras
Chair
Executive
Mr José Arnau Sierra
Deputy chair
Proprietary
Mr Amancio Ortega
Gaona
Ordinary member
Proprietary
Ms Marta Ortega Pérez
Ordinary member
Proprietary
Ms Pilar López Álvarez
Ordinary member
Independent
Mr José Luis Durán
Schulz
Ordinary member
Independent
Mr Rodrigo Echenique
Gordillo
Ordinary member
Independent
Mr Emilio Saracho
Rodríguez de Torres
Ordinary member
Affiliate
% executive directors
13%
% proprietary directors
38%
% independent directors
38%
% affiliate directors
13%
Mr Javier Monteoliva Díaz, General Counsel and Secretary of
the Board, acts as Secretary non-member of the Executive
Committee.
The structure of the Executive Committee is represented in the
image below:
Explain the duties delegated or assigned to this committee,
other than those that have already been described in Section
C.1.9. and describe the rules and procedures for its
organisation and functioning. For each of these functions,
briefly describe its most important actions during the year and
how it has exercised in practice each of the functions
assigned to it by law, in the articles of association or in other
corporate resolutions.
a)Composition
The board of directors resolved on 14 December 2020, following
a favourable report of the Audit and Compliance Committee to
amend in part its terms of reference for the purposes, inter alia,
of aligning the rules on the composition of the Executive
Committee with the new language of Recommendation 37 GGC.
As stated in section A.1.15 above, the board of directors
approved at its meeting held on 12 May 2022 following a
favourable report from the Audit and Compliance Committee
the partial amendment to its terms of reference for the purposes
of aligning the Executive Committee’s membership with the new
corporate organisational structure. In particular, it was resolved
that the Executive Committee would be hereinafter chaired by
the CEO or the company’s chief executive, should more than
one director perform executive functions, instead of the Chair of
the Board of Directors.
In line with the foregoing, the board of directors resolved on that
Inditex Annual Report 2022 / Annual Corporate Governance Report
136
same date, on the proposal of the Nomination Committee to
appoint Mr Óscar García Maceiras as new Chair of the
Executive Committee (pursuant to the new wording of section
14.3 of its terms of reference) and Ms Marta Ortega Pérez as
new ordinary member thereof.
Mr García and Ms Ortega will serve on the Executive Committee
for as long as they serve on the board, i.e. four years since the
ratification of their election to the board as executive and
proprietary directors, respectively, at the Annual General
Meeting.
Pursuant to section 14.2 of the Board of Directors’ Regulations,
the Executive Committee, should it exist, shall be made up of a
number of directors being no less than 3 and no greater than 8.
At least 2 of the members of the Executive Committee must be
non-executive directors and at least one of these latter must be
an independent director. The CEO will chair the Executive
Committee and the Secretary of the Board of Directors, who
may be assisted by the Deputy-Secretary, will act as Secretary
thereof.
b)Duties
The Executive Committee holds in delegation all the powers of
the board, except for those that cannot be delegated by statute
or pursuant to the Articles of Association and those that are
necessary for the responsible exercise of the general
supervisory function that is incumbent on the board of directors.
Pursuant to article 27 of the Articles of Association, for the
permanent delegation of any power of the board of directors to
the Executive Committee, it shall be necessary for two-thirds of
those making up the board of directors to vote for the motion.
c)Proceedings
No meeting of the Executive Committee was held in 2022.
AUDIT COMMITTEE
Article 28 of the Articles of Association and section 15 of the
Board of Directors’ Regulations, as well as the Audit and
Compliance Committee’s Regulations set out the regulations
governing the Audit and Compliance Committee.
Composition of the Audit and Compliance Committee as of 31
January 2023:
Name
Position
Directorship
type
Ms Pilar López Álvarez
Chair
Independent
Bns. Denise Patricia
Kingsmill
Ordinary member
Independent
Ms Anne Lange
Ordinary member
Independent
Mr José Arnau Sierra
Ordinary member
Proprietary
Mr José Luis Durán Schulz
Ordinary member
Independent
Mr Rodrigo Echenique
Gordillo
Ordinary member
Independent
Mr Emilio Saracho
Rodríguez de Torres
Ordinary member
Affiliate
% executive directors
0%
% proprietary directors
14.29%
% independent directors
71.42%
% affiliate directors
14.29%
Mr Javier Monteoliva Díaz, General Counsel and Secretary of
the Board, acts as Secretary non-member of the Audit and
Compliance Committee.
The structure of the Audit and Compliance Committee is
represented in the image below:
Explain the duties assigned to this committee and describe
the rules and procedures for its organisation and functioning.
For each of these duties, briefly describe its most important
actions during the year and how it has exercised in practice
each of the duties assigned to it by law, in the articles of
association or in other corporate resolutions.
a)Composition:
Pursuant to section 14 of the Audit and Compliance Committee’s
Regulations and article 28 of the Articles of Association, the
Audit and Compliance Committee shall be made up of a
minimum of 3 and a maximum of 7 non-executive directors
appointed by the board of directors, a majority of whom must
necessarily be independent directors. All members of the
committee and in particular its Chair shall be appointed taking
into account their knowledge and experience on accounting,
audit, internal control or risks management matters, both
financial and non-financial, as well as industry-specific
knowledge. Additionally, at least one of them shall be appointed
taking into account their knowledge, skills and experience in the
matter of information technology.
The Audit and Compliance Committee must be chaired by an
independent director serving on it, who shall be elected by the
board of directors for a maximum 4-year term, upon expiry of
which they shall be replaced. They may be re-elected a year
after the end of their term of office. The board of directors shall
137
appoint a Secretary of the Audit and Compliance Committee,
who needs not be a member of said body.
The board of directors shall encourage a diverse committee
membership in terms of professional experience, competences,
personal skills, sector-specific knowledge, international
experience or geographic origin, age and gender, taking into
account the restrictions that result from the smaller size of the
committee.
b)Duties
The mission and powers of the Audit and Compliance
Committee are addressed in article 28 of the Articles of
Association, section 15 of the Board of Directors’ Regulations
and sections 5 to 13 of the Audit and Compliance Committee’s
Regulations.
In addition to the powers expressly assigned to it pursuant to
statute and the Recommendations of the Good Governance
Code, the Audit and Compliance Committee shall be expressly
entrusted with the following duties:
•Powers relating to Corporate Governance: (i) to review and
evaluate the appropriateness of the corporate governance
system and to propose to the Board of Directors amendments
and updates of the Company’s corporate governance
regulations; (ii) to oversee the degree of compliance by the
Company with generally recognised recommendations on
good governance and in particular, with the GGC; (iii) to
oversee compliance with the Internal Regulations of Conduct
in the Securities Markets, and, in general, with the corporate
governance regulations of the Company; (iv) to be regularly
apprised of issues relating to management of treasury stock;
and (v) to prepare and table to the board of directors for
approval, the Annual Corporate Governance Report.
•Powers relating to Compliance: (i) to issue reports on the
policies and procedures of the Company on topics within its
remit; (ii) to oversee compliance with applicable regulations
and the effectiveness of the internal policies and procedures
of the Company; (iii) to review recommendations and best
practices on Compliance and corporate governance, both
domestic and/or international, and to encourage compliance
with the most demanding standard; (iv) to oversee compliance
with the Annual Compliance Plan and with the Model of
Criminal Risk Prevention of the Group; (v) to ensure that the
Compliance Function relies on the necessary resources for
the appropriate discharge of its duties; and (vi) to receive
information, at least every 6 months, on the degree of
compliance with the Codes of Conduct and the proceedings
of the Ethics Line and the reports received through the
relevant channel of any potential breach of the Group Codes
of Conduct, of any other internal regulation of the Group and
of any potentially relevant irregularities, including of a financial
and/or accounting nature, or otherwise relating to the
Company.
•Powers relating to tax issues: (i) to receive from the head of tax
issues of the Company prior to the statement of the annual
accounts and the filing of the Corporate Tax return,
information on tax criteria followed by the Company during the
financial year, and on the degree of compliance with the Code
on Good Tax Practices; and (ii) to apprise the board of
directors of the tax policies applied and, in the case of
transactions or matters which must be referred to the board of
directors for approval, of the tax consequences thereof, when
they represent a relevant factor.
•Other powers entrusted to the Committee: (i) to oversee in
coordination with the Sustainability Committee, where
applicable and with regard to issues under its purview, the
strategy of communication and relations with shareholders,
including small and medium shareholders, investors, proxy
advisors and other stakeholders as well as the effective
application of the Policy on Disclosure of Economic-Financial,
Non-Financial and Corporate Information, and encourage its
enhancement; (ii) to oversee and evaluate the process of
interaction with the different stakeholders of the company as
regards issues under its purview; and (iii) to exercise when the
Committee so decides all the duties inherent in audit
committees from time to time provided in applicable laws, as
regards such Group companies that are deemed to be public-
interest entities (as defined by applicable regulations) provided
that such companies are directly or indirectly wholly-owned by
the Company and the administration thereof is not vested in a
board of directors.
c)Organizational and operational rules
The Committee shall meet, at least on a quarterly basis, for the
purposes of reviewing the periodic financial information to be
submitted to the market authorities further to an obligation or of
its own accord, as well as the information that the board of
directors must approve and include within its annual public
documentation. Likewise, it shall meet each time that its Chair
calls it. The Chair must call the Audit and Control Committee
whenever the board of directors or its Chair request a report or
the submission of motions and, at any rate, whenever it is
appropriate for the successful performance of its functions.
Likewise, the Chair may arrange other communication channels,
working meetings to prepare committee meetings on specific
topics apart from the formal meetings of the committee.
Ordinary meetings shall be called by letter, fax, telegram or
email, and the meeting notice shall be signed by the Chair or the
Secretary. A quorum for committee meetings shall be declared
when at least half plus one of its members, present or
represented, are in attendance. The committee may also pass
resolutions in writing, without holding a meeting, pursuant to
statutory provisions.
Committee meetings may be held via videoconference or
conference call, or any other equivalent system allowing to
recognise and identify attendees, for them to communicate,
speak and cast vote, all in real time.
Likewise, for the purposes of making the appropriate
arrangements that ensure the achievement of the objectives
effectively sought, the committee shall prepare an annual
working plan, which shall include, at least, the specific objectives
for the financial year and an annual schedule of ordinary
meetings. In addition, the committee may rely on external
advisors to properly carry out its duties.
Inditex Annual Report 2022 / Annual Corporate Governance Report
138
d)Main proceedings of the Audit and Compliance Committee
carried out in 2022
The main proceedings of the Audit and Compliance Committee
in the year in furtherance of the responsibilities it has been
entrusted with pursuant to article 28 of the Articles of
Association and implemented in sections 5 to 13 of the Audit
and Compliance Committee’s Regulations, are outlined below:
1. Proceedings relating to the supervision of the process to
draw up and release the periodic financial information, annual
accounts, auditor’s report and Statement on Non-Financial
Information.
•Preparation of financial and non-financial information
The Audit and Compliance Committee reviews Inditex’s
economic and financial information before it is approved by the
board of directors.
To do so, prior to the stating of the quarterly, half-yearly or
annual financial statements, the Audit and Compliance
Committee also meets with the Company’s Management to
review, among other things, the enforcement of the accounting
principles and the estimates made upon stating the financial
statements.
Additionally, the committee, which is entirely made up of non-
executive directors, meets with the external auditor for the
purposes of reviewing the Company’s annual accounts and
certain periodic financial information, ensuring compliance with
statutory requirements, the appropriate delimitation of the
consolidation perimeter and the appropriate use of generally
accepted accounting principles upon stating the annual
accounts.
The Audit and Compliance Committee reviewed on 14 March
2022 the annual accounts and the directors’ report, both
consolidated and individual, as well as the auditor’s report for
FY2021. The Committee verified that an unqualified auditor’s
report was issued. In that same meeting, in the exercise of the
oversight duties inherent in audit committees assumed in
respect of Zara España, S.A. (“Zara España”), a wholly-owned
subsidiary, the Committee reviewed the results and the Annual
Financial Report, comprising the individual annual accounts and
directors’ reports for FY2021.
Likewise, the Committee reviewed the quarterly results for 2022
and the relevant Results Releases and Press Releases in the
meetings held on 6 June (1Q), 12 September (1H) and 12
December 2022 (3Q). Said results–and the respective Results
Releases and Press Releases–were submitted by the board of
directors to the market and its supervisory bodies on a quarterly
basis pursuant to the Periodic Public Information (PPI) format.
•Statement on Non-financial Information
The committee gave a favourable report to the consolidated
Statement on Non-financial Information (SNFI) of the Inditex
Group for 2021 in the meeting held on 14 March 2022.
The SNFI was prepared in accordance with the provisions of
applicable commercial regulations, following the criteria set forth
in Global Reporting Initiative (GRI) standards, in particular in GRI
101: Foundation 2016, selected pursuant to the table of required
contents provided in Act 11/2018.
To avoid material omissions in the SNFI that might be
subsequently included in the Annual Report and ensure full
consistency between both documents, a single integrated
report was issued in the year for the first time, which replaced
the Annual Report that the company used to prepare every year
in the month of June.
Likewise, following financial reporting best practices, an
Integrated Directors’ Report was also issued for the first time,
which integrated both financial and non-financial information.
The Statement on Non-Financial Information for FY2021 was
subject to an independent verification review by the auditors
who issued an unqualified report.
•Report on the Internal Control over Financial Reporting
System (ICFR)
The committee oversaw the effectiveness of the Internal Control
over Financial Reporting System (ICFR). This is accounted for in
section F of the 2021 Annual Corporate Governance Report
approved on 15 March 2022. The Company’s ICFR has been
verified by the statutory auditor, who issued an unqualified
report.
Likewise, in the meeting held on 6 June 2022, the committee
acknowledged the presentation given by external auditors on
the diagnosis of Internal Control over Financial Reporting
System (ICFR) of the Group.
139
2. Proceedings relating to statutory audit
•Overseeing the process to select and appoint the external
auditor
The audit tender process to select the new statutory auditor,
overseen by the committee, was completed in 2020. In the
meeting held on 11 December 2020, the Audit and Compliance
Committee resolved to submit to the Board of Directors the
proposal on the appointment of E&Y, S.L. to be the new statutory
auditor of the Company and its Group for FY2022, 2023 and
2024.
Given the time elapsed since the proposal was issued and the
fact that the AGM to which it would be submitted would be held
shortly, the committee resolved at its meeting held on 6 June
2022 to ratify and execute the terms relating to the proposal on
the appointment of E&Y. The proposal was approved at the
AGM 2022.
Until the proposed auditors are effectively appointed at the
AGM, at its meeting held on 14 March 2022, the committee
acknowledged the presentation given by E&Y on the status of
the external audit transition plan.
•Overseeing the effectiveness of the statutory audit and
fulfilment of the audit engagement
The audit conducted in 2021 was reviewed by the Audit and
Compliance Committee in the meeting held on 14 March 2022,
which was attended by the external auditors duly called to that
end.
The former external auditors audited the consolidated financial
statements of the Group as at 31 January 2022 as well as the
individual financial statements of certain Group companies, also
as at 31 January 2022. Likewise, the information about Zara
España’s individual accounts was included separately in the
audit scope. An unqualified report was issued.
In turn, the incoming external auditors have also carried out a
limited review of the consolidated financial statements for
1Q2022 and 3Q2022, which was accounted for in the meetings
held on 6 June and 12 December 2022, respectively.
External auditors (formally appointed at the AGM) were also in
attendance at the meeting held by the Audit and Compliance
Committee on 12 September 2022 to (i) account for the limited
review of interim condensed consolidated financial statements
of Industria de Diseño Textil, S.A. and subsidiaries, and (ii)
present their audit plan for the current year.
•Verifying the independence of Statutory Auditor
Pursuant to the provisions of the Policy on statutory auditor
contracting for the provision of non-audit services originally
approved by the Committee on 18 July 2016 as a Procedure and
amended in part on 15 March 2022, the Audit and Compliance
Committee evaluated and approved in the meetings held on 14
March, 12 September, 3 November and 12 December 2022 the
engagement by the Company, Group companies and Zara
España, of non-audit services from external auditors.
The committee also approved on 14 March 2022 the reports on
the independence of the former external auditors from the
Company and from Zara España. Both reports also covered the
provision of non-audit services by the former auditors in 2021.
Pursuant to Recommendation 6 GGC, the report on the
independence of the external auditor from the Company was
made available to the shareholders on the corporate website at
the time the Annual General Meeting was called.
3. Proceedings relating to Internal Audit
The Chief Audit Officer attended five (5) meetings of the Audit
and Compliance Committee held in 2022 and took an active
part therein.
A number of issues that fall under the purview of the committee
were addressed in such meetings. The committee oversaw the
work plan of the Internal Audit Department (such as projects
progress and review of follow-up on the most critical
recommendations in the field of operations, financial,
compliance and systems currently in progress), and approved
its budget. In particular:
•At the meeting held on 14 March 2022: The committee: (i)
acknowledged the Internal Audit Annual Activities Report for
2021; (ii) approved the 2022 Internal Audit Plan and budget, in
accordance with Recommendations 41 and 42 GGC, and (iii)
gave a favourable report to the external audit fees for 2021 and
the budget for 2022.
•At its meetings held on 6 June, 12 September and 12
December 2022, the committee acknowledged the
assignments carried out by Internal Audit in 1Q2022, 2Q2022
and 3Q2022, respectively.
•The committee resolved at its meeting held on 12 September
to approve the 2022 Internal Audit Plan update as a result of
follow-up on the progress of business, operations and new
risks in relevant areas
•Last, at the meeting held on 14 March 2022, the committee
gave a favourable report to the amendment to the Internal
Audit Charter primarily made to reinforce the independence of
the Internal Audit function, updating the CAO’s dual reporting:
(i) administrative reporting to the non-executive Chair of the
Board, and (ii) functional reporting to the Audit and
Compliance Committee.
Inditex Annual Report 2022 / Annual Corporate Governance Report
140
4. Proceedings relating to Compliance
•Supervision of the Model of Criminal Risk Prevention: review of
the reports issued by the Ethics Committee
The committee reviewed and approved at its meeting held on 14
March 2022 the Annual Report of the Ethics Committee
covering the main proceedings of such committee regarding
the Ethics Line in 2021, and the Half-yearly Report of the Ethics
Committee at its meeting of 12 September 2022. Both reports
review the enforcement of the Code of Conduct and
Responsible Practices and the Code of Conduct for
Manufacturers and Suppliers, outlining the cases handled by the
Ethics Committee, the measures taken and the resolutions
issued.
The committee also acknowledged the follow-up on the
evolution of the cases handled and the concerns received via
the Ethics Line at the meetings held on 6 June and 12 December
2022.
It acknowledged the Reports on the Model of Criminal Risk
Prevention for 2021 and for 1H2022 at its meeting held on 14
March and 12 September 2022, respectively. Such reports cover
the outcome of the supervision of Inditex’s Model of Criminal
Risk Prevention and the actions taken to roll out the Corporate
Compliance system both at domestic and international level
(dissemination and communication, proceedings relating to
acceptance of the Code of Conduct and Responsible Practices
and training on Corporate Compliance).
Last, at is meeting held on 14 March 2022, the committee: (i)
acknowledged the reasonable assurance report on the
evaluation of Inditex’s Model of Criminal Risk Prevention, and (ii)
gave a favourable report to the amendment to the Regulations
of the Ethics Committee to align its structure and encompass
certain organisational measures. 
•Supervision of the Compliance Function
At its meeting held on 14 March 2022, the committee approved
the 2022 Annual Compliance Work Plan and acknowledged the
appointment of the new Chief Compliance Officer.
Likewise, at the meetings held on 14 March and 12 September
2022, the Audit and Compliance Committee acknowledged the
2021 Annual Compliance Report and the half-yearly Compliance
Report for 2022 first half, respectively.
The committee further acknowledged the main proceedings of
the Compliance Function at the meetings held on 6 June and 12
December 2022.
•Corporate policies.
At its meeting held on 14 March 2022, the committee gave a
favourable report to the Global sexual harassment and sex or
gender identity-based harassment at the workplace prevention
Policy and to the Policy on statutory auditor contracting for the
provision of non-audit services. Both were approved by the
board of directors in the meeting held on 15 March 2022.
At its meeting held on 12 September 2022, the committee gave
a favourable report to the new Indirect Procurement Policy
which went on to be approved by the board of directors on the
following day.
Last, on 12 December 2022 the committee gave a favourable
report to the Health & Safety Policy which was subsequently
approved at the board meeting held on the following day.
5. Proceedings in the field of oversight and evaluation of the
Enterprise Risk Management Function
The Audit and Compliance Committee is responsible for
verifying the level of risk tolerance and its limits, at least by
means of an annual review and periodic reports on the degree
of compliance with the Enterprise Risk Management Policy, to
be raised to the board. Its main proceedings in the field in the
year were:
•Risk Map
At the meeting held on 12 December 2022, the Head of the ERM
Department apprised the committee of the main risks affecting
business development and the control measures established to
manage and monitor such risks. The committee gave a
favourable report to the update of the 2022 Risk Map.
•Evaluation of other risks
Pursuant to sections 5.3 (i) of the Audit and Compliance
Committee’s Regulations, and the provisions of the Enterprise
Risk Management Policy, the evaluation of any question
regarding “financial and non-financial risks (including
operational, technological, legal, social, environmental, political
and reputational risks or those related to corruption)” is part of
the Committee’s duty to oversee the effectiveness of risk control
systems.
Likewise, pursuant to section 9(h) of the above-mentioned set of
rules, the Audit and Compliance Committee may “Meet with the
heads of business units at least once a year, and whenever the
Committee deems it appropriate, for the purposes of reporting
to the Committee on trends of business and risks associated
with the respective areas under their purview.”
Considering the foregoing, the Committee has encouraged
attendance of company’s officers, managers and heads of
control areas at its meetings, to keep abreast of the operation of
the risk management systems established and the findings
reached. In particular, with regard to:
•Financial risks
At the meeting held on 12 December 2022, the Head of the ERM
Department and the Head of Financial Risk Management
reported to the Audit and Compliance Committee on the main
financial risks of the Group.
•Report on Tax Policies
Pursuant to the Company’s Tax Policy, the Audit and
Compliance Committee acknowledged at the meeting held on
14 March 2022 the tax policies followed in 2021.
141
•Information Security
At the meeting held on 14 March 2022, with the former external
auditors in attendance, the committee acknowledged the results
of the assessment of the cybersecurity maturity level and the
cyber incident response of the Group as well as of the review of
technological risks associated to financial information.
At that same meeting, the committee acknowledged the
presentation given by the CISO on: i) the main events of interest
noted by the Information Security Committee in 2H2021, (ii) the
most relevant projects and initiatives of the Information Security
Department, and (iii) the 2022 Plan.
On the other hand, at the meeting held on 12 September 2022,
the committee acknowledged the main events of interest noted
by the Information Security Committee in 1H2022.
At that same meeting, the committee acknowledged the new
CISO Charter that seeks to define the framework for action and
identify the CISO’s responsibilities, improve maturity terms and
ensure alignments with applicable cybersecurity requirements,
trends and regulations.
The Charter outlines: (i) the specialised knowledge and
experience required to be appointed as Chief Information
Security (CISO); (ii) the assurances of the CISO (including
without limitation, autonomy and independence and resources
and means); (iii) the CISO reports hierarchically to the CEO,
which ensures their independence, autonomy of action and
control; (iv) the reporting lines to the Audit and Compliance
Committee and the Information Security Committee; and (v)
responsibilities and functions, both internal and external.   
•Report of the Data Protection Officer (DPO)
At the meeting held on 12 September 2022, the Audit and
Compliance Committee acknowledged the report of the DPO,
which identified, inter alia: (i) the most relevant initiatives carried
out by the area, and (ii) the current strategy and main action
lines.
•Report of the Import, Export and Transport Department
At its meeting held on 6 June 2022, the committee
acknowledged the report of the Import, Export and Transport
Department outlining its main challenges, action lines and
current and scheduled projects of the area.
•IP
The committee acknowledged at its meeting held on 12
September 2022 the reports raised by the Head of the IP
Department and the Head of the Intellectual Property Control
(IPPC) area covering, inter alia: (i) the scope of the measures
taken by the Group to avoid potential conflicts with third parties’
rights/designs; (ii) the progress of the cases relating to IP assets
management, including the scope of the IP risk control
measures in force; and (iii) the evolution of the main IP litigation.
•Other risks
The Head of the ERM Department was in attendance at several
meetings of the Audit and Compliance Committee to brief it on
the progress, evolution and action lines regarding the
management of risks which are most relevant to the Group
according to the Risk Map. The committee acknowledged the
report on climate change risk at its meeting on 6 June.
Likewise, the committee assessed on 12 September potential
risks arising from the different innovation and investment
initiatives undertaken by the Group in the field of sustainability.
6. Proceedings relating to Corporate Governance
The most relevant proceedings of the committee in 2022
regarding observance of statutory and good governance
requirements have been:
•Annual Corporate Governance Report (ACGR)
On 14 March 2022, the Audit and Compliance Committee
approved the 2021 Annual Corporate Governance Report filed in
free format, in accordance with CNMV’s Circular 5/2013,
accompanied by the relevant Statistical Appendix set forth in
said Circular. The committee submitted the ACGR to the board
of directors, which approved it on 15 March 2022, and
subsequently sent it to the CNMV as other relevant information.
The ACGR is available on CNMV’s website.
•Review of the reports of the Market Transparency Committee
The Audit and Compliance Committee reviewed at the meetings
held on 14 March and 12 September 2022 the half-yearly reports
issued by the General Counsel’s Office and approved by the
Market Transparency Committee on: (i) the enforcement of the
Internal Regulations of Conduct in the Securities Markets (IRC);
(ii) the measures taken to promote knowledge of the obligations
arising out of the IRC and ensure compliance with its provisions;
(iii) the updated list of persons subject to the IRC; and (iv)
monitoring the incidents detected relating to transactions in
Inditex shares.
•Amendment to internal regulations
In 2022 almost all amendments to Inditex’s internal regulations
on corporate governance were made to bring their language
into line with the new organisational structure of the Company.
In particular:
–At the meeting held on 12 May 2022, it gave a favourable
report to the proposals on the amendment to the Board of
Directors’ Regulations and the Audit and Compliance
Committee’s Regulations, primarily to reflect the clear
separation of duties assigned to the Chair and those
assigned to the CEO, as chief executive of the Company,
thus preventing any risk of confusion regarding the profile
and role of the new non-executive Chair.
A second group of proposed amendments answered the
need to align the composition of the Executive Committee
with the new organisational structure of the company
–At the meeting held on 3 November 2022, the proposed
amendment to the Internal Regulations of Conduct in the
Securities Markets, consisting of: (i) changing the name of
the committee from “Compliance Supervisory Board” to
“Market Transparency Committee”; (ii) specifying Senior
Managers who are subject to the special IRC system; (iii) in
line with market practice, directors and senior managers will
be subject to the same blackout periods as the remaining
officers and employees; and (iv) reviewing certain technical
Inditex Annual Report 2022 / Annual Corporate Governance Report
142
aspects of the IRC in view of actual practice.
The above referred proposals were subsequently approved by
the board of directors.
•Evaluation of the appropriateness of the corporate
governance system
At the meeting held on 13 February 2023, the Audit and
Compliance Committee has appreciated that the Company’s
corporate governance system in 2022 is appropriate, as it
considers that it is fully compliant with the regulatory
requirements laid down in applicable regulations and with GGC
recommendations.
•Related party transactions
At the meeting held on 14 March 2022, the Audit and
Compliance Committee issued and approved the report on
related party transactions carried out by the Inditex Group
throughout 2021.
Pursuant to Recommendation 6 GGC, said report was made
available to shareholders on the corporate website at the time
the notice calling the Annual General Meeting was posted.
At its meetings held on 14 March, 6 June and 12 September, the
committee gave a favourable report to the related party
transactions outlined in the annual report on related party
transactions carried out by the Group in 2022 (approved by the
committee on 14 March 2023 and which will be posted on the
corporate website in June 2023). Following their assessment on
the basis of the reports issued by the committee, all such related
party transactions were approved by the board of directors.
•Report on treasury stock
The Audit and Compliance Committee acknowledged at the
meeting held on 14 March 2022 the report on the Group’s
treasury shares.
•Schedule of dates and business to be transacted
Pursuant to recommendations of CNMV’s Technical Guide
3/2017, the Audit and Compliance Committee approved on 12
December 2022 the schedule of dates and agenda of business
to be addressed by the Committee in 2023.
•Report on its proceedings and evaluation report
The committee issued the annual report on its proceedings at
the meeting held on 6 June 2022 (available on the corporate
website) and the report on the evaluation of its proceedings on
12 December 2022.
143
7. Other actions
•Assumption by Inditex’s Audit and Compliance Committee of
functions of audit committee at Zara España, S.A.
As described above in the relevant sections, the Audit and
Compliance Committee carried out duties inherent in the audit
committee of Zara España, S.A. in 2022.
Identify the directors who are members of the audit
committee and have been appointed taking into account their
knowledge and experience in accounting or audit matters, or
both, and state the date on which the Chairperson of this
committee was appointed.
Names of directors with
experience
Ms Pilar López Álvarez, Bns Denise
Patricia Kingsmill, Ms Anne Lange, Mr
José Arnau Sierra, Mr José Luis Durán
Schulz, Mr Rodrigo Echenique Gordillo
and Mr Emilio Saracho Rodríguez de
Torres
Date of appointment of the
chairperson
14/07/2020
NOMINATION COMMITTEE
Article 29 of the Articles of Association, section 16 of the Board
of Directors’ Regulations and the Nomination Committee’s
Regulations set out the regulations governing the Nomination
Committee.
Composition of the Nomination Committee as of 31 January
2023:
Name
Position
Directorship
type
Mr José Luis Durán Schulz
Chair
Independent
Ms Anne Lange
Ordinary member
Independent
Ms Pilar López Álvarez
Ordinary member
Independent
Mr José Arnau Sierra
Ordinary member
Proprietary
Mr Rodrigo Echenique
Gordillo
Ordinary member
Independent
% executive directors
0%
% proprietary directors
20%
% independent directors
80%
% affiliate directors
0%
Mr Javier Monteoliva Díaz, General Counsel and Secretary of
the Board, acts as Secretary-non-member of the Nomination
Committee.
The structure of the Nomination Committee is represented in
the image below:
Explain the duties assigned to this committee and describe
the rules and procedures for its organisation and functioning.
For each of these functions, briefly describe its most
significant actions during the year and how it has exercised in
practice each of the functions assigned to it by law, in the
articles of association or in other corporate resolutions.
a)Composition
Pursuant to the provisions of article 29 of the Articles of
Association and section 10 of its own terms of reference, the
Nomination Committee shall be comprised of a minimum of 3
and a maximum of 7 non-executive directors appointed by the
board of directors, a majority of whom must necessarily be
independent. They shall be elected, in particular its Chair,
considering the appropriate knowledge, qualifications and
experience to discharge the duties they are called upon to
perform, including on corporate governance issues, analysis
and strategic assessment of human resources, selection of
directors and senior executives and the assessment of the
suitability requirements legally provided for the discharge of
senior executive functions. The Chair of the Nomination
Committee shall be appointed by the board of directors from
amongst the independent members of the committee.
The board of directors shall encourage a diverse committee
membership in terms of professional experience, competences,
personal skills, sector-specific knowledge, international
experience or geographic origin, age and gender, taking into
account the restrictions that result from the smaller size of the
committee.
b)Duties
The mission and powers of the Nomination Committee are
provided in article 29.3 of the Articles of Association, section 16
of the Board of Directors’ Regulations, and sections 5 to 9 of the
Nomination Committee’s Regulations.
In addition to the powers expressly assigned to it pursuant to
statute and the Recommendations of the Code of Good
Inditex Annual Report 2022 / Annual Corporate Governance Report
144
Governance, the Nomination Committee is entrusted with the
following duties:
•With regard to the selection of directors: (i) to issue a report on
the Diversity of Board of Directors Membership and Director
Selection Policy; (ii) to set up and review the criteria that must
be adhered to regarding an appropriate and diverse board
membership and selection of prospective candidates; (iii) to
ensure that upon filling new vacancies or appointing new
directors, selection procedures shall encourage diversity and
ensure the absence of any manner of discrimination, and shall
follow a merit-based approach; and (iv) to be regularly
apprised of the succession and career plans of senior
managers.
•With regard to the annual evaluation programme: (i) to
establish and oversee an annual programme for evaluating
performance; (ii) to report on an annual basis to the board of
directors on its performance, the performance of the
committee itself, the Chair and the CEO (following a report
from the Lead Independent Director), the Lead Independent
Director and the Secretary of the Board; (iii) to propose an
action plan or recommendations to amend potential
weaknesses detected or to improve the effectiveness of the
board and its committees; and (iv) to assess the convenience
of discussing with the directors the findings of their individual
evaluations and, if appropriate, the measures to be adopted to
improve their performance.
Additionally, the Committee may gather information about the
evaluation of senior managers.
•Other powers entrusted to the Committee: to design and
periodically organise the induction and refresher programmes
for directors.
c)Organisational and operational rules.
The Nomination Committee shall meet at least 3 times a year
and each time that its Chair calls it. The Chair shall call a
committee meeting each time the Board of Directors or its Chair
requests the issuing of a report or the adoption of proposals and
in any case whenever this is suitable for the successful
performance of its functions.
Likewise, the Chair may arrange working sessions to prepare
committee meetings on specific topics apart from the formal
meetings of the committee.
Ordinary meetings shall be called by letter, fax, telegram or
email, and the meeting notice shall be signed by the Chair or the
Secretary. A quorum for committee meetings shall be declared
when at least half plus one of its members, present or
represented, are in attendance. The committee may also pass
resolutions in writing, without holding a meeting, pursuant to
statutory provisions.
Committee meetings may be held via videoconference or
conference call, or any other equivalent system enabling the
recognition and identification of attendees, allowing them to
communicate, speak and cast votes, all in real time.
Likewise, for the purposes of making the appropriate
arrangements to ensure that the objectives pursued are
effectively achieved, the committee shall prepare an annual
working plan, which shall include at least the specific objectives
for the financial year and an annual schedule of ordinary
meetings. The committee may rely on external advisors to
properly perform the duties it has been entrusted with.
d)Main proceedings of the Nomination Committee in 2022:
In 2022, the primary activities of the Nomination Committee
have revolved around the following areas:
1. Proceedings relating to appointment and removal of
directors and senior managers
At the meeting held on 14 March 2022, it gave a favourable
report to the proposal on the appointment of the new Deputy
Secretary of the board of directors. At that same meeting, the
Committee acknowledged the appointment of the new Chief
Compliance Officer. The board of directors approved the
appointment of its new Deputy Secretary on 15 March 2022.
At the meeting held on 12 May 2022, the committee issued the
proposals on the appointment of Ms Ortega and Mr García as
ordinary member and Chair, respectively, of the Executive
Committee. Such proposals were approved by the board at its
meeting held on 12 July 2022 following approval at the AGM of
the resolutions on the ratification of the co-option to the board
and subsequent appointment of both directors.
At its May meeting  the Nomination Committee compiled a new
skills matrix identifying the competences of the members of the
board at that time in terms of education, professional
experience and others such as origin, age, tenure, etc. Such
matrix was approved by the board at its meeting held on 12 May
2022.
At its meeting held on 6 June 2022, the committee gave a
favourable report to the proposals on the ratification of the co-
option of Ms Ortega and Mr García to the board as proprietary
and executive directors, respectively, and issued the proposals
on the re-election of Ms López and Mr Echenique to the board,
both of them as independent directors.
Such report addressed the convenience for Mr Echenique to
continue holding the position of Lead Independent Director
even though this is no longer a statutory requirement following
the effective separation of the roles of Chair and CEO, as
according to best international practices this is a good
corporate governance practice to reinforce independence.
The Committee had previously approved an explanatory report
on the analysis of prior needs of the Board for the purposes of
the above referred proposals.
Proposals on the ratification, appointment and re-election of
directors above referred were approved at the AGM held on 12
July 2022. The report on the needs of the board of directors,
including the skills matrix, the different proposals issued and the
explanatory report drafted by the board of directors were made
available to shareholders on the corporate website at the time
the notice calling the Annual General Meeting was posted.
In addition, the committee resolved at the meeting held on 6
June 2022 to raise to the board the following proposals: (i)
recommending that Mr Emilio Saracho Rodríguez de Torres
should continue serving on the board until the end of his term of
office (in 2023); (ii) the end of his term as Chair of the Nomination
Committee (having ceased to qualify as an independent director
he is no longer entitled to chair it); and (iii) the resulting
145
reorganisation of the Nomination and Sustainability Committees’
membership by appointing Mr Durán as new member and Chair
of the Nomination Committee and Mr Saracho as new member
of the Sustainability Committee (following the end of Mr Durán’s
and Mr Saracho’s offices on the Sustainability and Nomination
Committees, respectively).
The above proposals were approved at the board meeting held
on 7 June 2022. However, those referred to under sub-sections
(ii) and (iii) above became effective on 13 July 2022, date on
which Mr Saracho ceased to be independent.
Last, at its meeting held on 12 December 2022, the Nomination
Committee approved the formal confirmation of the changes to
Senior Management and to the Management Committee, in
particular after Mr Crespo’s resignation.
2. Proceedings relating to the process to evaluate the
performance of the board of directors, its members and
committees, the Executive Chairman, the CEO, the Lead
Independent Director and the Secretary of the board.
Pursuant to the provisions of the Board of Directors’ Regulations
and the Nomination Committee’s Regulations and, in line with
GGC Recommendations and Recommendation 7 of Technical
Guide 1/2019, the Nomination Committee is tasked with
overseeing the “Annual Programme for the Evaluation of the
Board of Directors, the Directors, the Committees, the Chair, the
CEO, the Secretary and the Lead Independent Director” before
the commencement of the evaluation process and determining,
if appropriate, that an external consultant should review and
oversee such evaluation.
At its meeting held on 12 September, the committee approved
the amendment to the Programme as follows: (i) the roles of
Chair and CEO are separate; (ii) the Sustainability Committee is
considered under the programme; (iii) the duties of the Lead
Independent Director are aligned with those that they are
effectively performing in practice regarding the evaluation
process; (iv) the scope of the evaluation programme is aligned
with the provisions of CNMV’s Technical Guide 1/2019; and (v)
the possibility of using different methodologies, including
questionnaires and/or interviews, is considered. For more
detailed information, see section C.1.17 above.
Likewise, pursuant to Inditex’s internal regulations and best
practices in the field of corporate governance, the Nomination
Committee approved on 12 December 2022 the report on the
annual evaluation of the performance of the Board of Directors,
the Chair and the CEO (following a report from the Lead
Independent Director in the case of these latter two), the Lead
Independent Director, the Secretary and of the committee itself.
Such reports were subsequently approved at the board meeting
held on 13 December 2022.
The findings of the evaluation carried out in 2022 show that in
general, directors are satisfied with regard to the areas
evaluated.
3. Ascertaining compliance with the Diversity of Board of
Directors Membership and Director Selection Policy
In the meeting held on 13 February 2023, the Nomination
Committee has assessed compliance with the Diversity of
Board of Directors Membership and Director Selection Policy in
the process to re-elect and appoint directors via the co-option
system carried out in 2022 (the findings of the report to
ascertain compliance with the Policy are outlined in section C.1.7
above).
