Sustainability Report

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An overview of inditex industry

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Content

Sustainability
Report
2004

00_0 Table of contens

01_0
Letter from the Chairman

05_0
14

6

04_1 Our shareholders
04_2 Communication channels
04_3 Share development

26

08_0
Society
08_1
08_2
08_3
08_4
08_5
08_6

10_0
44

Our social commitment
Community development programmes
Emergency programmes
Sponsorship and patronage programmes
Platforms for dialogue
Open to society

Economy
10_1
10_2
10_3
10_4
10_5
10_6
10_7

80

Basic amounts
International expansion
Segmented information
Inditex format by format
Corporate cash flow
Indicators of economic performance
Further indicators

06_1 Our people
06_2 Our objectives, policies and activities

10

14

Suppliers

11_0

09_0

07_0

04_0
Shareholders

06_0
Employees

03_0
Business profile

20

05_1 Our commitment
05_2 Model for customer relations

02_0
Perspective and strategy

Customers

Environment
36

07_1 Our model of responsibility
07_2 Programmes to verify level of compliance with
the Code of Conduct for External Manufacturers
and Workshops
07_3 Programmes for the creation of internal and
external Social Capital

09_1
09_2
09_3
09_4
09_5

Our model of sustainable growth
Strategic plan 2002-2005
Environmental controls
Indicator system
Relationships with interest groups

66

Good Governance

96

11_1 Corporate Governance Structure
11_2 Risk management

12_0
Annexes

102

12_1 GRI Summary
12_2 Independent validation

2

Sustainability Report INDITEX TABLE OF CONTENTS 3

01_0 Letter from the Chairman

Dear shareholders,
Over recent years, many businesses worldwide
have considered the need to take on the
demands of their surroundings in terms of
social and environmental responsibility. This
approach has become an important strategy
insofar as the business world has understood
firstly, the opportunity cost due to not meeting a
growing social demand for transparency and
secondly, its agreement with the general
interests of companies.
This does not mean that the vast majority of
companies, Inditex included, have not always
been concerned about the impact that their
activities have had on society, over and above
their legitimate economic interests. This
concern has been reflected in their human
resources policies, in their dealings with
business partners, suppliers, organisations and
social institutions, and even in their conception
of customer relationships. This said Corporate
Responsability policies have often taken second
place to fulfilling business development targets
and, ultimately, creating value for shareholders.
Early on, corporate responsibility was limited to
a philanthropic expression, generally related to
the principles of the company’s main

4

shareholders and business agents. Later, as a
result of the pressure from trade unions, NGOs
and citizen groups, during the second half of
the 20th Century, companies began to
implement an essentially defensive policy. Over
the past decade, this has become the doctrine
of corporate reputation as a shield against risks
due to actions that do not respect general
interests.
Knowing that this approach was not enough to
meet the demands that companies face today,
Inditex implemented a responsibility model
based on the idea of sustainability. In
accordance with the principles that govern our
commitment –good faith, dialogue and
transparency–, we set up a Code of Conduct
that lays the foundations for Inditex’s
relationships with interest groups. This
Sustainability Report, prepared in accordance
with the Global Reporting Initiative
recommendations, is a way of expressing this
commitment.
Perhaps the aspect that sparks off the most
interest as far as the sustainability policy is
concerned is controlling the supply chain. In
this regard, we can state that we are satisfied
with the progress made in 2004. Over the
course of this year, we have passed 100% of

audits on our supplier database, completing
those relating to European companies,
Morocco, Peru and Brazil –which represent
70% of our products- and starting the process
in Asia.
An important feature of this process is applying
the methodology developed by the Business
Social Compliance Initiative, an organisation of
which Inditex is a member and which brings
the leading European textile distributors
together. The goals of the BSCI include
improving the social regulations of the countries
that play an important role in textile supply, in
collaboration with the suppliers, governments
and other parties involved. BSCI also aims to be
a forum for members to exchange their
knowledge and a meeting point for the latter
and consumers. Maximum transparency is
guaranteed by the distributors.
The philosophy behind our sustainability model
actions is to encourage the improvement of the
conditions in which trade is carried out in
supplier countries, involving governments,
business organisations and trade unions, not to
mention NGOs, in our shared responsibility. For
its part, Inditex believes that this audit process
would only be complete with a program of
corrective plans that help our business partners

