Cuadriptico del presi EN.qxp 30/6/06 14:15 Página 7 CONTENTS Book1 Economic and Financial Performance Chronology of the year 7 The Costumer, the Focus of Inditex´s Activities 15 Key Data 23 International Expansion 29 Sales by Format 37 Stock Market 45 Other Indicators of Financial Activity 51 Auditor’s Report and Consolidated Annual Accounts 57 Consolidated Management Report 111 Book2 Corporate Performance Introduction. The Corporate Governance in Inditex 5 Corporate Governance Report 13 Audit and Control Committee Report 101 Nomination and Remuneration Committee Report 115 Book3 Social and Environmental Performance Corporate Cash Flow 5 Human Resources Report 9 Social Report 25 Environmental Report 61 Verification of the GRI indicators audit 79 LEGAL DOCUMENTS Consolidated Annual Accounts 57 Consolidated Management Report 111 Corporate Governance Report 13 Audit and Control Committee Report 101 Nomination and Remuneration Committee Report 115 Cuadriptico del presi EN.qxp 30/6/06 14:16 Página 8 Book 1. Economic and Financial Pe r fo r m a n ce. Book 2. Co r p o rate Pe r fo r m a n ce. GRI INDICATORS Book 3. Social and Env i ro n m e ntal Pe r fo r m a n ce. Report Guide and Letter from the Chairman. The whole Re p o r t. p a g e 1. VISION AND ST R AT EGY 1 . 1 St ate m e nt of the org a n i sation’s vision and st rategy re g a rding its co ntribution to sustainable deve l o p m e nt. 1 . 2 Chairman’s st ate m e nt 2. PRO F I L E O RG A N I SATION´S PRO F I L E 6 5 2 . 1 Name of the reporting org a n i sat i o n . 3 8- 4 3 2 . 2 Main products and/or services . 3 0 -3 5 2 . 3 O p e rational st r u c t u re of the org a n i z at i o n . 1 0 6 -1 0 8 2 . 4 D es c r i ption of the major divisions, operating co m p a n i es, subsidiaries and joint ve nt u res . 3 2-3 3 2 . 5 Co u nt r i es in which the org a n i sation’s operations are locate d . 1 9 -2 3 2 . 6 N at u re of ownership; legal form. 3 0 -3 5 2 . 7 N at u re of markets serve d . 2 4 -2 5 2 . 8 Scale of the reporting org a n i sat i o n . 1 9 2 . 9 L i st of st a ke h o l d e r s, key att r i b u tes of each and 1 1, 2 6, 4 6 re l ationship to the co m p a ny. S COPE OF THE REPORT 2 . 1 0 Co ntact person(s) for matters re l ated to the re p o r t . 2 . 1 1 Reporting period for info r m ation prov i d e d . 2 . 1 2 D ate of most re ce nt previous re p o r t . 2 . 1 3 B o u n d a r i es of report and any specific limitations on sco p e. 2 . 1 4 S i g n i f i c a nt c hanges in size, st r u c t u re, ow n e r s h i p, pro d u c t s / s e r v i ces that have occu r red since the previous re p o r t. 2 . 1 5 Basis for reporting on joint re p o r t s, partially owned subsidiaries and other situations that could affect co m p a rability f rom period to period. N / A 2 . 1 6 D es c r i ption of any re-st ate m e nts of info r m ation provided in previous reports rea s o n s . R E P O RT´S PRO F I L E N / A 2 . 1 7 Decisions to not apply GRI principles in the pre p a ration of the re p o r t. 6 6 -6 9 2 . 1 8 C r i teria used in the acco u nting of eco n o m i c , env i ro n m e ntal and social co sts and benef i t s . 7, 6 3, 7 2 9 4 -1 0 0 2 . 1 9 C h a n g es with respect to previous years in the mea s u re m e nt met h o d s . 4 6- 4 7 2 . 2 0 Po l i c i es and internal pra c t i ces to guara ntee the co m p l ete n ess and accu racy the info r m ation pres e nted in the re p o r t. 5 8- 5 9 2 . 2 1 Policy and cu r re nt pra c t i ce with re g a rd to providing independent mechanisms for the ve r i f i c ati on of the re p o r t . 8 0 -8 1 2 . 2 2 M eans by which report users can obtain additional info r m at i o n . 3. GOVERNANCE STRUCTURE AND MANAGEMENT SY ST E M S STRUCTURE AND GOV E R N M E N T 2 6 -3 4 3 . 1 G ove r n a n ce st r u c t u re and management sy ste m s . 2 8 3 . 2 Pe rce ntage of the board of dire c tors that are independent, exe cu t i ve dire c to r s . 6 6 -7 6 3 . 3 P ro cess for determining the expertise board members need to guide the st rategic direction of the org a n i sation in matters such as env i ro n m e ntal and social opportunities risks . 6 6 -7 6 3 . 4 B o a r d - l evel pro cess es for overseeing the ident i f i c ation and management of eco n o m i c, env i ro n m e ntal and social opportunities and r i s ks . 3 7-3 9 3 . 5 5 Linkage bet ween exe cu t i ve co m p e n sation and achieve m e nt of financial and financial goals. 8, 1 5, 1 7 3 . 6 O rg a n i sational st r u c t u re and key individual responsible for ove r s i g ht, implement ation and audit of eco n o m i c , env i ro n m e ntal and social policies . 3 . 7 M i ssion and value st ate m e nt, inte r n a l ly developed co d es of conduct and policies re l eva nt to eco n o m i c , env i ro n m e ntal and social perfo r m a n ce and the st atus of implement at i o n . 9-1 0, 8 4 -8 6 3 . 8 Mechanisms for shareholders to provide re co m m e n d ations to the Board of Dire c to r s . COM M I TMENT WITH STA K E H O L D E R S 3 . 9 Basis for the ident i f i c ation and selection of st a ke h o l d e r s . 9-1 0 3 . 1 0 A p p ro a c h es to st a keh older’s co n s u l t ati on . 2 0 -2 1 2 6, 4 4, 5 2- 5 5 2 6, 4 4, 5 2- 5 5 3 . 1 1 Type of info r m ation generated by st a keholder co n s u l t at i o n s . 2 6, 4 4, 5 2- 5 5 3 . 1 2 Use of the info r m ation obt a i n e d . Cuadriptico del presi EN.qxp 30/6/06 14:16 Página 9 ancial Pe r fo r m a n ce. m a n ce. n m e ntal Pe r fo r m a n ce. p a g e G LO BAL POLICIES AND MANAGEMENT SY ST E M S rom the Chairman. 6 5 -7 6 3 . 1 3 Ex p l a n ati on of whether and how the precautionary approach or principle addressed by the org a n i sat i o n . 5 4 - 5 5 3 . 1 4 Ex te r n a l ly developed co m m i t m e nts or other vo l u ntary initiat i ves that the org a n i sation supports. 4 6- 4 7, 5 4 - 5 5 3 . 1 5 Membership in business and industrial ass o c i ations and / or national and inte r n ational advocacy org a n i sat i o n s . 2 6- 5 5 3 . 1 6 Po l i c i es for managing upst ream and dow n st ream impacts. 5 1, 6 7-6 8 3 . 1 7 Reporting org a n i s ation’s approach to managing indirect eco n o m i c , env i ro n m e ntal and social impacts resulting f rom its activities .