4. Internal regulations
On 12 May 2022, the Nomination Committee gave a favourable
report to the proposal to amend its terms of reference and
resolved to raise it to the board of directors, primarily to reflect
the clear separation of duties assigned to the Chair and those
assigned to the CEO, as chief executive of the Company, thus
preventing any risk of confusion regarding the profile and role of
the new non-executive Chair.
The above referred proposal was approved at the board
meeting held on that same day.
5. Schedule of dates and agenda of business to be transacted:
Pursuant to recommendations of CNMV’s Technical Guide
1/2019, the Nomination Committee approved, in the meeting
held on 12 December 2022, the schedule of dates and order of
business to be conducted by the committee in 2023.
Inditex Annual Report 2022 / Annual Corporate Governance Report
146
6. Report on its proceedings
The Nomination Committee issued the annual report on its
proceedings on 6 June 2022. It was published in the 2020
Annual Report and is available on the corporate website.
REMUNERATION COMMITTEE
Article 30 of the Articles of Association, section 17 of the Board
of Directors’ Regulations and the Remuneration Committee’s
Regulations set out the regulations governing the Remuneration
Committee.
Composition of the Remuneration Committee as of 31 January
2022:
Name
Position
Directorship
type
Mr Rodrigo Echenique Gordillo
Chair
Independent
Bns Denise Patricia Kingsmill
Ordinary
member
Independent
Mr José Arnau Sierra
Ordinary
member
Proprietary
Mr José Luis Durán Schulz
Ordinary
member
Independent
Mr Emilio Saracho Rodríguez de
Torres
Ordinary
member
Affiliate
% executive directors
0%
% proprietary directors
20%
% independent directors
60%
% affiliate directors
20%
Mr Javier Monteoliva Díaz, General Counsel and Secretary of
the Board, acts as Secretary-non-member of the Remuneration
Committee.
The structure of the Remuneration Committee is addressed in
the sections below.
Explain the duties assigned to this committee and describe
the rules and procedures for its organisation and functioning.
For each of these functions, briefly describe its most
significant actions during the year and how it has exercised in
practice each of the functions assigned to it by law, in the
articles of association or in other corporate resolutions.
a)Composition
Pursuant to article 30 of the Articles of Association and section 7
of its own terms of reference, the Remuneration Committee
shall be made up of a minimum of 3 and a maximum of 7 non-
executive directors appointed by the board of directors, a
majority of whom shall be independent. Members of this
committee and in particular its Chair shall be appointed
considering the appropriate knowledge, qualifications and
expertise based upon the duties they must discharge, including
among others, the analysis and strategic assessment of human
resources and the design of remuneration policies and
schemes for directors and senior managers. The Chair of the
Remuneration Committee shall be appointed by the board of
directors out of the independent members of the committee.
Likewise, the board of directors shall encourage a diverse
committee membership in terms of professional experience,
competences, personal skills, sector-specific knowledge,
international experience or geographic origin, age and gender,
taking into account the restrictions that are a result of the
smaller size of the Committee.
b)Duties
The mission and powers of the Remuneration Committee are
addressed in article 30 of the Articles of Association, section 17
of the Board of Directors’ Regulations and sections 5 and 6 of
the Remuneration Committee’s Regulations.
The Remuneration Committee has not been assigned any
powers other than those expressly entrusted by statute, and the
Recommendations set forth in the Good Governance Code.
c)Organizational and operational rules
147
The Remuneration Committee shall meet at least 3 times a year
and whenever called by the Chair. The Chair must call the
Remuneration Committee whenever the board of directors or its
Chairman may request the issue of a report or the approval of
motions within the scope of its powers and, in any case,
whenever it is useful for the successful performance of its
functions.
Likewise, the Chair may arrange working sessions to prepare
committee meetings on specific topics apart from the formal
meetings of the committee.
Ordinary meetings shall be called by letter, fax, telegram or
email, and the meeting notice shall be signed by the Chair or the
Secretary. A quorum for committee meetings shall be declared
when at least half plus one of its members, present or
represented, are in attendance. The committee may also pass
resolutions in writing, without holding a meeting, pursuant to
statutory provisions.
Committee meetings may be held via videoconference or
conference call, or any other equivalent system enabling the
recognition and identification of attendees, allowing them to
communicate, speak and cast votes, all in real time.
Likewise, for the purposes of making the appropriate
arrangements to ensure that the objectives pursued are
effectively achieved, the committee shall prepare an annual
working plan, which shall include at least the specific objectives
for the financial year and an annual schedule of ordinary
meetings. The committee may rely on external advisors to
properly perform the duties it has been entrusted with.
d)Main proceedings of the Remuneration Committee in 2021:
In 2022 the most relevant proceedings of the Remuneration
Committee have revolved around the following areas:
1. Remuneration of executive directors and Senior Managers
With regard to the outgoing Executive Chairman and CEO:
The Remuneration Committee resolved at the meeting held on
14 March 2022 to submit to the board of directors:
•The assessment on the level of achievement of the targets set
for variable remuneration in FY2021 for the former Executive
Chairman and CEO, Messrs. Isla and Crespo, respectively and
the proposal on the aggregate remuneration earned by each
of them. The board of directors approved the level of target
achievement and of relevant incentive payment at its meeting
held on 15 March 2022.
•With regard to the departure of the former Executive
Chairman, Mr Isla, the proposal on the early settlement of: (i)
current long-term incentives, i.e. the second cycle (2020-2023)
of the 2019-2023 Plan and the first cycle (2021-2024) of the
2021-2025 Plan; (ii) annual variable remuneration for 2022 for
the period running between 1 February and 31 March 2022
(after assessing the target it was tied to); and (iii) the portion of
the fixed remuneration for FY2022 earned as extra wage
payments (July and December).
Proposals on early settlement of incentives and other
remuneration items were approved at the board meeting held
on 15 March 2022.
With regard to the new CEO:
Likewise, the Remuneration Committee also resolved at the
meeting held on 14 March 2022 to submit to the board of
directors:
•Assessment of the level of achievement of the targets set for
variable remuneration in FY2021 (approved in 2020) and the
proposal on the aggregate remuneration earned by the CEO
for that year.
•The proposal on the new full compensation package for the
CEO for the performance of his duties and responsibilities as
the company’s chief executive in the new organisational
structure, including the terms of his contract, for FY2022.
•The board of directors approved the proposals on Mr García’s
remuneration and the terms of his new contract at its meeting
held on 15 March 2022.
The committee resolved at the meeting held on 12 September
2022 to submit to the board of directors the proposal on the
basic terms of Mr García’s new executive services contract,
aligned with the Directors’ Remuneration Policy as amended,
approved at the Annual General Meeting on 12 July 2022. Such
Policy included the new compensation package for the CEO for
the performance of his functions and responsibilities as the only
executive director in the new organisational structure.
The contract was approved at the board meeting held on 13
September 2022.
With regard to the remuneration of the other directors and the
new non-executive Chair:
At its meeting held on 14 March 2022, the committee further
resolved to submit to the board the proposal on the fixed
remuneration specific to Ms Ortega for the performance of her
duties as non-executive Chair of the board, considering her new
functions and responsibilities.
The committee also raised to the board the proposal for
increasing the maximum limit for directors’ remuneration
covered in the Directors’ Remuneration Policy.
With regard to Senior Managers:
At the year-end meeting held in March 2022, the committee
gave a favourable report to and submitted to the board the
proposal on the remuneration earned by Senior Managers for
FY2021 and the yardsticks to determine remuneration for
FY2022.
Inditex Annual Report 2022 / Annual Corporate Governance Report
148
Last, at its meeting held on 12 December 2022, the
Remuneration Committee resolved to give a favourable report
and submit to the board of directors the economic terms arising
from Mr Crespo’s termination with the Company. Such terms
were approved at the board meeting held on 13 December
2022.
2. Duties relating to the remuneration and the remuneration
policy for directors and senior managers
The committee resolved at the meeting held on 14 March 2022
to give a favourable report to the draft Directors’ Remuneration
Policy for FY2021, FY2022 and FY2023, to be assessed and
approved by the board of directors and subsequently put to an
advisory say-on-pay vote at the 2022 Annual General Meeting.
The Policy, as amended, was approved at the Annual General
Meeting held on 12 July 2022.
3. 2019-2023 Long-Term Incentive Plan
The committee approved at the meeting held on 14 March 2022
the assessment of the level of target achievement for the first
cycle (2019-2022) of the 2019-2023 Plan to which the CEO’s
remuneration for FY2022 was tied. The board of directors
assessed the achievement of such targets at the meeting held
on 14 March 2022.
The committee assessed the impact of the conflict between
Russia and Ukraine on the terms of the Plan. Subsequently, at
the meeting held on 12 December 2022, the Remuneration
Committee reviewed the follow-up and evaluation of the level of
achievement of targets associated with certain metrics of the
second cycle (2020-2023) of the 2019-2023 Plan.
4. 2021-2025 Long-Term Incentive Plan
The committee approved at the meeting held on 12 December
2022 the proposals on a new peer group and the new
methodology to calculate Relative TSR and the performance
scales for each metric for the second cycle (2022-2025) of the
2021-2025 Plan. The committee gave a favourable report to the
proposed wording of Appendix III to the Plan Regulations. The
above proposals and the wording of Appendix III to the Plan
Regulations, above referred, were approved at the board
meeting held on 13 December 2022. In that same meeting, the
committee acknowledged the list of beneficiaries of this first
cycle.
5. Annual Report on Remuneration of Directors for 2021
The Remuneration Committee resolved in the meeting held on
13 March 2022 to raise the 2021 Annual Report on Remuneration
of Directors to the board of directors for approval. Such Report
was approved by the board of directors in the meeting held on
the following day.
Said report was submitted to CNMV as a relevant fact and is
available on CNMV’s website. Additionally, pursuant to section
541 LSC, the 2021 Annual Report on Remuneration of Directors
was approved at the Annual General Meeting held on 12 July
2022, having been put to an advisory say-on-pay vote.
6. Internal regulations
On 12 May 2022, the Committee gave a favourable report to the
proposal to amend in part its terms of reference and resolved to
raise it to the board of directors, primarily to reflect the clear
separation of duties assigned to the Chair and those assigned
to the CEO, as chief executive of the Company, thus preventing
any risk of confusion regarding the profile and role of the new
non-executive Chair.
Such amendment was approved at the board meeting held on
that same day.
7. Schedule of dates and business to be conducted
Pursuant to recommendations of CNMV’s Technical Guide
1/2019, the Remuneration Committee approved on 12 December
2022 the schedule of dates and agenda of business to be
conducted by the Committee in 2023.
8.  Report on its proceedings and evaluation report
The committee issued the annual report on its proceedings in
the meeting held on 6 June 2022 (available on the corporate
website) and the report on the evaluation of its proceedings on
12 December 2022.
SUSTAINABILITY COMMITTEE
Article 30bis of the Articles of Association, section 17bis of the
Board of Directors’ Regulations, and the Sustainability
Committee’s Regulations set out the regulations governing the
Sustainability Committee.
Composition of the Sustainability Committee as of 31 January
2023
Name
Position
Directorship
type
Bns Denise Patricia
Kingsmill
Chair
Independent
Ms Anne Lange
Ordinary member
Independent
Ms Pilar López Álvarez
Ordinary member
Independent
Mr José Arnau Sierra
Ordinary member
Proprietary
Mr Emilio Saracho
Rodríguez de Torres
Ordinary member
Affiliate
% executive directors
0%
% proprietary directors
20%
% independent directors
60%
% affiliate directors
20%
Mr Javier Monteoliva Díaz, General Counsel and Secretary of
the Board, acts as Secretary-non-member of the Sustainability
Committee.
149
The structure of the Sustainability Committee is addressed in
the sections below.
Explain the duties assigned to this committee and describe
the rules and procedures for its organisation and functioning.
For each of these functions, briefly describe its most
significant actions during the year and how it has exercised in
practice each of the functions assigned to it by law, in the
articles of association or in other corporate resolutions.
a)Composition:
Pursuant to article 30bis of the Articles of Association and
section 9 of its own terms of reference, the Sustainability
Committee shall be made up of a minimum of 3 and a
maximum of 7 non-executive directors appointed by the board
of directors, a majority of whom shall be independent. Members
of this Committee and in particular its Chair, shall be appointed
considering the appropriate knowledge, qualifications and
experience based upon the duties they must discharge, in
particular in the field of sustainability, social action initiatives,
sustainable management of resources and design of
communication policies with stakeholders. The Chair of the
Sustainability Committee shall be appointed by the board of
directors out of the independent members of the committee.
The board of directors shall encourage a diverse committee
membership in terms of professional experience, competences,
personal skills, sector-specific knowledge, international
experience or geographic origin, age and gender, taking into
account the restrictions that result from the smaller size of the
committee.
b)Duties:
Pursuant to article 30bis(3) of the Articles of Association, section
17bis of the Board of Directors’ Regulations and sections 5 to 8
of the Sustainability Committee’s Regulations, the Sustainability
Committee shall have the following basic responsibilities:
•Powers relating to sustainability: (i) to oversee that
environmental and social practices of the Company are
aligned with the strategy and the policy set by the Company;
(ii) to oversee monitoring of compliance with Inditex’s Code of
Conduct for Manufacturers and Suppliers across the supply
chain of products sold by the Group; (iii) to establish that the
products that the Company sells comply with product health
and safety standards; (iv) to establish and promote
compliance by the Company and Group entities with the most
exacting policies, regulations and standards in the field of
human, labour and environmental rights in any matter that
affects workers across the entire supply chain, production
processes, product and the store.
•Powers relating to the relations with the different stakeholders:
(i) to oversee and evaluate –in coordination with the Audit and
Compliance Committee, with regard to issues that fall under
its purview– the strategy on communication and relations with
shareholders –including small and medium shareholders–
investors, proxy advisors and other stakeholders, and
enforcement of the Policy on Disclosure of Economic-
Financial, non-Financial and Corporate information; and (ii) to
oversee –in coordination with the Audit and Compliance
Committee– the process for preparing and releasing
regulated and non-regulated non-financial information, as well
as the integrity and clarity thereof, with regard to the issues
that fall under its purview.
•Other powers entrusted to the Sustainability Committee: (i) to
report on the appointment and removal of the members of the
Social Advisory Board of the Company, before the report
issued by the Nomination Committee, assessing the suitability,
competences, knowledge, experience and other occupations
of the prospective candidates; (ii) to assess the draft bills and
the amendments of national as well as foreign or international
regulations on sustainable development, corporate social
responsibility and related issues, and their potential impact on
the Group’s activity, and; (iii) to issue reports on the internal
regulations of the Company on matters that fall within its
purview.
c)Organizational and operational rules.
The Sustainability Committee shall meet at least 3 times a year
and each time that its Chair calls it. The Chair must call the
Sustainability Committee whenever the board of or its Chairman
request the issue of a report or the approval of motions within
the scope of its powers and, at any rate, whenever it is useful for
the successful performance of its functions.
Ordinary meetings shall be called by fax, telegram or e-mail and
the meeting notice shall be signed by the Chair or the Secretary.
A quorum for committee meetings shall be declared when at
least half plus one of its members, present or represented, are in
attendance. The committee may also pass resolutions in writing,
without holding a meeting, pursuant to statutory provisions.
The Chair may call extraordinary meetings when in their view
circumstances warrant it. Likewise, the Chair may arrange
working meetings to prepare committee meetings on specific
topics aside from formal ones.
Inditex Annual Report 2022 / Annual Corporate Governance Report
150
Committee meetings may be held via videoconference or
conference call, or any other equivalent system enabling the
recognition and identification of attendees, allowing them to
communicate, speak and cast votes, all in real time.
For the purposes of making the appropriate arrangements that
ensure the achievement of the objectives effectively sought, the
committee shall prepare and report to the board of directors, an
annual working plan which shall include, at least, the specific
objectives for the financial year and an annual schedule of
ordinary meetings.
As provided in the Board of Directors’ Regulations, the
committee may rely on external advisors to carry out its duties in
an effective manner.
d)Proceedings of the Sustainability Committee in 2022:
The most relevant proceedings of the Sustainability Committee
in 2022 have revolved around the following areas:
1. With regard to overseeing the process to prepare and
release regulated and non-regulated non-financial
information
As part of its oversight duties regarding the process to prepare
and release regulated non-financial information, the
Sustainability Committee gave a favourable report in the
meeting held on 14 March 2022 to the Statement on Non-
Financial Information (SNFI) as regards the issues that fall under
its purview. The SNFI was approved by the board of directors in
the meeting held on the following day.
On the other hand, the committee acknowledged at its meeting
held on 12 December 2022 the presentation given by the
Sustainability Department on (i) the current environment in
terms of sustainability reporting standards and (ii) the new
methodology used and the outcome of the materiality analysis
from a dual perspective carried out in 2022 which will serve to
determine the contents to be included in the Statement on Non-
financial Information for 2022. 
2. With regard to monitoring the social and environmental
sustainability strategy and practices
The Sustainability Department reported to the committee the
most relevant sustainability milestones for each quarter (in the
meetings held on 14 March, 6 June, 12 September and 12
December 2022). At those same meetings, the committee
acknowledged the follow-up on the progress of the objectives of
the Strategic Sustainability Plan.
Meanwhile, in its meeting dated 14 March 2022, the
Sustainability Committee: (i) acknowledged the 2021 Annual
Report on the Activities of the Sustainability Department and (ii)
approved the annual work plan and the budget of the
department for 2022. On 12 September, the committee
acknowledged a number of updates in the structure of the
Department.
The committee acknowledged in the meetings held on 6 June,
12 September and 12 December the strategy, main action lines
and goals in terms of traceability, community investment and
social management of the supply chain, respectively.
The committee also acknowledged in the meetings held on 6
June and 12 September a number of initiatives implemented by
the Sustainability Department within the scope of its authority, in
particular those relating to innovation and investment in the field.
3. With regard to Human Rights
In the meeting held on 6 June 2022, the committee resolved to
give a favourable report to the Inditex Group Modern Slavery,
Human Trafficking and Transparency in Supply Chain
Statement for FY2021 and submit it to the board of directors,
pursuant to the provisions of section 2021 of the UK Modern
Slavery Act, the California Transparency in Supply Chain Act
and section 14 of the Australian Modern Slavery Act.
4. With regard to monitoring of applicable regulations
In the meeting held on 6 June 2022, the committee
acknowledged the presentation given by the Sustainability
Department on the current EU regulatory environment in the
field of Sustainability.
5. With regard to the monitoring of the supply chain
In the meeting held on 12 May 2022, the committee gave a
favourable report to the proposal for the amendment to its
terms of reference and raise it to the board of directors, to
reflect the clear separation between the duties assigned to the
Chair and those assigned to the CEO.
Likewise, in the meetings held on 3 November and 12 December
2022, it gave a favourable report to the following before raising
them to the board: (i) the proposal on the update of the
Sustainability Policy and (ii) the approval of a new Community
Investment Policy, respectively. Said Policies were approved by
the Board of Directors on 13 December 2022.
Last, the committee gave a favourable report to the following,
before raising it to the Remuneration Committee: (i) in the
meeting held on 14 March 2022, the level of global achievement
of the targets of the sustainability metric tied to the first cycle
(2019-2022) of the 2019-2023 LTIP and; (ii) in the meeting held
on 12 December 2022, the proposal on the new metrics of the
sustainability indicator tied to the second cycle (2022-2025) of
the 2021-2025 LTIP. The Remuneration Committee had given a
favourable report to the proposal on the new metrics at the
meeting held on that same day. The board of directors
approved such proposal which was included as Appendix III to
the 2021-2025 Plan Regulations.
151
6. Schedule of dates and business to be transacted
The Sustainability Committee approved in the meeting held on
12 December 2022 the schedule of dates and agenda of
business to be conducted by the Committee in 2023.
7. Report on its proceedings and evaluation report
The committee issued the annual report on its proceedings in
the meeting held on 6 June 2022 (available on the corporate
website) and the report on the evaluation of its proceedings on
12 December 2022.
C.2.2. Complete the following table with
information regarding the number of female
directors who were members of Board
committees at the close of the past four years:
Number of female directors
2022
2021
2020
2019
2018
Number %
Number %
Number %
Number %
Executive Committee
25%
13%
13%
13%
14%
Audit and Compliance Committee
43%
43%
43%
43%
33%
Nomination Committee
40%
40%
40%
40%
33%
Remuneration Committee
20%
20%
20%
20%
33%
Sustainability Committee
60%
60%
60%
60%
—%
C.2.3. Indicate, where applicable, the existence of
any regulations governing Board committees,
where these regulations are to be found, and any
amendments made to them during the year. Also
indicate whether any annual reports on the
activities of each committee have been voluntarily
prepared.
The terms of reference of the Audit and Compliance,
Nomination, Remuneration and Sustainability Committees can
be found on Inditex’s corporate website (Section“Investors”, sub
section “ Corporate Governance” - “Reports & Regulations”).
Additionally, information on board committees is also included
in the Board of Directors’ Regulations and in the Articles of
Association. The full text of the Board of Directors’ Regulations is
available on both the corporate website (Section “Investors”,
subsection“Corporate Governance” - “Reports & Regulations”),
and on CNMV’s website (www.cnmv.es).
Each of the Audit and Compliance, Nomination, Remuneration
and Sustainability Committees draw up every year a report on
their proceedings. Such reports are available on the corporate
website (Section“Investors”, sub section “ Corporate
Governance” - “Reports & Regulations”). .
The latest amendment to the terms of reference of board
committees was approved by the board of directors in the
meeting held on 12 May 2022, as hereunder set forth.
Inditex Annual Report 2022 / Annual Corporate Governance Report
152
D. Related party and intra-group transaction
Related party transactions carried out in 2022 are addressed
below in accordance with the definitions, criteria and groupings
provided in section 540 LSC, as amended by Act 31/2014, and
chapter VI LSC, as amended by Act 5/2021.
D.1. Explain, where appropriate, the
procedure and competent bodies relating
to the approval of transactions with
related and intra-group parties, indicating
the criteria and general internal rules of
the entity that regulate the abstention
obligations of the affected director or
shareholders. Detail the internal
information and periodic control
procedures established by the company
in relation to those related-party
transactions whose approval has been
delegated by the board of directors..
Pursuant to the provisions of section 5.3(b)(vii) of the Board of
Directors’ Regulations, the Audit and Compliance Committee
shall report on the transactions of the Company or any
company of its Group with directors, significant shareholders
(i.e. shareholders owning at least 10% of the voting rights or any
shareholder represented on the Board of Directors or who has
proposed the election of any board member), or with any other
person qualifying as related party in accordance with the
definition provided in IAS 24 of Commission Regulation (EC)
1126/2008 of 3 November adopting certain international
accounting standards, and with their respective Related
Persons, as mentioned in Section 40 of the Board of Directors’
Regulations.
Said related party transactions shall be approved by the board
of directors, following a favourable report of the Audit and
Compliance Committee, except for those that shall be approved
at the Annual General Meeting, on account of their value or
special nature.
Any transaction with a director for a value in excess of ten (10%)
of the corporate assets shall be approved by the General
Meeting of Shareholders.
The board of directors shall not approve related party
transactions without a prior report from the Audit and
Compliance Committee assessing whether it is fair and
reasonable.
In this regard, section 13 (c) of the Audit and Compliance
Committee’s Regulations provides that it is incumbent on this
Committee to advice the board of directors on any transaction
that the Company or the companies comprising its corporate
Group intend to carry out with directors, significant shareholders
or shareholders who hold a significant stake or who have
proposed the appointment of any director of the Company, or
with their respective related persons, from an arm’s length
perspective.
In the event of transactions with significant shareholders, the
Audit and Compliance Committee shall also examine them from
the standpoint of an equal treatment of all shareholders.
The Company shall report on any transactions carried out with
its directors, significant shareholders and Related Persons in the
half-yearly public periodic information and in the Annual
Corporate Governance Report, within the scope provided by
statute in each case.
Likewise, the Company shall include in the notes to the annual
accounts information on the transactions carried out by the
Company or any companies within the Inditex Group with
directors or with those acting on their behalf, whenever they do
not fall within the scope of the ordinary course of business of the
Company or are not carried out on an arm’s length basis.
Pursuant to section 40.5 of the Board of Directors‘ Regulations,
which has also been amended to be brought into line with the
terms of the new section 529duovicies(4) LSC introduced by Act
5/2021, the board of directors has delegated to the Market
Transparency Committee the approval of the following
transactions.:
(a)Transactions between companies of the Inditex Group made
in the ordinary course of business of the companies and on
an arm’s-length basis; and
(b)Transactions that cumulatively meet the following 3
requirements:
•they are carried out pursuant to standard agreements and
applied en masse to a large number of client
•they are carried out at prices or rates generally set by the
provider of the good or service in question; and
•their value does not exceed of 0.5% of the company’s net
turnover.
Such transactions are subject to the Internal Procedure for
Periodic Reporting and Control on Related Party Transactions,
which is part of the internal regulations of the company in the
field of corporate governance and seeks to govern the
procedure for periodic control and reporting applicable to
related party transactions whose approval has been delegated
to the Market Transparency Committee. It ultimately seeks to
ensure that these transactions are equitable and transparent
and that applicable statutory requirements are met.
153
The board’s approval shall not be required for any transactions
that must be carried out on grounds of urgency provided that
this is duly supported. However, these transactions shall be
subsequently confirmed by the board of directors.
D.2. Give individual details of operations
that are significant due to their amount or
of importance due to their subject matter
carried out between the company or its
subsidiaries and shareholders holding
10% or more of the voting rights or who
are represented on the board of directors
of the company, indicating which one has
been the competent body for its approval
and if any affected shareholder or director
has abstained. In the event that the board
of directors has responsibility, indicate
whether the proposed resolution has
been approved by the board without a
vote against by the majority of the
independents:
No significant transactions have been carried out in 2022
between the Company or any company within the Inditex Group
and its controlling shareholder Pontegadea Inversiones, S.L., or
with Partler Participaciones, S.L.U. (or Partler 2006, S.L.) and with
any persons and companies related thereto, the details of which
must be separately reported.
For Inditex, significant transactions due to their amount are
those in the amount determined by auditors with regard to the
financial information materiality, and transactions relevant due to
their subject matter are those outside the ordinary course of
business considering the Group’s main business activities.
D.3. Give individual details of the
operations that are significant due to their
amount or relevant due to their subject
matter carried out by the company or its
subsidiaries with the administrators or
managers of the company, including
those operations carried out with entities
that the administrator or manager
controls or controls jointly, indicating the
competent body for its approval and if
any affected shareholder or director has
abstained. In the event that the board of
directors has responsibility, indicate
whether the proposed resolution has
been approved by the board without a
vote against by the majority of the
independents:
No new relevant transactions have been carried out in 2022
between the Company or entities of its group and the directors
and officers of the Company.
The definition of significant or relevant transactions is provided
in section D.2 above..
Name (person or company)
of directors or officers
Name (person or company) of the
related party
Relationship
Type of transaction
Amount (thousand euros)
-
With regard to the remuneration received by directors and
officers, reference is made to the provisions of sections C.1.13
and C.1.14 above.
Inditex Annual Report 2022 / Annual Corporate Governance Report
154
D.4. Report individually on intra-group
transactions that are significant due to
their amount or relevant due to their
subject matter that have been undertaken
by the company with its parent company
or with other entities belonging to the
parent's group, including subsidiaries of
the listed company, except where no
other related party of the listed company
has interests in these subsidiaries or that
they are fully owned, directly or indirectly,
by the listed company.
No transactions as described in this section have been carried
out in 2022.
Transactions undertaken by Inditex with its subsidiaries are part
of their ordinary course of business as regards their purpose
and terms. They have been fully eliminated on consolidation and
therefore, they are not broken down in this section.
In any case, report any intragroup transaction conducted with
entities established in countries or territories considered as
tax havens
Company name of the
entity within the group
Brief description of
the transaction
Amount
(thousand euros)
Joint Control Companies
(1)
Purchase of
goods
-1,024,810
100% Subsidiaries (2)
Sale of goods and
provision of
services to stores
12,635
(1) Transactions between Inditex or any company of the Inditex Group with Tempe
and/or its subsidiaries are made in their ordinary course of business as regards
their purpose and terms. Being jointly controlled entities, they are consolidated
using the equity method.
(2) The above mentioned transactions are exclusively within the ordinary course of
business of the Group through its stores, not being due to tax reasons, and are
made on arm’s length basis. As at 31 January 2022, transaction of the Group with
Group companies residing in countries or territories considered tax havens under
Spanish laws, correspond to sales through three stores of the Group located in
Macau and in Monaco.
D.5. Give individual details of the
operations that are significant due to their
amount or relevant due to their subject
matter carried out by the company or its
subsidiaries with other related parties
pursuant to the international accounting
standards adopted by the EU, which have
not been reported in previous sections
Company name of
the related party
Brief description of the
transaction and other
information necessary for
its evaluation
Amount
(thousand euros)
—
No other significant transactions have been carried out in 2022
with other related parties..
D.6. Give details of the mechanisms in
place to detect, determine and resolve
potential conflicts of interest between the
company and/or its group and its
directors, senior management, significant
shareholders or other associated parties..
Section 34 of the Board of Directors’ Regulations addresses
potential situations of conflict of interest for board members:
“1. It shall be understood that a conflict-of-interest situation exists
where there is a direct or indirect conflict between the interest of
the Company and the personal interest of a director. It is
considered that directors have a personal interest when the
matter affects them or any of their Related Persons.
For the purposes of these Regulations, Related Persons are
understood as being the following:
(a)The spouse of the director or any other person deemed to
be equivalent to a spouse;
(b)the ancestors, descendants and siblings of the director or
of the spouse (or any other person deemed to be
equivalent to a spouse) of the director;;
(c)the spouse (or any other person deemed to be equivalent
to a spouse) of the ancestors, descendants and siblings of
a director;
155
(d)Those companies or entities where directors would hold,
directly or indirectly, even via a nominee a significant
shareholding giving them a significant influence or, if they
hold in them or in their parent companies an office in their
governing body or act a senior manager thereof. For this
purpose, any shareholding equal to or in excess of 10% of
the share capital of the company or of its voting rights or
based upon which a representation on the governing body
of the company has been secured de facto or de jure, shall
be deemed to give significant influence..
(e)Shareholders represented by a director on the Board of
Directors.
With regard to directors who are legal entities, Related Persons
are understood as being the following:
(a)Those partners who are included with regard to the
Director legal entity, in any of the situations provided in
Section 42 of the Code of Commerce;
(b)The representative, who is a natural person, the director de
jure or de facto, the liquidators and the attorneys-in fact
with general powers of the director, who is a legal entity;
(c)Those companies that are part of the same corporate
group, as defined in Section 42 of the Code of Commerce,
and their shareholders; and
(d)Those persons who are understood, with regard to the
director who is a legal entity, as being related persons in
accordance with the provisions of the paragraph above
regarding directors who are natural persons.
The following rules shall apply to the conflict-of-interest
situations:
(a)Prevention: directors must take all necessary measures to
prevent, as far as possible, becoming involved in any
situations in which their interests may, either on their
behalf, or on behalf of third parties, be in conflict with the
interest of the company and with their duties towards the
company.
(b)Information: without prejudice to their obligation of active
prevention, directors must inform the Board of Directors,
through the Chairman or the Secretary thereof, of any
conflict-of-interest situation in which they are involved.
(c)Abstention: directors must abstain from attending and
taking part in the discussions and voting of those matters
regarding which they are in a conflict-of-interest situation,
with the exceptions provided in the applicable laws.
Likewise, with regard to proprietary directors, they shall
abstain from taking in the voting of those matters that
might entail a conflict of interest between those
shareholders that had proposed their appointment and the
Company, with the exceptions provided for in the
applicable regulations.
(d)Transparency: the Company must disclose in the notes to
the annual accounts any conflict-of-interest situation in
which a director is, that the Company is aware of by virtue
of the information of same by the affected person, or by
any other means.”
In addition, sections 33 and 35 to 37 of the Board of Directors’
Regulations address the following situations that can give rise to
conflicts of interest: (i) the rendering of professional services in
competing companies (section 33); (ii) the use of corporate
assets (section 35); (iii) the use of non-public Company
information for private ends (section 36), and (iv) taking
advantage of business opportunities of the Company (section
37).
Moreover, section 39 of the Board of Directors’ Regulations
provides that directors must inform: (i) the Company of the
shares of its share capital that he/she directly or indirectly holds.
Likewise, they must inform about those other shares that are
held, directly or indirectly, by their closest relatives, all in
accordance with the provisions of the Internal Regulations of
Conduct in the Securities Markets; (ii) the Company of any
conflict-of-interest situation, either direct or indirect, in which
either themselves or their Related Parties may be involved with
respect to the interest of the Company; and (iii) the Nomination
Committee of all the positions they hold and the activities they
carry out in other companies or entities and, in general, about
any fact or situation that may be relevant to the performance of
their duties as director of the Company (in this regard, without
prejudice to the obligation of tendering their resignation to the
board of directors, provided in Section 25 of the Board of
Directors’ Regulations–which addresses the resignation,
removal and dismissal of directors–, directors shall inform the
board of any other change to their professional situation and of
any circumstance that might damage the name and reputation
of the Company or jeopardise its interests); and (iv) of any legal,
administrative proceedings or other proceedings whatsoever
brought against them that might, given their relevance or
description, seriously affect the reputation of the Company.
Namely, directors shall inform the Company via the Chairman of
the board of directors, of any criminal charges brought against
them as well as how the legal proceedings subsequently unfold.
The Board of Directors shall examine the case, as soon as
possible, and shall take, subsequent to a report from the
Nomination Committee, based upon the interests of the
company, any measures it may deem appropriate, such as the
opening of an internal investigation, calling on a director to
resign or proposing his/her dismissal.
In this case, the Company shall report the measures taken in the
Annual Corporate Governance Report, unless there are special
circumstances that justify otherwise, which must be recorded in
the minutes.
Additionally, section 1 of the Board of Directors’ Regulations
provides that the rules of conduct therein established for
directors shall apply, to the extent that they are compatible with
their specific nature, to the senior managers of the company
who are not directors. More particularly and with the due
nuances, the following sections shall apply to senior managers:
section 32 (duty of confidentiality), 34 (conflicts of interest), in
connection with the duty of informing the Company, 35 (use of
corporate assets), 36 (non-public information), 37 (business
opportunities), and 38 (prohibition to make undue influence of
the office).
With regard to significant shareholders, section 40 of the Board
of Directors’ Regulations provides that:
Inditex Annual Report 2022 / Annual Corporate Governance Report
156
“1. The Board of Directors reserves the right to be apprised of
any transaction between the Company or any of its subsidiaries
with directors, with shareholders owning 10% or more of the
voting rights or represented on the Board of Directors, or with
any other person qualifying as related party in accordance with
the definition provided in International Accounting Standards.
2. The approval of a related party transaction must be subject to
the preliminary report of the Audit and Compliance Committee.
In its report, the committee shall consider whether the
transaction is fair and reasonable from the standpoint of the
Company and, if appropriate, of any shareholder other than the
related party, in accordance with the requirements set forth for
each case in the applicable regulations. Affected directors will
not take part in the preparation of the report.
3. Where duly supported reasons for urgency exist, related party
transactions may be approved, if appropriate, by delegated
bodies or individuals. In this case, they must be ratified at the
first board meeting held following their conduct.
4. The Company shall inform of the transactions conducted with
directors, significant shareholders and Related Persons in the
half-yearly public periodic information and in the Annual
Corporate Governance Report, within the scope of applicable
regulations. Likewise, the Company shall include on the notes to
the annual accounts information on the transactions carried out
by the company or any companies within the Inditex Group with
directors and with those acting on their behalf, whenever they
are alien to the ordinary course of business of the Company or
are not carried out on an arm’s length basis.
Related parties' transactions whose value is in excess of 5% of
the equity value or 2.5% of the annual turnover must be
published on the Company’s website no later than the date they
are carried out, together with the report issued by the Audit and
Compliance Committee. Likewise, they should be disclosed to
the National Securities Market Commission to be publicly
released.
5. The Board of Directors may delegate the approval of the
following related-party transactions in the following cases:
(i)Transactions that cumulatively meet the following 3
requirements:
(a)they are carried out pursuant to standard agreements and
applied en masse to a large number of clients;
(b)they are carried out at prices or rates generally set by the
provider of the good or service in question; and
(c)their value does not exceed of 0.5% of the company’s net
turnover.
(ii)Transactions among companies of the same group carried
out within the ordinary course of company business and on
an arm’s length basis. Said transactions will be subject to the
internal information and monitoring procedure overseen by
the Audit and Compliance Committee.
6. The authorisation shall be granted by the General Meeting of
Shareholders when it refers to any transaction with a director for
a value that is in excess of 10% of the corporate asset.”
As stated in section D.1 above, the Audit and Compliance
Committee is responsible for reporting on the transactions that
involve–or are likely to involve–any conflict of interest, and the
Nomination Committee is responsible for reporting on the
authorisation or release by the Board of Directors of the
obligations stemming from the duty of loyalty of directors, where
said responsibility is not incumbent upon the General Meeting
of Shareholders.
Although the system above described exclusively applies to
directors and other individuals within the Company considered
as senior managers, the Company has in place a number of
mechanisms to detect, determine and solve potential conflicts
of interest that may arise regarding officers and other Group
employees.
Thus, section 4.8 of the Code of Conduct and Responsible
Practices provides that: “INDITEX’s employees shall avoid any
situation that might entail any conflict between their personal
interests and those of the company. They shall also refrain from
representing the company and from taking part or having a say
in any decision making wherein they may have, either directly or
indirectly, either themselves or through any related party thereto,
any personal interest. They may not avail themselves of their
position in the company to obtain any economic or personal
benefit, or any business opportunity for them.
No INDITEX employee may render services as a consultant,
director, officer, employee or advisor to any of INDITEX’s
competitors, except for services that may be rendered at the
request of INDITEX or with the authorisation of the Ethics
Committee.
INDITEX respects the private life of its employees and therefore
the private sphere of their decisions. Within the framework of this
policy of respect, employees are urged to report to the Ethics
Committee any personal conflicts of interest or any conflicts of
interest involving their relatives, that might jeopardise the
necessary objectivity or professionalism of their duties within
Inditex, so that, in the respect of the confidentiality and privacy of
individuals, the relevant measures might be taken for the mutual
benefit of the company and of the affected individuals.
Namely, the cases below shall be considered as potential
situations of conflict of interest and, they shall be reported to the
Ethics Committee:
•The conduct by any employee or by any person related to
him/her, either directly or indirectly, by themselves or through
any company or institution, of any business that is the same,
similar or supplementary to the business conducted by
INDITEX.
•The conduct by any employee or by any person related to
him/her, either directly or indirectly, by themselves or through
any company or institution, of any business that involves an
exchange of goods and/or services, regardless of the
remuneration system agreed.”
On the other hand, the Board of Directors approved on 16 July
2019 the Conflicts of Interest Policy, following a favourable report
of the Audit and Compliance Committee.
157
Said Policy seeks to supplement and implement the provisions
of the Code of Conduct on conflicts of interest, defining the
appropriate measures aimed at preventing, detecting, disclosing
and managing any conflicts of interest that may affect
employees in the performance of their job.
In this regard, section 4 of the Policy defines conflict of interest
as “any situation where an employee’s personal interest (direct
conflict of interest) or the interest of any related party thereto
(indirect conflict of interest) contradicts (actual conflict of
interest) or may contradict (potential conflict of interest) the
Company’s interest, jeopardising the requisite objectivity or
professionalism of said employee in the workplace.”
Likewise, section 5 provides the obligation for employees to
avoid where possible, being in any situations that may entail a
direct or indirect, actual or potential conflict of interest.