to overcome any failings detected. At the same
time, the global approach of our sustainability
model is rounded off by setting up social action
programs targeted at the environment in which
we operate. Special attention is paid to more
susceptible groups and action is focused on
areas such as education, health or social
integration. We feel that this guarantees a more
significant contribution towards social
transformation and improvement.
All of Inditex’s efforts channelled into applying
the sustainability model to its activities are
based on our double conviction that this
approach meets the demands of both the group
that forms part of the company –shareholders,
business agents and business partners– and
those of our customers, with a commitment to
quality in terms of our range of products and
services. This quality would not be complete
without the value-added service that we provide
directly to our customers –a keen emphasis on
design and attractive prices– and that which we
provide to society as a whole through improved
social, environmental and business governance
practices.
Amancio Ortega Gaona
Chairman

Sustainability Report INDITEX LETTER FROM THE CHAIRMAN 5

02_0 Perspective and strategy
Inditex views Corporate Social Responsibility as a strategic factor within its management
procedure. We are convinced that the growth of our organization is closely linked to the
economic, social and environmental commitments we establish with all of the different
groups we are involved with: our shareholders, customers, employees, suppliers and
social players

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Our model of sustainability_

1

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We believe that we must respect and
encourage values of sustainability in all the
things we do, formalizing and putting into
practice policies and management systems
in the three areas in which the company is
involved –social, economic and
environmental – acting according to criteria
of transparency, and establishing
independent mechanisms for control and
evaluation.
We believe that our responsibility as a
company should be measured by our ability
to respond to and anticipate the expectations
and demands of our main interest groups.
We believe that interest groups form an
intrinsic part of our corporate structure,
contributing as partners towards our growth.
For this reason we have decided to situate
our shareholders, employees, suppliers,
customers and social players at the very
heart of our business.

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Our activities in terms of Social
Responsibility have a social, economic and
environmental scope, unavoidably involving
our interest groups both in establishing goals
and commitments, as well as in developing
specific programmes.
The Corporate Governance model acts as a
driving force and guarantee of the model
through different bodies and documents.

6

Sustainability Report INDITEX PERSPECTIVE AND STRATEGY 7

Our commitments_
_with our

shareholders,
for transparency and good governance

_with our

costumers,
with their needs and espectations

_We eliminated the minimum share requirement to
take part in the Annual shareholders’ Meeting

_Extension of our network of stores
(322 more)

_New, more accessible corporate website

_Plan for training employees in
customer service

_with our

employees,

offering stable, just and quality employment

_ 7,867 new employees

_to

society,

the enviroment,

with a Code of Conduct that guarantees
their working conditions

respecting Human Rights and the
improvement of economic conditions
wherever we carry out our work

with a global policy to respect and protect
our natural surroundings

suppliers,

_ 2,620 independent audits carried out in
factories in more than 30 countries

_ 70% full-time contracts
_Increase in shareholder dividends: of 150%

_ Plan for identifying potential and internal
promotion

_ Social involvement projects in the communities
where our suppliers’ employees live. Projects
in Morocco and Peru

_Stopped selling fur items
_Inclusion in the FTSE4Good and Dow Jones
Sustainability indexes

_with the

_with our

_Social development programmes in Latin America
_Solidarity projects in emergency situations: in
Spain (Prestige) and in South-East Asia (tsunami)

_ISO 14.001 Certification in all of distribution
centres, factories and head offices
_Programme for implanting the sustainable
management model in our stores
_Reduction of waste and harmful emissions

_ Halve the number of manufacturers in 2005
_ Develop social intervention programmes in
our suppliers employees’ communities

_Energy saving plan and investment in renewable
energies
_Awareness plan: competition amongst
employees to choose the mascot

Activities 2004_

8

Sustainability Report INDITEX PERSPECTIVE AND STRATEGY 9

We believe that the growth of our
organization is based on the commitment
we have with our interest groups.
Through our activity we contribute towards improving the social,
economic and environmental conditions of our surroundings. In
2004 our turnover amounted to Euros 5,670 million, an
increase of 23% over the previous year. We created 7,867 new
jobs, and have entered eight new markets.

03_0 Business profile

10

Sustainability Report INDITEX BUSINESS PROFILE 11

Oysho 1.3 %
Stradivarius 4.3 %

Breakdown of sales by geographical area

Zara Home 0.7 %

Percentage of sales in international / national stores per chain
Bershka 9.1 %

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Inditex is the leader of a group of fashion
distributors. In 2004, it brought in a consolidated turnover of 5,670 millions of euros and
net profit of 628 million euros. Inditex has been
listed on the Stock Exchange since 2001 and is
one of the largest companies in the world in its
industry.

Net profit*
No. of stores
No. of countries
International sales
Employees

2004

04/03

2003

2002

2001

2000 CAGR 04/00

5,670

23%

4,599

3,974

3,250

2,615

21%

628

41%

447

438

340

259

25%

2,244

322

1,922

1,558

1,284

1,080

56

8

48

44

39

33

55%

54%

54%

54%

52%

47,046

39,760

32,535

26,724

24,004

Inditex makes its business proposal
through eight fashion distribution chains:
Zara, Kiddy’s Class, Pull and Bear,
Massimo Dutti, Bershka, Stradivarius,
Oysho and Zara Home. Zara is the largest
chain with the most sales outlets and a
broader international presence. It is also
the main contributor to the Group’s sales,
bringing in 67.4% of the total in 2004.

Zara 67.4 %

Kiddy’s Class 2.1 %

Sales by chain

Millions of euros
Format
Zara
Kiddy’s Class
Pull and Bear
Massimo Dutti
Bershka
Stradivarius
Oysho
Zara Home

weighting
(%)

2004

2003

04/03

2004

2003

3,819.6
120.6
378.9
481.3
516.0
241.9
71.7
40.4

3,219.6
89.7
287.9
388.9
395.0
162.0
45.1
10.6

19%
35%
32%
24%
31%
49%
59%
279%

67.4%
2.1%
6.7%
8.5%
9.1%
4.3%
1.3%
0.7%

70.0%
1.9%
6.3%
8.5%
8.6%
3.5%
1.0%
0.2%

23%

100%

100%

5,670.4

4,598.9

We adapt our global
fashion concept to each
different market

Milan. Italy, 15 december 2004

New York. USA, 15 december 2004

Zara

65.8

34.2

Kiddy's Class

12.8

87.2

Pull and Bear

30.2

69.8

Massimo Dutti

41.9

58.1

Bershka

35.7

64.3

Stradivarius

15.4

84.6

Oysho

31.5

68.5

Zara Home

12.7

87.3

Internacional

The vast majority of the Group’s sales –82.8%- take place in
Europe, both in terms of weighting in the home market (representing 45.5% of sales) and the total number of stores (1,943
stores, 86.6% of the total are present in European markets). This
region has also seen the highest growth in terms of sales outlets
over recent years. Indeed, in 2004 the 91% of new stores (–293)were opened in Europe.

Sales by format

Sales total

12

2004

At the end of FY2004, Inditex owned 2,244 stores in 56 countries
in Europe, America, the Asia-Pacific Region, the Middle East, and
Africa. During the year, Inditex increased its number of stores by
322 and began trading in Hungary, Romania, Estonia, Latvia,
Lithuania, Hong Kong, Morocco and Panama.

*in millions of euros

São Paulo. Brazil, 15 december 2004

Pull and Bear 6.7 %

Although all the sales formats have individual characteristics as far
as target audience, business lines or store design are concerned,
all the chains have one characteristic in common: fashion with an
emphasis on design, aimed at meeting customer demands and at
attractive prices.

Main indicators
Turnover*

Massimo Dutti 8.5 %

Nacional

Sales per geographic area

6.7%
Rest world

10.5%
America

45.5

%

2004

37.3

Spain

%

Rest Europe

Inditex sales formats grow largely due to
opening stores managed by companies in
which Inditex is the sole or the main shareholder. As at 31 January 2005, 88.3% of stores
were company-managed and represented 90%
of the total sales.

The Group’s main business centres in Spain

Inditex’s business model is characterised by a
high degree of vertical integration. Inditex is
involved in all the stages of the fashion process:
design, manufacture, logistics and distribution
to its own stores. It has a flexible structure and
a strong customer focus in all its business
areas.