Moreover, employees are bound to forthwith disclose to the
Ethics Committee any apparent or real conflict-of-interest
situation that may arise, as well as any concerns they may have
about whether a specific situation qualifies as conflict of interest.
The Ethics Committee shall be responsible for addressing the
conflicts of interest situations that may arise between the
Company and its employees.
D.7. Indicate whether the company is
controlled by another entity within the
meaning of section 42 of the Commercial
Code, whether listed or not, and whether
it has, directly or through any of its
subsidiaries, business relationships with
said entity or any of its subsidiaries (other
than the listed company) or carries out
activities related to those of any of them.
Yes x    No
Pontegadea Inversiones, S.L. owns 1,558,637,990 shares of the
Company, which represents a 50.1% stake in its share capital.
Transactions that are significant, either on account of the
amount involved or of their nature, entered into between the
company and the different entities within the Inditex Group and
Pontegadea Inversiones, S.L. and its related entities, are
covered in section D.2 above. However, no new significant
transaction has been entered into in financial year 2022.
Mandatory full information on related party transactions
pursuant to the yardsticks and the disaggregation level
envisaged in applicable regulations is provided in the Notes to
the annual accounts for FY2022. Included therein is the
information about the related party transactions carried out
between the Company or any entity of the Inditex Group and its
controlling shareholder, Pontegadea Inversiones, S.L. and/or
any company of its Group, as well as with Partler
Participaciones, S.L.U. and/or any company of its Group (since
Mr Amancio Ortega Gaona is the indirect owner of a 59.294%
stake in Inditex’s share capital and therefore its controlling
shareholder via Pontegadea Inversiones, S.L. and Partler
Participaciones, S.L.U.).
The object of Pontegadea Inversiones, S.L. is that of holding
stakes in trading companies and the purchase and disposal of
stock, transferable securities and real estate.
Indicate whether the respective areas of activity and any
business relationship between the listed company or its
subsidiaries, and the parent company or its subsidiaries have
been defined publicly and precisely:
Yes x    No
Report the respective areas of activity and any business
relationships between the listed company or its subsidiaries
and the parent company or its subsidiaries and identify where
these aspects have been publicly reported.
Transactions that are significant, either on account of the
amount involved or of their nature, entered into between the
company and the different entities within the Inditex Group and
Pontegadea Inversiones, S.L. and its related entities, are
covered in section D.2 above.
Pursuant to section 40.4 of the Board of Directors’ Regulations,
the Company reports on the transactions carried out with its
significant shareholders and their related parties in the periodic
half-yearly information.
Additionally, pursuant to Recommendation 6 GGC, the report on
related party transactions issued by the Audit and Compliance
Committee is made available to the shareholders on the
corporate website well in advance of the Annual General
Meeting.
Identify the mechanisms in place to resolve potential conflicts
of interest between the parent of the listed company and the
other group companies:
Mechanisms for resolving possible conflicts of interest
Section 40 of the Board of Directors’ Regulations governs the
procedure to approve transactions between the Company and
its shareholders as well as the rules on the reporting thereof. It is
fully transcribed in section D.6 above. In short: this type of
transactions must be approved by the board of directors,
following a report of the Audit and Compliance Committee,
except for (i) transactions within the ordinary course of company
business and of a habitual or recurrent nature. In this case, a
general approval of the line of transactions will suffice; (ii)
transactions that do not require the approval of the board of
directors for meeting simultaneously a number of conditions;
and (iii) any transaction with a director for a value that is in
excess of 10% of the corporate assets.
These latter must be approved by the General Meeting of
Shareholders. Likewise, as stated in section D.1 above, the Audit
and Compliance Committee is tasked with reporting on
transactions that entail or that might entail conflicts of interest
situations.
Inditex Annual Report 2022 / Annual Corporate Governance Report
158
E. Enterprise Risk Management system
The information on the Enterprise Risk Management System is
provided in section.5.10 – “Responsible risk management” of the
Statement on Non-Financial Information (SNFI), which is part of
the Integrated Directors’ Report of the Inditex Group..
159
F. Describe the mechanisms forming your
company’s Internal Control over Financial
Reporting System (ICFR)
F.1. The entity's control environment
Give information on the key features of at least:
F.1.1 The bodies and/or functions that are
responsible for: (i) the existence and maintenance
of an adequate and effective ICFR; (ii) its
implementation; and (iii) its supervision.
Board of Directors
Except for any matters exclusively within the purview of the
shareholders at the General Meeting of Shareholders, the board
of directors is the supreme decision-making, supervisory and
monitoring body of the Group, being ultimately responsible for
the existence and update of an appropriate and effective ICFR,
as provided in the Policy on Internal Control System over
Financial Reporting (the “ICFR Policy”), approved by the board of
directors.
The board of directors is entrusted with the duties of leadership,
management and representation of the Group, delegating as a
general rule the management of the day-to-day business of the
Company to the executive bodies and the management team
and focusing on the general supervisory function, which
includes guiding the policy of the Group, monitoring
management activity, evaluating officers’ performance, making
the most relevant decisions for the Group and liaising with the
shareholders.
Audit and Compliance Committee
Pursuant to the provisions of the Articles of Association, the
Board of Director’s Regulations and the Audit and Compliance
Committee’s Regulations, and as part of its financial and
monitoring duties, the committee shall oversee the process for
preparing and releasing the regulated financial information, as
well as the effectiveness of the Internal Control over Financial
Reporting System, as provided in the ICFR Policy.
In this regard, the Committee carries out the following duties,
without limitation:
•To oversee the effectiveness of the internal control system of
the Group, the internal audit, and the risk management
systems, including tax risks, as well as reviewing with the
statutory auditor the significant weaknesses of the internal
control system revealed, as the case may be, during the audit..
•With regard to the powers relating to the process of preparing
the regulated financial information
◦To oversee and evaluate on an ongoing basis the process of
preparation and presentation as well as the clarity and
integrity of the financial information and the directors’ report
relating to the Company and its Group, ensuring that the
half-yearly financial reports and the quarterly management
statements are drafted in accordance with the same
accounting standards as the annual financial reports and to
oversee the review of the interim financial statements
requested from the statutory auditor, with the scope and
frequency that may be defined, as the case may be.
◦To review compliance with statutory requirements, the
appropriate delimitation of the consolidation perimeter and
the correct application of the generally accepted accounting
principles and international financial reporting standards as
may be applicable.
◦To keep a fluent communication with the Company’s
Management to understand its decisions regarding the
application of the most significant criteria; with the Internal
Audit Function to be apprised of the findings of the reviews
carried out; and with the external auditor or verifier, to obtain
their opinion regarding financial information.
◦To be familiar with, understand, oversee and evaluate the
effectiveness of the internal control over financial and non-
financial reporting system and receive information on a
regular basis from the supervisor thereof.
◦To submit recommendations or proposals to the board of
directors for the purposes of safeguarding the integrity of
the financial information;
◦To assess and advice the board of directors on any
significant changes in accounting standards and on the
significant risks on the balance sheet and off-balance sheet;
•With regard to enterprise risk management:
◦To oversee the enterprise risk management function and
establish that it operates pursuant to the provisions of the
policy approved by the Board.
◦To receive, on a regular basis, reports from the Management
or from the supervising areas, on the proceedings of risk
management systems established, as well as on the results
of the tests carried out by internal auditors relating to the
same, and on any significant internal control weakness
detected by the external auditors..
Inditex Annual Report 2022 / Annual Corporate Governance Report
160
◦To evaluate the effectiveness of internal control and
management systems relating to financial risks, as well as of
the measures established to mitigate the impact of identified
risks.
◦To promote a corporate culture within the Company wherein
risk assessment is a factor upon decision-making, at all
levels of the Company and its Group.
◦To identify and re-assess, at least on an annual basis, the
most significant financial risks and the level of risk tolerance.
◦To identify and understand emerging risks as well as their
alert mechanisms, and regularly evaluate their effectiveness.
◦To ensure that risks are kept and managed within the levels
of risk tolerance set by the board of directors.
◦To ensure that the internal control policies and systems
established by the company are effectively applied in
practice.
◦To meet with the heads of business units at least once a
year, and whenever the committee deems it appropriate, for
the purposes of briefing the committee on business trends
and risks associated with the respective areas under their
remit.
◦To submit recommendations or motions to the board of
directors and the relevant deadline for follow-up..
Most members of the Audit and Compliance Committee are
non-executive independent directors. The committee meets on
a quarterly basis and whenever it is called by its Chair. In 2022,
the Audit and Compliance Committee has met 7 times.
Financial Department
The Financial Department is responsible for the design, roll-out
and implementation of the ICFR system, keeping the system
updated, monitoring its design and proceedings to ensure that it
is effective and appropriate, communicating and training the
parties involved and keeping a periodic report.
The Financial Department drafts and circulates the policies,
guidelines and procedures, associated with financial reporting
and ensures the appropriate enforcement thereof within the
Group.
Internal Audit
The Internal Audit function supports the board of directors,
through the Audit and Compliance Committee, with regard to
the oversight duty relating to risk exposure, ensuring that
appropriate and effective controls are set as an answer to risks
in the field of governance, operations and information systems,
regarding, inter alia, reliability and integrity of financial
information and in particular, the Internal Control over Financial
Reporting System (ICFR). To achieve this, Internal Audit carries
out specific periodic ICFR audits, requests action plans to
correct or reduce any weaknesses revealed and follows up on
the implementation of the proposed recommendations.
The Internal Audit Charter, approved by the board of directors,
covers the mission, authority and responsibilities of the Internal
Audit function pursuant to both domestic and international
regulations and standards for the professional practice of
internal auditing.
Likewise, Internal Audit has been awarded the certificate of
compliance with the “International Standards for the
Professional Practice of Internal Auditing” by the Instituto de
Auditores Internos, a member of the IIA (Institute of Internal
Auditors).
F.1.2. Indicate whether the following exist, especially
in relation to the drawing up of financial
information:
Departments and/or mechanisms in charge of: (i) the design
and review of the organisational structure; (ii) clear definition of
lines of responsibility and authority with an appropriate
distribution of tasks and functions; and (iii) ensuring that
adequate procedures exist for their proper dissemination within
the entity.
The board of directors is responsible for the design and review
of the organisational structure and the lines of responsibility
within the Group. The departments charged with drawing up the
financial information are found within said structure.
Senior Managers and the Human Resources Department (HR
Department) define the duties and responsibilities of each area.
The Group has clearly defined lines of authority and
responsibility regarding the process to draw up financial
information. The main responsibility regarding financial reporting
lies with the Financial Department.
The structure, size and definition of duties and tasks of each
position within the financial area are defined by the Financial
Department and disclosed by the Human Resources
Department.
With regard to ICFR, a specific management area was set up
within the Financial Department, to which it reports, (the “ICFR
Area”).
The Group relies on financial organisational structures that meet
local requirements in each country where it operates, with a
Chief Financial Officer at the helm who is charged, inter alia, with
complying with the procedures set out within the ICFR System.
•Code of conduct, the body approving this, degree of
dissemination and instruction, principles and values
covered (stating whether there is specific mention of record
keeping and preparation of financial information), body
charged with analysing breaches and proposing corrective
actions and sanctions.
The board of directors approved in the meeting held on 17 July
2012, following a favourable report of the Audit and Compliance
Committee, the Code of Conduct and Responsible Practices
and the Code of Conduct for Manufacturers and Suppliers of
the Inditex Group.
Likewise, on 19 September 2017, following a favourable report of
the Audit and Compliance Committee the Board of Directors
approved the Inditex Group's ·Integrity Policies".
The main internal conduct regulations of the Group are provided
in::
•The Code of Conduct and Responsible Practices
161
•The Code of Conduct for Manufacturers and Suppliers
•The Compliance Policy.
•The Integrity Policies, which are: (i) the Policy on Gifts and
Business Courtesies; (ii) the Policy on Donations and
Sponsorships, and; (iii) the Policy on Dealings with Public
Officials.
•The Conflicts of Interest Policy
•The Internal Regulations of Conduct in the Securities Markets
(IRC)
Code of Conduct and Responsible Practices
The Code of Conduct and Responsible Practices provides the
lines of action that must be followed by Group employees when
doing their jobs. In 2022, a process of review and update of the
Code of Conduct has been launched, that seeks to bring its
contents, structure and approach into line with the new
regulatory realities and challenges, the commitments
undertaken by the Company—especially in the area of
sustainability—and the Company’s digital transformation
Its goal consists of exacting an ethical and responsible
professional conduct from Inditex and its entire workforce in the
conduct of business anywhere in the world, as a gist of its
corporate culture built up on training and personal and
professional career development for its employees. For these
purposes, the principles and values that shall govern relations
between the Group and its stakeholders (employees, customers,
shareholders, business partners, suppliers and the societies
where its business model is implemented) are defined therein.
The Code of Conduct and Responsible Practices is based upon
a number of overarching principles. (i) the Inditex Group shall
carry out all its transactions under an ethical and responsible
perspective; (ii) 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; (iii)
all the activities of Inditex shall be carried out in the manner that
most respects the environment, promoting biodiversity
preservation and sustainable management of natural resources.
One of the standards of conduct covered in the Code of
Conduct and Responsible Practices is the “Obligation to Record
Transactions”, addressed in section 4.13 thereof, according to
which:
“Any and all transactions carried out by the Company that may
have an economic impact shall be clearly and accurately shown
on the appropriate records of accounts, as a true representation
of the transactions carried out, and they shall be made available
to the internal and external auditors.
Inditex’s employees shall enter the financial information on the
company’s systems in a full, clear and accurate manner, so that
they would show, as at the relevant date, their rights and
obligations in accordance with the applicable regulations.
Additionally, the accuracy and integrity of the financial
information that, under the prevailing regulations in force shall
be disclosed to the market shall be ensured.
Inditex undertakes to implement and maintain an appropriate
internal control system on financial reporting, ensuring the
regular supervision of the effectiveness of this system.
Accounting records shall be at all times made available to the
internal and external auditors. For this purpose, Inditex
undertakes to provide its employees with the necessary training
for them to understand and comply with the commitments
undertaken by the company regarding the internal control on
financial information.”
Policy on Criminal Risk Prevention.
The Policy on Criminal Risk Prevention relates engagements of
ethical behaviour undertaken pursuant to the Code of Conduct
and Responsible Practices with the offences that it intends to
prevent.
Similarly to the provisions of the Code of Conduct and
Responsible Practices, section 2.9 of the Policy reads as follows:
“(…) any transaction of economic weight carried out by the
Company shall be clearly and accurately recorded in
appropriate accounting records that show the true and fair
image of the transactions carried out. Said records must be
made available to internal and external auditors.
Inditex’s employees shall enter the full financial information into
the Company’s systems clearly and accurately so that they
show, as of the relevant date, its rights and obligations in
accordance with the applicable regulations. Likewise, they shall
ensure that the financial information that must be disclosed to
the market under the prevailing regulations in force, is accurate
and full.
Inditex is committed to implementing and keeping an
appropriate internal control system in respect of financial
reporting, ensuring that the effectiveness of this information is
regularly monitored. For this purpose, required training will be
offered so that employees may be apprised of and understand
the company’s commitments in the field of internal control on
financial information.”
The Policy, together with the Criminal Risk Prevention Procedure
and the Criminal Risk and Control Matrix, comprise the Model of
Criminal Risk Prevention of the Inditex Group. The Ethics
Committee is the governing body responsible for overseeing
compliance with said Model and the effective and appropriate
implementation of the controls therein set.
Inditex Annual Report 2022 / Annual Corporate Governance Report
162
IRC
Compliance with the IRC is mandatory for all the persons
included in its scope of application and any noncompliance may
be reported in a confidential manner to the Ethics Committee,
pursuant to the provisions of the Ethics Line Procedure.
In this regard, noncompliance with the IRC may give rise to the
relevant disciplinary sanctions, as the case may be, to civil,
criminal and/or administrative liability, and to the obligation to
compensate any damages incurred, where appropriate.
Last, there is a Market Transparency Committee (formerly, the
“Compliance Supervisory Board”) which reports directly to the
Audit and Compliance Committee, composed of:
•The CEO
•The General Counsel and Secretary of the Board
•The Chief Financial Office
•The Capital Markets Director, and
•The Chief People Officer.
The Committee is mainly responsible for developing procedures
and implementing regulations to enforce the IRC. The General
Counsel’s Office, led by the General Counsel and the Board of
Directors is accountable to the Market Transparency
Committee. The General Counsel’s Office is tasked, inter alia,
with enforcing the conduct regulations of securities markets and
the rules and procedures of the IRC on directors, officers,
employees and any other person to which the IRC applies.
The IRC sets outs the principles and criteria to ensure (i) that the
information released to the market and to CNMV is reliable,
clear, quantified and complete, avoiding subjective evaluations
that lead or may lead to confusion or deception, as well as (ii) the
appropriate use and dissemination of inside information and
other relevant information of the Company.
The proceedings of the companies that are part of the Group
and of all the individuals with access to information that may be
deemed to be inside information and/or other relevant
information, and namely financial information, shall comply with
the following principles, without limitation: regulatory
compliance, transparency, collaboration, information,
confidentiality and neutrality. Both the Market Transparency
Committee and the General Counsel’s Office ensure that the
above referred principles are observed.
With regard to the IRC, the General Counsel’s Office keeps a
General Documentary Register of Affected Persons. The
General Counsel’s Office informs Affected Persons that they
have been included in such Register and that they are subject to
the provisions of the IRC and reports any breaches and
penalties which may result, as the case may be, from an
inappropriate use of inside information.
Compliance with the Codes of Conduct of the Inditex Group
and, in general, with its internal regulations of conduct is
ensured through the Ethics Committee, composed of:
•The General Counsel and Secretary of the Board, who
chairs it.
•The Chief Compliance Officer, in her capacity of Deputy Chair.
•The Chief Sustainability Officer
•The Chief People Officer
•The Chief Audit Officer, in an advisory capacity
The Committee of Ethics may act of its own motion or at the
behest of any employee, manufacturer or supplier of Inditex, or
any third party involved in a direct relation and with a lawful
business or professional interest, further to a report made in
good faith.
The Committee of Ethics reports to the board of directors
through the Audit and Compliance Committee and has the
following basic responsibilities:
•To oversee compliance with the Code and the internal
circulation thereof to the Group’s s personnel.
•To receive any manner of written instruments with regard to
the enforcement of the Code and to send them, where
appropriate, to the relevant body or department which may be
responsible for processing and issuing a resolution regarding
such instrument.
•To oversee the Ethics Line and compliance with the Ethics
Line Procedure..
•To monitor and oversee proceedings and their settlement.
•To resolve any questions that may arise regarding the
enforcement of the Code..
•To propose to the board of directors, following a report of the
Audit and Compliance Committee, any explanation or
implementation rule that the enforcement of the Code may
require, and at least, an annual report to review its
enforcement.
•To promote training plans for employees on internal conduct
regulations and the proceedings of the ethics line.
In the performance of its duties, the Ethics Committee shall
ensure:
•The confidentiality of all information and background details
and of the action taken unless the disclosure of information is
required by law or by a court order.
To ensure that the Ethics Line is effective, and that the privacy of
the parties concerned is protected, the Ethics Committee may
handle ex-officio anonymous concerns..
•The thorough review of any information or document that
triggered its action.
•The commencement of proceedings that adjust to the
circumstances of the case, where it shall always act with
independence, fully respecting the right of the parties to be
heard, to honour and to the presumption of innocence
•Prohibition of retaliation and indemnity of anyone who reports
through the Ethics Line in good faith.
163
After the due investigation of the case, the Ethics Committee
resolves to either close it or that an actual breach exists. In the
event of a breach, the Committee will decide on its severity and
the advisability of taking action, but the specific preventive,
corrective and/or disciplinary measures will be determined by
the competent department or area which will report them to the
Ethics Committee.
Decisions of the Ethics Committee are binding for the Inditex
Group and its employees.
The Ethics Committee submits a report to the Audit and
Compliance Committee at least every six months, reviewing its
proceedings and the enforcement of the Code of Conduct and
Responsible Practices.
Additionally, the Audit and Compliance Committee apprises the
board of directors, on an annual basis as well as whenever this
latter so requires, of the enforcement of the Code of Conduct
and Responsible Practices and the additional documents which
comprise the Model of Compliance with internal regulations,
from time to time in force.
With regard to the dissemination of the above-mentioned
conduct regulations, the Group Human Resources Department
is responsible for distributing a copy of the Code of Conduct
and Responsible Practices to all new employees when they join
the organisation.
Likewise, conduct regulations, as amended, are available on the
corporate website under the Compliance tab, and on INET. They
are subject to the appropriate measures regarding disclosure,
distribution, training and awareness-raising, so that they may be
understood and implemented within the whole organisation.
•Whistleblowing channel allowing notifications to the audit
committee of irregularities of a financial and accounting
nature, in addition to potential breaches of the code of
conduct and unlawful activities undertaken in the
organisation, indicating whether this channel is confidential
and whether anonymous notifications can be made,
protecting the rights of the whistleblower and the person
reported.
An Ethics Line is available to all employees of the Group,
manufacturers, suppliers or third parties with a direct relation
and a lawful business or professional interest, regardless of their
tier or geographic or functional location, so that they may report,
even anonymously and within the remit of the Ethics Committee,
any breach of the Group’s internal conduct regulations by
employees, manufacturers, suppliers or third parties engaged in
an employment, business or direct professional relations with
the Group, which affect Inditex or its Group.
Therefore, any breach and/or any manner of malpractice,
including those of a financial and accounting nature, may be
reported.
The Ethics Committee is responsible for overseeing the Ethics
Line and compliance with the Ethics Line Procedure.
The proceedings of the Ethics Line are described in the Ethics
Line Procedure approved by the board of directors on 17 July
2012 and amended on 10 December 2019. The Ethics Line
Procedure clarifies and reinforces guarantees and protective
measures for all parties in the process: (i) maximum
confidentiality; (ii) non-retaliation; (iii) presumption of innocence
and respect for the right to honour of reported parties; (iv) the
right of the parties to be heard, and; (v) appropriate use of
personal data processed.
Full information on the Ethics Committee and the Ethics Line is
available on the intranet and on the corporate website where a
direct link to such Line is available.
Reports of noncompliance and/or queries regarding the
construction or enforcement of internal conduct regulations
may be sent to the Company either (i) by post - to the attention
of the Ethics Committee to the following postal address: Avenida
de la Diputación, Edificio INDITEX, 15143 Arteixo, A Coruña
(Spain) – or (ii) by email - (ethicsline@inditex.com).
•Training and periodic refresher programmes for personnel
involved in the preparation and revision of financial
information, as well as in the assessment of the ICFR
system, covering at least accounting standards, auditing,
internal control and risk management.
The Group’s Training and Career Development Area, reporting
to the HR Department, is charged with preparing, together with
each of the areas reporting to the Financial Department, training
and refresher courses addressed to staff responsible for
drawing up and overseeing the financial information of each
company within the Group. Said schemes include, both general
courses, focusing on business expertise and knowledge of the
different interrelated departments that make up the company,
and specific schemes aimed at training and refreshing
employees in respect of regulatory developments on financial
reporting and oversight of financial information.
General Induction
Aimed at gaining internal knowledge of each business unit, as
well as of each department and the respective activities,
functions and duties within the business. Under this scheme,
employees begin by working at the stores, getting directly
acquainted with the whole process of running a store and they
continue at different headquarters
Specific training
Group employees responsible for the processes associated
with the preparation of financial information regularly take
training and refresher courses that seek to acquaint them with
local and international regulations on financial reporting, as well
as with existing regulations and best practices in the area of
internal control. An e-learning platform (Tra!n) is available to
employees, to train them on issues regarding financial reporting
or information security, among others.
Within the financial environment, training and refresher schemes
are arranged by the Human Resources Department liaising with
each of the areas of the Financial Department.
Inditex Annual Report 2022 / Annual Corporate Governance Report
164
Training courses are provided on an annual basis for all new
heads of financial areas in each country, in order to get them
acquainted with the Inditex Group’s management model, as well
as with the internal control system over financial reporting
implemented by the Group. Specific training on the system is
run to every employee who starts to play a role associated with
ICFR (control owner, process owner, etc.).
Additionally, courses are taught by internal staff on the operation
of financial software tools used to draw up financial information.
Among the specialised training run to employees of the different
units and areas of the Financial Department, training is imparted
every year on risk management, the update on international
accounting standards (IFRS), local accounting standards and
tax regulations. In addition, specific training is imparted on ICFR
and on financial hedging.
F.2. Assessment of risks in financial
reporting
Report on at least the following:
F.2.1. The main characteristics of the risk
identification process, including risks of error and
fraud, as regards:
•Whether the process exists and is documented.
The risk identification process has been documented in the
Procedure for Enterprise Risk Management regarding Financial
Reporting. This Procedure seeks to describe the mechanisms
for identifying and assessing, on an annual basis, the risks that
might lead to material errors in financial reporting
•Whether the process covers all the objectives of financial
reporting, (existence and occurrence; completeness;
valuation; presentation; disclosure and comparability; and
rights and obligations), whether it is updated and if so how
often.
The above-mentioned risks management process consists of
five stages:
–Gathering financial information.
–Identifying the operating processes with an impact on
financial information.
–Assessment of risks by the reporting unit of financial
statements.
–Prioritising the accounts' criticality.
–Checking risks versus operating processes.
As a result of this process, a scoping matrix of risks regarding
financial information (ICFR Scoping Matrix) is updated on an
annual basis. This Scoping Matrix is used to identify the material
headings of the financial statements, assertions or goals of
financial information with respect to which any risks may exist,
and the prioritisation of operational processes that have an
impact on financial information.
Assessment covers all the goals of financial information: (i)
existence and occurrence; (ii) integrity; (iii) assessment; (iv)
release and breakdown; and (v) rights and obligations.
Following the identification of potential risks, they are assessed
on an annual basis based upon the management’s information
and understanding of the business and upon materiality criteria.
Assessment criteria are established (i) from a quantitative
perspective in accordance with parameters such as turnover,
size of assets and pre-tax profit; and, (ii) from a qualitative
perspective in accordance with different issues such as
transactions standardising and processes automation,
composition of accounting headings, changes versus the
previous year, complexity of accounting, likelihood of fraud or
error or degree of use of estimates in book recording.
•The existence of a process for identifying the scope of
consolidation, taking into account, among other factors, the
possible existence of complex corporate structures or
special purpose vehicles.
The Group relies on a Corporate Master of Companies wherein
all the companies that are part of the Inditex Group are included.
Said Master is at the basis of the consolidation perimeter and is
managed and updated in accordance with the Procedure for
Incorporating and Financing of Companies.
The Master covers, on the one hand, general corporate
information, such as company name, accounting closing date
and currency, and on the other, legal details such as the date of
incorporation, share capital, list of shareholders, equity interest,
and other relevant information. The Legal Department is
responsible for updating the Master as regards legal
information.
The External Reporting area, which reports to the Planning and
Management Control Department, reviews and updates, on a
monthly basis, the number of companies that make up the
Consolidation Perimeter, as well as the consolidation methods
that apply to each of the companies included in the above-
mentioned perimeter.
•Whether the process takes into account the effects of other
types of risk (financial, geopolitical, technological,
environmental, social and governance) to the extent that
they affect the financial statements.
In addition to the above-mentioned quantitative and qualitative
factors, the main risks identified through the Risks Map of the
Inditex Group are considered in the process for the assessment
of financial information risks.
Potential risks identified through the ICFR Scoping Matrix are
taken into account upon preparing the Risks Map of the Group,
which is updated on an annual basis by the Enterprise Risks
Management Department (reporting to the Financial
Department) with the assistance of all areas of the Organisation
involved in the process. The Group may thus consider the
impact that the remaining risks classified in the following groups:
financial, geopolitical, technological, environmental, social and
governance risks, may have on financial statements.
165
•The governing body within the company that oversees the
process..
The whole process is overseen and approved on an annual
basis by the Audit and Compliance Committee.
F.3. Control activities
Report on whether the company has at least the following,
describing their main characteristics:
F.3.1. Review and authorisation procedures for
financial information and a description of the ICFR,
to be disclosed to the securities markets, indicating
those responsible, as well as documentation
describing the flow of activity and controls
(including those relating to the risk of fraud) of the
various types of transactions that may materially
affect the financial statements, including
accounting closing procedures and the specific
review of significant judgements, estimates,
valuations and projections.
Pursuant to the Board of Directors’ Regulations, the Audit and
Compliance Committee is responsible, inter alia, for reviewing
the annual accounts and the periodic information that the board
of directors must submit to the markets and their supervisory
bodies, verifying at all times compliance with statutory
requirements and the appropriate use of generally accepted
accounting principles upon drawing up such information.
Likewise, pursuant to the above-mentioned Regulations the
Audit and Compliance Committee shall meet on a quarterly
basis to review the periodic financial information to be
submitted to the Stock Exchanges authorities and the
information that the board of directors must approve and
release as its annual public documentation.
Furthermore, the ICFR Area monitors that the ICFR is effective
and apprises the Financial Department and, where appropriate,
the Audit and Compliance Committee, of the findings of this
monitoring.
The Group relies on mechanisms to review financial information.
Each of the organisational structures is responsible for
reviewing the financial information reported. Analytical reviews
of the financial information reported by said structures are
carried out at corporate level. Prior to stating the annual
accounts and approving the half-yearly financial statements, the
Financial Department and the external auditor meet, for the
purposes of reviewing and assessing the financial information.
The Audit and Compliance Committee submits this information
to the board of directors, which is ultimately responsible for
approving it before releasing it to the market.
The Group keeps its main business processes with ICRF scope
duly documented. Each process is structured into a number of
sub-processes, with their relevant flowcharts, including the
proceedings that play a direct or indirect role on financial
reporting.
These processes describe the controls that make it possible to
respond appropriately to risks associated with the achieving the
objectives related to the reliability and integrity of the financial
information, identifying any risks that may result in accounting
fraud, so as to prevent, detect, reduce and correct the risk of any
potential error way in advance. Each ICFR process has its
scoping matrix of risks and controls associated, and they are
separated between processes carried out at local level and at
corporate level for the entire Group. Design of flowcharts,
description of the different processes and sub-processes and
identification of risks and controls is carried out with a process
modelling software application.
This software application allows keeping the entire
documentation relating to the Group’s ICFR processes within a
single environment, which results in streamlined processes, as
flowcharts, narratives and scoping matrices of risk and control
are integrated.
The ICFR monitoring model is implemented based upon a tool
to manage and oversee internal control systems. In such tool,
each control is assigned to an owner who carries them out with
the defined frequency.
Each process is assigned to a process owner who assesses on
a quarterly basis the effectiveness of controls and defines and
updates the ICFR processes for which they are responsible.
The ICFR Area monitors on a quarterly basis the assessments
made by processes owners about the effectiveness of controls.
It also coordinates and encourages the periodic review of
processes and controls design.
In addition, the ICFR Area is subject every year to an internal
certification process whereby financial officers of the markets
within the scope of ICFR monitoring, process owners and
corporate directors of areas who take part in the process of
preparation and monitoring of financial information certify that
they have implemented the controls for which they are
responsible.
With regard to closing, consolidation and reporting processes,
the Financial Department issues the instructions together with
the calendar and contents of the financial information to be
reported by each of the local financial structures to draw up the
consolidated financial statements.
Risks are identified in the ICFR’s risk and controls matrix of the
closing process, which includes controls relating to relevant
opinions, estimates, assessments and projections.
Inditex Annual Report 2022 / Annual Corporate Governance Report
166
F.3.2. Internal IT control policies and procedures
(access security, control of changes, system
operation, operational continuity and segregation
of duties, among others) that support significant
processes within the company relating to the
preparation and publication of financial
information.
The internal control framework of the Group’s information
systems seeks to set up controls over the main business
processes, which are closely related to Information
Technologies (“IT”).
Based upon the link between business processes and
associated systems, basic risks are reviewed, enabling the
company to prioritise and focus on the IT environments that are
deemed to be especially relevant.
Within the ICFR IT controls defined by the Group, a number of
general controls on applications are identified, including the
following domains:
•Secure access to both applications and data.
•The application of logic and physical security measures
•Control and monitoring on changes in applications and their
data.
•Environment segregation.
•Appropriate operation of applications.
•Availability of data and continuity of applications.
It bears mention that design of such controls is reviewed on an
annual basis for the purposes of implementing such changes, if
necessary, which ensure that associated risks are appropriately
mitigated. Following such review, new controls have been
included in 2022 aimed at shoring up controls on privileged
access to platforms within the scope.
The implementation of ITGCs on the applications identified
within the ICFR scope is monitored on an annual basis. As a
general rule, the yardstick to identify applications within such
scope is that they play a significant role in the preparation and
monitoring of financial information.
The findings of such monitoring are reported to the Financial
Department through the annual report assessing ICFR controls.
It bears mention that, in the process to design and implement
applications and products, the Group has defined a
methodological framework with different requirements aimed at
ensuring that the solution implemented actually meets both the
functions demanded by users and the security standards set
out.
Likewise, the Group relies on contingency mechanisms and
procedures, which have been defined to ensure recovery of
information systems in case of lack of availability.
In 2022, the Information Security Committee met on a quarterly
basis. Said Committee is charged with ensuring the effective
and consistent enforcement of best practices regarding
information security management across the organisation,
reducing risks affecting security to the minimum, taking into
account the company’s business.
The members of such Committee as at 31 January 2023 are:
•The COO & Head of Digital and Sustainable Transformation
• The General Counsel and Secretary of the Board
• The Chief Digital Officer.
• The Chief Information Security Officer (CISO).
• The Chief Financial Officer
• The Chief Audit Officer (CAO).
• The Chief Compliance Officer.
The CEO, Mr Óscar García Maceiras, attended the last
committee meeting held on 5 December 2022. The CEO will
chair the Information Security Committee as of 1 February 2023.
The Information Security Policy sets forth the principles and
guidelines whereby Inditex will protect its information, pursuant
to applicable regulations and its ethical values defined in the
Code of Conduct and Responsible Practices as well as the
provisions of the Regulations of the Information Security
Committee and of any other applicable internal regulations.
The overarching principles that inform the Policy are:
(i)classification of information, in accordance with its value,
relevance and criticality for the business;
(ii)limited use of information systems to lawful and exclusively
professional purposes;
(iii)segregation of duties to avoid risks;
(iv)setting retention periods by information category, where
necessary or convenient;
(v)setting monitoring procedures to control how information is
made available to third parties;
(vi)security in Information Systems;
(vii)setting a process for continuity management to ensure
recovery of critical Information for the Group in the event of
disaster; and
(viii)alignment of Information Systems and communications of
the Group with the requirements of applicable laws and
regulations..
167
The Information Security Department performs its monitoring
duties in an independent manner and is responsible for
implementing the Policy and monitoring compliance therewith,
and with all requirements arising from applicable laws,
regulations and best practices in the field of Information
Security. In the framework of the Information Security Policy, the
CISO’s Charter has been approved in the year, which seeks to
define the framework for action, the competences and the
internal and external responsibilities of the Information Security
function.
F.3.3. Internal control policies and procedures for
overseeing the management of activities
subcontracted to third parties, as well as of those
aspects of assessment, calculation or valuation
entrusted to independent experts, which may
materially affect financial statements.
Included in the ICFR processes are controls on calculations
made by third parties and on the criteria used for the purposes
of mitigating the risks that might impact financial information.
Outsourced services are commissioned by the supervisors of
the relevant areas, ensuring the technical and legal
qualifications, capacity and independence of the experts hired.
F.4. Information and communication
Report on whether the company has at least the following,
describing their main characteristics::
F.4.1. A specifically assigned function for defining
and updating accounting policies (accounting
policy area or department) and addressing
concerns or conflicts arising from their
interpretation, maintaining a free flow of
information to those responsible for operations in
the organisation, as well as an up-to-date
accounting policy manual distributed to the
business units through which the company
operates..
Within the Planning and Management Control Department, the
External Reporting area is responsible for drawing up,
disclosing, implementing and updating the Group’s Manual on
Accounting Policies. With regard to the Group’s accounting
policies, this area is responsible for, inter alia:
•Defining the accounting treatment of the transactions that
make up the business of the Group.
• Defining and updating the accounting practices of the Group.
• Addressing concerns and conflicts arising from the
construction of accounting standards.
• Standardising the accounting practices of the Group.
The Manual covers the different transactions inherent in the
Groups’ business and their accounting treatment in accordance
with the benchmark accounting framework of the Inditex Group.
The Manual is regularly updated. As part of these updating
procedure, the External Reporting area includes all accounting
changes identified that were advanced to those in charge of
drawing up the financial statements.
The Manual is available on the Company’s INET.
F.4.2. Mechanisms for capturing and preparing
financial information in standardised formats for
application and use by all units of the entity or
group, and support its main financial statements
and notes, as well as disclosures concerning ICFR.
The process of consolidating and preparing financial statements
is centralised and is incumbent on the External Reporting area,
which reports to the Planning and Management Control
Department.
Drawing up the consolidated financial information begins with
the addition of individual financial statements of each company
included in the consolidation perimeter, to be subsequently
consolidated based upon the accounting regulations of the
Group.
Inditex Annual Report 2022 / Annual Corporate Governance Report
168
Financial information reported to CNMV is prepared based upon
consolidated financial statements gathered through the above-
mentioned tool, and upon certain supplementary information
reported by the markets, required to prepare the annual/half-
yearly report. Contemporaneously, certain specific controls are
exerted to confirm integrity of said information.
The board of directors approved on 14 December 2020 the
Policy on Disclosure of Economic-Financial, Non-Financial and
Corporate Information that seeks to establish a framework for
action and define the overarching principles that will govern
disclosure by the Company of economic-financial, non-financial
and corporate information via regulated and non-regulated
channels.
Under said Policy, the board of directors, as the highest
supervisory body responsible for overseeing economic-
financial, non-financial and corporate information, shall ensure
the broadest circulation and the highest quality of the
information provided to the stakeholders, in accordance with a
set of principles that include transparency, objectivity, accuracy,
immediacy and symmetry in disclosure of information.
F.5. Supervision of the system’s operation
Give information on the key features of at least:
F.5.1. The activities of the audit committee in
overseeing ICFR as well as whether there is an
internal audit function one of the responsibilities of
which is to provide support to the committee in its
task of supervising the internal control system,
including ICFR. Additionally, describe the scope of
ICFR assessment made during the year and the
procedure through which the person responsible
for performing the assessment communicates its
results, whether the company has an action plan
detailing possible corrective measures, and
whether their impact on financial reporting has
been considered.
With regard to the evaluation of ICFR and the procedure set to
disclose its results, the ICFR area monitors on a quarterly basis,
via the owners of processes with an impact on financial
information, the implementation of controls, requesting and
reviewing a sample of evidence from the owners of each
control.
As a result of such monitoring, improvement areas are identified
and they are assigned an action plan to remedy them. Follow up
ensues to ensure they have been complied with.
Likewise, the ICFR area issues on a quarterly basis a report with
the findings of each control, the main action lines followed in the
quarter and the incidences identified. Such reports are
submitted to the Financial Department, the heads of financial
departments and the Internal Audit Department.
In 2020 and specifically regarding ICFR oversight activities, the
Audit and Compliance Committee has carried out the following
proceedings, without limitation:
•It has reviewed the consolidated annual accounts of the
Group and the periodic quarterly and half-yearly financial
information that the Board of Directors has to provide to the
markets and its supervisory bodies, overseeing compliance
with statutory requirements and the appropriate application of
the generally accepted accounting principles upon drafting
this information.
•As part of its supervision duties regarding the Internal Audit
function, it has approved its annual activities report, as well as
its budget and the annual internal audit plan that includes
specific audits on ICFR processes, pursuant to a pluri-annual
plan set.
•It has reviewed the annual audit plan of external auditors that
includes the audit objectives based upon the evaluation of
risks of financial information and the main areas of interest or
significant transactions subject to review in the year.
•It has reviewed with the external auditor and with Internal Audit
the internal control weaknesses revealed, where appropriate,
in the course of the different audit and review assignments.
Meanwhile, both external auditors and Internal Audit have
regularly advised the Audit and Compliance Committee on the
degree of enforcement of recommendations resulting from
these assignments.
•It has met regularly with other corporate departments of the
Inditex Group for the purposes of overseeing the effectiveness
of internal control systems of the Group, including ICFR,
verifying their suitability and integrity and the degree of
implementation of action plans to meet audit
recommendations.
Internal Audit is a corporate function directly linked to the board
of directors, which ensures full independence in the
performance of its activities. Internal Audit functionally reports to
the Audit and Compliance Committee.
The area is centrally managed from headquarters and has
representatives in the geographic areas where the presence of
the Inditex Group so requires. Additionally, it is divided into
specialised areas, which allows for gaining a deep
understanding of risks and processes.
Internal Audit’s budget is approved on an annual basis by the
Audit and Compliance Committee, which provides for the
human and material assets, both internal and external of the
Internal Audit Department.
The mission of the Internal Audit function consists, inter alia, of
assessing risk exposure and the suitability and effectiveness of
controls in respect of risks identified and namely, those related
to reliability and integrity of financial and operational information.
Based upon the ICFR Scoping Matrix, Internal Audit drafts a
pluri-annual plan for the regular review of ICFR of the Group,
which is submitted to the Audit and Compliance Committee for
approval every year.
169
This pluri-annual plan entails conducting ICFR reviews of the
significant processes and elements of the Group’s financial
statements. Review priorities are set based upon the risks
identified. This plan is implemented through annual planning
that determines the scope of the annual ICFR reviews. The
suitability of this plan is reviewed every year, further to the
update of the process to identify and assess financial
information risks. Additionally, annual planning include
compliance with the provisions of current internal corporate
policies, including the ICFR Policy.
Namely, the following issues are subject to review: the design
and effective operation of key transactional controls and general
controls on the main software tools involved in financial
reporting, as well as the review of the general control
environment.
To carry out its activities, Internal Audit uses different audit
techniques, mainly interviews, analytical reviews, specific control
tests, reviewing both the appropriateness of design and the
effective operation thereof, review of the effectiveness of
software tools and material tests.
Results of the assignments, together with the corrective
measures recommended, where appropriate, are reported to
the Financial Department and the Audit and Compliance
Committee. Internal Audit follows up on the implementation of
these measures, which is then reported to the Audit and
Compliance Committee.
F.5.2. Whether there is a discussion procedure
whereby the auditor (as defined in the Spanish
Technical Audit Standards), the internal auditor and
other experts can report to senior management
and the audit committee or directors of the
company any significant weaknesses in internal
control identified during the review of the annual
financial statements or any others they have been
assigned. Additionally, state whether an action plan
is available for correcting or mitigating any
weaknesses detected.
Internal Audit regularly discloses to the Financial Department
and the Audit and Compliance Committee the internal control
weaknesses identified in the reviews carried out, as well as the
follow-up on the action plans set out to settle or reduce them.
In turn, external auditors meet regularly with the Financial
Department and Internal Audit, both to gather information and to
disclose any potential control weaknesses that may have been
revealed, where appropriate, in the course of their work.
In its meetings, the Audit and Compliance Committee considers
the potential weaknesses in control that might have an impact
on financial statements, requesting, where appropriate, from the
affected areas, the necessary information to assess any effects
on the financial statements.
Section 45.5 of the Board of Directors’ Regulations provides
that: “The Board of Directors shall ensure that the annual
accounts are drawn up in accordance with accounting
standards, endeavouring to draft them in such a manner that
they do not give rise to qualifications on the part of the auditor.
However, in the exceptional circumstances where the auditor
expresses a qualified opinion and the Board of Directors
considers that it must stick to its position, it shall publicly explain
the contents and scope of the discrepancy. The foregoing
without prejudice to the information that the Chair of the Audit
and Compliance Committee would make available to the
shareholders at the General Meeting of Shareholder”
To meet the provisions of section 45.5 above-mentioned, any
discussions or differing views that may exist are advanced in the
meetings of the Audit and Compliance Committee with external
auditors. In turn, external auditors report, where appropriate, on
the main internal control issues that need to be improved that
have been identified as a result of their work. Additionally,
Management reports on the degree of implementation of the
relevant action plans set in train to correct or reduce the issues
identified.
Meanwhile, the Audit and Compliance Committee meets with
the statutory auditors of the individual and consolidated annual
accounts for the purposes of reviewing on the one hand the
Group’s annual account, and on the other, certain periodic
financial information that the board of directors must provide to
the market and its supervisory bodies, overseeing compliance
with statutory requirements and the appropriate enforcement of
generally accepted accounting principles upon preparing such
information.
Moreover, the Committee regularly receives from the statutory
auditor information on the audit plan and the results of its
implementation, follows up on the recommendations proposed
by the statutory auditor and may request its collaboration
whenever this is deemed necessary.
In 2022 members of the Internal Audit function were in
attendance at 5 of the 6 meetings held by the Audit and
Compliance Committee and external auditors were in
attendance at 4 of them.
F.6. Other relevant information
—
Inditex Annual Report 2022 / Annual Corporate Governance Report
170
F.7. External auditor's report
Report:
F.7.1. Whether the ICFR information sent to the
markets has been subjected to review by the
external auditor, in which case the entity should
include the corresponding report as an attachment.
If not, reasons why should be given.
The information on ICFR included in this section F of the Annual
Corporate Governance Report for 2022 and prepared by the
Group’s Management is reviewed by the external auditors.
171
G. Degree of compliance with corporate
governance recommendations
Specify the company’s degree of compliance with
recommendations of the Good Governance Code for listed
companies.
In the event that a recommendation is not followed or only
partially followed, a detailed explanation of the reasons must
be included so that shareholders, investors and the market in
general have enough information to assess the company´s
conduct. General explanations are not acceptable.e.
1.That the articles of association of listed companies should
not limit the maximum number of votes that may be cast
by one shareholder or contain other restrictions that
hinder the takeover of control of the company through the
acquisition of its shares on the market..
Complies x         Explain
2.That when the listed company is controlled by another
entity within the meaning of section 42 of the Commercial
Code, whether listed or not, and has, directly or through its
subsidiaries, business relations with said entity or any of
its subsidiaries (other than the listed company) or carries
out activities related to those of any of them it should
make accurate public disclosures on:
•The respective areas of activity and possible business
relationships between the listed company or its
subsidiaries and the parent company or its subsidiaries..
•The mechanisms in place to resolve any conflicts of
interest that may arise.
Complies x        Complies partially          Explain
3.That, during the Annual General Meeting, as a
complement to the distribution of the written annual
corporate governance report, the chairman of the Board
of Directors should inform shareholders orally, in sufficient
detail, of the most significant aspects of the company's
corporate governance, and in particular:
•Changes that have occurred since the last Annual
General Meeting.
•Specific reasons why the company has not followed one
or more of the recommendations of the Code of
Corporate Governance and the alternative rules applied,
if any
Complies x        Complies partially          Explain
4.That the company should define and promote a policy on
communication and contact with shareholders and
institutional investors, within the framework of their
involvement in the company, and with proxy advisors that
complies in all aspects with rules against market abuse
and gives equal treatment to shareholders who are in the
same position. And that the company should publish this
policy on its website, including information on how it has
been put into practice and identifying the contact persons
or those responsible for implementing it. And that, without
prejudice to the legal obligations regarding dissemination
of inside information and other types of regulated
information, the company should also have a general
policy regarding the communication of economic-
financial, non-financial and corporate information through
any channels that as it may consider appropriate (media,
social media or other channels) that helps maximise the
dissemination and quality of information available to the
market, investors and other stakeholders..
Complies x        Complies partially          Explain
5.That the Board of Directors should not submit to the
General Meeting of Shareholders any proposal for
delegation of powers allowing the issue of shares or
convertible securities with the exclusion of pre-emptive
rights in an amount exceeding 20% of the capital at the
time of delegation.
And that whenever the Board of Directors approves any
issue of shares or convertible securities with the exclusion
of pre-emptive rights, the company should immediately
publish the reports mentioned by company law on its
website.
Complies x        Complies partially          Explain
6.That listed companies that prepare the reports listed
below, whether under a legal obligation or voluntarily,
should publish them on their website well in advance of
the Annual General Meeting, even if their publication is not
mandatory:
•Report on auditor independence..
•Reports on the proceedings of the audit and nomination
and remuneration committees
•Report by the audit committee on related party
transactions.
Complies x        Complies partially          Explain
Inditex Annual Report 2022 / Annual Corporate Governance Report
172
7.That the company should broadcast its Annual General
Meeting live on its website
And that the company should have mechanisms in place
allowing to grant proxy and to cast votes by means of data
transmission and even, in the case of large-caps and to
the extent that it is proportionate, attendance and active
participation in the General Meeting to be conducted by
said remote means
Complies x        Explain 
8.That the audit committee should ensure that the financial
statements submitted to the General Meeting of
Shareholders are prepared in accordance with accounting
regulations. And that in cases in which the auditor has
included a qualification or reservation in its audit report,
the chairman of the audit committee should clearly explain
to the general meeting the opinion of the audit committee
on its content and scope, making a summary of this
opinion available to shareholders at the time when the
meeting is called, alongside the other Board proposals
and reports.
Complies x        Complies partially          Explain
9.That the company should permanently publish on its
website the requirements and procedures for certification
of share ownership, the right of attendance at the General
Meeting of Shareholders, and the exercise of the right to
vote or to issue a proxy.
And that these requirements and procedures promote
attendance and the exercise of shareholder rights in a
non-discriminatory manner..
Complies x        Complies partially          Explain
10.That when a duly authenticated shareholder has exercised
his or her right to supplement the agenda or submit new
proposals for resolutions in advance of the General
Meeting of Shareholders, the company should:
•immediately distribute the supplementary items and
new proposals for resolutions.
•publish the standard form of attendance card or the
form to vote by proxy or cast absentee voting with the
necessary changes so that the new agenda items and
alternative proposals may be voted on in the same
terms as those proposed by the Board of Directors.
•put all these items or alternative proposals to the vote
applying the same voting rules as for those submitted by
the board of directors, with particular regard to
presumptions or deductions about the direction of
votes.
•after the General Meeting of Shareholders, disclose the
breakdown of votes on said supplementary items or
alternative proposals.
Complies x    Complies partially    Explain    Not applicable
11.That if the company intends to pay premiums for
attending the General Meeting of Shareholders, it should
establish in advance a general policy on said premiums
and this policy should be stable..
Complies    Complies partially    Explain    Not applicable x
12.That the board of directors should perform its functions
with a unity of purpose and independence of criterion,
treating all similarly situated shareholders equally and
being guided by the best interests of the company, which
is understood to mean the pursuit of a profitable and
sustainable business in the long term, promoting its
continuity and maximising the economic value of the
business..
And that in pursuit of the company’s interest, in addition to
complying with applicable law and rules and conducting
itself on the basis of good faith, ethics and a respect for
commonly accepted best practices, it should seek to
reconcile its own company interests, when appropriate,
with the interests of its employees, suppliers, customers
and other stakeholders that may be affected, as well as
the impact of its corporate activities on the communities
in which it operates and on the environment..
Complies x        Complies partially          Explain
13.That the Board of Directors should be of an appropriate
size to perform its duties effectively and in a collegial
manner, which makes it advisable for it to have between
five and fifteen members..
Complies x        Explain
14.That the Board of Directors should approve a policy aimed
at encouraging an appropriate composition of the Board
and that::
•Is specific and ascertainable;
•Ensures that motions for appointment or re-election are
based upon a prior analysis of the needs of the board of
directors; and
•Favours diversity of knowledge, experience, age and
gender. For these purposes, it is considered that the
measures that encourage the company to have a
significant number of female senior executives favour
gender diversity.
That the result of the prior analysis of the competences
required by the board of directors are written up in the
explanatory report from the nomination committee
published upon calling the Annual General Meeting to
which the ratification, appointment or re-election of each
director is submitted.
The nomination committee shall verify annually
compliance with this policy and explain its findings in the
annual corporate governance report.
Complies x        Complies partially          Explain
173
15.That proprietary and independent directors should
constitute a substantial majority of the board of directors
and that the number of executive directors be kept to a
minimum, taking into account the complexity of the
corporate group and the ownership interest of executive
directors.
And that the number of female directors should represent
at least 40% of the members of the Board of Directors
before the end of 2022 and thereafter, and not less than
30% prior to that date.
Complies x        Complies partially          Explain
16.That the number of proprietary directors out of all non-
executive directors should not be greater than the
proportion of the company's share capital represented by
those directors and the rest of the capital.
This yardstick may be relaxed:
•In large-cap companies where very few shareholdings are
legally considered significant.
•In the case of companies where a plurality of shareholders is
represented on the board of directors without ties among
them.
Complies x        Explain
17.That the number of independent directors should
represent at least half of the total number of directors.
That, however, when the company does not have a high
level of market capitalisation or in the event that it is a
large-cap company with one shareholder or a group of
shareholders acting in concert who together control more
than 30% of the company’s share capital, the number of
independent directors should represent at least one third
of the total number of directors.
Complies x        Explain
18.That companies should publish the following information
on its directors on their website, and keep it regularly
updated:
•Professional experience and biography.
•Any other boards to which the directors belong,
regardless of whether or not the companies are listed,
as well as any other remunerated activities engaged in,
regardless of type.
•Directorship type, indicating, in the case of individuals
who represent significant shareholders, the shareholder
that they represent or to which they are connected.
•Date of their first appointment as a director of the
company’s board of directors, and any subsequent re-
elections.
•Company shares and share options that they own.
Complies x        Complies partially          Explain
19.That the annual corporate governance report, following
verification by the nomination committee, should explain
the reasons for the appointment of any proprietary
directors on the proposal of shareholders whose holding
is less than 3%. It should also explain, where applicable,
any rejection of a formal request for a board position from
shareholders whose equity stake is equal to or greater
than that of others applying successfully for a proprietary
directorship.
Complies    Complies partially    Explain    Not applicable x
20.That proprietary directors representing significant
shareholders should resign from the board when the
shareholder they represent disposes of its entire
shareholding. They should also resign, in a proportional
fashion, in the event that said shareholder reduces its
stake to a level that requires a decrease in the number of
proprietary directors.
Complies x    Complies partially    Explain    Not applicable
21.That the board of directors should not propose the
removal of any independent director before the
completion of the director’s term provided for in the
articles of association unless the Board of Directors finds
just cause and a prior report has been prepared by the
nomination committee. Specifically, just cause is
considered to exist if the director takes on new duties or
commits to new obligations that would interfere with his or
her ability to dedicate the time necessary for attention to
the duties inherent to his or her position as a director, are
in breach of their fiduciary duty, or is affected by any of the
circumstances that would cause the loss of independent
status in accordance with applicable law.
The removal of independent directors may also be
proposed as a result of a public takeover bid, merger or
other similar corporate transaction entailing a change in
the shareholder structure of the company, provided that
these changes in the structure of the Board are the result
of application of the proportionate representation
criterion provided in Recommendation 16.
Complies x        Explain
22.That companies should establish rules requiring that
directors inform the Board of Directors and, where
appropriate, resign from their posts, when circumstances
arise that affect them, whether or not related to their
actions in the company itself, and that may harm the
company’s standing and reputation, and in particular
requiring them to inform the board of any criminal charges
brought against them as well as of how the legal
proceedings subsequently unfold..
Inditex Annual Report 2022 / Annual Corporate Governance Report
174
And that, if the board is informed or becomes aware in any
other manner of any of the circumstances mentioned
above, it must examine the case as quickly as possible
and, depending on the specific circumstances, decide,
based on a report from the nomination and remuneration
committee, whether or not any measure must be adopted,
such as the opening of an internal investigation, asking the
director to resign or proposing that he or she be
dismissed. And that these events must be reported in the
annual corporate governance report, unless there are any
special reasons not to do so, which must also be noted in
the minutes. This without prejudice to the information that
the company must disclose, if appropriate, at the time
when the corresponding measures are implemented..
Complies x          Complies partially          Explain
23.That all directors clearly express their opposition when
they consider any proposal submitted to the board of
directors to be against the company’s interests. This
particularly applies to independent directors and directors
who are unaffected by a potential conflict of interest if the
decision could be detrimental to any shareholders not
represented on the board of directors.
Furthermore, when the board of directors makes
significant or repeated decisions about which the director
has serious reservations, the director should draw the
appropriate conclusions and, in the event the director
decides to resign, explain the reasons for this decision in
the letter mentioned in the next recommendation..
This recommendation also applies to the secretary of the
Board of Directors, even if he or she is not a director
Complies x          Complies partially          Explain
24.That whenever, due to resignation or resolution of the
General Meeting of Shareholders, a director leaves before
the completion of his or her term of office, the director
should explain the reasons for this decision, or in the case
of non-executive directors, their opinion of the reasons for
the general meeting resolution, in a letter addressed to all
members of the board of directors.
And that, without prejudice to all this being reported in the
annual corporate governance report, as far as it is relevant
to investors, the company should publish an
announcement of the departure as rapidly as possible,
with sufficient reference to the reasons or circumstances
provided by the direct.
Complies xComplies partially Explain
25.That the nomination committee should make sure that
non-executive directors have sufficient time available in
order to properly perform their duties.
And that the Board regulations establish the maximum
number of company boards on which directors may sit.
Complies x          Complies partially          Explain
26.That the board of directors meet frequently enough to be
able to effectively perform its duties, and at least eight
times per year, following a schedule of dates and agendas
established at the beginning of the year and allowing each
director individually to propose other items that do not
originally appear on the agenda.
Complies x          Complies partially          Explain
27.That director absences occur only when absolutely
necessary and be quantified in the annual corporate
governance report. And when absences do occur, that the
director appoint a proxy with instructions.
Complies x          Complies partially          Explain
28.That when directors or the secretary express concern
regarding a proposal or, in the case of directors, regarding
the direction in which the company is headed and said
concerns are not resolved by the board of directors, these
concerns should be included in the minutes at the request
of the director expressing them.
Complies x    Complies partially    Explain    Not applicable
29.That the company should establishes adequate means for
directors to obtain appropriate advice in order to properly
fulfil their duties including, should circumstances warrant,
external advice at the company’s expense.
Complies x          Complies partially          Explain
30.That, without regard to the knowledge necessary for
directors to complete their duties, companies make
refresher courses available to them when circumstances
make this advisable
Complies x          Complies partially          Explain
31.That the agenda for meetings should clearly indicate
those matters on which the board of directors is to make a
decision or adopt a resolution so that the directors may
study or gather all relevant information ahead of time.
When, under exceptional circumstances, the chairman
wishes to bring urgent matters for decision or resolution
before the board of directors that do not appear on the
agenda, the prior express agreement of a majority of the
directors shall be required, and said consent shall be duly
recorded in the minutes.
Complies x          Complies partially          Explain
32.That directors be periodically informed of changes in
shareholding and of the opinions of significant
shareholders, investors and rating agencies of the
company and its group.
Complies x          Complies partially          Explain
175
33.That the chairman, as the person responsible for the
efficient workings of the board of directors, in addition to
carrying out the duties assigned by law and the articles of
association, should prepare and submit to the board of
directors a schedule of dates and matters to be
considered; organise and coordinate the periodic
evaluation of the board as well as, where applicable, the
chief executive of the company, should be responsible for
leading the board and the effectiveness of its work;
ensuring that sufficient time is devoted to considering
strategic issues, and approve and supervise refresher
courses for each director when circumstances make this
advisable.
Complies x          Complies partially          Explain
34.That when there is a lead independent director, the
articles of association or Board regulations should confer
upon him or her the following powers in addition to those
conferred by law: to chair the board of directors in the
absence of the chairman and deputy chairmen, should
there be any; to reflect the concerns of non-executive
directors; to liaise with investors and shareholders in order
to understand their points of view and respond to their
concerns, in particular as those concerns relate to
corporate governance of the company; and to coordinate
a succession plan for the chairman.
Complies x    Complies partially    Explain    Not applicable
35.That the secretary of the board of directors should pay
special attention to ensure that the activities and
decisions of the board of directors take into account the
recommendations regarding good governance contained
in the Good Governance Code as may be applicable to the
company.
Complies x Explain
36.That the board of directors meets in plenary session once
a year and adopt, where appropriate, an action plan to
correct any deficiencies detected in the following:
•Quality and efficiency of the proceedings of the board.
•Proceedings and composition of its committees.
•Diversity of board membership and competences.
•Performance of the chairman of the board of directors
and of the chief executive officer of the company.
•Performance and input of each director, paying special
attention to those in charge of the various board
committees.
In order to perform its evaluation of the various
committees, the Board of Directors shall take a report
from the committees themselves as a starting point and
for the evaluation of the Board, a report from the
nomination committee..
Every three years, the Board of Directors will turn for its
evaluation to an external advisor, whose independence
shall be verified by the nomination committee.
Business relationships between the external adviser or
any member of the adviser’s group and the company or
any company within its group must be specified in the
annual corporate governance report.
The process and the areas evaluated must be described in
the annual corporate governance report.
Complies x          Complies partially          Explain
37.That if there is an executive committee, it must contain at
least two non-executive directors, at least one of whom
must be independent, and its secretary must be the
secretary of the Board
Complies x    Complies partially    Explain    Not applicable
38.That the board of directors must always be aware of the
matters discussed and decisions taken by the executive
committee and that all members of the board of directors
receive a copy of the minutes of meetings of the executive
committee..
Complies x    Complies partially    Explain    Not applicable
39.That all members of the audit committee, in particular its
chairman, be appointed in consideration of their
knowledge and experience in accountancy, audit and risk
management issues, both financial and non-financial..
Complies x    Complies partially    Explain    Not applicable
40.That under the supervision of the audit committee, there
should be a unit in charge of the internal audit function,
which ensures that information and internal control
systems operate correctly, and which reports to the non-
executive chairman of the board or of the audit
committee.
Complies x    Complies partially    Explain    Not applicable
41.That the person in charge of the unit performing the
internal audit function should present an annual work plan
to the audit committee, for approval by that committee or
by the board, reporting directly on its execution, including
any incidents or limitations of scope, the results and
monitoring of its recommendations, and present an
activity report at the end of each year.
Complies x    Complies partially    Explain    Not applicable
42.That in addition to the provisions of applicable law, the
audit committee should be responsible for the following:
1) With regard to information systems and internal control:
a)Overseeing and evaluating the process of preparation
and the completeness of financial and non-financial
information, as well as the control and management
systems for financial and non-financial risk relating to
the company and, where applicable, the group -
including operational , technological, legal, social,
environmental, political and reputational risk, or risk
related to corruption- reviewing compliance with
regulatory requirements, the appropriate delimitation
of the scope of consolidation and the correct
Inditex Annual Report 2022 / Annual Corporate Governance Report
176
application of accounting criteria.
b)Ensuring the independence of the unit charged with
the internal audit function; proposing the selection,
appointment and dismissal of the head of internal
audit; proposing the budget for this service; approving
or proposing its orientation and annual work plans for
approval by the Board, making sure that its activity is
focused primarily on material risks (including
reputational risk); receiving periodic information on its
activities; and verifying that senior management takes
into account the conclusions and recommendations of
its reports
c)Establishing and overseeing a mechanism that allows
employees and other persons related to the company,
such as directors, shareholders, suppliers, contractors
or subcontractors, to report any potentially serious
irregularities, especially those of a financial or
accounting nature, that they observe in the company
or its group. This mechanism must guarantee
confidentiality and in any case provide for cases in
which the communications can be made anonymously,
respecting the rights of the whistleblower and the
person reported.
d)Generally ensuring that internal control policies and
systems are effectively applied in practice
2) With regard to the external auditor:
a)In the event that the external auditor resigns, examining
the circumstances leading to their resignation.
b)Ensuring that the remuneration paid to the external
auditor for its work does not compromise the quality of
the work or the auditor’s independence..
c)Making sure that the company informs the CNMV of the
change of auditor, along with a statement on any
differences that arose with the outgoing auditor and,
where applicable, the contents thereof.
d)Ensuring that the external auditor holds an annual
meeting with the Board of Directors in plenary session
in order to make a report regarding the tasks
performed and the development of the company's
accounting situation and risks..
e)Ensuring that the company and the external auditor
comply with applicable rules regarding the provision of
services other than auditing, limits on the concentration
of the auditor’s business, and, in general, all other rules
regarding auditors' independence.
Complies x          Complies partially          Explain
43.That the audit committee be able to require the presence
of any employee or manager of the company, even
stipulating that he or she appear without the presence of
any other member of management..
Complies x          Complies partially          Explain
44.That the audit committee be kept abreast of any corporate
and structural changes planned by the company in order
to perform an analysis and draw up a prior report to the
Board of Directors on the economic conditions and
accounting implications and, in particular, any exchange
ratio involved.
Complies x    Complies partially    Explain    Not applicable
45.That the risk management and control policy identify or
determine, as a minimum:
a)The various types of financial and non-financial risks
(including operational, technological, legal, social,
environmental, political and reputational risks and risks
relating to corruption) that the company faces,
including among the financial or economic risks
contingent liabilities and other off-balance sheet risks.
b)An enterprise risk management model based on
different levels, which will include a specialised risk
committee when sector regulations so require, or the
company considers it to be appropriate..
c)The level of risk that the company considers to be
acceptable.
d)Measures in place to mitigate the impact of the risks
identified in the event that they should materialise.
e)Internal control and information systems to be used in
order to control and manage the aforementioned risks,
including contingent liabilities or off-balance sheet
risks.
Complies x          Complies partially          Explain
46.That under the direct supervision of the audit committee
or, where applicable, of a specialised committee of the
Board of Directors, an internal risk control and
management function should exist, performed by an
internal unit or department of the company that is
expressly charged with the following responsibilities:
a)Ensuring the proper functioning of the enterprise risk
management systems and, in particular, that they
adequately identify, manage and quantify all material
risks affecting the company.
b)Actively participating in drawing up the risk strategy
and in important decisions regarding risk management.
c)Ensuring that the enterprise risk management systems
adequately mitigate risks as defined by the policy set
forth by the Board of Directors.
Complies x          Complies partially          Explain
177
47.That in designating the members of the nomination and
remuneration committee–or of the nomination committee
and the remuneration committee if they are separate–
efforts are made to ensure that they have the knowledge,
skills and experience appropriate to the functions that
they are called upon to perform and that the majority of
said members are independent directors.
Complies x          Complies partially          Explain
48.That large-cap companies have separate nomination and
remuneration committees.
Complies x          Complies partially          Explain
49.That the nomination committee consult with the chairman
of the Board of Directors and the chief executive of the
company, especially in relation to matters concerning
executive directors.
And that any director be able to ask the nomination
committee to consider potential candidates that he or she
considers suitable to fill a vacancy on the board of
directors
Complies x          Complies partially          Explain
50.That the remuneration committee operates independently
and that, in addition to the functions it has been assigned
by statute, it should be responsible for the following:
a)Proposing to the board of directors the basic terms and
conditions of employment for senior management.
b)Verifying compliance with the company's remuneration
policy.
c)Periodically reviewing the remuneration policy applied
to directors and senior managers, including share-
based remuneration systems and their application, as
well as ensuring that their individual remuneration is
proportional to that received by the company's other
directors and senior managers.
d)Making sure that potential conflicts of interest do not
undermine the independence of external advice given
to the committee.
e)Verifying the information on remuneration of directors
and senior managers contained in the various
corporate documents, including the annual report on
director remuneration.
Complies x          Complies partially          Explain
51.That the remuneration committee should consult with the
chairman and the chief executive of the company,
especially on matters relating to executive directors and
senior management.
Complies x          Complies partially          Explain
52.That the rules on membership and proceedings of the
supervision and control committees should appear in the
regulations of the Board of Directors and that they should
be consistent with those applying to legally mandatory
committees in accordance with the foregoing
recommendations, including:
a)That they be composed exclusively of non-executive
directors, with a majority of independent directors
b)That their chairpersons be independent directors.
c)That the board of directors appoints members of these
committees taking into account their knowledge, skills
and experience and the duties of each committee;
discuss their proposals and reports; and require them
to render account of their activities and of the work
performed in the first plenary session of the Board of
Directors held after each committee meeting.
d)That the committees be allowed to avail themselves of
outside advice when they consider it necessary to
perform their duties.
e)That their meetings be recorded and their minutes be
made available to all directors.
Complies x    Complies partially    Explain    Not applicable
53.That verification of compliance with the company's
policies and rules on environmental, social and corporate
governance matters, and with the internal codes of
conduct be assigned to one or divided among more than
one committee of the Board of Directors, which may be
the audit committee, the nomination committee, a
specialised committee on sustainability or corporate
social responsibility or any other specialised committee
that the Board of Directors, in the exercise of its powers of
self-organisation, may have decided to create. And that
this committee be composed exclusively of non-executive
directors, with a majority of these being independent
directors, and that the minimum functions indicated in the
next recommendation be specifically assigned to it.
Complies x          Complies partially          Explain
54.The minimum functions mentioned in the foregoing
recommendation are the following:
a)Monitoring compliance with the company’s internal
codes of conduct and corporate governance rules, also
ensuring that the corporate culture is aligned with its
purpose and values.
b)Monitoring the application of the general policy on
disclosure of economic and financial information, non-
financial and corporate information and communication
with shareholders and investors, proxy advisors and
other stakeholders. The manner in which the entity
communicates and handles relations with small and
medium-sized shareholders must also be monitored.
Inditex Annual Report 2022 / Annual Corporate Governance Report
178
c)The periodic evaluation and review of the company’s
corporate governance system, and environmental and
social policy, with a view to ensuring that they fulfil their
purposes of promoting the interests of society and take
account, as appropriate, of the legitimate interests of
other stakeholders
d)Oversee the company's environmental and social
practices to ensure that they are in alignment with the
established strategy and policy.
e)Oversee and evaluate the company’s interaction with
its different stakeholders..
Complies x          Complies partially          Explain
55.That environmental and social sustainability policies
identify and include at least the following:
a)The principles, commitments, objectives and strategy
relating to shareholders, employees, customers,
suppliers, social issues, the environment, diversity, tax
responsibility, respect for human rights, and the
prevention of corruption and other unlawful conduct.
b)Means or systems for monitoring compliance with
these policies, their associated risks, and management.
c)Mechanisms for supervising non-financial risk,
including that relating to ethical aspects and aspects of
business conduct.
d)Channels of communication, participation and dialogue
with stakeholders..
e)Responsible communication practices that impede the
manipulation of data and protect integrity and honour.
Complies x          Complies partially          Explain
56.That director remuneration be sufficient in order to attract
and retain directors who meet the desired professional
profile and to adequately compensate them for the
dedication, qualifications and responsibility demanded of
their posts, while not being so excessive as to
compromise the independent judgement of non-executive
directors
Complies xExplain
57.That only executive directors should receive variable
remuneration linked to corporate results and personal
performance, as well as remuneration in the form of
shares, options or rights to shares or instruments
referenced to the share price and long-term savings plans,
such as pension plans, retirement schemes or other
provident schemes.
Consideration may be given to delivering shares to non-
executive directors as remuneration providing this is
conditional upon their holding them until they cease to be
directors. The foregoing shall not apply to shares that the
director may need to sell in order to meet the costs related
to their acquisition.
Complies x          Complies partially          Explain
58.That as regards variable remuneration, remuneration
policies should incorporate the necessary limits and
technical safeguards to ensure that this remuneration is in
line with the professional performance of its beneficiaries
and not based solely on general developments in the
markets or in the sector in which the company operates,
or other similar circumstances.
And, in particular, that variable remuneration components:
a)Are linked to pre-determined and measurable
performance criteria and that said criteria take into
account the risk incurred to achieve a given result.
b)Promote the sustainability of the company and include
non-financial criteria that are geared towards creating
long term value, such as compliance with the
company's rules and internal operating procedures and
with its risk management and control policies.
c)Are based on balancing the attainment of short-,
medium- and long-term objectives, so as to allow
remuneration of continuous performance over a period
long enough to be able to assess its contribution to the
sustainable creation of value, in such a way that the
elements used to measure performance are not
associated only with one-off, occasional or
extraordinary events.
Complies x    Complies partially    Explain    Not applicable
59.That the payment of variable remuneration components
be subject to sufficient verification that previously
established performance or other conditions have
effectively been met. Entities must include in their annual
report on director remuneration the criteria for the time
required and methods used for this verification depending
on the nature and characteristics of each variable
component.
That, additionally, companies consider the inclusion of a
reduction ('malus') clause for the deferral of the payment
of a portion of variable remuneration components that
would imply their total or partial loss if an event were to
occur prior to the payment date that would make this
advisable.
Complies x    Complies partially    Explain    Not applicable
60.That remuneration related to company results should take
into account any reservations that might appear in the
external auditor’s report and that would diminish said
results.
Complies x    Complies partially    Explain    Not applicable
61.That a material portion of executive directors' variable
remuneration be linked to the delivery of shares or
financial instruments referenced to the share price.
Complies x    Complies partially    Explain    Not applicable
179
62.That once shares or options or financial instruments have
been allocated under remuneration schemes, executive
directors be prohibited from transferring ownership or
exercising options or rights until a term of at least three
years has elapsed.
An exception is made in cases where the director has, at
the time of the transfer or exercise of options or rights, a
net economic exposure to changes in the share price for a
market value equivalent to at least twice the amount of his
or her fixed annual remuneration through the ownership of
shares, options or other financial instruments.
The forgoing shall not apply to shares that the director
may need to sell in order to meet the costs related to their
acquisition or, following a favourable assessment by the
nomination and remuneration committee, to deal with any
extraordinary situations that may arise and so require.
Complies x    Complies partially    Explain    Not applicable
63.That contractual arrangements should include a clause
allowing the company to demand reimbursement of the
variable remuneration components in the event that
payment was not in accordance with the performance
conditions or when payment was made based on data
subsequently shown to have been inaccurate.
Complies x    Complies partially    Explain    Not applicable
64.That payments for contract termination should not exceed
an amount equivalent to two years of total annual
remuneration and should not be paid until the company
has been able to verify that the director has fulfilled all
previously established criteria or conditions for payment.
For the purposes of this recommendation, payments for
contractual termination will be considered to include any
payments the accrual of which or the obligation to pay that
arises as a consequence of or on the occasion of the
termination of the contractual relationship between the
director and the company, including amounts not
previously vested of long-term savings schemes and
amounts paid by virtue of post-contractual non-
competition agreements
Complies x    Complies partially    Explain    Not applicable
Inditex Annual Report 2022 / Annual Corporate Governance Report
180
Further information of interest
1. If there is any significant aspect regarding corporate
governance in the company or other companies in the group
that has not been included in other sections of this report, but
that must be included in order to provide a more
comprehensive and reasoned picture of the structure and
governance practices in the company or its group, describe
them briefly below.
2. This section may also be used to provide any other
information, explanation or clarification relating to previous
sections of the report, so long as it is relevant and not
repetitive.
Specifically, indicate whether the company is subject to any
corporate governance legislation other than that of Spain and,
if so, include any information required under this legislation
that differs from the data required in this report.
3. The company may also indicate whether it has voluntarily
subscribed to other ethical or best practice codes, whether
international, sector-based, or other. In this case, name the
code in question and the date on which the company
subscribed to it. Specific mention must be made as to
whether the compan
The codes and global commitments undertaken voluntarily by
INDITEX include:
–UNI GLOBAL UNION (www.uniglobalunion.org). It
encourages respect and promotion of fundamental rights
and decent work within the retail and distribution network.
Date of endorsement: 2 October 2009.
–The United Nations Global Compact
(www.globalcompact.org). A United Nations initiative that
encourages social dialogue between companies and the
civil society. Date of endorsement: 31 October 2001.
–Ethical Trading Initiative (ETI) (www.ethicaltrade.org). A
dialogue platform to improve working conditions of workers
across the supply chains. It is an alliance of companies,
international trade unions, and non-governmental
organisations. Date of endorsement: 17 October 2005.
–Global Framework Agreement with IndustriALL Global Union
(formerly, ITGLWF) (www.industriall-union.org). To promote
fundamental human and social rights within Inditex’s supply
chain, including the definition of mechanisms of joint action
within the supply chain to implement the Code of Conduct
for Manufacturers and Suppliers. Date of endorsement: 4
October 2007. Inditex and IndustriALL executed on 4 May
2012 the “Protocol to define the involvement of trade unions
in the reinforcement of the International Framework
Agreement within Inditex’s supply chain.” On 8 July 2014, the
Framework Agreement was renewed by both parties at ILO
headquarters in Geneva, Switzerland. A new Agreement was
executed on 25 April 2016 between Inditex and IndustriALL,
that introduces the concept of “union experts” to enforce the
Global Framework Agreement. The Global Framework
Agreement was renewed on 13 November 2019. At this new
stage, both parties have agreed to set up a Global Union
Committee on which worker representatives from each of
the Inditex Group’s key areas of production will sit.
–Zero Discharge of Hazardous Chemicals (ZDHC): Multi-
stakeholder organisation comprising brands and
representatives of the supply chains of the textile and
footwear industry committed to the elimination of certain
chemicals in the textile and footwear product manufacturing
process. Date of execution: 27 November 2012.
–The ILO's Better Work Programme (www.betterwork.org).
Platform to improve compliance with labour regulations and
competitiveness of global supply chains. Date of
endorsement: October 2007. In the course of this
partnership, Inditex and Better Work executed on 9 October
2013 a specific partnership agreement whereby Inditex
became a direct buyer partner of the Better Work
programme.
–CEO Water Mandate (www.ceowatermandate.org). A United
Nations initiative to support companies in the development,
implementation and disclosure of their water-related
strategies and policies. Date of endorsement: 30 June 2011
–Sustainable Apparel Coalition (www.apparelcoalition.org). An
initiative of the textile sector to set in train a joint sustainable
index to assess the environmental performance of retail
brands, suppliers and products. Date of endorsement: 20
October 2011..
–Textile Exchange (www.textileexchange.org): we are
members of Textile Exchange, a global non-profit
organisation with the mission of inspiring and equipping
people to accelerate the adoption of preferred materials
through clear and actionable guidance.
–Better Cotton Initiative (www.bettercotton.org). An initiative
that develops and promotes best practices in the traditional
growing of cotton to benefit the farmers and the
environment, and to ensure the future of the sector. Date of
endorsement: 1 July 2011
–Code of Good Tax Practices. It encourages a mutually
cooperative relationship between the Tax Administration
Authority of Spain and the companies. Date of endorsement:
21 September 201
–Cooperation Agreement between the Ministry of Health and
Consumption and the fashion sector in Spain. It promotes
the defence and encouragement of the rights of Spanish
customers in the world of fashion, namely as regards
creating and encouraging a healthy-looking appearance.
– Cotton Campaign: this is an initiative led by companies and
organisations of the third sector to improve working
conditions and defend Human Rights in the production and
supply of cotton. Date of endorsement: 26 October 2012.
181
–International Accord (https://internationalaccord.org/).