Arteixo – A Coruña
Inditex head office
Zara, Zara Home and Kiddy’s
Class head office
Zara and Kiddy’s Class logistics
centre
Production centres

Part of the production process takes place in
the Group’s own factories in Galicia and the rest
is manufactured by external suppliers. 70% of
production comes from Europe and the
surrounding area, the rest coming from Asia
and, to a lesser degree, from other countries
around the world. The closeness factor is
extremely important given the structure of the
Group’s offer, which is targeted at highly
fashionable garments.
Production, regardless of its origin, is received
at the logistics centres of each chain, from
where it is distributed simultaneously to all the
stores worldwide on a highly frequent and
constant basis.

Sallent de Llobregat – Barcelona
Stradivarius head office
Stradivarius logistics centre
Tordera – Barcelona
Massimo Dutti, Bershka and Oysho
head office
Massimo Dutti, Bershka and Oysho
logistics centre

Narón – A Coruña
Pull and Bear head office
Pull and Bear logistics centre
Indipunt (knitwear)
Zaragoza
Zara logistics centre

Elche - Alicante
Tempe head office
Tempe logistics centre (footwear)

Sustainability Report INDITEX BUSINESS PROFILE 13

Transparency and active communication
with our shareholders, is one of our
basic operating principles.
Our aim is to provide them with information that is clear,
detailed and complete enough to evaluate the Group’s
management and its economic and financial results.

04_0 Shareholders
04_1 Our shareholders
04_2 Communication channels
04_3 Share propers

14

Sustainability Report INDITEX SHAREHOLDERS 15

04_1 Our shareholders
At the end of the financial year, Inditex had a
total of 88,484 shareholders, of which 84,771
are individuals, and the rest institutions. During
FY2004, Inditex changed its regulations for the
General Shareholders’ Meeting in order to
withdraw the requirement of holding a
minimum of 50 shares in order to attend the
meeting. Retributions for shareholders via
dividends has increased by 150%. The organization has set itself the objective of increasing
shareholder dividends from 35% of profits in
2004, to reaching 60% of profits in 2008.

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04_2 Channels of communication

od
Go

Shareholder’s office
Any private investor is free to visit the Shareholder’s office to
obtain detailed information about the development of business
and future strategies. Through this channel, the 84,000
individual shareholders may issue any request for information
they consider relevant concerning the growth of INDITEX.
The Shareholder’s Office is particular relevant when calling and
holding the General Shareholders’ Meeting, traditionally held in
mid-July at Inditex head office in Arteixo (A Coruña). Precise
information and documentation is sent to provide shareholders
with sufficient details on the meeting and the contents to be
discussed, as well as facilitating their participation in the
decision-making process of the main governing body.

Shareholders’ e-mail address:
[email protected]
Shareholders direct line:
+34 901 33 02 12

www.inditex.com
The corporate website has been adapted to the Transparency Guidelines

>>

Distribution of share capital according
to number of shares

Shareholder breakdown

Shareholders
3,713

Individuals
Institutions
Board of Directors
Total

Shares
46,717,257
203,114,730
373,498,413
623,330,400

Individuals shareholders
7.50 %
Institutionals shareholders

32.60%

Individuals

>>

88,484 Shareholders

Website
The corporate website includes all of the
relevant information necessary for
Shareholders and Investors, and is aimed
at being a method of communication with
shareholders, offering them up to date
information on all of the significant aspects
of their interest.
The new Regulations of the Board of
Directors includes an expressed regulation
on the corporate website, detailing the
minimum documentation and information it
must contain. Also in FY2004, the
corporate website was adapted to comply
with the requirements on structure and
information detailed in Spanish Law
26/2003 dated 27 July (‘Law on
Transparency’) and in Bulletin 1/2004
dated17 March from the Spanish National
Stock Market Commission.

Any user entering the corporate website
may obtain information on daily and
historical share prices, public yearly reports
published by Inditex since 1998, all
financial information sent to the Stock
Market Commission via Regular Public
Information, all relevant information sent to
the Stock Market Commission, its board of
directors and the financial calendar,
amongst others.
During 2004 the section on Information for
Shareholders and Investors of the corporate
website (www.inditex.com) received a total
of 384,254 ‘hits’.
Apart from the corporate website,
www.inditex.com, each of Inditex’s trading
companies has its own website:

84,771
59.90 %

Institutions
Board of Directors

16

www.zara.com
www.pullandbear.com
www.massimodutti.com
www.bershka.com
www.e-stradivarius.com
www.oysho.com
www.zarahome.com

Sustainability Report INDITEX SHAREHOLDERS 17

Investor Relations Department
< 43 financial and stock market bodies
publish analytical reports on Inditex shares.
We are the third Spanish company in terms
of coverage

In 2004 some 500 meetings were
held with investors, analysts and
investors specialized in Corporate
Social Responsibility.

< More than 3,700 institutional shareholders, owning 32.6% of the capital, play
a key role in setting share prices and their
liquidity.

Appreciation of shares on IBEX 35 from launch on
stock exchange (23 May 2001) to 31/1/05: 54.21%.

Relevant information about the growth and development
of Inditex is also provided on a quarterly basis from the
CNMV (Spanish Stock Market Commission) to the shareholders as a whole, to the financial community and the
media, both in Spain and abroad, paying special attention
to the economic media. This relevant information includes
the Balance Sheet, Profit and Loss Accounts and
Management Report.
This same procedure is used with information on relevant
events that affect the development of business. This
corporate information is available immediately via the
company’s website, and is distributed to a database of
investors and analysts with more than 1,100 entries.
In the area of institutional investors, Inditex completes this
information with quarterly, freely accessible multiconferences via internet and over the telephone, in order to
explain the quarterly results.
Other important events are the Presentations of Yearly
Results to Analysts and Investors, held in London and
Madrid, before an audience of some 60 people.
Further presentations are made in the main financial
capitals and at visits to the installations.
Article 41 of the Regulations of the Board of Directors
establishes a series of measures that govern relations with
shareholders.
In 2005 special efforts have been made within the
markets to explain the impact of transition to IFRS (with
presentations in London and Madrid on 12 May), as well
as to explain the Group’s initiatives in the area of
Corporate Social Responsibility.

Activities with Institutional Investors
a) Roadshows
Every year the Board of Directors offers a series of
presentations or ‘roadshows’ at which it presents the
results from the first two quarters (Spring-Summer
seasons) and for the full financial year (after the Winter
season), visiting the world’s main financial capitals. Over
two and a half weeks, the main investors have access to
the strategic perspective of the management team, mainly
through individual meetings. These visits have been used
to establish direct contact with more than 200 investors.
b) Sectorial conferences
Another forum for communication with investors are the
sectorial conferences organized by financial institutions,
taking part at the main events held throughout Europe,
with an average attendance of 50 of the main institutional
investors at each.
c) One-to-one meetings
Apart from the programmed events, a further extensive
series of individual meetings are organized with investors
every year. In the case of specific demands, visits are
organized with investors to a specific country or region. In
the last year presentations were offered in Europe’s main
financial centres, with more than 100 institutional
investors.
d) Visits by Investors to the company’s premises
A large number of visits were also made by institutional
investors to Inditex installations to provide them with more
detailed knowledge of our organization, its business
model and corporate strategy. Throughout FY2004
meetings were held in different locations with more than
150 institutional investors from all over the world.

13,538 Million Euros of market capitalization
(as of 31 January 2005)
04_3 Progress of shares FY2004
Inditex shares are currently listed on the four Spanish
stock exchange indexes through the Mercado
Contínuo or ‘Continuous Market’. It is listed on the
Ibex 35 index of the Madrid Stock Exchange, on the
MSCI Euro, DJ Euro Stoxx and the FTSE Eurotop 300.

Trends of share price 2004
(in euros)

15.66

Over FY2004 Inditex shares
appreciated by 38.7%,
compared to the appreciation
of the IBEX 35 index of
16.3%.

31 January 2005

38.7%

Inditex is present in the main stock market indexes
that measure the commitment of companies in terms
of Corporate Social Responsibility: the Dow Jones
Sustainability Indexes and the FTSE4Good.
In the evaluation carried out by SAM (Sustainability
Asset Management), a body that evaluates the
economic, social and environmental indicators of
companies in order for them to be listed on the Dow
Jones Sustainability Indexes, Inditex obtained above
average results for all of the criteria analyzed.