Agreement signed in 2021 by brands and international trade
unions, witnessed by non-governmental organisations to
honour the commitment to continue and expand the efforts
towards a safe and healthy textile industry, based on the
principles first upheld in Bangladesh in 2013. Inditex is a
founding member and serves on its Steering Committee.
The International Accord recognises the RMG Sustainability
Council (RSC) as an independent organisation that
continues the efforts in Bangladesh. Date of execution: 1
September 2021
–Fur Free Alliance (www.infurmation.com). Inditex is a
member of the Fur Free Retailer Program of the Fur Free
Alliance. The Fur Free Alliance is an international coalition of
animal protection organisations working to bring an end to
the exploitation and killing of animals for their fur. Date of
endorsement: 1 January 2014.
–ACT (Action Collaboration Transformation): an initiative of
international brands & retailers, manufacturers, and trade
unions to address the issue of living wages in the textile and
garment supply chain. In development thereof, a
Memorandum of Understanding was subscribed by ACT’s
brands and IndustriALL Global Union to establish within the
supply chains the principles of freedom of association,
collective bargaining and living wages. Date of execution: 13
March 2015.
–Canopy: As founders of the Canopy Style initiative we
collaborate with the Canopy organisation to protect primary
high conservation-value (HCV) forests, and are particularly
committed to ensuring that no cellulose originating in such
forests will be used in man-made fibres (viscose, modal,
Lyocell).
–CEOE (Spain’s Employers’ Association): We cooperate
actively with CEOE, the main spokesperson between
companies in Spain and the Government and international
institutions. Inditex is part of a number of work groups linked
to different sustainability and circularity related issues.
–Red Cross: We have been collaborating with the Red Cross
since 2004 in a number of emergency relief programmes
linked to natural disasters and similar crises. Over the course
of the last 18 years we have cooperated to tackle emergency
situations in countries such as India, China, Japan, Mexico,
Australia, Italy and Spain, among others. We also have a
stable arrangement with the Red Cross through
programmes such as Salta or our used garments collection
programme.
–Organic Cotton Accelerator (OCA Foundation). One of the
founding partners of OCA Foundation in 2016 and member
of the Investment Committee, being actively committed to
contributing to develop a responsible and healthy market of
organic cotton for all parties involved.
–International Labour Organization (ILO): Execution of a global
Public-Private Partnership aimed at promoting respect for
the fundamental principles and rights at work in the cotton
sector. Date of execution: 11 May 2017. Inditex has also joined
ILO’s Global Business and Disability Network that aims at
creating an inclusive work culture respectful of disability
worldwide. They encourage employment policies and
practices inclusive of disabled people across every
environment and help raise awareness among businesses
for disability inclusion to be a pillar of their social
commitment. Date of execution: 25 January 2023
–Open for Business: Coalition of leading global companies
dedicated to LGBT+ inclusion and the rights of the LGBT+
community (lesbian, gay, bisexual and transgender) to prove
that inclusive societies are better for business and that
companies that promote LGBT+ inclusion are more
dynamic, productive and innovative. Inditex joined this
coalition in 2016.
–Open to All: Inditex is a supporter of Open to All and one of
the brands that signed in 2022 the “Mitigate Racial Bias in
Retail Charter”, a campaign led by retailers in the US to
combat racial discrimination and make everyone visiting our
stores feel welcome irrespective of their race, ethnicity,
origin, gender, sexual orientation, gender identity and
expression, religion or disability.
–Fashion Industry Charter for Climate Change. The Fashion
Industry Charter was subscribed with the UN Climate
Change Office. Aligned with the goals of the Paris
Agreement, the Charter has set an initial target of 30% GHG
emission reduction by 2030. Date of execution: 28
November 2018.
–Better Than Cash Alliance. Based in the UN, this is an
alliance of governments, companies and large international
organisations that seek to globally promote the transition to
a digital economy. Inditex is focused on achieving
digitalisation and financial education across its supply chain.
Inditex became a member in November 2018.
–Sustainable Fibre Alliance (SFA): Non-profit international
organisation that works with the extended cashmere supply
chain, from herders to retailers. Its goal is to promote a
global sustainability standard for cashmere production in
order to preserve and restore grasslands, ensure animal
welfare and secure livelihoods. Year of endorsement: 2019.
–Tent Partnership for Refugees: Founded by Tent Foundation,
a non-profit organisation, this is a global network of more
than 200 companies that seeks to mobilise the private
sector to create partnerships to improve the lives of
refugees.
–The Fashion Pact (https://thefashionpact.org/): Global
coalition of companies in the fashion industry committed to
key specific common goals to meet the challenges that the
industry faces to stop climate change, preserve the oceans
and restore biodiversity. Date of endorsement: 23 August
2019.
Inditex Annual Report 2022 / Annual Corporate Governance Report
182
–Global Fashion Agenda (GFA) (https://
globalfashionagenda.com/): The Company continues to
strive to improve and sustain the circularity commitments
made to the GFA and achieved in 2020, known as GFA 2020
Commitments. Our stores continue offering the used
garments collection programme, we continue training our
design teams in circularity and we have stepped up our
activity to scale up textile to textile recycling. Inditex has
been a signatory since 11 May 2017. 11 May 2017.
–Accelerating Circularity: A collaborative project of the
garment industry that brings together the efforts of various
operators from areas ranging from waste collection,
recycling, fibre production or textile distribution, to promote
circularity. With the support of Textile Exchange, Euratex,
Wrap, Circle Economy, Fashion for Good, ReFashion or
Apparel Impact Institute among others, Inditex is a founding
partner and member of the Steering Committee of the
initiative in Europe. We also belong to the initiative's Brand &
Retailer Working Group in the US
–ASA. Action for Social Advancement: Since 2022, we have
been collaborating with Action for Social Advancement
(ASA), along with Laudes Foundation, IDH The Sustainable
Trade Initiative and WWF India, to promote regenerative
agriculture, ecosystem restoration and community well-
being in a 300,000 hectares area in the Indian states of
Madhya Pradesh and Odisha. The initiative seeks to improve
soil quality and biodiversity, optimise water management
and reduce greenhouse gas emissions.
–United Nations High Commissioner for Refugees (UNHCR):
Inditex and UNHCR have been working together since 2020
with the common goal of protecting the rights and well-
being of refugees and internally displaced people. Through
this strategic partnership, Inditex, in collaboration with its
suppliers, supports UNHCR in its task of sheltering refugees
who have been forced to abandon their homes and helping
to restore their dignity.
–Arborus: Inditex collaborates since 2018 with the Arborus
Endowment Fund, created by the Arborus association and
large international corporations, with the support of the
European Economic and Social Council. Its goal is to
promote equality between women and men in the world, in
particular through the dissemination of a European and
global standard: the European and international label GEEIS
(Gender Equality European and International Standard),
which is a tool that fosters diversity and inclusion in
enterprises and with which Inditex has certified several of its
subsidiaries.
–Artic Corporate Shipping Pledge: An Ocean Conservancy
initiative that seeks that consumer goods companies and
shipping logistics operators avoid the Arctic Trans-Shipment
Routes to protect the region’s communities, marine life and
ecosystems. Inditex joined this organisation in 2021.
–Istanbul Textile and Apparel Exporter Association (ITKIB): In
Türkiye, we have established a long and fruitful collaboration
with ITKIB (Istanbul Textile and Apparel Exporter
Associations) and EKOTEKS (the customs surveillance
laboratory), to develop new techniques for the analysis of
cosmetics and sustainable fibres.
–Asociación Española para la Calidad (AEC) (Spanish
Association for Quality): We are a member of the Asociación
Española para la Calidad as we sit on the Fashion Industries
committee. A large number of Spanish companies from the
fashion industry sit on this committee that aims at driving
competitiveness within the industry through quality and
sustainability.
–Asociación Nacional de Perfumería y Cosmética (Stanpa)
(National Perfumery and Cosmetics Association): We are a
member of the Asociación Nacional de Perfumería y
Cosmética, that represents and promotes a competitive,
dynamic, innovating and sustainable industry, committed to
ensuring people’s care and well-being. Date of
endorsement: 10 November 2021
–AFIRM GROUP: working forum of leading brands in the
fashion, footwear and sport goods sector who share the
common goal of reducing the use and impact of harmful
substances across the textile and leather supply chain.
–Partnership for Sustainable Economic Recovery: initiative
promoted in  2020 by Ecodes and the Spanish Green
Growth Group, among others, to advocate for economically
and socially effective stimulus policies and in turn to ensure
they are aligned with sustainability and biodiversity policies.
–Business for Social Responsibility (BSR): Global non-profit
organisation that works with a network of more than 200
members to build a fair and sustainable world. Inditex has
been a member of BSR since 2019 and takes part in several
of BSR’s initiatives, such as the HER Project to promote
women’s empowerment or projects on the social impact of
the transition into a circular economy.
–UN Business Ambition for 1.5°C: Inditex joined in 2020 this
urgent call for action from UN Global Compact, for a global
coalition of business and industry leaders to commit their
companies to set science-based emission reduction targets.
–Race to Zero: a campaign under the umbrella of the United
Nations Framework Convention on Climate Change
(UNFCCC) aimed at driving the change to a decarbonised
economy. Inditex has been involved in the Race to Zero
initiative since it was launched on 05/06/2020.
–Business for Nature: Business for Nature is a global coalition
that brings together forward-thinking companies and
conservation organisations aimed at demonstrating and
amplifying a credible business voice on nature calling for
governments to adopt policies to reverse nature loss in this
decade. Inditex has signed up its Call to Action. Date: 27
September 2021
–Business for Societal Impact (B4SI): Global standard,
formerly known as LBG, to measure corporate social impact.
Inditex belongs to the global B4SI network which currently
comprises more than 150 companies.
–The Fashion Industry Charter for Climate Action (UNFCCC):
Inditex is a signatory of the Charter with the UN Climate
Change Office, aligned with the goals set in the Paris
Agreement, to be climate-neutral by 2050 (net-zero GHG
emissions). The Fashion Industry Charter was launched in
December 2018 at the COP24 summit in Katowice, Poland.
183
–Covid-19: Action in the global garment industry: this initiative
aims to catalyse action from across the global garment
industry to support manufacturers to survive the economic
disruption caused by the COVID-19 pandemic and to protect
garment workers’ income, health and employment. This call
to action has been coordinated in 2020 by the International
Organisation of Employers (IOE), the International Trade
Union Confederation (ITUC) and IndustriALL Global Union
together with international brands, with the technical support
of the International Labour Organization (ILO). Inditex is a
member of the international working group convened by ILO
to implement it.
–CIQ Shanghai: We participate in the Pre-Testing Programme
with CIQ Shanghai which belongs to the China Customs
Inspection and Quarantine Department reserved for
companies with a very high level of compliance with health
regulations on imported goods.
–Disability:In: With a network of over 400 corporations
Disability:IN is a non-profit organisation that works to expand
opportunities for people with disabilities across enterprises
and for people with disabilities to participate fully and
meaningfully in an inclusive global economy. Based in the
US, Disability:IN also promotes accessible innovation for all
and the creation of inclusive work environments. Inditex has
been a corporate partner of the organisation since 2022.
–REDI (Business Network for LGTB+ Diversity and Inclusion):
Inditex is a member of REDI, Spain’s first inter-company and
expert network for diversity and inclusion of LGBTI
employees and allies, since 2018. REDI aims to nurture an
inclusive and respectful environment in organisations that
appreciate talent, regardless of sexual identity, gender
expression and sexual orientation.
–Foro Social de la Moda [Fashion Industry Social Forum]:
This forum was founded in 2018 as a joint initiative involving
organisations in the third sector, local unions affiliated with
IndustriALL Global Union (CCOO and UGT) and various
Spanish textile brands including Inditex. It provides a forum
for dialogue on global supply chains between various
stakeholders.
–Euratex Rehubs: As a founding partner, in 2021 Inditex joined
the Business Council of the ReHubs initiative developed by
Euratex to set up five recycling centres in Europe with the
aim of collecting, processing and recovering textile waste.
–Fashion for Good: global initiative for accelerating innovation
specialising in the textile sector. Through this platform,
brands, producers, suppliers, non-profit organisations and
innovators work together to scale sustainable solutions. At
Inditex we participated in a study on the actual typology of
post-consumer textile waste according to its characteristics
and composition. The goal is to gauge textile waste sorting
capacities in Europe. Inditex began collaborating with this
organisation in 2021.
–Four Paws: We have had a public positioning against
mulesing since 2022, in an initiative led by global animal
welfare organisation Four Paws that seeks to stop this
practice from the wool industry. This initiative is currently
supported by over 50 brands worldwide.
–Massachusetts Institute of Technology (MIT): Inditex has
partnered with the Massachusetts Institute of Technology
(MIT) in the MIT-MISTI (International Science and
Technology Initiatives) initiative to research the development
of recycling processes and the creation of textile fibre
processes through new clean methods, or from waste, or
any other sustainable initiative related to the circular
economy in the textile industry. We have endowed the
Inditex Materials Science and Engineering Fellowship Fund
Chair at MIT’s Department of Materials Science and
Engineering. This lifelong chair focuses on promoting
research into sustainability.
–MIT Climate and Sustainability Consortium (MCSC): Inditex is
part of the group of founding companies of the MIT Climate
and Sustainability Consortium (MCS), created in 2021 with
the aim of accelerating the development of large-scale
solutions to combat climate change. The initiative brings
together leading multinationals from various industries to
work with the Massachusetts Institute of Technology (MIT) to
share processes and strategies for environmental
innovation.
–Medicus Mundi: Since 2015, we have been working with this
international NGO founded in 1963 towards the common
goal of promoting the right to health. Through this
partnership, we contribute to improving the social and health
situation for workers in the garment industry in Morocco.
–Médecins Sans Frontières (MSF): Since 2008 we have been
cooperating with the medical-humanitarian endeavours of
Médecins Sans Frontières/Doctors Without Borders (MSF)
to help people threatened by armed conflict, epidemics,
natural disasters or exclusion from medical care. As a result
of this strategic partnership in community investment, we
have rolled out projects in 52 countries that have benefited
more than six million people.
–NAACP Legal Defense and Educational Fund: NAACP Legal
Defense and Educational Fund is the foremost US legal
organisation advocating for racial justice. Inditex
collaborates with this organisation to finance projects
primarily in the area of education that seek to improve
access for African-American students, bringing about
structural changes in society to eliminate disparities and
achieve racial equality. NAACP LDF works for civil rights and
to improve the quality of education.
–Shift: non-profit organisation specialising in Human Rights
led by Professor John Ruggie, the author of the UN Guiding
Principles on Business and Human Rights. Inditex has been
a participant of Shift’s Business Learning Program since
2018. This leading program in Human Rights involves
companies of all sectors willing to work towards
implementing the Guiding Principles.
Inditex Annual Report 2022 / Annual Corporate Governance Report
184
–RMG Sustainability Council (RSC): The RMG Sustainability
Council (RSC) is the Bangladeshi organisation that continues
the inspection and remediation efforts in production facilities
to ensure building security, taking over from Accord in 2020.
The same number of representatives from each of its three
constituents: textile industry brands, trade union federations
and employers’ associations in the country sit on its board of
directors. Inditex works actively with its suppliers and
manufactures in the programmes above and is a member of
its board of directors.
–Plena Inclusión (Full Inclusion): association that works in
Spain advocating for the rights of people with intellectual or
development disabilities and their families. Supporting and
actively searching for job opportunities, they help people
with disabilities develop a life quality project and feel that
they are fully included in the society and at the workplace.
Inditex began collaborating with this organisation in 2019.
–Smart Freight Centre: Inditex has joined in 2020 this global
non-profit organisation dedicated to sustainable freight. Its
vision is achieving an efficient and zero-emissions global
logistics sector, contributing to the Paris Agreement targets
and the Sustainable Development Goals. To achieve this, it
brings together the global logistics community through its
Global Logistics Emissions Council (GLEC). The Clean Cargo
initiative joined the Smart Freight Centre family in 2022.
Inditex adhered to Clean Cargo Group in 2020. Its CO2
emission calculation methodology is the shipping standard
used by other initiatives, such as the US Environmental
Protection Agency (EPA) SmartWay programme and the
Global Logistics Emissions Council (GLEC).
–Social & Labor Convergence Program (SLCP): this initiative
provides tools to gather accurate data on working
conditions across global supply chains facilitating data
exchanges and minimising the need for individual social
audits. Inditex has been a member of SLCP since its
inception and has played an active role in reinforcing the
programme in terms of management and contents. Inditex
sits on the SLCP Council representing the interests of the
adhering brands and providing a strategic oversight of the
programme.
– Policy Hub-Circularity for Apparel and Footwear: Inditex
actively collaborates with Policy Hub-Circularity for Apparel
and Footwear, an organisation that brings the textile industry
and its stakeholders together to speed up the sector’s
transformation to a circular model. Inditex has been
collaborating with the Policy Hub since its inception in 2018
as member of the SAC organisation work group.
–UN Uniting Business and Governments to Recover Better:
Inditex signed in 2020, together with some other 150
companies in the Science Based Targets initiative, this joint
statement urging governments across the world to align
their COVID-19 economic aid and recovery efforts with the
latest climate science.
–Alianza país por la pobreza infantil cero [Country Alliance for
Zero Child Poverty]. This initiative was launched by the High
Commissioner against Child Poverty of the Government of
Spain. It seeks to encourage participation and joint alliances
from social players to work together towards a common
goal: a country where all kids and teens have the same
opportunities irrespective of their birth conditions. Inditex
has been a member of the Alliance since January 2021.
–Cargo Owners for Zero Emissions Vessels (COZEV) (https://
www.cozev.org/): This initiative is led by Aspen Institute as
part of its Shipping Decarbonization Initiative (SDI)
programme to accelerate the transition towards zero
emissions vessels and to set a commitment to use only zero
—carbon ocean shipping by 2040. Date of endorsement: 19
October 2021.
–Cáritas: We have been working with this non-profit
organisation since 2007 to help improve well-being in the
community. Within the frame of our strategic partnership
with Cáritas, we are currently developing a number of
projects such as the circular economy project Moda Re- or
the programme to boost employment in Spain.
–Ellen MacArthur Foundation: Within the framework of our
collaboration with the Ellen MacArthur Foundation, we have
signed a 2025 commitment to the New Plastics Economy
launched by the Ellen MacArthur Foundation and the UN
Environment Programme that targets a circular economy for
plastic. Under such commitment, every plastic that we use in
our activity should be reused or recycled so that they can be
reintroduced into the circuit, at the same time that
unnecessary plastic in packaging is reduced and the
percentage of recycled plastic in such packaging is
increased. We are also endorsing its Jeans Redesign project
undertaking to put on sale garments designed focusing on
recycling and durability. Date of endorsement: 12 September
2021.
–Entreculturas: We have been collaborating with the Jesuit-
sponsored NGO since 2001 with the goal of generating
social change through education. Thanks to this partnership,
over the last 20 years we have developed a number of
educational programmes that have directly benefited more
than 1.3 million vulnerable people in Africa, America and
Asia.
–EuroCommerce: Since 16 March 2005, we are actively
involved with EuroCommerce, the largest representative
body of the retail industry in Europe, with over 6 million retail
and wholesale companies from various sectors. We are also
members of its environmental committee and founding
members of its representative body, TEFRIG, made up of
companies from the textile industry.
185
–European Network Against Racism (ENAR): Like the ENAR
Foundation (“European Network Against Racism”, which
advocates racial equality), Inditex envisions a society where
there is full equality, solidarity and well-being for all and
where discrimination against people based on their skin
colour, religion, culture, nationality or origin is not tolerated.
In 2021, the ENAR Foundation granted the Holistic Diversity
Management Certificate to the Inditex network of
Champions of Diversity in Europe, developed in conjunction
with experts in D&I management.
–Every Mother Counts: A charitable organisation dedicated to
helping women receive quality healthcare to prevent infant
and maternal mortality. Our partnership with Every Mother
Counts, which commenced in 2015, has developed (among
others) a number of maternal health projects in countries
such as Bangladesh and the United States.
–Global Reporting Initiative (GRI): GRI is an international non-
profit organisation that provides companies and
organisations with universal sustainability reporting
standards. Inditex has been following the criteria and
guidelines of this international reporting framework since
2007. Inditex is also a member of the GRI Community, a
community of companies from different sectors that
collaborate, demonstrate leadership in reporting and share
knowledge and best practices.
–IFRS Sustainability Alliance: Inditex is a member of the IFRS
Sustainability Alliance that combines the SASB Alliance and
<IR> Business Network. This alliance seeks to provide a
global framework of reference for sustainability reporting
standards to achieve a consistent and comprehensive
corporate reporting system. Inditex has been a member of
the organisation from inception, and as a member of the
<IR> Business Network, has been guided by its principles
since the initiative was launched. It took part in the first pilot
carried out by IIRC in 2011.
–Chinese Institute of Public and Environmental Affairs (IPE):
We work with the Chinese Institute of Public and
Environmental Affairs (IPE) to improve the environmental
management of our supply chain in China and to
disseminate the results of wastewater analyses. We continue
working together to prepare a map to monitor the
performance of textile companies in China.
–LEAF Coalition (https://leafcoalition.org/). Voluntary global
coalition that brings together the private sector and
governments to focus on the protection of tropical forests to
halt deforestation and support sustainable development in
the countries where they are found. Inditex became a
participant in November 2021.
–Leather Working Group (LWG): Inditex is a member of the
Leather Working Group (LWG), an international non-profit
organisation from the leather industry. LWG’s mission is to
guarantee the responsible supply of leather to the industry
and consumers and is committed to driving best practices
and a positive social and environmental change to ensure a
responsible leather production. The LWG standard includes
environmental best practices for the industry and it
promotes continuous improvement.
–London Benchmarking Group Spain (LBG): A methodology
that measures business social impact. Inditex is a member
of LBG Spain, currently composed of 20 companies.
–The Ali Forney Center: The Ali Forney Center (AFC), based in
New York City, is the largest LGBT community centre
helping LGBTQ+ homeless youth in the United States. It
provides them with stable housing as well as support and
integrated services linked to healthcare, education and
safety. Its mission is to empower them with the tools needed
to live independently. Inditex has been a corporate partner of
the organisation since 2022.
–Tsinghua University: Through our partnership with Tsinghua
University, since 2016 we have been involved in a number of
academic programmes related to our community
investment model. Notable are the Sustainable
Development Fund, the Oversea Student Scholarship and
Teaching Fund or the collaboration programme with this
university’s School of Economics and Management, among
others.
–Universidade da Coruña (UDC): As part of our strategic
alliance with Universidade da Coruña (UDC), we have
launched a number of programmes such as Intalent, the
Inditex-UDC Sustainability Chair, the Inditex Chair of Spanish
Language and Culture in Bangladesh or the Inditex-UDC
Predoctoral Residency Grant Programme, among others.
–Universidade de Santiago de Compostela (USC): In the
framework of our community investment, we have been
working together with the University of Santiago de
Compostela since 2010 to develop the Inditex Chair of
Spanish Language and Culture in Bangladesh.
–Universidad Miguel Hernández (UMH): We collaborate with
UMH to develop the TEMPE-APSA Disability and
Employability Chair as part of our community investment
initiatives.
–Universidad Pontificia de Comillas: We collaborate with this
University to run the Inditex Chair of Refugees and Forced
Migrants within the scope of our community investment.
–Universitat de Lleida. A3 Leather Innovation Center in
Igualada: Our collaboration with A3 Center revolves around
the development of the best leather tanning and finishing
technologies, as well as sensitive and versatile methods to
analyse key substances such as formaldehyde and
chromium (IV).
–Universidad Politécnica de Catalunya (UPC): Inditex has
joined forces with the Universitat Politècnica de Catalunya to
research microplastics present in marine ecosystems as a
result of laundry wastewater. The project aims at minimising
detachment of such particles (< 5 mm) from garments, to
prevent their ending up into the sea.
–University of Cambridge: We have joined forces with the
Centre for Risk Studies at the University of Cambridge to
enhance our climate risk assessment model and explore the
resilience of our value chain under different scenarios and
greenhouse gas emissions pathways. Date of execution: 2
March 2020.
Inditex Annual Report 2022 / Annual Corporate Governance Report
186
–University of Dhaka: We have been working together with the
University of Dhaka since 2010 to develop the Inditex Chair
of Spanish Language and Culture. This Chair located at the
University of Dhaka’s Institute of Modern Languages
promotes Spanish language and culture in Bangladesh
through various academic and cultural dissemination
initiatives notably including annual courses in Spanish
language and culture, student mobility grants programme
and the hosting of especially significant artistic events.
–University of Oxford: Inditex has worked since 2019 with
researchers from the University of Oxford to support
innovation in improving well-being and empowerment of
workers across the fashion supply chain. This collaboration
has materialised in a project that seeks to understand the
needs and preferences of workers in Morocco.
–Water.org: We have been working with global non-profit
organisation Water.org since 2015 to improve access to
drinking water and sanitation for vulnerable families in
Bangladesh, Cambodia and India. Through our strategic
alliance with Water.org, over three million people have
improved their access to drinking water and sanitation
through microloans. . Additionally, in 2022 we have launched
a new programme named Water and Climate Fund to carry
out projects to improve water and sanitation infrastructure in
Bangladesh, India, Indonesia and the Philippines. The goal is
to boost efficiency and savings, in addition to helping local
communities gain access to such resource.
–World Wildlife Fund (WWF): In 2022, we entered a global
partnership with WWF to carry out projects aimed at nature
restoration and ecosystem conservation. In addition to
funding projects, the agreement also includes the joint work
of both organisations in transformation projects in the textile
industry aimed at conservation and creating a positive
impact on large ecosystems.
This Annual Corporate Governance Report was approved by the
Board of Directors of the company in the meeting held on 14
March 2023.
Indicate whether any director voted against or abstained from
approving this report.
Yes        No x
Name or company name of the member of the Board of Directors
who has not voted for the approval of this report
Reasons (against, abstention, non attendance))
Explain the reasons
187
ANNUAL REPORT
ON REMUNERATION (ARR)
2022
Issuer Identification
Year-end date:
31/01/2023
Tax Identification Number (CIF):
A-15075062
Company name:
Industria de Diseño Textil, S.A.
Registered office:
Avenida Diputación, Edificio Inditex, Arteixo (A Coruña)
189
About this Report
This Report (the “Report” or the “Annual Report on
Remuneration of Directors”) provides information on
remuneration of directors for the period running from 1 February
2022 through 31 January 2023 (financial year 2022) and offers
detailed information about the Directors’ Remuneration Policy of
INDUSTRIA DE DISEÑO TEXTIL, S.A. (INDITEX, S.A.), (“Inditex”or
the “Company”) for 2023.
This Report has been drawn up by the Remuneration
Committee (the “Remuneration Committee” or the “Committee”)
pursuant to the provisions of section 541 of the Spanish
Companies Act (“LSC” (Spanish acronym) or the “Companies
Act”); Order EEC/461/2013 of 20 March, whereby the contents
and structure of the annual corporate governance report, the
annual remuneration report, and of other information
instruments of listed companies, savings banks and other
entities which issue securities admitted to trading on official
securities markets, are determined, as amended by Order
ECC/2515/2013 of 26 December; Circular 3/2021 of 28
September issued by the National Securities Market
Commission (“CNMV” (Spanish acronym)) amending Circular
4/2013 of 12 June, which provides the standard forms of the
annual report on remuneration of directors of listed companies
and of members of the board of directors or the control
committees of savings banks and other entities that issue
securities admitted to trading on official securities markets and
section 30 of the Board of Directors’ Regulations and section 6
of Inditex’s Remuneration Committee’s Regulations.
This Report is filed in free format, in accordance with the
provisions of CNMV’s Circular 4 of 12 June 2013 (consolidated
text); however, its contents comply with the minimum
requirements established in the regulations above and is
accompanied by the standardised statistical appendix stipulated
therein.
It bears mentioning that for reasons beyond the Company’s
control and on account of CNMV’s own systems, the information
shown in the standardised statistical appendix for financial year
2023 actually refers to Inditex’s financial year 2022, and so on
and so forth for all the previous years.
This Annual Report on Remuneration of Directors for financial
year 2022 was approved by Inditex’s Board of Directors on 14
March 2023, on the proposal of the Remuneration Committee.
As provided in section 541(4) LSC, this Report will be submitted
to an advisory say-on-pay vote at the next Annual General
Meeting as a separate agenda item.
Inditex Annual Report 2022 / Annual Report on Remuneration
190
A. Company remuneration policy
for the current year
A.1.1. Current directors’ remuneration policy for the
current year
Inditex’s Directors’ Remuneration Policy for financial years 2021,
2022 and 2023 was approved at the Annual General Meeting
held on 13 July 2021 (the “2021 AGM”) with 98.42% of votes in
favour.
The Annual General Meeting held on 12 July 2022 (the “2022
AGM”) subsequently approved the amendment to the Policy
with 98.6% of votes in favour. The purpose of the amendment
brought forward by the Board of Directors, following a
substantiated proposal of the Remuneration Committee, was to
adapt the contents of the Policy to the new corporate
governance structure approved in 2021, which took full effect in
financial year 2022, with the full separation of the position of
Chair of the Board of Directors and CEO, with a new Chair
without executive functions, and a single executive director.
The remuneration policy applicable in financial year 2023 is
therefore the policy as set out in the consolidated text of the
Remuneration Policy approved at the 2021 AGM (the
“Remuneration Policy approved at the 2021 AGM”), after its
amendment approved at the 2022 AGM (the “Current Text of
the Remuneration Policy”).
A.1.1. a) Procedures and company bodies involved
in determining, approving and applying the
remuneration policy and its terms and conditions.
The procedures and Company bodies involved in determining
and approving the Remuneration Policy and its terms and
conditions are described below:
1. Annual General Meeting. Pursuant to section 529septdecies
and novodecies LSC and article 31 of the Articles of Association,
the Annual General Meeting shall be responsible for:
•Approving the Directors’ Remuneration Policy, at least every
three years.
•Determining the maximum amount of the annual
remuneration to be paid to all directors in their status as such.
The Board of Directors plans to submit for approval at the 2023
Annual General Meeting the following proposed resolutions as
separate agenda items: (i) the Annual Report on Remuneration
of Directors for the year ended 31 January 2023 (submitted to an
advisory say-on-pay vote); (ii) the Directors’ Remuneration Policy
for financial years 2024, 2025 and 2026; and (iii) approval of a
new cash and shares Long-Term Incentive Plan for the
management team, including the executive directors and other
Inditex Group employees.
2. Board of Directors.Pursuant to sections 249 and 249bis LSC,
the Board of Directors shall have the following powers, which
are non-delegable:
•Decisions relating to remuneration of directors within the
scope of the Articles of Association and of the Remuneration
Policy approved by the General Shareholders’ Meeting.
•The approval of the contracts entered into with the executive
directors including, without limitation, the remuneration items
they may be entitled to for the performance of executive
functions, including the potential severance pay as a result of
early termination, and the amounts to be paid by the Company
as insurance premiums or contributions to savings systems.
3. Remuneration Committee.
Pursuant to the provisions of the Board of Directors’ Regulations
and the Remuneration Committee’s Regulations, below is a
summary of the duties the Committee is entrusted with
regarding determination, enforcement, review and transparency
of the Remuneration Policy:
a) Determination of the Remuneration Policy:
–To propose to the Board of Directors the Directors’
Remuneration Policy as well as the regular review and
update thereof.
–To propose to the Board of Directors the system and
amount of the annual remuneration of directors, to be
submitted to shareholders at the Annual General Meeting.
–To propose to the Board of Directors for approval, the
individual remuneration of executive directors and the
remaining basic terms and conditions of their contracts,
including any potential severance pay or indemnity which
may be payable in the event of termination of the contract by
unilateral decision of the Company and the amounts to be
paid by the Company as insurance premiums or
contributions to savings schemes, pursuant to the provisions
of the internal regulations of the Company and of the
directors’ remuneration policy from time to time in force.
b) Application of the Remuneration Policy:
–To approve at the beginning of each year the targets to
which the annual variable remuneration of executive
directors is tied and evaluate the achievement thereof at the
end of the year. Further to such evaluation, the
Remuneration Committee drafts a proposal on annual
variable remuneration of executive directors that is
submitted to the Board of Directors for approval.
191
–To approve the targets of each cycle of long-term variable
remuneration for executive directors. The Remuneration
Committee carries out an annual evaluation and an overall
evaluation upon expiry of each cycle, of the level of
achievement reached for each target, considering the
information provided by the Company, and proposes to the
Board of Directors for approval, the levels of incentive
associated to achievement, based upon the performance
scales set, and extraordinary factors, as the case may be,
which may have occurred during the performance period of
the plan in question.
The evaluation of targets and the level of achievement
thereof to which long-term annual variable remuneration is
linked, is based upon the results provided by different areas
and departments of the company, pursuant to the terms of
section A.1.10 below. Considering the foregoing, the
Remuneration Committee drafts a proposal on annual
variable remuneration of executive directors which is
submitted to the Board of Directors for approval. In the
proposal on variable remuneration, the Remuneration
Committee also considers the quality of results in the long-
term as well as any risk associated thereto.
–To propose to the Board of Directors the cancellation of
payment or, where appropriate, the refund (clawback) of the
variable items of the remuneration of executive directors
based on results, when these items have been paid on the
basis of information clearly shown later to be inaccurate, as
well as, where appropriate, filing claims or any other
applicable measures.
c) Review of the Remuneration Policy:
–To regularly review the Directors’ Remuneration Policy,
including share-based remuneration systems and the
application thereof, verifying that it is consistent with the
specific circumstances of the Company, and aligned with its
strategy, in the short, mid and long-term, and with market
conditions, considering whether it contributes to building
sustainable value, and to ensuring an appropriate risk
control and management.
d) Transparency of the Remuneration Policy:
–To prepare and submit to the Board of Directors, for
approval, the Annual Report on Remuneration of Directors,
and to verify the information on the remuneration of
directors provided in the corporate documents, the notes to
the annual accounts and in the interim financial statements
of the Company.
The Remuneration Committee meets at least three times a year
and whenever it is deemed appropriate for its smooth
operations, and at any rate, each time the Board of Directors or
its Chairman requests the issuing of a report or the passing of
proposals within its remit.
The Board of Directors or its Chair will request information from
the Remuneration Committee. Likewise, the Committee shall
consider the suggestions made by the Chair, Board members,
officers and/or shareholders of the Company. Moreover, the
Remuneration Committee shall hold a regular meeting every
year to prepare the information on the remuneration of
directors, which the Board of Directors has to approve and
include as part of its annual public documentation.
The Remuneration Committee shall report to the Board of
Directors on the matters discussed and the decisions made,
accounting for its proceedings and work done in the meeting
that the Board of Directors holds immediately after each
meeting of the Remuneration Committee. Additionally, a copy of
all the minutes taken at the Committee’s meetings shall be
made available to all directors.
In accordance with its schedule for financial year 2023, the
Remuneration Committee is expected to hold, at least, 4
meetings.
A.1.1. b) Consideration of comparable companies in
order to establish the Company's Remuneration
Policy
The Remuneration Committee deems essential to regularly
review the Directors’ Remuneration Policy, in line with best
practices on corporate governance endorsed by institutional
investors and the recommendations of the main proxy advisors.
In financial year 2022, in the context of implementing the current
organisational structure, the Remuneration Committee
considered a number of analyses into the external
competitiveness of total remuneration, with the support of an
independent external advisor specialising in director
remuneration, to propose appropriate levels of remuneration for
both the new Chair of the Board of Directors (without executive
functions) and for the CEO for his functions as the only
executive director. These analyses were updated in the first
quarter of financial year 2023 to ensure that they were still
relevant and that the decisions on remuneration taken in
financial year 2022 remained in line with market practice.
In particular, with regard to the remuneration of the (non-
executive) Chair of the Board of Directors, market practice in
relevant European countries has been considered. For this
purpose, the amounts and remuneration practices for the
remuneration of chairs of the board without executive functions
in the companies that make up the main stock market indices
(Ibex-35 in Spain, CAC40 in France, FTSE MIB in Italy, DAX40 in
Germany, SMI 20 in Switzerland and FTSE 100 in the United
Kingdom) have been analysed.
With regard to the CEO, several comparator groups were
considered in financial year 2022, selected on the basis of
sector, size and geographic spread criteria, in line with the
analyses carried out in previous years for the Company's chief
executive. The comparator groups considered are the
following:
•STOXX Europe 50, comprising the 50 companies with the
largest market capitalisation in Europe. This index was
designed by STOXX Ltd.
Inditex Annual Report 2022 / Annual Report on Remuneration
192
•Large Ibex-35 companies comparable in size to Inditex
(Iberdrola, Santander, Telefónica and BBVA).
•Dow Jones Retail Titans 30 Index, made up of the 30 leading
companies of the retail sector. These companies are selected
by Dow Jones based upon ranking by market capitalisation,
revenue and net profit.
In financial year 2023, the findings for the STOXX Europe 50
group and the large Ibex-35 companies have been revised.
A.1.1. c) Information on external advisors.
To better discharge its duties, the Remuneration Committee
may request the Board of Directors to engage legal, accounting,
financial or other experts at the expense of the Company.
In this regard, in the current year to this date, the Remuneration
Committee has been advised, in the exercise of its powers, by
WTW, an independent consultant with experience in the field of
directors’ and senior executives’ remuneration, on preparing this
Report and the aforementioned remuneration benchmarks.
A.1.1. d) Procedures set forth in the current
directors' remuneration policy in order to apply
temporary exceptions to the policy, conditions
under which those exceptions can be used and
components that may be subject to exceptions
according to the policy.
The Current Text of the Remuneration Policy does not allow for
the possibility of applying temporary exceptions.
A.1.2. a) Remuneration mix. Criteria and targets
taken into consideration in their determination and
to ensure an appropriate balance between fixed
and variable remuneration items.
Remuneration of directors in their position as such is fully
comprised of fixed remuneration items.
The executive directors’ total remuneration, the total
remuneration is made up of a fixed element, a short-term or
annual variable element and a long-term or multi-year variable
element, in cash and/or in shares.
Pursuant to the Current Text of the Remuneration Policy, under
a scenario with maximum achievement of targets, the weight of
variable or at-risk remuneration with respect to total
remuneration (considered for these purposes as fixed
remuneration, annual variable remuneration and long-term
incentive annualised according to the share price at the
beginning of each cycle) could represent up to 75% for the CEO.
The remuneration mix of the different remuneration scenarios
based upon target achievement ensures that the fixed
remuneration represents a significant part of total remuneration,
for the purposes of preventing taking any unnecessary risks.
Variable remuneration items to compensate executive
directors, tied to the achievement of Group’s targets, are flexible
enough to allow their shaping, including the possibility to pay no
variable remuneration component under certain circumstances;
in such case, fixed remuneration would represent 100% of total
remuneration. Under no circumstances is variable
remuneration guaranteed.
A.1.2. b) Actions adopted to adapt the
Remuneration Policy to the long-term targets,
values and interests of the Company, and
measures to guarantee that the long-term results
of the company are taken into account in the
Remuneration Policy
In the design of the remuneration scheme, fixed and variable
components are efficiently balanced, as indicated above.
Specifically, pursuant to the Current Text of the Remuneration
Policy, long-term or multi-year variable remuneration, on an
annualised basis and for a maximum target achievement
scenario, has a weighting of less than 40% of total remuneration
of the CEO (considering for these purposes the fixed, short-term
variable and long-term variable remuneration annualised based
on the share price at the beginning of each cycle).
Long-term variable remuneration plans are encompassed in a
multi-year framework (of at least 3 years) to ensure that the
evaluation process is based upon long-term results and that the
underlying economic cycle of the Company and the
achievement of strategic targets is considered therein.