21.72

31 January 2004

Variation 04/03

14.70

21.72

23 May 2001

31 January 2005

47.7%
Variation since initial value

Annual trends Inditex vs. IBEX 35

140

INDITEX

120

IBEX 35

Index 100*

80

60
31/01/04

02/04

03/04

04/04

05/04

06/04

07/04

08/04

09/04

10/04

11/04

12/04

31/01/05

* Value at 31st. January 2004

18

Sustainability Report INDITEX SHAREHOLDERS 19

We listen to our customers
to anticipate their needs, improving the
products and services we offer.

05_0 Customers
05_1 Our commitment
05_2 Customer relations model

20

Sustainability Report INDITEX CUSTOMERS 21

We work to improve each of the critical factors
that define our business: fashion, quality,
design and price, to keep strengthening our
costumers’confidence in our products, and
guaranteeing the satisfaction of everyone who
shares our outlook on fashion. Thanks to them,

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we have grown. Our stores are increasingly
larger, and extended across more countries. We
launch new products and extend our services.
We listen to their suggestions and adapt our
offer according to their needs.

Actions 2004

We have

05_1 Our commitments

eliminated

fur products from
our stores
In response to the concerns of
many of our customers all over the
world regarding the use of fur in
garments, Inditex has decided to
eliminate it from its products in all
the world.
This measure was fully effective in
100% of our stores from January
2005, and since 22nd September
2004 in Canada, USA, UK, Ireland,
France, Belgium, Holland,
Luxembourg, Germany, Austria,
Switzerland, Italy, Sweden, Norway,
Denmark, Finland, Iceland, the
Czech Republic, Poland and
Slovenia.

Action guidelines
Inditex has adopted a full commitment in all of the areas of customers service. A
commitment based on two main principles that guide our activities.

Flexibility
We adapt to our customers
expectations
Fashion, despite being a global cultural
expression, has an essential component of
individual choice. Inditex proposes a wide
range of options, so that it is the customer
who makes their own decision, according
to their tastes and desires.

We continue
working on the

Oeko-tex
certification

We show

concern
We are

responsible
Personal customer
service

for our

customers

We launch

Customer
Service

Personal
Tailoring, a

that guarantees full satisfaction
Sales do not end with the exchange of a
product or service between business and
customer. Visiting one of our stores must
be in itself a satisfactory experience.

Minimums
Campaign

new personalized
fitting service

People are one of the most important
factor in acheiving this goal.

We listen to
our customers
and create
new products
and services

22

In 2004 Massimo Dutti
incorporated the possibility
of men having their suits
made to measure. An
initiative that added even
more value to the high
quality of the suits sold by
the chain, designed for
customers seeking a more
exclusive product.

We continue to make
advances in the certification
programme using the Oekotex Standard 100
Certification. In this period
we have achieved 24% of
certified product for
garments for 0 to 16 years
of age, guaranteeing the
absence of harmful
substances throughout all of
the production process.

We keep
improving to
offer you the

We train all of our store
teams in Customer Service.
An awareness campaign
channelled via the internal
magazine, and which has
had the support of the
teams from the sales and
marketing network, by
offering different training
activities throughout the
year.

very best
service
Sustainability Report INDITEX CUSTOMERS 23

05 _2 Customer relations model

The store as the centre of our activities
The Inditex Group’s way of understanding the fashion business situates the store as
the central hub of our activity. Our store staff receive full training in customer service
as an essential value. Store managers are responsible for leading their sales team as
representatives of the values, reputation and image of the Company. The comfort of
customers and their freedom to choose are the essential principles of our activity. The
customer may remain as long as they wish in our store, discovering more about the
items on offer and coming into direct contact with the product.

Direct, open relationship

Customer satisfaction

The model for customer attention at stores belonging
to the Inditex Group is essentially focused on
establishing an open, direct relationship.

The main objective of

we are more accesible
In 2004 we re-designed our corporate
website, reaffirming our commitment
towards offering transparent information by
improving access to its contents, using a
more intuitive design that meets the most
demanding international standards in terms
of navigability, accessibility and visual
design.
Both the corporate website of the Group
and those of the different chains are useful
tools to help provide our customers with
information.

we listen
The different chains that belong to the
Inditex group have a range of channels
open to the public to deal with any request
for information, suggestions or complaints
they may have. Apart from the
personalized service offered in our stores,
the group has a series of suggestion forms
available for the public. There are also
telephone helplines and e-mail services,
available via the websites of each chain.

personalized service in a sales
outlet is customer satisfaction.