Part of this long-term variable remuneration is granted and
delivered in shares, based upon value creation, so that the
interests of the executive directors and officers are aligned with
those of the shareholders. Specifically, in a scenario of
maximum target achievement, close to 30% of the CEO’s total
variable remuneration would be delivered in shares (this value
considers the share price at the start of each cycle; it does not
take into account the potential change in share price during the
performance period).
The CEO has undertaken to hold the net shares that he may
receive as a result of any element of variable remuneration for a
term of at least 3 years until he holds a number of shares
equivalent to at least 2 years of his fixed remuneration. In any
case, once this shareholding target has been reached, the CEO
must comply with the retention obligations set out from time to
time for shares delivered through incentive schemes. These
courses of action result in a better alignment of the interests of
the CEO with those of the shareholders.
Payment of variable remuneration at Inditex, both annual and
multi-year, is tied to the achievement of sustainability targets
(ESG). These targets are aligned with the Group’s sustainable
strategy, wherein all stakeholders are considered, and allows
rewarding its implementation. Namely, in financial year 2023 the
weight of sustainability objectives on the CEO’s aggregate
variable remuneration is approximately 20%.
193
A.1.2. c) Actions adopted relating to the
remuneration system to reduce exposure to
excessive risks and avoid conflicts of interest and
clauses reducing the deferred remuneration or
obliging the director to return remuneration
received.
(i)Measures taken by the Company to reduce exposure to
excessive risks
The measures taken by the Company to reduce exposure to
excessive risks are:
•Executive directors’ total remuneration comprises different
remuneration items, mainly consisting of: (i) a fixed
remuneration, (ii) a short-term variable remuneration (annual),
and (iii) a long-term (multi-year) variable remuneration. The
remuneration mix in the different remuneration scenarios
based upon achievement of targets, ensures that the fixed
remuneration represents a significant part of aggregate
compensation, for the purposes of preventing taking any
unnecessary risks.
•No guaranteed variable remunerations exist. Variable
remuneration items are flexible enough to allow their shaping,
to the extent that it is possible that no amount is paid in terms
of variable remuneration.
(ii)Measures taken in respect of those categories of staff
whose professional activities may have a relevant impact
on the Company’s risk profile.
The measures taken in respect of those categories of staff
whose professional activities may have a relevant impact on
the Company’s risk profile are:
•The Remuneration Committee is responsible for considering
and reviewing the Directors’ and Senior Managers’
Remuneration Policy and for enforcing it. Those professionals
whose activity may have a relevant impact on the Company’s
risk profile are included in this group.
In addition, the Committee is tasked with conducting regular
reviews of the terms and conditions of the executive directors'
and senior management's contracts and ensuring that they
are consistent with the remuneration policies in force.
•All members of the Remuneration Committee also sit on the
Audit and Compliance Committee. The Audit and
Compliance Committee is responsible for overseeing
enterprise risk management systems in respect of financial
and non-financial risks. The presence of the same directors on
both committees and the reporting to the Board of Directors
by the Chairs of the Remuneration and the Audit and
Compliance Committees on the main matters discussed in the
meetings, ensures that risks associated to remuneration are
considered in the course of the debates of the Remuneration
Committee and of the Audit and Compliance Committee and
in the proposals they submit to the Board of Directors,
regarding both the determination and the evaluation of annual
and multi-year incentives.
•Likewise, three ordinary members of the Remuneration
Committee also sit on the Sustainability Committee. In
particular, the Chair of the Sustainability Committee is a
member of the Remuneration Committee. The Sustainability
Committee is responsible for overseeing and monitoring
proposals in the field of sustainability, on social and
environmental issues, on health and safety of the products
that the Company places on the market, and the relations with
the different stakeholders, and with following up on the
sustainable strategy, evaluating the level of compliance
thereof and, as the case may be, proposing recommendations
to improve the Group’s positioning in the field. Thus, the fact
that the same directors sit on the above referred board
committees allows ensuring that alignment with the Group’s
priorities in the field of sustainability and with those of its
stakeholders is considered upon establishing and enforcing
the Remuneration Policy.
(iii)Measures taken by the Company to avoid potential
conflicts of interest
With regard to the measures set to detect, determine and
resolve any potential conflicts of interest, conflict of interest
scenarios are defined in section 34 of the Board of Directors’
Regulations, which also provides the rules which govern such
conflicts. Sections 33 and 35 to 37 thereof cover the obligation
of non-competition, the use of corporate assets, the use of non-
public information for private purposes and the taking
advantage of business opportunities corresponding to the
Company. Meanwhile, section 39 covers such specific issues
that Directors must report to the Company.
Additionally, section 1 of the Board of Directors’ Regulations
provides that the rules of conduct for directors shall apply,
insofar as they are compatible with their specific nature, to
senior managers of the Company, namely, the following
sections: 32 (duty of confidentiality); 34 (conflicts of interest), with
regard to the duty to inform the Company; 35 (use of corporate
assets); 36 (non-public information); 37 (business opportunities),
and 38 (prohibition to make undue use of the office).
Moreover, with regard to significant shareholders, senior
managers and their related parties, section 40 of the Board of
Directors’ Regulations provides the rules applicable to
“transactions with directors and significant shareholders”. One
of the duties assigned to the Audit and Compliance Committee
consists of assessing and reporting on certain related party
transactions. In light of this report, it is incumbent on the Annual
General Meeting, the Board of Directors or another body with
delegated authority, as the case may be, to approve the
transaction when appropriate.
Meanwhile, section 4.8 of the Code of Conduct and Responsible
Practices of the Group addresses how Inditex’s employees must
act when faced with a conflict of interest between their personal
interests and those of the Company, as well as the situations
which need to be reported to the Ethics Committee.
Inditex Annual Report 2022 / Annual Report on Remuneration
194
(iv)Measures taken by the Company regarding the clauses on
reduction or return of variable remuneration
With regard to the clauses on reduction of the deferred
remuneration or that force directors to return remuneration
received when such remuneration has been based on certain
figures that have clearly been shown to be inaccurate:
•The Remuneration Committee may propose to the Board of
Directors the cancellation of payment or, where appropriate,
the clawback of the variable items of the remuneration of
executive directors based on results, when these items have
been paid on the basis of information clearly shown later to be
inaccurate. In such cases, the Committee may also propose
the termination of the relationship with the relevant manager
and the filing of the relevant claims, all the foregoing pursuant
to the terms of section 6 of the Remuneration Committee’s
Regulations.
In this regard, should (i) any event or circumstance occur that
would result in the negative change or variation, in final terms,
of the financial statements, results, economic data,
performance data or otherwise, upon which the accrual and
payment to the executive directors of any amount in terms of
variable remuneration would have been based, and, (ii) should
such change or variation determine that, if they had become
known at the date of accrual or payment, the executive
directors would not have received any amount, or, would have
received a lesser amount than the one initially paid, the
Remuneration Committee may propose to the Board of
Directors that the Company claims the clawback of the full
sum or of any excess paid (regardless of whether or not the
executive director in question is still with the Company at the
time of the claim).
•With regard to the current 2021-2025 Long-term Incentive
Plan, as well as any outstanding variable remuneration while
the Current Text of the Remuneration Policy is in effect, the
Company may cancel before payment and/or claim refund of
the incentive previously paid, in full or in part, in the event that
any of the following unforeseen circumstances would occur
during (i) the period immediately before consolidation, or (ii)
the 2 years following settlement of the incentive for the
executive director’s performance in each cycle, as the case
may be:
–(i) losses in the Group (negative PBT) in the 2 years after the
expiry of each cycle, attributable to management decisions
made in the performance period of each cycle;
–(ii) material restatement of the Group’s financial statements,
when so considered by the external auditors, except where
this is appropriate pursuant to a change in accounting
standards;
–(iii) serious breach of the internal regulations on the part of
the executive directors, as proven by the Ethics Committee.
A.1.3. Amount and nature of fixed components that
are due to be accrued during the year by directors
in their capacity as such.
Pursuant to section 529septdecies LSC, the directors'
remuneration policy must determine the maximum amount of
remuneration that may be paid each year by the Company to all
directors in their status as such. Under the Current Text of the
Remuneration Policy, this maximum amount has been set at
€3,380 thousand, in accordance with the current membership
on the Board of Directors and its Committees.
Within the limit set by the Annual General Meeting, it is
incumbent on the Board of Directors, upon proposal of the
Remuneration Committee, to determine how and when such
amounts are to be paid. At its meeting held on 14 March 2023
and on the proposal of the Remuneration Committee, the Board
of Directors resolved to maintain the following amounts for
financial year 2023 as set out in the Current Text of the
Remuneration Policy (approved at the 2022 AGM with 98.6% of
votes in favour):
•Each director will receive an annual fixed remuneration in the
amount of €100,000 for their directorship.
•The Non-Executive Chair of the Board of Directors will receive
an additional fixed remuneration of €900,000.
•The Deputy Chair or Deputy Chairs of the Board of Directors
will receive an additional fixed remuneration of €80,000.
•Directors who in turn sit on the Audit and Compliance
Committee, the Nomination Committee the Remuneration
Committee and/or the Sustainability (including the Chair of
each Committee) will receive an additional fixed remuneration
of €50,000.
•The Chairs of the Audit and Compliance Committee, the
Nomination Committee, the Remuneration Committee and the
Sustainability Committee, will receive an additional fixed
remuneration of €50,000.
Such amounts are fully independent and compatible with each
other. They are paid fully in cash.
These items and amounts have remained unchanged since they
were approved at the Annual General Meeting held on 19 July
2011 (with 99.59% of votes in favour), except for the fixed
remuneration established for the non-executive Chair of the
Board of Directors, as a position without executive functions
created in financial year 2022, following the full separation of the
position of Chair of the Board of Directors and CEO of the
Company. This allocation also remains unchanged in 2023.
195
Except for the remuneration of the CEO for the performance of
executive functions, the amounts shown above represent the
only remuneration paid to directors of the Company for
membership on the Board of Directors of Inditex or any Group
company. No per diems are paid for attendance at board and
committees’ meetings, nor is there any remuneration in the form
of profit-sharing or bonuses, or remuneration systems or
pension plans incorporating variable remuneration, or
severance payments for the termination of their relationship with
the Company or any other items determined for the
performance of executive functions. The remuneration of the
(non-executive) Chair of the Board of Directors will not include
either any other remuneration and/or compensation item in
addition to the above.
The foregoing is notwithstanding the refund to the directors of
any reasonable travelling and accommodation fees incurred
upon attending the meetings of the Board of Directors or of the
Committees where they sit.
Inditex has also taken out a D&O liability policy for directors,
officers and staff performing similar duties in the Company.
A.1.4. Amount and nature of fixed components that
are due to be accrued during the year for the
performance of senior management functions of
executive directors.
Pursuant to the provisions of the Current Text of the
Remuneration Policy and as anticipated in the Annual Report on
the Remuneration of Directors for financial year 2021, the CEO's
fixed remuneration for financial year 2023 totals €2,500
thousand, remaining unchanged with respect to financial year
2022 (from the 2022 AGM).
A.1.5. Amount and nature of any component of
remuneration in kind that will accrue during the
year.
No remunerations in kind exist other than the delivery of shares
referred to in the following section regarding variable
components of remuneration.
A.1.6. Amount and nature of variable components,
differentiating between those established in the
short and long terms. Financial and non-financial,
including social, environmental and climate change
parameters selected to determine variable
remuneration for the current year, explaining the
extent to which these parameters are related to
performance, both of the director and of the
company, and to its risk profile, and the
methodology, necessary period and techniques
envisaged to be able to determine the effective
degree of compliance, at the end of the year, with
the parameters used in the design of the variable
remuneration, explaining the criteria and factors
applied in regard to the time required and methods
of verifying that the performance or any other
conditions linked to the accrual and vesting of each
component of variable remuneration have
effectively been met.
Monetary terms of the different variable
components according to the degree of fulfilment
of the objectives and parameters established, and
whether any maximum monetary amounts exist in
absolute terms.
With regards to directors in their status as such, including the
Chair of the Board of Directors, the fixed remuneration items
referred to above are the only remuneration paid to them for
membership on the Board of Directors of Inditex. There is no
remuneration under a profit-sharing scheme, nor any
remuneration systems or schemes covering a variable
remuneration.
For the CEO, the variable components of his remuneration for
the performance of his executive functions, as stipulated in the
Remuneration Policy approved at the 2021 AGM and the Current
Text of the Remuneration Policy, are as follows:
•Short-term or annual variable remuneration.
•Long-term or multi-year variable remuneration.
Below is a description of the main features of each of such
components:
•Short-term or annual variable remuneration:
Annual variable remuneration is tied to the achievement of
annual quantitative and qualitative targets, specific, pre-
established and quantifiable, aligned with the interest of the
Company and consistent with the medium to long-term
strategy.
Quantitative targets represent at least 60% of the aggregate
incentive. They consist of metrics which ensure an appropriate
balance between financial and operational elements of the
management of the Company. Non-financial metrics represent
at least 30% of the aggregate incentive.
A performance scale is associated, when reasonably possible,
to targets. Such scale, fixed at the beginning of each financial
year, includes a minimum threshold below which no incentive is
paid, a level of achievement on target, which corresponds to the
standard level of achievement of targets, and a maximum level
of achievement, above which the incentive is not increased.
Each metric is associated a specific performance scale,
determined and calibrated in accordance with the variability of
each of them and the target’s level of requirement. In this
regard, scales may have different slopes (i.e. relationship
between level of achievement and level of payment).
Additionally, the scale may include different payout levels
between minimum and on target level, and between on target
and maximum level of achievement regarding the same target.
The Remuneration Committee is responsible for approving the
targets at the beginning of each financial year and evaluating
their achievement at year end. This evaluation is done based
upon the data and the results provided by the Financial Division,
the General Counsel’s Office –Compliance Office, the Corporate
Inditex Annual Report 2022 / Annual Report on Remuneration
196
Development Department and the Sustainability Department, all
of which are first reviewed by the Audit and Compliance
Committee and the Sustainability Committee, as the case may
be, as well as upon the level of achievement of the relevant
targets.
Further to such review, the Remuneration Committee draws up
a proposal on annual variable remuneration which is submitted
to the Board of Directors for approval. In this proposal, the
Remuneration Committee also considers the quality of results in
the long-term as well as any associated risk.
For the purposes of ensuring that the annual variable
remuneration is effectively aligned with the performance of the
CEO, any positive or negative economic effects arising from any
extraordinary events which might introduce distortions into the
results of the evaluation, may be removed upon determining the
level of achievement of the quantitative targets.
In accordance with the Current Text of the Remuneration Policy,
the target amount of the CEO’s annual variable remuneration,
i.e., the one which corresponds to a level of achievement of the
objectives on target, shall be equivalent to 120% of the fixed
remuneration for the performance of executive functions. In
case of overachievement of the pre-established targets, it
could reach a maximum of 125% of the annual target variable
remuneration (150% of the fixed remuneration for the
performance of senior management duties, i.e. €3,750
thousand).
The terms of the annual variable remuneration system for the
CEO, including the structure, maximum levels of remuneration,
targets established and the weight of each of them, are
reviewed every year by the Remuneration Committee,
considering the Company’s strategy, business needs and status,
and the recommendations and best practices in the market in
the field of remuneration. Such terms are submitted to the
Board of Directors for approval.
Namely, the Board of Directors has resolved on 14 March 2023,
on the proposal of the Remuneration Committee, that the
annual variable remuneration for the CEO in financial year 2023
will be determined in accordance with the following criteria:
Weighting
Target
Measurement criteria
70%
Net sales (35%) and
contribution margin (35%)
The same criteria established for senior managers according to the budget of the
Company are applied.
15%
CEO’s personal performance
Assessment by the Board of Directors, on the proposal of the Nomination Committee.
Strategic development of the
Company
Boost of store and online integration, through the development and implementation of
new processes and tools allowing to provide a differentiated customer experience,
pursuant to the Groups’ targets, along with the ongoing development of new initiatives that
strengthen our values of sustainability and responsibility pursuant to the Group’s
objectives.
15%
Progress in implementation
of the strategy towards
global sustainability,
measured against the
following indicators:
(i) Increase in the number of sustainable items, measured through the use of raw materials
from preferred sources: cotton, linen, polyester and cellulose fibres.
(ii) Progress of the collaborative plan aimed at the environmental improvement of the
supply chain, with a focus on reducing water and energy consumption.
(iii) Progress towards our commitment that, from 2023, the waste generated at our
corporate headquarters, logistics centres, own factories and own stores are appropriately
collected and managed to be made available as a resource for repurposing through reuse
or recycling.
(iv) Percentage of packaging material collected to be recycled or reused in the supply
chain (Green to Pack).
(v) Development of additionality mechanisms in the renewable energy infrastructure.
(vi) Level of implementation of environmental and social projects related to the in-store
paper bag and envelope charging initiative.
(vii) Progress in the elimination of single-use plastics from customer sales;
(viii) Innovation project related to textile recyclability:
Progress in corporate
governance
Degree of compliance with the recommendations of the Good Governance Code of
Listed Companies and alignment with international best practices
Progress in implementing
diversity and compliance
programmes
Approval of internal regulations and degree of international roll-out
The short-term variable remuneration for 2023 on account of
achievement of the above referred targets will be paid in 2024
in cash.
197
•Multi-year or Long-term variable remuneration
a) 2023 LONG-TERM INCENTIVE PLAN
The Board of Directors plans to submit for approval at the 2023
Annual General Meeting a new long-term cash and share
incentive plan for members of the management team, including
executive directors and other Inditex Group employees.
b) 2021-2025 LONG-TERM INCENTIVE PLAN
The Annual General Meeting held on 13 July 2021 approved the
2021-2025 Long-Term Incentive Plan. The Plan consists of the
combination of a multi-year bonus in cash and the promise to
deliver shares, which, once a specific period of time has
elapsed and the achievement of the specific targets has been
verified, will be paid to the beneficiaries of the Plan, either in full
or in the relevant applicable percentage, as the case may be.
The total duration of the Plan is 4 years. It is structured in 2
overlapping independent cycles:
–The first cycle of the Plan runs from 1 February 2021 to 31
January 2024.
–The second cycle runs from 1 February 2022 to 31 January
2025.
The Plan is linked to the Company's strategic objectives for the
duration thereof. Upon completion of the performance period of
each cycle, the Remuneration Committee shall assess the
achievement reached for each objective and of the cycle as a
whole, based on the data and results provided by the Financial
Division, the General Counsel’s Office, the Compliance Office
and the Sustainability Department, and analysed first by the
Audit and Compliance Committee and the Sustainability
Committee, as appropriate. On the basis of this information, the
Remuneration Committee shall propose, for approval by the
Board of Directors, the performance-related incentive levels
based on the established performance scales. Upon setting the
targets and evaluating the achievement thereof, the
Remuneration Committee will also take into consideration any
associated risk. When determining the level of target
achievement  any positive or negative economic impact caused
by extraordinary events that could distort the results of the
evaluation is disregarded.
Under such Plan, executive directors will receive, if appropriate,
an incentive which will materialize as follows: 60% in shares and
40% in cash. Regarding 60% of the incentive which would, if
appropriate, be settled in shares, the number of shares to be
granted at the commencement of each cycle will be determined
based upon the average weighted share price on the 30 trading
days immediately prior to the commencement date of each
cycle. Upon expiry of each cycle, the Remuneration Committee
will assess the level of achievement of objectives and propose
the number of shares to be delivered.
The CEO has undertaken to hold for a term of at least 3 years
the net shares that he may receive as a result of any element of
variable remuneration, until he holds a number of shares
equivalent to at least 2 years of his fixed remuneration. In any
case, once this shareholding target has been reached, the CEO
must comply with the holding obligations under this Plan, which
involve holding a number of shares equivalent to the incentive
received in shares, net of applicable taxes, for two years after
their delivery.
Likewise, the Company may cancel before payment and/or
claim refund of the long-term incentive previously paid, in full or
in part, (clawback) should certain unforeseen circumstances
occur during the 2 years following the delivery of the incentive
for the proceedings of each cycle. Such specific circumstances
have been addressed in section A.1 above.
The incentive amounts and features for the two cycles of the
2021-2025 Plan are detailed below.
–The maximum amount of the incentive assigned to the
CEO would amount to: 
Maximum Incentive
=
Cash
+
Shares
First Cycle (2021-2024)
118% of annual fixed remuneration
€1,183 thousand
68,562
Second Cycle (2022-2025)
133% of annual fixed remuneration
€1,331 thousand
71,472
Inditex Annual Report 2022 / Annual Report on Remuneration
198
•With regard to the first cycle (2021-2024), the specified amount
includes the total incentive granted for the full cycle taking into
account the different positions held by the CEO, i.e. the
amount granted for the performance of duties as General
Counsel and Secretary of the Board in 2021 and the amount
assigned as CEO, in accordance with the Remuneration Policy
approved at the 2021 AGM, in force at the time of such
assignment. The incentive, which is expressed as a
percentage of the annual fixed remuneration, is calculated
based on a fixed remuneration of €2,500 thousand (this
amount corresponds to the annual fixed remuneration set for
the CEO in accordance with the Current Text of the
Remuneration Policy).
•For the second cycle (2022-2025) the amount shown includes
the total incentive allocated for the full cycle taking into
account his sole position as CEO.
–Upon expiry of each cycle, the Remuneration Committee will
assess the level of target achievement and propose the
cash amount and the number of shares to be delivered.
Target achievement will be measured through identifiable
and quantifiable parameters known as metrics.
The incentive for the first cycle (2021-2024) will vary depending
upon the following metrics, with the following weighting:
Weighting
Target
Measurement criteria
25%
Profit before Taxes (“PBT”)
PBT figure for financial year 2023, expressed in euros, compared to the amount
set by the Board of Directors as a target at the commencement of the first cycle.
25%
Store and Online Sales
(“TTTT” (Spanish acronym))
Amount in euros of total sales in store and online in financial year 2023 at
constant currency, according to the Company's information, measured against
the amount set by the Board of Directors as a target at the commencement of
the first cycle.
12.5%
Absolute Total Shareholder Return (“TSR”)
Performance of an investment in Inditex shares over the period of the first cycle,
determined by the ratio (expressed as a percentage) between the final value of a
hypothetical investment in Inditex shares (reinvesting the dividends from time to
time) and the initial value of that same hypothetical investment.
The initial value is defined as average weighted share price on the 30 trading
days immediately prior to 1 February 2021, excluding 1 February 20211, and the
final value is defined as average weighted share price on the 30 trading days
immediately prior to 31 January 2024 (included).
To this end, for calculating such final value, the dividends or other similar
amounts received by shareholders on said investment during the respective
period of time will be considered, as if the gross amount thereof (before taxes)
would have been reinvested in more shares of the same class on the first date
on which the dividend or any similar amount is payable to shareholders and at
the closing share price on that date.
The TSR achieved will be measured against the target set by the Board of
Directors at the commencement of the first cycle.
12.5%
Relative Total Shareholder Return (“TSR”)
Comparison of the evolution of an investment in Inditex’s shares with the
evolution of an investment in shares of any of the companies included in the
Peer Group of companies (as defined below), determined by the ratio
(expressed as a percentage) between the final value of a hypothetical
investment in shares (reinvesting the dividends from time to time) and the initial
value of that same hypothetical investment.
The initial value of Inditex and the companies in the Peer Group is defined as the
weighted average share price on the 30 trading days immediately prior to 1
February 2021 (excluded), and the final value is defined as the weighted average
share price on the 30 trading days immediately prior to 31 January 2024
(included).
To this end, for calculating such final value, the dividends or other similar
amounts received by shareholders on said investment during the respective
period of time will be considered, as if the gross amount thereof (before taxes)
would have been reinvested in more shares of the same class on the first date
on which the dividend or any similar amount is payable to shareholders and at
the closing share price on that date.
25%
Sustainability index (comprising 4 indicators)
(i) Sustainable product, measured as the percentage of sustainable garments.
(ii) Waste management, measured as the percentage of Inditex facilities
(headquarters, factories, logistics centres and stores) where a waste
management system for an appropriate waste recycle, recovery and processing
is in place, to be made as a resource for repurposing through reuse or recycling.
(iii) Decarbonisation, measured as the reduction in the volume of greenhouse
gas emissions in the company's own operations (Scope 1 and 2).
(iv) Social, measured as the percentage of Inditex suppliers rated A or B in social
audits.
1.  Having found that the resolution passed at the Annual General Meeting regarding the approval of the aforementioned 2021-2025 Long-Term Incentive Plan erroneously
refers to a reference price of €25.81 per share for the first cycle of the Plan, when the average weighted price of the Company’s shares on the 30 trading days immediately
prior to 1 February 2021 (exclusive) was €25.88 per share, the Board of Directors of Inditex resolved, on the proposal of the Remuneration Committee, to set the amount of
the average share price at such amount, pursuant to the authority granted to the Board by the Annual General Meeting to rectify the resolution passed at the AGM.
199
•For the purpose of calculating the payout ratio attained for
each level of achievement of targets, a performance scale will
be determined for each metric, set at the commencement of
the cycle, which will include a minimum threshold below which
no incentive will be paid, corresponding to a payout ratio of
30% of the maximum incentive granted, and a maximum level,
corresponding to a payout ratio of 100% of the Maximum
Incentive Granted. For intermediate levels, the results shall be
determined by linear interpolation.
–PBT, TTTT, absolute TSR and Sustainability Index, the
following will be measured:
Level of achievement
Level of Incentive
(% of Maximum Incentive)
Below minimum
0%
Minimum
30%
Maximum
100%
Intermediate figures are calculated by linear interpolation.
◦Regarding the evolution of relative TSR:
▪The Peer Group is made up of the companies included
in the Dow Jones Retail Titans 30 index (the “Peer
Group”).
In this respect, for the first cycle (2021-2024), the index
will be considered as it stood on 1 February 2021.
▪At the end of the cycle, Inditex’s TSR and the TSR of
each company included in the Peer Group will be
calculated. Afterwards, Inditex’s TSR will be compared
with the TSR of the companies within the Peer Group
to identify between which positions Inditex is ranked.
Subsequently, the portion of the incentive to be
delivered shall be calculated, interpolating between the
payout ratios of such positions, according to the
difference between TSR values in accordance with the
following scale:
Level of
achievement
Place in ranking
Level of Incentive
(% of maximum
Incentive)
Below minimum
< 15th (median)
0%
Minimum
= 15th (median)
30%
Maximum
≥ 5th
100%
For intermediate positions, the payout ratio will be
calculated by linear interpolation.
In order to be eligible to receive the relevant incentive, as a
general rule, beneficiaries must remain in the Company
until expiry of the accrual period.
The incentive for the second cycle (2022-2025) will vary
depending upon the following metrics, with the following
weighting:
Weighting
Target
Measurement criteria
25%
Profit before Taxes (“PBT”)
PBT figure for financial year 2024, expressed in euros, compared to the amount
set by the Board of Directors as a target at the commencement of the second
cycle.
25%
Store and Online Sales
(“TTTT” (Spanish acronym))
Amount in euros of total sales in store and online in financial year 2024 at
constant currency, according to the Company's information, measured against
the amount set by the Board of Directors as a target at the commencement of
the second cycle.
12.5%
Absolute Total Shareholder Return (“TSR”)
Performance of an investment in Inditex shares over the period of the second
cycle, determined by the ratio (expressed as a percentage) between the final
value of a hypothetical investment in Inditex shares (reinvesting the dividends
from time to time) and the initial value of that same hypothetical investment.
The initial value is defined as average weighted share price on the 30 trading
days immediately prior to 1 February 2022 (excluded), and the final value is
defined as average weighted share price on the 30 trading days immediately
prior to 31 January 2025 (included).
To this end, for calculating such final value, the dividends or other similar
amounts received by shareholders on said investment during the respective
period of time will be considered, as if the gross amount thereof (before taxes)
would have been reinvested in more shares of the same class on the first date
on which the dividend or any similar amount is payable to shareholders and at
the closing share price on that date.
The TSR achieved will be measured against the target set by the Board of
Directors at the commencement of the second cycle.
Inditex Annual Report 2022 / Annual Report on Remuneration
200
Weighting
Target
Measurement criteria
12.5%
Relative Total Shareholder Return (“TSR”)
The relative TSR is defined as the performance of an investment in Inditex
shares compared to the performance of an investment in a Peer Group (as
defined below) during the period corresponding to the second cycle, determined
by the difference (by subtraction) between Inditex's annualised TSR and the
annualised TSR of this Peer Group.
In order to calculate the performance of the investment in shares of Inditex and
of each company in the Peer Group, we determine the quotient (expressed as a
percentage ratio) between the final value of a hypothetical investment in shares
(reinvesting the dividends from time to time) and the initial value of that same
hypothetical investment. The initial value is average weighted share price of
each company on the 30 trading days immediately prior to 1 February 2022
(excluded) (the “Initial Value”). The final value is average weighted share price of
each company on the 30 trading days immediately prior to 31 January 2025
(included) (the “Final Value”).
To this end, for calculating such Final Value, the dividends or other similar
amounts received by shareholders on said investment during the respective
period of time will be considered, as if the gross amount thereof (before taxes)
would have been reinvested in more shares of the same class on the first date
on which the dividend or any similar amount is payable to shareholders and at
the closing share price on that date.
25%
Sustainability index (comprising 4 indicators)
(i) Fibre consumption: measured as the reduction in percentage points of the
weight of conventional fibres in total fibre consumption (in tn), for the four fibres
subject to a public commitment (cotton, polyester, man-made cellulosic fibres
and linen).
(ii) Water consumption: measured as the percentage reduction of water
consumption (litre/kg) in the supply chain.
(iii) Decarbonisation: measured as the percentage reduction in the volume of
Scope 3 greenhouse gas emissions in the category “goods and services
purchased”.
(Iv) Social: measured as the percentage of suppliers of Inditex products that are
classified with social ranking A and B.
•For the purpose of calculating the payout ratio attained for
each level of achievement of targets, a performance scale will
be determined for each metric, set at the commencement of
the cycle, which will include a minimum threshold below which
no incentive will be paid, corresponding to a payout ratio of
30% of the maximum incentive granted, and a maximum level,
corresponding to a payout ratio of 100% of the maximum
incentive granted. For intermediate levels, the results shall be
determined by linear interpolation.
Level of achievement
Level of Incentive
(% of Maximum Incentive)
Below minimum
0%
Minimum
30%
Maximum
100%
Intermediate figures are calculated by linear interpolation.
Regarding the evolution of relative TSR:
•The Peer Group consists of 14 competitors in the textile
industry whose share price can be potentially impacted by
external factors similar to Inditex's, as shown below: Nike, Fast
Retailing, Lululemon Athletica, Adidas, H&M, Associated British
Foods, VF Corporation, Burberry, Next, Puma, Zalando, JD
Sports Fashion, Ralph Lauren Corporation and Hugo Boss.
This Peer Group marks a departure from the Dow Jones
Retail Titans 30 index, which Inditex has been using to
measure relative TSR since the 2013-2016 cycle of the
2013-2017 Long-Term Incentive Plan.
The original makeup of the Dow Jones Retail Titans 30
index, though biased towards North American companies,
consisted of retailers whose business models were based
on store sales or a combination of online and store sales,
similar to Inditex. However, the index's makeup has shifted
from European to Asian companies with an increasingly
broader definition of "retail" and now includes a significant
number of companies with a purely online business model
at a different stage of the life cycle than Inditex.
As a result, the Remuneration Committee has conducted a
thorough analysis with a view to defining a peer group to
appropriately reflect the performance of Inditex share in
comparison to relevant peer companies, as well as its
operating dynamics and complexity as an organisation in
the medium term.
The following selection criteria were applied:
–Consumer discretionary textile sector, excluding the luxury
segment.
–Business model: mainly a combination of store and online
sales.
–Companies whose results are monitored by Inditex.
–Share price correlation from 30%.
–Volatility +/- 25 p.p. with respect to the volatility of Inditex
share.
–Higher proportion of European companies.
–Mainly mature companies.
As part of the selection process, a simulation of Inditex's TSR
result and the TSR of this new Peer Group for the period
covering the last four long-term incentive cycles that Inditex
201
has had in place has been carried out to ensure that it
appropriately reflects the performance of Inditex's share in
comparison to that of the selected peer companies.
•The following will be calculated at the end of the second cycle:
–Inditex's TSR and the TSR of each company in the Peer
Group for the 2022-2025 period.
–The arithmetic mean of the TSR of each company, resulting
in the average TSR for the Peer Group.
–Inditex's annualised TSR and the annualised TSR of the Peer
Group.
Next, the difference (by subtraction) between Inditex's
annualised TSR and the annualised TSR of the Peer Group will
be calculated. This difference will be compared against the
target set by the Board of Directors at the beginning of the
second cycle and a payout ratio, ranging from 0% to 100% of the
maximum incentive granted, will be applied in accordance with
the specified scale.
In order to be eligible to receive the relevant incentive, as a
general rule, beneficiaries must remain in the Company until
expiry of the accrual period.
c) 2019-2023 LONG-TERM INCENTIVE PLAN:
The second cycle (2020-2023) of the 2019-2023 Long-Term
Incentive Plan approved at the Annual General Meeting held on
16 July 2019 expired on 31 January 2023. The characteristics and
incentive amounts associated with each of the cycles are
specified in section B of this Report, which includes information
on the application of the Remuneration Policy in financial year
2022.
A.1.7. Main characteristics of long-term savings
systems.
Pursuant to the Current Text of the Remuneration Policy, the
CEO is not a beneficiary of any long-term saving system,
including retirement and/or any other survivor benefit, partly or
wholly funded by the Company. In any event, provision is made
for the possibility that the Board of Directors may implement
such a system for executive directors during its term.
A.1.8. Any type of payment or indemnification for
early termination or dismissal, or deriving from the
termination of the contractual relationship, in the
terms provided, between the company and the
director, whether at the company's or the director's
initiative, as well as any type of agreement reached,
such as exclusivity, post-contractual non-
competition, minimum contract term or loyalty, that
entitles the director to any kind of remuneration.
No severance pay has been agreed in case of termination of
duties as director, except for that provided in subparagraphs iii)
and iv) of the following section regarding the CEO for the
performance of executive functions.
A.1.9. State the conditions that contracts should
respect for those exercising senior management
duties as executive directors. 
Pursuant to the provisions of sections 249 and 529octodecies
LSC and section 30.3 of the Board of Directors’ Regulations, the
relevant terms of the contracts entered into with executive
directors are detailed below:
(i)Term
The Chief Executive Officer's contract has an indefinite term.
(ii)Notice period
Both in case of termination of the contract on account of certain
grounds attributable to Inditex, and on account of voluntary
resignation of the executive director, notice shall be given at
least 3 months in advance. Such notice may be replaced with an
amount equivalent to the fixed remuneration of the non-
observed term of notice.
(iii)Golden parachute clause
The CEO shall be entitled to severance pay in a gross amount
equivalent to the remuneration of two (2) years calculated
based upon the sum of his annual fixed and variable
remuneration, established for the current year, where the
relevant contract is terminated by unilateral decision of the
Company, as well as in case of resignation tendered by the CEO
under certain premises (including the succession in the
company or a change in control in the Company that affects
more than 50% of the share capital or of the voting rights,
provided that a significant refreshment of the governing bodies
of the Company or a change in the contents or purpose of the
main business activity of the Company takes place at the same
time, if such request for termination is made within six months of
the occurrence of such succession or change. For such
purpose, no succession or change in control shall be deemed to
have taken place in the event of direct or indirect family
succession in the ownership of the Company).
Inditex Annual Report 2022 / Annual Report on Remuneration
202
(iv)Agreement on exclusivity and post-contractual non-
compete obligation
For as long as his contractual relationship with Inditex remains
in force, the CEO shall perform his senior management
functions exclusively for the Company and the Inditex Group,
and he shall refrain from working either directly or indirectly for
any third parties, or for his own account, even where the
activities he may carry out would not compete with those of the
Inditex Group. This provision does not apply to the office of non-
executive director on the board of other companies which do
not compete with Inditex, subject to the restrictions set out in the
Board of Directors’ Regulations.
Under the terms and conditions of his contract, compensation
for the post-contractual non-compete obligation is included in
the severance payment.
With regard to the post-employment non-compete agreement
and as regards all members of the Board of Directors,
irrespective of their directorship type, section 24.3 of the Board
of Directors’ Regulations provides that “the director who ends
his/her mandate or for any other cause should cease to hold
his/her office may not render service in another entity having a
corporate purpose that is similar to that of the company for a
period of two years”.
(v)Clawback provision
Pursuant to the provisions of section A.1 above, should (i) any
event or circumstance occur that would result in the negative
change or variation, in final terms, of the financial statements,
results, economic data, performance data or otherwise, upon
which the accrual and payment to the executive director of any
amount in terms of variable remuneration would have been
based, and, (ii) should such change or variation determine that, if
they had become known at the date of accrual or payment, the
executive director would have received a lesser amount than
the one initially paid, the Company shall be entitled to claim from
him clawback of any excess paid.
Additionally, as explained in section A.1 above, the Company
may cancel and/or claim the clawback of the long-term
incentive previously paid to the executive director, in full or in
part, in the event of occurrence of certain unforeseen
circumstances during the 2 years following the delivery of the
incentive.
A.1.10. The nature and estimated amount of any
other supplementary remuneration accrued by
directors in the current year in consideration for
services rendered other than those inherent in their
position.
Directors will not receive in the current year any remuneration
other than that accrued for the services rendered in their
position. 
A.1.11. Other items of remuneration such us any
deriving from the company’s granting the director
advances loans or guarantees or any other
remuneration.
The granting of advance payments, loans or guarantees to
directors is not covered in the Current Text of the Remuneration
Policy.
As at the date of this Report, no advanced payment, loans or
guarantees have been granted to any director.
A.1.12. The nature and estimated amount of any
other planned supplementary remuneration to be
accrued by directors in the current year that is not
included in the foregoing sections, whether paid by
the company or by another group company.
No supplementary remuneration other than the one explained
above is provided in the Current Text of the Remuneration
Policy.
As at the date of this Report, no supplementary remuneration
has been accrued to directors in consideration for services
rendered other than those inherent in their position, nor any
additional remuneration item other than those addressed in the
sections above.
A.2. Significant changes in the
Remuneration Policy applicable in the
current year.
No changes to the Current Text of Inditex's Remuneration Policy
are expected in 2023, which, as explained in section A.1.1. above,
is the consolidated text of the Remuneration Policy approved at
the 2021 AGM, with 98.42% of votes in favour, after its
amendment, approved at the 2022 AGM, with 98.6% of votes in
favour. The Policy expires on 31 January 2024.
The Board of Directors plans to submit for approval at the 2023
Annual General Meeting the following proposed resolutions as
separate agenda items: (i) the Annual Report on Remuneration
of Directors for the year ended 31 January 2023 (to be submitted
to an advisory say-on-pay vote); (ii) the new Directors’
Remuneration Policy for financial years 2024, 2025 and 2026;
and (iii) a cash and shares Long-Term Incentive Plan for the
management team, including the executive directors and other
Inditex Group employees. The terms of this new plan will be in
line with the Current Text of the Remuneration Policy.
The new Remuneration Policy for financial years 2024, 2025 and
2026 is expected to have the same approach as the current
one, maintaining the fundamental lines applied in previous
years, although it might include some adjustments to reinforce
its alignment with all stakeholders, particularly, the shareholders,
with the Group's strategy and with the best corporate
governance recommendations on remuneration matters.
203
A.3. Direct link to the document
containing the company’s current
remuneration policy, which must be
available on company’s website.
A link to the Current Text of the Remuneration Policy applicable
for financial year 2023 is provided below:
https://www.inditex.com/itxcomweb/api/media/6ff2001c-
e0c9-4ce1-b8c9-46d12fe882f1/13.
+AGM2022_Amendment+Remuneration+Policy+2021_2023.pdf?
t=1657885632301
A.4. Consideration on the voting by the
General Shareholders' Meeting on the
annual report on remuneration for the
previous year.
The 2022 AGM approved the following:
•The amendment to the Remuneration Policy approved at the
2021 AGM with 98.6% of votes in favour.
•The Annual Report on the Remuneration of Directors for
financial year 2021 with 97.07% of votes in favour.
Since the first directors' remuneration policy was approved, the
Annual Reports on the Remuneration of Directors have been
broadly supported by shareholders in the advisory say-on-pay
vote and, in addition, by institutional investors and proxy
advisors.
Inditex Annual Report 2022 / Annual Report on Remuneration
204
B. Overall summary of how remuneration policy
has been applied during the year ended
As discussed in section A.1.1. of the Report on the Remuneration
of Directors for financial year 2021, a distinction must be made
between two periods in financial year 2022 based on the
corporate governance structure in place and the Remuneration
Policy that has been applied during the period:
•From 1 February to 31 March 2022, a transitional period for the
transfer of duties from Mr Pablo Isla Álvarez de Tejera,
Executive Chairman during such period, to the CEO, Mr Óscar
García Maceiras. The Directors' Remuneration Policy
approved at the 2021 AGM was applicable in this period.
•From 1 April 2022 to 31 January 2023, the period starting with a
new (non-executive) Chair of the Board of Directors, Ms Marta
Ortega Pérez, and the CEO as the sole executive director.
Again, two different time intervals should be considered in this
period:
–Between 1 April and the date of the 2022 AGM, directors'
remuneration was in accordance with the Remuneration
Policy approved at the 2021 AGM.
–From the 2022 AGM until 31 January 2023, remuneration
was in accordance with the Current Text of the
Remuneration Policy and the agreement regarding the
novation of Mr Isla's post-contractual non-compete clause,
both of which were approved at the 2022 AGM.
Corporate governance
structure
Period
Remuneration to be paid
under the following
Remuneration Policy
Transitional period
for the transfer of
duties from the
previous Executive
Chairman to the
CEO
01/02/22 –
31/03/22
Remuneration Policy
approved at the 2021
AGM.
(Non-executive)
Chair of the Board of
Directors and CEO
fully in office
01/04/22 –
Date of the
2022 AGM
Date of the
2022 AGM
– 31/01/23
Current Text of the
Remuneration Policy (as
amended and approved
at the 2022 AGM).
Specific resolution of the
2022 AGM on the post-
contractual non-
compete clause.
The following sections detail the application of the
Remuneration Policy applicable to financial year 2022.
B.1.1. Process followed to apply the remuneration
policy and determine the individual remuneration
contained in Statistical Appendix. Role of the
Remuneration Committee, decisions made by the
Board of Directors and role played by external
advisors.
B.1.1. a) Composition of the Remuneration Committee.
As provided in Article 30 of the Articles of Association, section 17
of the Board of Directors’ Regulations, and section 7 of the
Remuneration Committee’s Regulations, the Remuneration
Committee shall be made up of a number of at least 3 and at
most 7 non-executive directors, a majority of whom must be
independent directors.
Members of the Remuneration Committee are appointed by the
Board of Directors following a report of the Nomination
Committee. The Chair of the Remuneration Committee is also
appointed by the Board of Directors, out of the independent
members of such Committee.
As of 31 January 2023 and as at the date of this Report, the
Remuneration Committee was made up of the following
members, most of them independent directors (all, except Mr
José Arnau Sierra, proprietary director):
Mr Rodrigo Echenique
Gordillo (Chair, Independent
Director)
Bns. Denise Patricia Kingsmill
(Member, Independent
Director)
Mr José Arnau Sierra
(Member, Proprietary
Director)
Mr José Luis Durán Schulz
(Member, Independent
Director)
Mr Emilio Saracho Rodríguez
de Torres
(Member, Independent
Director)
As of 31 January 2023, Mr Javier Monteoliva Díaz is the
Secretary non-member of the Committee, having been
appointed by the Board of Directors following a favourable
report from the Nomination Committee, on 29 November 2021.
The Remuneration Committee meets whenever it is deemed
appropriate for its smooth operations, and in any case,
whenever the Board of Directors or its Chair requests the
issuing of a report or the issue of proposals within its purview.
Moreover, the Remuneration Committee shall hold a regular
meeting every year to prepare the information on the
remuneration of directors, which the Board of Directors has to
approve and include as part of its annual public documentation.
During the meeting that the Board of Directors holds
immediately after each meeting of the Remuneration
Committee, the Chair of the latter informs Board members of
the business transacted in the course of such meeting.
205
B.1.1. b) Process followed to enforce the Remuneration Policy
and determine individual remunerations.
The duties of the Remuneration Committee are covered in
Article 30 of the Articles of Association, section 17 of the Board
of Directors’ Regulations and sections 5 and 6 of the
Remuneration Committee’s Regulations.
The Remuneration Committee met five (5) times in 2022, with
the attendance of all its members (either in person or by proxy).
This represents a 100% attendance rate. In financial year 2023 to
the date of release of this Report, the Committee has met once.
At the aforementioned meetings, the Remuneration Committee
has discussed, inter alia, the following matters and has resolved,
where appropriate, to submit them to the Board of Directors for
approval:
•In the meeting held on 14 March 2022:
–Regarding Mr Isla and the outgoing CEO:
◦The evaluation of the level of achievement of the targets
tied to the annual variable remuneration of the former
Executive Chairman, Mr Isla, and the former CEO, Mr
Crespo, for financial year 2021 and the payout level for
each one. The Board of Directors approved the
achievement of these targets at its meeting held on 15
March 2022 along with the corresponding level of the
incentive payment.
◦The evaluation of the level of achievement of the targets
for the various metrics to which the first cycle (2019-2023)
of the 2019-2023 Long-Term Incentive Plan was tied and
the corresponding payout level for the former Executive
Chairman and CEO. At its meeting held on 15 March 2022,
the Board of Directors approved the achievement of these
targets and the corresponding level of the incentive
payment.
–In relation to the former Executive Chairman's departure:
◦The proposed settlement of the current long-term
incentives, i.e. the second cycle (2020-2023) of the
2019-2023 Long-Term Incentive Plan and the first cycle
(2021-2024) of the 2021-2025 Long-Term Incentive Plan.
The proposed settlement was approved by the Board of
Directors on 15 March 2022.
◦The proposal to the Board of Directors regarding the
assessment of the target to which the annual variable
remuneration for the period from 1 February to 31 March
2022 was tied and the settlement of such remuneration.
The Board of Directors approved the proposed settlement
at its meeting held on 15 March 2022.
◦The proposed settlement of the pro-rated part of the
accrued fixed remuneration for FY2022 corresponding to
the payments for the months of July and December. The
Board of Directors approved the proposed settlement at
its meeting held on 15 March 2022. 
–Regarding the new CEO:
◦The assessment of the level of achievement of the targets
tied to the CEO's annual variable remuneration for financial
year 2021, and the corresponding payout level (pro-rated
according to the time spent in office in the aforementioned
financial year). At its meeting held on 15 March 2022, the
Board of Directors approved the achievement of these
targets and the level of the incentive payment.
◦The assessment of the level of achievement of the targets
for the various metrics to which the first cycle (2019-2022)
of the 2019-2023 Long-Term Incentive Plan was tied and
the corresponding payout level. At its meeting held on 15
March 2022, the Board of Directors approved the
achievement of these targets and the level of the incentive
payment.
◦The proposal to the Board of Directors on the new total
remuneration package of the CEO for the performance of
his duties and responsibilities as chief executive under the
new corporate governance structure, including the terms
of his contract, for financial year 2022. Thus:
With a view to proposing to the Board of Directors the
fixed remuneration of the position of CEO, the
Remuneration Committee carried out a reflection exercise
where it considered the following factors and applied the
following criteria:
▪The principles and foundations set out in the
Remuneration Policy approved at the 2021 AGM. In
particular, the principle whereby this fixed remuneration
must represent a sufficient part of their compensation
package for the sake of achieving an appropriate
balance between fixed and variable remuneration items.
▪The new corporate governance structure under which
the roles of Chair and CEO are separate and the position
of Chair of the Board of Directors is non-executive.
▪The consistency with the responsibility and duties as
chief executive and leadership within the organisation, in
line with the remuneration paid in the market by
comparable companies.
▪The extent to which fixed and total remuneration is
appropriate to reward the value of the contribution of the
position and the individual, both to the Company and to
shareholders.
▪Internal fairness with regard to the remuneration of the
members of the Management Committee, made up of
officers of the Inditex Group with a long track record and
from different corporate and business areas.
▪Guidelines from institutional investors and proxy
advisors, as well as feedback received from them in the
Company's regular consultation process.
▪Total remuneration benchmarking for the lead executive
in various comparator groups.
Inditex Annual Report 2022 / Annual Report on Remuneration
206
In view of the foregoing considerations, the Remuneration
Committee proposed to set a fixed remuneration for the
CEO amounting to €2,500 thousand on an annualised
basis.
On the other hand, the specific amount of the annual
variable remuneration (expressed as a percentage of the
annual fixed remuneration) and the amount of the long-
term incentive remained unchanged from those set out in
the Remuneration Policy approved at the 2021 AGM.
The CEO's total remuneration was midway between the
remuneration set out in the Remuneration Policy approved
at the AGM 2021 (prior to its amendment) for the former
Executive Chairman and CEO of the Company.
In addition, the Remuneration Committee reviewed Mr
García Maceiras' contractual conditions as CEO
specifically in relation to the golden parachute and post-
contractual non-compete clause, in order to protect the
interests of the Company and its shareholders, as detailed
in section B.11. below.
The Board of Directors approved Mr Óscar García
Maceiras' proposed remuneration for the performance of
his executive functions, along with the terms of his new
contract, at its meeting held on 15 March 2022.
–The proposal to the Board of Directors regarding the
remuneration of the (non-executive) Chair of the Board of
Directors in the new corporate governance structure.
In order to propose this specific remuneration to the Board
of Directors, the Committee carried out a reflection exercise
in financial year 2022, taking into account the following
factors:
◦The intrinsic value of the person holding the position, due
to her knowledge of the retail business in the fashion
industry and of the Inditex Group, where she has carried
out different roles and performed different duties, and her
importance from an institutional perspective.
◦The special responsibility of the position and the criticality
of the duties inherent thereto. Specifically, in addition to the
duties inherent to the position of Board Chair, the (non-
executive) Chair of the Board of Directors of Inditex has
under her direct responsibility the areas of Internal Audit,
General Counsel’s Office, and Communication.
◦Exclusive and additional dedication with respect to the
members of the Board of Directors.
◦Recommendations from institutional investors and proxy
advisors, as well as general corporate governance
recommendations.
◦Market practices in relevant European countries. For this
purpose, the amounts and remuneration practices for the
remuneration of (non-executive) board chairs in the
companies that make up the main stock market indices
(Ibex-35 in Spain, CAC40 in France, FTSE MIB in Italy,
DAX40 in Germany, SMI20 in Switzerland and FTSE 100 in
the United Kingdom) were analysed.
As a result of the aforementioned analyses, the Remuneration
Committee proposed to the Board of Directors to establish a
specific fixed remuneration for the position of (non-executive)
Chair of the Board of Directors, which amounts to €900,000
(annualised) and which will be paid in cash. Such proposal was
approved by the Board of Directors on 15 March 2022.
–The proposal to increase the maximum amount of
remuneration that the Company may pay annually to all
directors in their status as such up to €3,380 thousand.
Such proposal was approved by the Board of Directors on
15 March 2022.
–The proposal to amend the Remuneration Policy approved
at the 2021 AGM, for evaluation and approval by the Board of
Directors and subsequent submission to the binding vote at
the 2022 AGM. The Board of Directors approved such
Report on 15 March 2022.
–The proposed Annual Report on Remuneration of Directors
for financial year 2021 to be submitted to the Board of
Directors for evaluation and subsequent approval, and then
to be submitted to an advisory say-on-pay vote at the 2022
AGM. The Board of Directors approved such Report on 15
March 2022.
•In the meeting held on 12 September 2022:
◦The Committee submitted to the Board of Directors the
proposal for the CEO's new contract in accordance with the
Current Text of the Remuneration Policy, approved at the
2022 AGM, which sets out the new remuneration package
for the CEO for the performance of his duties and
responsibilities as the only executive director under the
current corporate governance structure. The Board of
Directors approved such contract on 13 September 2022.
◦Monitoring and assessing the impact of the crisis arising
from the Russia-Ukraine conflict on the conditions of the
current long-term incentive plans.
•In the meeting held on 12 December 2022:
◦Monitoring of the expected level of achievement of the
second cycle (2020-2023) of the 2019-2023 Long-Term
Incentive Plan.
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◦The proposal of a new peer group and calculation
methodology for the Relative TSR and of performance
scales for the second cycle (2022-2025) of the 2021-2025
Long-Term Incentive Plan for each metric and the
favourable report on the draft Annex III to the Regulations of
such Plan. The Board of Directors approved the text of the
aforementioned Annex III to the Regulations of the Plan at its
meeting held on 14 December 2022.
◦The acknowledgement of the list of beneficiaries for this
second cycle.
•In the meeting held on 13 March 2023:
◦The evaluation of the level of achievement of the targets tied
to the annual variable remuneration and the second cycle
(2020-2023) of the 2019-2023 Long-Term Incentive Plan for
the CEO for financial year 2022. The Board of Directors
evaluated the achievement of such targets in the meeting
held on 14 March 2023.
◦The proposal submitted to the Board of Directors on the
remuneration of the CEO for the performance of executive
functions in 2023, with regard to the amount and the
remaining terms thereof. Such proposal was approved by
the Board of Directors on 14 March 2023.
◦The draft of the Annual Report on Remuneration of Directors
for financial year 2022 to be submitted to the Board of
Directors for evaluation and subsequent approval, and to be
subsequently submitted to an advisory say-on-pay vote at
the 2023 Annual General Meeting. The Board of Directors
approved such Report on 14 March 2022.
The information on the remaining proceedings of the
Remuneration Committee in 2022 will be included in the Annual
Corporate Governance Report and in the Annual Activities
Report of the Remuneration Committee, which will be published
in June.
B.1.1. c) Identity and role of external advisors.
To better perform its functions, the Remuneration Committee
may request the Board of Directors to engage legal, accounting,
financial or other experts at the expense of the Company.
In this regard, the Remuneration Committee has been advised
in financial year 2022 by WTW, an independent consultant
specialising in the field of compensation of directors and senior
managers, (i) in the preparation of the Annual Report on the
Remuneration of Directors for financial year 2021, (ii) the design
of the 2021-2025 Long-Term Incentive Plan, (iii) the preparation
of remuneration benchmarking on the remuneration of non-
executive chairs of the board of directors and executive
directors with full executive functions, (iv) the amendment of the
Remuneration Policy and (v) the assessment of the implications
for remuneration arising from the departure of the previous
Executive Chairman. On this latter issue, the Committee was
also assisted by law firm Uría & Menéndez, which provided legal
advice on corporate governance and post-contractual non-
compete clauses.
B.1.2. Explain any deviation from the procedure
established for the application of the remuneration
policy that has occurred during the year.
Regarding the former Executive Chairman, section B.10. sets out
the terms of the novation of the executive services contract
entered into between Mr Isla and the Company, dated 17 March
2015, the purpose of which was to update the post-contractual
non-compete agreement. Since the amount in this update
exceeded the provisions in the Remuneration Policy approved
at the 2021 AGM with regard to severance payments for
executive directors, at its meeting held on 14 December 2021
and on the proposal of the Remuneration Committee, the Board
of Directors resolved to submit to the Annual General Meeting
for approval the proposal regarding the Novation of Mr Isla’s
contract, the offer for which Mr Isla accepted on 15 March 2022.
The 2022 AGM approved this resolution with 97.89% of votes in
favour.
There were no other deviations from the established procedure
for the application of the Remuneration Policy in financial year
2022.
B.1.3. Temporary exceptions to the remuneration
policy and exceptional circumstances that have led
to the application of these exceptions, the specific
components of the remuneration policy affected
and the reasons why the company deems that
these exceptions have been necessary to serve the
long-term interests and sustainability of the
company as a whole or to ensure its viability.
Quantification of the impact the application of
these exceptions has had on the remuneration of
each director in the financial year.
No temporary exceptions to the Remuneration Policy (in the two
applicable versions thereof) have been applied during financial
year 2022.
Inditex Annual Report 2022 / Annual Report on Remuneration
208
B.2. Actions taken to align the
remuneration system with the long-term
targets, values and interests of the
Company, and measures to guarantee
that the long-term results of the Company
have been taken into consideration in the
remuneration accrued. Actions taken
regarding the remuneration system to
reduce exposure to excessive risks and
measures to avoid conflicts of interest.
B.2.1. Actions taken to align the remuneration
system with the long-term targets, values and
interests of the Company, and measures to
guarantee that the long-term results of the
Company have been taken into consideration in the
remuneration accrued.
The measures taken in 2022 to ensure that long-term results of
the Company are considered in the application of the
Remuneration Policy are described below:
•Executive directors’ total remuneration comprises different
remuneration elements, mainly consisting of: (i) a fixed
remuneration, (ii) a short-term variable remuneration (annual),
and (iii) a long-term variable remuneration (multi-year).
•In financial year 2022, this long-term element had a weighting
of approximately 40% of the total remuneration (fixed + short-
term variable + long-term variable) for the executive directors.
•Long-term variable remuneration plans are part of a multi-year
framework to ensure that the evaluation is based upon long-
term results and that the underlying economic cycle of the
Company is considered therein.
•Part of this remuneration is granted and delivered in shares,
based upon shareholder value creation, so that the interests of
executive directors and officers are aligned with shareholders’
interests.
•The CEO has undertaken to hold for a term of at least 3 years
the net shares that he may receive as a result of any element
of variable remuneration, until he holds a number of shares
equivalent to at least 2 years of his fixed remuneration. In any
case, once this shareholding target has been reached, the
CEO must comply with the holding obligations under the long-
term incentive plans, which involve holding a number of
shares equivalent to the incentive received in shares, net of
applicable taxes, for two years after their delivery.
While Mr Isla held the position of Executive Chairman, he
committed to the Company to maintain in his personal wealth
a number of shares equivalent to at least 2 years of fixed
remuneration.
These courses of action result in a better alignment of the
interests of executive directors with those of the shareholders.
The Remuneration Policy in effect in 2022 (in the two applicable
versions thereof) set an appropriate balance between fixed
and variable items of the remuneration as described below:
•The design of the remuneration scheme shows an efficient
balance between fixed and variable items, as described in
section A.1. above.
•Variable remuneration items were flexible enough to allow
their shaping, to the extent that it was possible that no amount
was paid on in terms of variable remuneration, whether annual
or multi-year; in such case, fixed remuneration would have
represented 100% of total compensation.
•Variable remuneration is not guaranteed.
B.2.2. Actions taken regarding the remuneration
system to reduce exposure to excessive risks and
measures to avoid conflicts of interest.
The measures taken in 2022 with regard to those members of
staff whose professional activity may have a material impact on
the risks profile of the Company were:
•The Remuneration Committee was responsible for
considering and reviewing the Directors’ and Senior
Managers’ Remuneration Policy and for enforcing it. Those
professionals whose activity may have a material impact on
the risks’ profile of the Company are included among them.
•All members of the Remuneration Committee also sit on the
Audit and Compliance Committee. Therefore, the Chair of the
Remuneration Committee is a member of the Audit and
Compliance Committee. This ensures that risks associated to
remuneration are considered in the course of the debates of
the Remuneration Committee and of the Audit and
Compliance Committee and in proposals submitted by both
Committees to the Board of Directors, on both the
determination and the process to assess annual and multi-
year incentives.
•Likewise, three ordinary members of the Remuneration
Committee also sit on the Sustainability Committee. In
particular, the Chair of the Sustainability Committee is a
member of the Remuneration Committee. The Sustainability
Committee is responsible for overseeing and monitoring
proposals in the field of sustainability, on social and
environmental issues, on health and safety of the products
that the Company places on the market, and the relations with
the different stakeholders in the field of sustainability. Thus, the
fact that the same directors sit on different committees allows
ensuring that alignment with the Group’s priorities in the field
of sustainability for all its stakeholders is considered upon
establishing and enforcing the Remuneration Policy.
209
With regard to clawback provisions in order to be entitled to
claim the refund of variable items of the remuneration that are
based on results, when such items have been paid on the basis
of information clearly shown later to be inaccurate:
•A clawback clause is included in the contract executed with
executive directors in respect of variable items of their
remuneration in such cases. Additionally, the Company may
cancel and/or claim the refund of the long-term incentive
previously paid in full or in part, upon occurrence of certain
unforeseen circumstances, as described in section A.1 above.
•The Remuneration Committee may propose to the Board of
Directors the cancellation of payment or, where appropriate,
the refund of the variable items of the remuneration of
directors based on results, when they have been paid on the
basis of information clearly shown to be inaccurate, as well as
the termination of the relationship with the relevant supervisor
and the filing of the relevant claims, pursuant to the terms of
section 6 of the Remuneration Committee’s Regulations.
The measures taken to detect, determine and resolve potential
conflicts of interest have been addressed in section A.1.2.c)
above.
B.3. How the remuneration accrued in the
financial year complies with the
provisions of the applicable remuneration
policy and how it contributes to the long-
term and sustainable performance of the
company. Relationship between the
remuneration accrued by the directors
and the results or other performance
measures of the company in the short
and long term.
The Directors’ Remuneration Policy for 2022 was approved at
the 2021 AGM and the subsequent amendment was approved
at the 2022 AGM.
The amounts set out in section A.1 above are the only
remuneration paid in 2022 to directors in their status as such for
membership on the Board of Directors of Inditex, or of any
Group companies, except for the remuneration of executive
directors for the performance of senior management functions.
Directors have not received any other remuneration under a
profit-sharing scheme or bonus, nor any remuneration systems
or schemes covering a variable remuneration or based on
results or other indicators of performance of the Company.
As regards executive directors, certain items of their
remuneration for the performance of senior management
functions are tied to results and other indicators of performance
of the Company. In particular, in 2022:
•Short-term or annual variable remuneration:
As explained below, the Board of Directors resolved, on the
proposal of the Remuneration Committee, that the annual
variable remuneration for financial year 2022 should be
determined in accordance with the following criteria for the
CEO, Mr Óscar García Maceiras:
Inditex Annual Report 2022 / Annual Report on Remuneration
210
Weighting
Target
Measurement criteria
70%
Net sales (35%) and
contribution margin (35%)
The same criteria established for senior managers according to the budget of the Company are
applied
15%
Personal performance
Assessment by the Board of Directors, on the proposal of the Nomination Committee
Strategic development of the
Company
Boost of store and online integration, through the development and implementation of new
processes and tools allowing to provide a differentiated customer experience, pursuant to the
Groups’ targets
15%
Progress in the implementation
of the strategy towards global
sustainability, measured
against the following indicators:
(i) Increase in the number of sustainable items, measured against the following parameters:
a More sustainable raw materials: cotton, linen, polyester and cellulose fibres.
b Garments featuring the Join Life sustainability label.
(ii) Number of audits and control of discharges at dyeing facilities (wet processes) within the
scope of the Zero Discharge of Hazardous Chemicals (ZDHC) Programme;
(iii) Percentage of waste reduction in respect of waste generated at Inditex facilities (HQ, logistics
centres and own stores) (Zero Waste);
(iv) Percentage of packaging material collected to be recycled or reused in the supply chain
(Green to Pack);
(v) Percentage of internal consumption of renewable energy at Inditex facilities (HQ, logistics
centres and own stores);
(vi)  Progress in the roll-out of the “Reusable shopping bag” project;
(vii) Progress in the elimination of single-use plastics from customer sales;
(viii) Innovation projects related to textile recyclability:
Progress in corporate
governance
Degree of compliance with the recommendations of the Good Governance Code of Listed
Companies and alignment with international best practices
Progress in implementing
diversity and compliance
programmes
Approval of internal regulations and degree of international roll-out
In order to assess the criteria above for the purpose of
determining the CEO’s annual variable remuneration for
financial year 2022, the Remuneration Committee has taken into
account the target achievement levels and the performance
scales associated with each target, with their corresponding
slopes (i.e. the relation between the level of achievement and the
payout level):
•The Inditex Group’s net sales were €32.569 billion in financial
year 2022, beyond the maximum achievement scenario which
implies a 125% payout level for this target.
•The contribution margin was €5.520 billion in financial year
2022, beyond the maximum achievement scenario, which
implies a 125% payout level for this target.
With regard to such results, the excellent operating performance
of the Group in a highly volatile and uncertain context marked by
cost inflation and disruption of the supply chain, should be
underscored. This has resulted in the need for a very efficient
management of every operating expense item, and in particular
for an inventory position that balances appropriate levels of
procurement with a high level of quality in terms of commercial
success.
This operating performance of the Group has absorbed the
impact of the Russia/Ukraine conflict and has entailed the end
of operations in both markets since the beginning of FY2022. To
the subsequent relevant loss of sales, and in particular, of
contribution to the consolidated profit, an extraordinary negative
accounting impact should be added, in the amount of €231
million. This is shown in the Income Statement for 2022.
Also noteworthy is the profound transformation of the Group’s
retail space, with different actions in terms of store openings,
closings, absorptions and refurbishments aimed at creating a
privileged space to showcase the commercial offer in a
framework of omnichannel and eco-efficiency.
It also bears mentioning the Group’s strong net cash position, in
excess of €10 billion at year-end, that guarantees the financial
soundness as well as the investment requirements associated
with the company’s operating performance in addition to an
attractive remuneration policy predictable to our shareholders.
•For the remaining targets, with a 30% weight,:the
Remuneration Committee has assessed a level of
achievement and a payout level of 125% for these targets. In
this respect, the Remuneration Committee has considered the
following:     
–In terms of progress related to the Company's strategic
development, throughout 2022 the Group continued to
advance its strategy of integration between online and in-
store. The most obvious example of this is Zara's latest store
image, with boutique spaces dedicated to specific
collections such as Lingerie, Beauty or Athleticz, combined
with the introduction of new processes and technological
improvements in the customer experience such as Pay&Go,
the silo for online orders or the Store Mode. New openings
such as Madrid Plaza de España or London Battersea
provide unique retail spaces that offer customers a
distinctive shopping experience, where they can choose to
visit and browse directly or browse online, check available
stock, pay without having to go to the till or buy products
from the store online and pick them up within two hours.
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–The findings of the evaluation of the CEO’s performance,
carried out by the Board of Directors at the meeting held on
14 December 2022, following a report from the Nomination
Committee, with a high rating. This evaluation has
particularly highlighted both his good and rapid adaptation
to the position as well as his integrated management and his
shared commitment to the Company's values and strategic
vision.
A very positive assessment was made of the systematic
bolstering of good corporate governance practices, which
has resulted mainly in a notable improvement in the working
dynamics of the meetings of the Board and its committees,
promoting open and constructive dialogue among directors,
direct dialogue with the management team and
transparency of information through the regular updates on
business performance provided to the directors.
–Progress has continued in 2022 towards achievement of
sustainability targets in accordance with the current Road
Map. Thus:
▪Increase in the number of sustainable items, measured by
the following parameters: (i) more sustainable raw
materials: cotton, linen, polyester and cellulosic fibres and
(ii) garments under the Join Life sustainability label.
In 2022, more than 60% of our products met Join Life
requirements, far exceeding the commitment to have 50%
of our collection under Join Life this year. In addition, in
2022, consumption of preferential raw materials, based on
the classification established by the industry's benchmark
organisations such as Textile Exchange, will already
account for 60% of the total used, 43% more than in the
previous year.
▪Number of audits and control of discharges at dyeing
facilities where wet processing is carried out in the
framework of Inditex’s commitment to the Zero Discharge
of Hazardous Chemicals (ZDHC) Programme: The List, by
Inditex ensures compliance with the chemical restrictions
of the Clear to Wear product health standard and Inditex's
commitment to achieve Zero Discharge of Unwanted
Substances (also known as Zero Discharge or ZDHC
Commitment (Zero Discharge of Hazardous Chemicals).
Over the course of 2022, the Company has adopted the
MRSL (Manufacturing Restricted Substances List) that
regulates the quality of the ZDHC Foundation's discharges,
thus taking a further step in industry convergence by
facilitating compliance with manufacturing requirements
by chemical suppliers as well as the facilities that use
these chemicals. Likewise, The List by Inditex programme
has been integrated into the ZDHC Foundation's chemical
control strategy. This means that the whole industry will be
able to benefit from crucial information to determine
whether a chemical product complies with both the MRSL
discharge parameters and the legal requirements
applicable to the textile or leather article being marketed.
Verification of compliance with the GtW 2.1 standard is
evaluated periodically, through environmental audits,
performed at suppliers and factories that belong to the
Inditex supply chain and that carry out wet processes.
These audits are carried out by independent external
auditors. During financial year 2022, 2,065 audits have
been carried out under this standard.
▪Percentage of waste reduction in respect of waste
generated at Inditex facilities (HQ, logistics centres and
own stores) (Zero Waste): In 2022, the Company has
continued to make progress in the programme to reduce
waste generated internally at Inditex facilities (Zero Waste).
As a result, during the year, waste generated per unit sold
was reduced by 4% compared to 2021. In 2022, 92.2% of
the waste collected at our facilities was sent for reuse and
recycling or energy recovery. Headway was also made in
the programme to ensure that store waste is managed
correctly.
▪Percentage of packaging material collected to be recycled
or reused in the supply chain (Green to Pack): In 2022, the
Green to Pack boxes used for transport and distribution of
our products contained more than 75% post-consumer
recycled cardboard.
▪Percentage of internal consumption of renewable energy
at Inditex facilities (HQ, logistics centres and own stores): In
2022, the target of 100% renewable electricity
consumption in our facilities (including all the Company
facilities - HQ, logistics centres, factories and stores, with
the exception of international offices) was reached.
▪Progress in the roll-out of the “Reusable shopping bag”
project: The roll out of the “Reusable shopping bag”
project continued in 2022, reaching 59 markets at year-
end, with a consequent reduction in the volume of bags
used.
▪Progress in the elimination of single-use plastics from
customer sales: In 2022 all packaging coming into the
store was mapped, both plastic items accompanying our
products and in-store items, eliminating or replacing the
vast majority of these items. In addition, efforts continue to
replace residual packaging and strengthen the necessary
control mechanisms to avoid single-use plastics at source,
and their arrival in warehouses and stores. 
The Company is also participating in The Fashion Pact's
(RE)SET project, which involves the development of
alternative and recycled material solutions for all single-
use plastics in the textile value chain. 
Inditex Annual Report 2022 / Annual Report on Remuneration
212
▪Innovation projects related to textile recyclability: Through
the collaborative Sustainability Innovation Hub, the
Company collaborated with more than 200 start-ups and
participated in more than 30 pilot tests in 2022. Two
particularly noteworthy initiatives that have become a
reality in 2022 result from this collaborative effort: (i)
Infinited Fiber, with whom a purchase commitment for
more than €100 million has been signed, and (ii) the
contribution made to Circ, an innovative start-up
promoting a disruptive recycling technology with the aim
of generating new sustainable fibres for use by the textile
industry.
–Progress in corporate governance.
◦In terms of the composition and structure of the corporate
bodies, financial year 2022 was the year in which the
changes in the organisational structure approved by co-
option by the Board of Directors at its meeting held on 29
November 2021 took full effect, following a careful
transition period, thus bringing the orderly and planned
process of succession to the chairmanship to a successful
conclusion.
The resulting organisational structure has contributed to: (i)
strengthening diversity among directors and reducing their
average tenure, (ii) strengthening female representation,
exceeding the 40% target established for 2022, (iii) fully
separating the position of Board Chair from that of the
Company's CEO, (iv) maintaining the existence of a
balanced composition between proprietary and
independent directors, while meeting the requirements
that non-executive directors represent a broad majority on
the board and that the proportion of independent directors
be at least equal to the company's free float, (v) upholding
the values of Inditex and the continuity of the founding
partner and main shareholder's vision, while at the same
time ensuring the stability of the company due to the
extensive experience of both the CEO and the new Chair,
(vi) providing expertise in areas such as digital
transformation, sustainability, compliance, corporate
governance and relations with regulators, along with
leadership and commercial strategy management, in
particular in the areas of product, design, innovation and
brand image, which are strategic priorities for the
Company and (vii) at the same time, this gradual board
refreshment has resulted in a younger, more diverse and
plural Board with the ability to address issues in a more
up-to-date manner and in line with the expectations and
demands of new generations of customers and other
stakeholders.
In view of the aforementioned far-reaching changes in the
composition of Inditex's governing bodies, at its meeting
held on 12 May 2022, the Board of Directors approved a
skills matrix. This board skills matrix is designed as an
instrument to provide objective criteria in the selection and
appointment of directors and is very useful for projecting
aspects such as diversity on the Board, not only in terms of
experience and knowledge, but also with regard to
aspects such as gender, age, origin and years in office (for
the purpose of complying with the principle of progressive
renewal).
It should also be noted that this new organisation came
hand in hand with a change in the Company's
management model, with the creation of the Management
Committee to support the CEO in the exercise of his
functions, promoting an environment of collegiate
decision-making, in line with international corporate
governance best practices. In 2022, the Management
Committee met 15 times to discuss all aspects of business
operations.
◦As regards organisational and operational aspects, one of
the key features of the 2022 financial year was the
increase in the number of meetings held by the Board of
Directors (a total of 10, compared to 7 in the previous
financial year), combining in person meetings with hybrid
meetings, with directors attending the meetings both
physically and remotely. The agenda of business
transacted by Inditex's different corporate bodies (duly
planned) is increasingly dominated by sustainability.
In addition, the ITX Board Academy director training plan,
launched in 2021 by the General Counsel’s Office together
with the Board committees responsible for these matters,
was stepped up.
◦As far as the Annual General Meeting is concerned, an
external advisor was commissioned in financial year 2022
to review compliance with the standards, rules and
procedures that the Board of Directors of Inditex has put in
place in relation to (i) the publication of the notice of
meeting, (ii) the management of shareholders' rights, and
(iii) the preparation and holding of the 2022 AGM. This
verification resulted in the issuance of an unqualified
report.
Bearing in mind the foregoing and other aspects addressed in
the relevant corporate governance reports, the Audit and
Compliance Committee has conducted an analysis of the
suitability of the Corporate Governance system and has
positively assessed such system. It has considered that the
Company has achieved full compliance with the regulatory
requirements in the applicable law and with the
recommendations of the Good Corporate Governance Code of
Listed Companies, approved by CNMV in February 2015, and
amended in June 2020, as can also be seen in section G.
“Degree of compliance with Corporate Governance
recommendations” in the Annual Corporate Governance Report
for financial year 2022.
•With regard to progress in terms of Compliance, several
projects and initiatives were implemented in financial year
2022, among which the following are worth highlighting:
–A process was started to review and update the Code of
Conduct and Responsible Practices in order to bring its
contents, structure and approach into line with the new
regulatory realities and challenges, the commitments
undertaken by the Company, especially in the area of
sustainability, and the digital transformation of the Company.
Following the applicable good practices, the process is
being carried out with the cooperation of different areas of
the Company, external advisors and Inditex's Social Advisory
Board, as the main point of contact with the Group's different
213
stakeholders.
–A review has been carried out and the transformation of the
Model of Criminal Risk Prevention and the local compliance
models into a Global Compliance Model has begun with the
aim of improving the efficiency of risk identification,
prioritisation and management. With this aim in mind, an
analysis of legislation, the main international standards and
best practices in the field of Compliance was carried out. As
part of the project carried out during the year, a
comprehensive review of the Risk and Control Matrix of the
Model of Criminal Risk Prevention was carried out in
accordance with legislative developments, internal
regulations and changes in the Organisation.
–A number of initiatives were implemented to ensure the
operation of the Ethics Channel is in line with new regulatory
requirements and applicable best practices. Specifically, the
Regulations of the Ethics Committee were amended in
order, inter alia, to strengthen the supervisory and
management functions of this body with respect to the
Ethics Line, to make certain changes to its operations and,
where necessary under the applicable regulations, to
provide it with the authority to set up local bodies similar to
the Ethics Committee. In addition, successive national
transpositions of Directive (EU) 2019/1937 on Whistleblower
Protection were monitored and analysed to ensure the
Ethics Channel's compliance with the applicable
requirements.
–Moreover, in financial year 2022, the Compliance Training
Plan was redesigned to include both the training, awareness
and sensitisation actions aimed at addressing the Group's
primary compliance risks and the role of the Compliance
Function in the coordination and management of the
Training Framework Plan, which aims to organise and
standardise, under the same umbrella, the training provided
by the main corporate areas exposed to compliance risks. In
this context, with the aim of promoting the Group's corporate
ethical culture and compliance system, a global compliance
training course was launched in 2022 on “Tra!n”, the
corporate e-learning platform, which also has a specific area
dedicated to “Culture and values”. This course is mandatory
for a certain group of Group employees who, either because
of their position or responsibilities or because of the type of
work they perform, are exposed to a higher risk of
Compliance. In addition, in order to bolster Compliance
training and awareness among the third parties with which
Inditex has business relationships, a specific compliance e-
learning training course was launched in 2022. It is aimed at
the Group's main product suppliers, which are present in
more than 50 markets. This course will make it possible to
convey to these suppliers the principles and guidelines of
behaviour that the Company expects from them within the
framework of the commercial or professional relationship
with Inditex.
In addition, further progress was made during financial year
2022 in the implementation of third-party due diligence, by
regularising all the Group's existing suppliers and
broadening knowledge and control over the members of the
production supply chain.
In financial year 2022, the Board of Directors approved the
Global sexual harassment and sex or gender identity-based
harassment at the workplace prevention Policy and
reviewed and/or updated the Policy on statutory auditor
contracting for the provision of non-audit services, the
Indirect Procurement Policy, the Sustainability Policy, the
Community Investment Policy and the Internal Code of
Conduct in the Securities Markets. In addition, four
procedures and nine terms of reference or charters of board
committees or internal function were approved and/or
revised.
•As regards progress in the area of Diversity and Inclusion,
during this year 2022, internal awareness of the Group's
Diversity and Inclusion Policy was further strengthened
through various training activities, as well as the active
participation of the diversity team in a number of operational
meetings in different countries. The recognition of "Diversity
Champions" has also been extended to all the Group's chains
to act as internal ambassadors of the diversity policy and
diversity strategy. In terms of training, this year we created our
own diversity and inclusion channel for the Tra!n e-learning
platform, which will make it possible to have all the training
activities related to this area in one place and organised by
level, target groups and specific themes. This channel was
launched as a pilot to all champions and changemakers in the
Company (around 1,500 people) and will be made public to all
teams worldwide at the beginning of financial year 2023. 2022
also saw the renewal of GEEIS, our gender equality
certification for corporate departments and areas. It was
extended to include certification in the area of diversity, and
our Nordic hub was certified for the first time. All the projects
carried out were accompanied by 4 awareness-raising and
sensitisation initiatives: (i) 8 March for gender equality, (ii) 21
May for cultural and socio-ethnic diversity, (iii) the “I'm proud”
initiative for LGBTIQ+ people in July and (iv) the 3rd edition of
Impact Week for the inclusion of people with disabilities in
December. Regarding this latter pillar of the Company’s
diversity strategy, the inclusion of people with disabilities, a
direct boost was given in 2022 with the commitment to recruit
1,500 more people in the teams around the world in the next
two years, doubling the current number. This commitment was
bolstered by the signature of the Global Business Disability
Network (GBDN) Charter of the International Labour
Organization (ILO). 2022 was a year of consolidation in the
diversity and inclusion strategy in its four pillars of activity,
allowing to further strengthen the values of respect, fairness
and non-discrimination.
Inditex Annual Report 2022 / Annual Report on Remuneration
214
Therefore, on the proposal of the Remuneration Committee,
the Board of Directors resolved an overall payout level of the
annual variable remuneration for financial year 2022 for the
CEO equivalent to 125% of target, i.e. €3,750 thousand (150% of
his annual fixed remuneration).
The settlement of Mr Isla's annual variable remuneration for his
period of service in financial year 2022 is detailed in section B.10.
•Multi-year or Long-term variable remuneration:
The second cycle (2020-2023) of the 2019-2023 Long-Term
Incentive Plan (the “2019-2023 Plan”), approved at the Annual
General Meeting held on 16 July 2019, ended on 31 January
2023.
The features and amounts for the second cycle (2020-2023) are
set out below:
•This cycle began on 1 February 2020 and ended on 31 January
2023.
•The amount of the incentive for the second cycle (2020-2023)
assigned to the CEO was as follows:
Executive
Director
Target Incentive
=
Cash
+
Shares
CEO
70% of annual
fixed
remuneration
€700
thousand
33,460
shares
In a scenario of overachievement, the incentive would be
equivalent to 185% of the above referred target incentive.
•The metrics to which this cycle is tied, and their weightings,
are as follows:
Weighting
Target
Measurement criteria
30%
Profit before
Taxes
(“PBT”)
PBT in a certain period of time.
30%
Same-store
Sales
(“MMTT”)
Sales in comparable physical
and online stores, according to
the information released by the
Company.
30%
Relative
Total
Shareholder
Return
(“TSR”)
Comparison of the evolution of
an investment in Inditex’s shares
with the evolution of an
investment in shares of any of
the companies included in the
Peer Group of companies (as
defined below), determined by
the ratio (expressed as a
percentage) between the final
value of a hypothetical
investment in shares (reinvesting
the dividends from time to time)
and the initial value of that same
hypothetical investment.
10%
Sustainability
index
(comprising
4 indicators)
(i) Percentage of factories within
Inditex’s supply chain where wet
processing (such as washing,
dyeing and printing) is carried
out, that use The List, by Inditex
standard as a reference to
select the chemical products
used in their processes. This
percentage will be verified by
means of the relevant audits. It is
measured at the end of each
cycle.
(ii) Percentage of waste (in terms
of waste similar to urban waste
and hazardous waste) internally
generated at Inditex
headquarters, and at all own
factories and logistics centres,
that is recycled, evaluated and
appropriately managed to be
made available as a resource for
repurposing through reuse or
recycling.It is measured at the
end of each cycle.
(iii) Greenhouse as direct
emissions reduction ratio in own
operations in respect of total net
sales of the Group. It is
measured at the end of each
cycle.
(iv) Percentage of Inditex’s
suppliers of goods ranked A and
B following their social audit. The
average of the three years of
each cycle is measured.
215
•In order to calculate the incentive achieved for each level of
achievement of objectives, a Maximum Incentive level and a
performance scale for each metric. have been determined
The performance scales are described below:
–Regarding PBT and MMTT:
Level of achievement
Level of Incentive
(% of Maximum Incentive)
Below minimum
0%
Minimum
50%
Target
75%
Maximum
100%
Overachievement
125%
Intermediate figures are calculated by linear interpolation.
–Regarding the evolution of relative TSR:
–The Peer Group is made up of the companies included
in the Dow Jones Retail Titans 30 index as of 1
February 2020 (the “Peer Group”).
–For the purposes of Inditex’s TSR and the TSR of each
company within the Peer Group, initial value shall be
understood as the average weighted closing share
price of each company on the 30 trading days
immediately prior to 1 February 2020 (excluded) (the
“Initial Value”).
–For the purposes of Inditex’s TSR and the TSR of each
of the companies included in the Peer Group, final
value shall be understood as the average weighted
closing share price of each company on the 30 trading
days immediately prior to 31 January 2023 (included)
(the “Final Value”).
–To this end, for calculating such Final Value, the
dividends or other similar amounts received by
shareholders on said investment during the respective
period of time will be considered, as if the gross
amount thereof (before taxes) would have been
reinvested in more shares of the same class on the first
date on which the dividend or any similar amount is
payable to shareholders and at the closing share price
on that date.
–At the end of the cycle, Inditex’s TSR and the TSR of
each company included in the Peer Group is
calculated. The companies within such Peer Group are
ranked in descending order, based upon the highest or
lowest TSR of each of them. A payout ratio ranging
from 0% to 125% of Maximum Incentive is assigned to
each position in the ranking, in accordance with the
following scale:
Level of
achievement
Place in ranking
Level of
incentive
Below
minimum
< 15th (median)
0%
Minimum
= 15th (median)
30%
Maximum
5th to 8th (75th percentile but
below 90th percentile)
100%
Overachieve
ment
1st to 4th (ranked at or above
90th percentile)
125%
For intermediate positions between median and 75th percentile
within the Peer Group, the payout ratio will be calculated by
linear interpolation.
–Afterwards, Inditex’s TSR will be compared with the
TSR of the companies within the Peer Group to identify
between which positions Inditex is ranked.
Subsequently, the portion of the incentive to be
delivered shall be calculated, interpolating between the
payout ratios of such positions, according to the
difference between the values of TSR.
–Regarding the Sustainability index: the Remuneration
Committee jointly evaluates the 4 indicators above referred
based upon the results achieved, disclosed by the
Company’s Sustainability Department, in accordance with
the following performance scales defined for each of them:
–Indicator no. 1: ensuring the use of the The List by
Inditex standard for chemical products used in the
textile industry:
Percentage of factories where wet
processing is carried out across Inditex’s
supply chain that use The List as a reference
standard
Level of Incentive
(% of maximum
incentive)
< 45%
0%
45%
50%
48%
75%
51%
100%
>55%
125%
–Indicator no. 2: Improvement of own waste
management:
Percentage of
waste similar
to urban waste
Percentage of hazardous waste
appropriately managed to be
recovered
Level of
Incentive
(% of maximum
incentive)
< 85%
< 80%
0%
85%
80%
50%
88%
82.5%
75%
91%
85%
100%
> 95%
> 88%
125%
Inditex Annual Report 2022 / Annual Report on Remuneration
216
–Indicator no. 3: GHG emissions reduction:
Percentage of reduction of GHG emissions
upon expiry of each cycle of the 2019-2023
Plan
Level of Incentive
(% of maximum
incentive)
< 4%
0%
4%
50%
5%
75%
6%
100%
> 8%
125%
–Indicator no. 4: concentrating production in suppliers
ranked A and B following their social audits:
Percentage of concentration of production in
suppliers ranked A and/or B following their
social audit upon expiry of each cycle of the
2019-2023 Plan
Level of Incentive
(% of maximum
incentive)
< 90%
0%
90%
50%
92%
75%
94%
100%
> 95%
125%
–The incentive will be delivered within the calendar month
following the publication of the 2022 annual accounts.
In order to determine the level of achievement reached and the
resulting level of payment, at its meeting held on 14 March 2023
and on the proposal of the Remuneration Committee, the Board
of Directors has taken into account the following results:
•Growth in Same-store Sales in the period from 1 February
2020 to 31 January 2023 was 13.3% on an annualised basis.
This growth is significantly above the overachievement
scenario set at the beginning of the cycle.
•The Group's PBT in financial year 2022 was €5.358 billion. This
growth is significantly above the overachievement scenario
set at the beginning of the cycle.
•Inditex's Total Shareholder Return (“TSR”) position is below the
median TSR ranking of the Peer Group. Therefore, the payout
level is zero.
•Regarding the sustainability index:
(i)The percentage of factories within Inditex’s supply chain
where wet processing (such as washing, dyeing and
printing) is carried out, that use The List by Inditex standard
as a reference to select the chemical products used in their
processes, was above 55% on 31 January 2023 according to
the audits conducted.
(ii)The percentage of waste reduction internally generated at
Inditex headquarters, and at all own factories and logistics
centres, that is appropriately recycled, evaluated and
managed to be recovered, preventing discharge to landfill,
was 92.4% for urban assimilable waste and 80.9% for
hazardous waste on 31 January 2023.
(iii)The ratio of direct greenhouse gas emission reductions in
own operations to the Group's total sales volume has been
reduced by more than 8% from 1 February 2020 to 31
January 2023.
(iv)The percentage of Inditex's product suppliers with a social
ranking of A and B has exceeded 95% in the average of the
three years of the cycle.
The Remuneration Committee has assessed the results with a
full view of the achievements in the second cycle period to
ensure that the level of pay is consistent with them, carrying out
an appropriate balance between the Company’s performance
and the protection of shareholders’ interests. Without prejudice
to underscoring the good performance of sustainability metrics,
the level of achievement of financial metrics has been
considered, which is significantly above the initial
overachievement scenario:
•Growth in Same-store Sales exceeds the long-term rate of
between 4% and 6% expected in 2019 before the COVID-19
pandemic (announced in the financial year 2019 results report)
and is 8 p.p. above the growth achieved in the previous
2019-2021 cycle (5.28%).
•Inditex Group’s PBT in 2022 amounts to €5.358 billion, versus
the PBT in the previous year which stood at €4.199 billion. This
is 14% above the levels achieved in financial year 2019. These
results were achieved without operations in Russia and
Ukraine since March 2022. Russia and Ukraine's PBT
represented 11.1% on total PBT in 2021 (the year before the end
of the cycle) and 10.5% in 2019 (beginning of the cycle).
•Regarding relative Total Shareholder Return (TSR), as this was
totally an unpredictable event in 2020 and with a logical
impact on the share value, the level of direct exposure to
Russia and Ukraine of the Dow Jones Retail Titans 30 stocks
set at the beginning of the second cycle of the 2019-2023 Plan
was assessed. Specifically, 21 companies with no commercial
presence in Russia and Ukraine have been identified, and the
remaining 8 companies have medium or low exposure. Inditex
had a higher level of exposure.
Viewed by geography, these findings are even more relevant
for the purpose of understanding the different evolution of
TSR for the various index constituents:
◦Of the 17 North American companies comprising the Dow
Jones Retail Titans 30 as of 1 February 2020 (and
representing 59% of the index), 15 companies (88%) have no
direct exposure to Russia and Ukraine and only 2 of them
have exposure, albeit to a low degree. This factor partially
explains the better TSR performance of companies based in
the United States and Canada.
◦Of the 7 companies with headquarters in Asia-Pacific and
Africa (24% of the index), 3 of them have no direct exposure
to Russia and Ukraine, 3 have a low degree of exposure and
only one has a medium degree of exposure.
◦Of the 5 European companies (17% of the index), only 2 have
a medium-high degree of exposure to Russia and Ukraine.
The rest have no direct exposure or a low degree.
Based on this analysis, the Remuneration Committee proposed
217
to recognise an overall achievement of the financial targets of
116.7% of the incentive granted in the scenario of
overachievement. As a result, the overall incentive payout level
is 80% of the incentive allocated in the overachievement
scenario.
On the proposal of the Remuneration Committee, the Board of
Directors resolved the following incentive amounts:
For the CEO:
◦A cash incentive of €1,035 thousand.
◦A share incentive equivalent to 49,477 shares.
The settlement of the incentive for Mr Isla, in his capacity as
former Executive Chairman of the Company, has been detailed
in section B.10.
B.4. Report on the result of the advisory
say-on-pay vote at the Annual General
Meeting on remuneration in the previous
year, indicating the number of votes in
favour, votes against, abstentions and
blank ballots:
The Annual Report on the Remuneration of Directors for 2022
was submitted to the advisory say-on-pay vote at the Annual
General Meeting on 12 July 2022, as agenda item number 9,
with the following outcome:
Number
% of total
Votes cast
2,732,426,019
99.54%
Number
% cast
Votes against
79,935,473
2.93%
Votes in favour
2,652,490,546
97.07%
Abstentions
12,744,943
0.46%
Blank votes
78
0%
B.5. Determination of the fixed
components accrued and vested during
the year by the directors in their capacity
as such, and their change with respect to
the previous year.
To determine the remuneration accrued by the directors in their
status as such in 2022, the amounts fixed in the Remuneration
Policy approved at the 2021 AGM and in the Current Text of the
Remuneration Policy as amended and approved at the 2022
AGM have been considered. These amounts have been applied
since the resolution passed at the Annual General Meeting held
on 19 July 2011, except for the position of non-executive Chair of
the Board of Directors, which was created in financial year
2022..The different items and amounts have been detailed in
section A.1.7. above.
Pursuant to the foregoing, and based on the current
composition of the Board of Directors and its Committees, in
2022 the total amount accrued by the directors in their status as
such for the performance of supervisory and collegiate
decision-making duties amounted to €3,230 thousand, of which
€100,000 correspond to the CEO, Mr Óscar García Maceiras,
who held the position of director throughout financial year 2022
and €16 thousand to Mr Isla for holding the position of director
in the transitional period from 1 February until 31 March 2022.
B.6. Determination of the salaries accrued
and vested by each of the executive
directors over the past financial year for
the performance of management duties,
and their change with respect to the
previous year.
The fixed remuneration accrued by the CEO for senior
management functions in financial year 2022 totalled €2,041
thousand. This amount is the sum of the following payments:
•From 1 February to 11 July 2022, remuneration for this item was
in accordance with the Remuneration Policy approved at the
2021 AGM for this position. Therefore, in this period, the fixed
remuneration accrued amounted to €689 thousand.
•From the 2022 AGM until 31 January 2023, remuneration was
in accordance with the Current Text of the Remuneration
Policy. Therefore, in this period, the fixed remuneration
accrued amounted to €1,352 thousand.
The payments were made in 14 instalments and entirely in cash.
For Mr Isla, as mentioned in the Annual Report on the
Remuneration of Directors for financial year 2021, the
remuneration for the period from 1 February to 31 March 2022,
the effective date of his resignation, was in accordance with the
terms set at the Remuneration Policy approved at the 2021 AGM
for the position. Therefore, the fixed remuneration accrued by
Mr Isla in this period was €597 thousand (this amount includes
the payments for the months of February and March and the
prorated part of the 13th and 14th months extraordinary
Inditex Annual Report 2022 / Annual Report on Remuneration
218
payments).
B.7. Nature and main characteristics of
the variable items of the remuneration
systems accrued in the year ended.
A detailed breakdown of annual variable remuneration and long-
term incentive plans is provided in sections A.1. and B.3. of this
report.
B.8. Reduction or return (clawback) of
certain variable components, and, where
appropriate, amounts reduced or clawed
back, grounds for reduction or clawback
and years to which they refer.
No such proceedings have taken place in 2022.
B.9. Main characteristics of the long-term
savings systems.
In financial year 2022 Inditex has made no contributions to the
defined contribution pension schemes.
B.10. Severance pay or any other type of
payment deriving from early cessation,
accrued and/or received by directors
during the year ended.
At its meeting held on 29 November 2021 and following a report
from the Nomination Committee, the Board of Directors of
Inditex resolved by unanimous vote, inter alia, to accept the
resignation tendered by Mr Pablo Isla Álvarez de Tejera as
member and Executive Chairman of the Board of Directors of
Inditex and as member and Chairman of its Executive
Committee. The termination took effect on 31 March 2022, until
which time Mr Isla continued to perform his duties.
As stated in section A.1. 8. of the Directors' Remuneration Report
for financial year 2021, upon the departure of Mr Isla as
Executive Chairman of the Company, on the proposal of the
Remuneration Committee and after an in-depth analysis
process, the Board of Directors approved at its meeting held on
14 December 2021 the offer to amend the Service Contract
entered into between the Company and Mr Isla in 2015 (the
“Contract”), in order to update the post-contractual non-
compete clause included therein, both in terms of a broader
definition of the scope of the post-contractual non-compete
clause of Mr Isla (covering the marketing of any products that
are the same, similar or complementary to those marketed by
the Inditex Group, through online channels, and logistics
services) and also, accordingly, as regards the compensation to
be paid by the Company (increased to a total amount equivalent
to two (2) annual payments of his total target remuneration) and
the multiplier applicable to the penalty in the event of breach of
such obligation (double the compensation received). The
novation was intended to increase the deterrent effect and thus
improve the protection of the Company's legitimate interests
(the “Novation of the Contract”). Mr Isla accepted the offer on 15
March 2022.
Based on the above, the total amount to be paid by the
Company to Mr Isla in consideration of his post-contractual
non-compete obligation amounted to nineteen million seven
hundred and forty thousand euros (€19,740,000.00).
In any case, under no circumstances did the sum of this amount
and the severance payment also agreed (the gross amount
equivalent to one (1) year's fixed remuneration established for
financial year 2022, i.e. €3,250 thousand) exceed an amount
equal to two (2) years of Mr Isla's maximum total remuneration.
Since the total amount of compensation for the aforementioned
non-compete obligation exceeds the provisions of the then
applicable Remuneration Policy as regards payments for
termination of executive directors' contracts, the effectiveness of
such Novation of the Contract was subject to the proviso that it
be approved at the Company's Annual General Meeting in
accordance with the provisions of section 529novodecies(5)
LSC. The 2022 AGM approved the Novation of the Contract with
97.89% of votes in favour.
In accordance with the provisions of the Remuneration Policy
approved at the 2021 AGM, the Company paid Mr Isla the
following amounts within 15 days following the date of
termination of his Contract: (i) €3,250 thousand as severance
pay for termination and (ii) €3,250 thousand, as compensation
for the post-contractual non-compete obligation. The Company
paid the remaining €16,490 thousand to Mr Isla within 15 days
after the date of the 2022 AGM in accordance with the Current
Text of the Remuneration Policy. 
At its meeting held on 15 March 2022 and on the proposal of the
Remuneration Committee, the Board of Directors resolved to
pay the following amounts to Mr Isla as settlement of current
incentives and fixed remuneration:
•Settlement of the incentive for the second cycle (2020-2023)
of the 2019-2023 Long-Term Incentive Plan.
As shown in section B.3. above, this cycle ran from 1 February
2020 to 31 January 2023. Therefore, on Mr Isla’s effective
termination date, i.e. 31 March 2022, 2 year and 2 months had
elapsed out of a total accrual period of 3 years. Since the
metrics associated with this cycle (PBT, MMTT, relative TSR
and sustainability index) are measured at the end of the cycle,
it was not possible to determine an accurate level of
achievement. Therefore, the Board of Directors resolved to
consider as the level of achievement solely for the purposes of
the early settlement a “target” level of achievement in view of
the good results of Inditex in 2021. As a result, the target
incentive, pro-rated for the time elapsed from the
commencement of the cycle until the termination date, would
amount to €980 thousand and 46,859 shares.
•Settlement of the incentive for the first cycle (2021-2024) of the
2021-2025 Long-Term Incentive Plan.
As shown in section A.1.6. above, this cycle runs from 1
February 2021 to 31 January 2024. Therefore, on Mr Isla’s
effective termination date, i.e. 31 March 2022, 1 year and 2
219
months had elapsed out of a total accrual period of 3 years.
Since the metrics associated with this cycle (PBT, TTTT, total
TSR, relative TSR and sustainability index) are measured at the
end of the cycle, it was not possible to determine a precise
level of achievement. Therefore, the Board of Directors
resolved to consider as the level of achievement solely for the
purposes of the early settlement a “target” level of
achievement in view of the good results of Inditex in 2021. As a
result, the target incentive, pro-rated for the time elapsed from
the commencement of the cycle until the termination date,
would amount to €421 thousand and 24,418 shares.
•Settlement of the annual variable remuneration for financial
year 2022.
The Board of Directors deemed that the transfer of duties from
Mr Isla to the (non-executive) Chair of the Board of Directors
and to the CEO has been successfully completed. In addition,
sales continued to improve compared to the same months in
the previous year. On this basis, the Board of Directors has
resolved to consider a maximum level of achievement for the
incentive (125% of target). As a result, the early settlement
amount of the annual variable remuneration for financial year
2022, prorated for the time elapsed from the beginning of the
financial year (1 February 2022) until the termination date (31
March 2022), amounted to €788 thousand.
•Settlement of the accrued pro-rated share of the fixed
remuneration for financial year 2022 corresponding to
extraordinary payments.
Pursuant to the Remuneration Policy approved at the 2021
AGM and as stated in Mr Isla's Contract, the amount of the
annual fixed remuneration for his executive duties was paid in
14 instalments. As a result, 2 payments were due for the period
between 1 February and 31 March 2022, and the prorated part
of the extraordinary payments that would have been made in
July and December was also accrued. This amount was €132
thousand.
Lastly, for information purposes, the features of the pension
scheme of which Mr Isla was a beneficiary and the amount of
the accumulated funds are set out below.
From 2011 to 31 January 2015, Mr Isla was the beneficiary of a
defined contribution pension scheme, implemented through a
group life insurance policy underwritten with an insurance
company of repute in Spain (the “Policy”).
Contributions to such pension scheme up to the specified date
were made by Inditex in the month of September of each of the
years referred to in the paragraph above. The amount of the
annual contributions each year was equivalent to 50% of the
fixed remuneration paid each year by Inditex to Mr Isla.
As has been the norm since 2015, in financial year 2022, no
contributions have been made to the pension scheme for Mr
Isla.
Pursuant to the terms and conditions of the Policy, in case of
termination at Inditex before the retirement age, Mr Isla would
keep 100% of the entitlement to the accumulated funds under
the Policy. However, this being a pension commitment, Mr Isla
or his successors, as the case may be, shall not materialise such
rights until any of the contingencies covered by the Policy would
occur. General contingencies covered are retirement (regular or
early), permanent disability while in performance of professional
duties (ranked as total/absolute and severe disability) and death
while in performance of professional duties. As an exception,
acute illness and long-term unemployment will also be
considered.
Pursuant to the provisions of Royal Decree 681/2014 of 1 August,
whereby the Regulations on Pension Plans and Funds approved
by Royal Decree 304 of 20 February 2004 were amended, the
Policy also covers the possibility of receiving retirement benefit
upon attaining 65 years where the Social Security retirement
benefit is not available, as well as receiving the retirement
benefit in advance on account of termination of the employment
agreement and joining the ranks of unemployed following the
loss by the company of its legal personality, collective dismissal,
dismissal on objective grounds and insolvency proceedings.
These benefits are separate from any other to which Mr Isla may
be entitled on other grounds.
At 31 December 2023, the accumulated funds amounted to
€9,838 thousand.
B.11. Significant changes in the contracts
entered into with executive directors.
On the proposal of the Board of Directors, the 2022 AGM
passed a resolution to amend the Remuneration Policy
approved at the 2021 AGM, section 3 of which defines the key
aspects of the new remuneration package and other basic
contractual conditions to be applied to the CEO under the new
corporate governance structure.
In the context of the departure of the former Executive
Chairman and the tightening of his post-contractual non-
compete clause explained in section B.10 above, the
Remuneration Committee also considered it appropriate to
review the contractual conditions of Mr García Maceiras as
CEO, specifically in relation to the golden parachute clause and
the post-contractual non-compete clause, bearing in mind that
the fact that when evaluating the conditions established for Mr
Isla in his Contract and in the Remuneration Policy approved by
the 2021 AGM, for the purposes of post-contractual non-
compete, these had been deemed insufficient to protect the
interests of Inditex.
When updating these conditions, the Remuneration Committee
also took into account:
•The guidelines of institutional investors and proxy advisors, as
well as recommendation 64 of the Good Governance Code of
Listed Companies in Spain.
•Ibex-35 market practice in relation to severance payments
and post-contractual non-compete clauses.
As a result, the Current Text of the Remuneration Policy fixes the
gross compensation payable in the cases identified therein at
an amount equivalent to the remuneration for two (2) years,
calculated based on the annual fixed and variable remuneration
of the CEO for the current year. This severance payment
includes compensation for the post-contractual non-
competition obligation.
Inditex Annual Report 2022 / Annual Report on Remuneration
220
In any case, the aforementioned severance payment is in
accordance with the limits on the maximum amounts of
severance payments for executive directors set out in the
recommendations of the Good Governance Code of Listed
Companies.
For the Executive Chairman, at its meeting held on 13 December
2021, the Remuneration Committee resolved to submit to the
Board of Directors a proposal for the Novation of Mr Isla’s
Contract, as described in section B.10. above, in order to
strengthen the post-contractual non-compete clause. Such
proposal was accepted and implemented in March 2022 and
approved at the 2022 AGM.
B.12. Any supplementary remuneration
accrued by directors in consideration of
the provision of services other than those
inherent in their position.
No supplementary remuneration other than the one explained
above is provided in the Current Text of the Remuneration
Policy.
As at the date this Report is issued, no supplementary
remuneration has been accrued by the directors in
consideration for any services rendered outside of their post.
B.13. Any remuneration deriving from
advance payments, loans or guarantees
granted.
The granting of advance payments, loans or guarantees to
directors is not covered in the Current Text of the Remuneration
Policy.
As at the date of this Report, no advance payment, loans or
guarantees have been granted to any director.
B.14. Remuneration in kind accrued by the
directors over the year.
No remunerations in kind exist.
B.15. Remuneration accrued by directors
by virtue of payments settled by the listed
company to a third company at which the
director renders services when these
payments seek to remunerate the
director’s services to the company.
As at the date this Report is issued, no such remuneration has
been accrued by any director.
B.16. Any other items of remuneration
other than those mentioned in the
previous sections.
As at the date this Report is issued, no other additional item of
remuneration other than the ones mentioned in the previous
sections are provided in the remuneration system for directors.
221
C. Statistical Appendix III to the annual report on
the remuneration of directors of listed public
companies (CNMV’s Circular 2/2018, of 12 June),
corresponding to Industria de Diseño Textil, S.A.
ISSUER IDENTIFICATION
Ending date of reference period: 31/01/2023
CIF: A-15075062
Company name: Industria de Diseño Textil, S.A.
Registered office: Avenida de la Diputación, Edificio Inditex,
Arteixo (A Coruña)
Statistical appendix to the annual report
on remuneration of directors of listed
public companies
B. OVERALL SUMMARY OF HOW REMUNERATION
POLICY HAS BEEN APPLIED DURING THE YEAR
ENDED
B.4. Report on the result of the advisory say-on-pay vote at
the Annual General Meeting on the annual remuneration
report for the previous year, stating the number of votes
against that may have been cast:
Number
% of total
Votes cast
2,732,426,019
99.54%
Number
% cast
Votes against
79,935,473
2.93%
Votes in favour
2,652,490,546
97.07%
Abstentions
12,744,943
0.46%
Blank ballots
78
0%
Inditex Annual Report 2022 / Annual Report on Remuneration
222
C. ITEMISED INDIVIDUAL REMUNERATION
PAYABLE TO EACH DIRECTOR
Name
Type
Accrual period 2022
Ms MARTA ORTEGA PÉREZ
Proprietary
From 01/04/2022 to 31/01/2023
Mr ÓSCAR GARCÍA MACEIRAS
Executive
From 01/02/2022 to 31/01/2023
Mr AMANCIO ORTEGA GAONA
Proprietary
From 01/02/2022 to 31/01/2023
Mr JOSÉ ARNAU SIERRA
Proprietary
From 01/02/2022 to 31/01/2023
PONTEGADEA INVERSIONES, S.L. 
(REPRESENTED BY MS FLORA PÉREZ MARCOTE)
Proprietary
From 01/02/2022 to 31/01/2023
BNS. DENISE PATRICIA KINGSMILL
Independent
From 01/02/2022 to 31/01/2023
Mr JOSÉ LUIS DURÁN SCHULZ
Independent
From 01/02/2022 to 31/01/2023
Mr RODRIGO ECHENIQUE GORDILLO
Independent
From 01/02/2022 to 31/01/2023
Ms PILAR LÓPEZ ÁLVAREZ
Independent
From 01/02/2022 to 31/01/2023
Mr EMILIO SARACHO RODRÍGUEZ DE TORRES
Independent
From 01/02/2021 to 31/01/2022
Ms ANNE LANGE
Independent
From 01/02/2022 to 31/01/2023
Mr PABLO ISLA ÁLVAREZ DE TEJERA
Executive
From 01/02/2022 to 31/03/2022
223
C.1. Complete the following tables regarding the individual remuneration of each director (including the remuneration paid for performing their executive duties) payable during the financial
year.
a) Remuneration from the reporting company:
i) Remuneration in cash (in thousand euro)
Name
Fixed
remuneration
Attendance
fees
Remuneration for
membership of
board committees
Salary
Short-term
variable
remuneration
Long-term
variable
remuneration
Compensation
Other items
Total year
2022
Total year
2021
Ms MARTA ORTEGA PÉREZ
834
-
-
-
-
-
-
-
834
-
Mr ÓSCAR GARCÍA MACEIRAS
100
-
2,041
3,750
1,035
6,926
712
Mr AMANCIO ORTEGA GAONA
100
-
-
-
-
-
-
-
100
100
Mr JOSÉ ARNAU SIERRA
100
-
200
-
-
-
-
80
380
380
PONTEGADEA INVERSIONES, S.L.
(REPRESENTED BY MS. FLORA PÉREZ
MARCOTE)
100
-
-
-
-
-
-
-
100
100
BNS. DENISE PATRICIA KINGSMILL
100
-
150
-
-
-
-
50
300
300
Mr JOSÉ LUIS DURÁN SCHULZ
100
-
150
-
-
-
-
28
278
250
Mr RODRIGO ECHENIQUE GORDILLO
100
-
150
-
-
-
-
50
300
300
Ms PILAR LÓPEZ ÁLVAREZ
100
-
150
-
-
-
-
50
300
300
Mr EMILIO SARACHO RODRÍGUEZ DE
TORRES
100
-
150
-
-
-
-
22
272
300
Ms ANNE LANGE
100
-
150
-
-
-
-
-
250
250
Mr PABLO ISLA ÁLVAREZ DE TEJERA
16
-
-
597
788
1,402
22,990
-
25,793
9,985
Inditex Annual Report 2022 / Annual Report on Remuneration
224
ii) Table of changes in share-based remuneration schemes and gross profit from vested shares or financial instruments
Name
Name of Plan
Financial instruments
Financial instruments
granted in FY2022
Financial instruments vested during the year
Instruments
matured but
not exercised
Financial instruments at
end of FY2022
at start of FY2022
No.
instruments
No.
equivalent
shares
No.
instruments
No.
equivalent
shares
No.
instruments
No. 
equivalent/
vested shares
Price of
vested
shares
Gross Profit from vested
shares or financial instruments
(thousands of euros)
No.
instruments
No.
instruments
No.
equivalent
shares
Mr ÓSCAR GARCÍA
MACEIRAS 
Second cycle (2020-2023) of the
2019-2023 Long-term Incentive
Plan
61,854
61,854
49,477
49,477
29.27
1,448
12,377
0
0
Mr ÓSCAR GARCÍA
MACEIRAS
First cycle (2021-2024) of the
2021-2025Long-term Incentive
Plan 
68,562
68,562
68,562
68,562
Mr ÓSCAR GARCÍA
MACEIRAS
Second cycle (2022-2025) of the
2021-2025 Long-term Incentive
Plan
71,472
71,472
Mr PABLO ISLA ÁLVAREZ DE
TEJERA
Second cycle (2020-2023) of the
2019-2023 Long-term Incentive
Plan
120,172
120,172
46,859
46,859
19.88
932
73,313
Mr PABLO ISLA ÁLVAREZ DE
TEJERA
First cycle (2021-2024) of the
2021-2024 Long-term Incentive
Plan
116,568
116,568
24,418
24,418
19.88
485
92,150
225
iii) Long-term savings systems
Name
Remuneration from vesting of rights to
savings system (€ thousand)
Mr PABLO ISLA ÁLVAREZ DE TEJERA
Contribution over the year from the company
Amount of accrued funds
(€ thousand)
(€ thousand)
Name
Savings systems with
vested economic rights
Savings systems with non-
vested economic rights
Financial
year 2022
Financial
year 2021
Financial
year 2022
Financial
year 2021
Financial year 2022
Financial year 2021
Systems with vested
economic rights
Systems with non-
vested economic rights
Systems with vested
economic rights
Systems with non-vested
economic rights
Mr PABLO ISLA ÁLVAREZ DE TEJERA
-
-
-
-
9,838
-
9,422
-
iv) Details of other items
Name
Concept
Amount of remuneration
No data
b) Remuneration paid to the company’s directors for being members on the boards of other group companies:
i) Remuneration in cash (in thousand euro)
Name
Fixed
remuneration
Attendance
fees
Remuneration for
membership of Board
committees
Salary
Short-term
variable
remuneration
Long-term
variable
remuneration
Indemnification
Other
items
Total FY
2022
Total FY
2021
No data
Inditex Annual Report 2022 / Annual Report on Remuneration
226
ii) Table of changes in share-based remuneration schemes and gross profit from vested shares or financial instruments
Name
Name of Plan
Financial instruments at
start of FY2022
Financial instruments granted
in FY2022
Financial instruments vested during the year
Instruments matured
but not exercised
Financial instruments at
end of FY2022
No.
instruments
No.
equivalent
shares
No.
instruments
No. equivalent
shares
No.
instruments
No. 
equivalent/
vested shares
Price of
vested
shares
EBITDA from vested shares
or financial instruments (€
thousand)
No. instruments
No.
instruments
No.
equivalent
shares
No data
iii) Long-term savings systems
Name
Remuneration from vesting of rights to savings systems
No data
Contribution over the year from the company (thousands of euros)
Amount of accrued funds (thousands of euros)
Name
Savings systems with vested economic
rights
Savings systems with non-vested
economic rights
Financial year
2022
Financial year 2021
Financial year
2022
Financial year 2021
Financial year 2022
Financial year 2021
Systems with
vested economic
rights
Systems with non-
vested economic
rights
Systems with
vested economic
rights
Systems with non-
vested economic
rights
No data
iv) Details of other items
Name
Concept
Amount of remuneration
No data
227
c) Summary of remuneration (in thousand euro):
This should include a summary of the amounts corresponding to all the remuneration items included in this report that have accrued to each director (in €k) .
Remuneration accrued in the company
Remuneration accrued in group companies
Name
Total cash
remuneration
EBITDA of
vested shares
or financial
instruments
Remuneration
by way of
savings
systems
Other items of
remuneration
Total
FY2022
company
Total cash
remuneration
Gross profit of
vested shares
or financial
instruments
Remuneration
by way of
savings
systems
Other items of
remuneration
Total
FY2022
group
Ms MARTA ORTEGA PÉREZ
834
834
Mr ÓSCAR GARCÍA MACEIRAS
6,926
1,448
8,374
Mr AMANCIO ORTEGA GAONA
100
100
Mr JOSÉ ARNAU SIERRA
380
380
PONTEGADEA INVERSIONES, S.L.
(REPRESENTED BY MS. FLORA PÉREZ
MARCOTE)
100
100
BNS. DENISE PATRICIA KINGSMILL
300
300
Mr JOSÉ LUIS DURÁN SCHULZ
278
278
Mr RODRIGO ECHENIQUE GORDILLO
300
300
Ms PILAR LÓPEZ ÁLVAREZ
300
300
Mr EMILIO SARACHO RODRÍGUEZ DE
TORRES
272
272
Ms ANNE LANGE
250
250
Mr PABLO ISLA ÁLVAREZ DE TEJERA
25,793
1,417
27,210
TOTAL
35,833
2,865
38,698
Inditex Annual Report 2022 / Annual Report on Remuneration
228
C.2. State the development over the last 5 years of the amount and the percentage change in
the remuneration earned by each of the listed company's directors who have been directors
during the year, the consolidated results of the company and the average remuneration on a
full-time equivalent basis of the employees of the company and its subsidiaries who are not
directors of the listed company.
Total amounts  accrued and annual variation
Financial
year 2022
Percentage
variation
2022/2021
Financial
year 2021
Percentage 
variation
2021/2020
Financial
year 2020
Percentage 
variation
2020/2019
Financial
year 2019
Percentage 
variation
2019/2018
Financial
year 2018
Executive Directors (€ thousand)
Mr ÓSCAR GARCÍA MACEIRAS
8,374
1022%
746
0%
0
0%
0
0%
0
Mr PABLO ISLA ÁLVAREZ DE TEJERA
27,210
119%
12,443
111%
5,885
(5%)
6,209
(35%)
9,489
Non-executive Directors
Mr AMANCIO ORTEGA GAONA
100
0%
100
0%
100
0%
100
0%
100
Mr JOSÉ ARNAU SIERRA
380
0%
380
0%
380
15%
330
0%
330
PONTEGADEA INVERSIONES, S.L. (REPRESENTED BY MS. FLORA PÉREZ
MARCOTE)
100
0%
100
0%
100
0%
100
0%
100
BNS. DENISE PATRICIA KINGSMILL
300
0%
300
0%
300
20%
250
0%
250
Mr JOSÉ LUIS DURÁN SCHULZ
278
11%
250
(8%)
273
(9%)
300
0%
300
Mr RODRIGO ECHENIQUE GORDILLO
300
0%
300
0%
300
0%
300
0%
300
Ms PILAR LÓPEZ ÁLVAREZ
300
0%
300
8%
277
11%
250
87%
134
Mr EMILIO SARACHO RODRÍGUEZ DE TORRES
272
(9%)
300
0%
300
0%
300
0%
300
Ms ANNE LANGE
250
0%
250
0%
250
762%
29
0%
0
Consolidated results of the company (€ million)
5,358
28%
4,199
200%
1,401
(70%)
4,681
6%
4,428
Average employee remuneration (€ thousand)
25
9%
23
28%
18
(18%)
22%
10%
20%
229
This annual remuneration report has been approved by the
Board of Directors of the Company in the meeting held on 14
March 2023.
State whether any director has voted against or abstained
from approving this Report.
Yes  □                          No  ☒
Name or company name of the member of the board of directors who has
not voted for the approval of this report
Reasons (against, abstention,
non-attendance)
Explain the reasons
Inditex Annual Report 2022 / Annual Report on Remuneration
230
Pursuant to the provisions of section 253 of the Revised Text of the Companies Act, and section 34 of the Code of Commerce. The
Directors of the company Industria de Diseño Textil, S.A. proceeded, at the meeting held on 14 March 2023, to issue the Annual
Accounts and the Management Report of Industria de Diseño Textil, S.A. for financial year 2022 (1 February 2022 – 31 January 2023),
which consist of the documents preceding this page, all of the pages of which have been signed by the Secretary of the Board of
Directors for identification purposes.
Ms Marta Ortega Pérez
Chair
Mr Amancio Ortega Gaona
Mr José Arnau Sierra
Ordinary Member
Deputy Chairman
Mr Oscar García Maceiras
Pontegadea Inversiones, S.L
CEO
Ordinary Member
Dña. Flora Pérez Marcote
Bns Denise Patricia Kingsmill
Ms Pilar López Álvarez
Ordinary Member
Ordinary Member
Ms Anne Lange
Mr José Luis Durán Schulz
Ordinary Member
Ordinary Member
Mr Rodrigo Echenique Gordillo
Mr Emilio Saracho Rodríguez de Torres
Ordinary Member
Ordinary Member
231