Freedom to choose
The store is a dynamic, ever-changing environment.
Customers visiting any of our stores who are interested
in the fashion items we offer enjoy absolute freedom in
their contact with the product.

The managers of our sales
outlets, supported by their team,

The store team is fully available at all times, although
without interfering in customers choosing and buying
items if not requested to do so.

are responsible for offering a fast

2004

and efficient response to their
regardless of whether they buy
2003

our products or not.
I

845,638
Z 8,063,628

PB 594,457
PB 415,025
MD 430,357
BSK 543,26
STR 264,917
OYS 119,402
Z H 79,333

8%
32.24%

MD 676,084
BSK 794,779
STR 408,820
OYS 1 69,719
Z H 209,755

60%

Throughout 2004 our websites received a
total of 12,015,327 hits, 3,704,993 more
than in the previous year. Zara’s website
continued to be the most visited which
represented 67.1% of the total.

38.43%

Others

12%

20%

17.45%
Customer attention
1st option

24

+
+
+
+

closer
quality
services
solutions

Origin of e-mails received in 2004: 49,305

14000
12000
12000
10000
10000
8000
8000
6000

Quality and price

2nd option

Our customer relations model is
focused on the point of sale, where
the store team is the main nucleus
of customer attention.
This Department may be contacted on a
Customer Attention freefone number in Spain
(900 400 323); via the general telephone
number of the Company’s central services
(+34 981 185 400); from all of our stores; by
mail or e-mail, with the address listed on all
of the different corporate websites.

16000
14000

Product/design

11.88%

In the case of Zara, the chain which
represents the largest turnover, out of a
total of 10,539 forms received, 53.44%
referred specifically to customer service
matters. Of these, 41.2% (2.324)
referred to queries or circumstances
directly in relation to the attention
received in the store, with the remaining
58.8% being requests for a wide range
of information.

16000

Z 5,612,396

Customers choose Zara based on...

All suggestions or complaints are dealt with
initially by the store managers and their team.
The priority in this case is to offer a correct
solution in the most agile manner possible,
without turning to other procedures that delay
the process. In any event, the customer
always has the opportunity – if they consider
it necessary – to contact the Customer
Attention Department, which is responsible
for receiving, evaluating and responding to
the requests our customers pass on to us
directly.

TOTAL 12,015,327
I 1,002,677

Both the design and product offered by Zara, the
chain that represents 67.4% of the Group’s total
sales, continue to be the elements most highly
valued by its customers.

All of the Group’s websites make it
possible to contact the other chains or
head offices using a form. In 2004 a
total of 49,305 forms were received in
this way, all of which were answered
personally.

Hits on websites: comparison 03/04

customers’ demands, again

Personalized service

we focus on solutions

www.inditex.com
www.zara.com
www.pullandbear.com
www.massimodutti.com
www.bershka.com
www.e-stradivarius.com
www.oysho.com
www.zarahome.com

6000
4000
4000
2000
2000
0

I of e-mails received in 2004: 49,305
Origin
15,678

I

15,678

BSK
Z 11,350
BSK
10,539
Z 11,350
10,539

MD
6,294

MD

6,294

In 2004, the Customer Service Department
dealt with more than 3,600 calls directly,
representing a monthly average of more than
300 calls. This is a very low number if we
Origin of e-mails
received
in 2004:
49,305sold in
consider
the large
number
of products
I
stores throughout Spain (94.3 million
16000 Zara
15,678
items). This low ratio is the result of the
14000
model for customer relations focused on the
BSK
with the store team serving as
12000 point of sale,
Z 11,350
10,539
the main nucleus of public attention.
10000

PB
1,947

PB

1,947

OYS ZH
1,435 1,405

OYS ZH

1,435 1,405

STR

8000

6,57

STR

6000

MD
6,294

6,57

0
I Inditex | Z Zara | PB Pull and Bear | MD Massimo Dutti
BSK Bershka | STR Stradivarius | OYS Oysho | ZH Zara Home
I Inditex | Z Zara | PB Pull and Bear | MD Massimo Dutti
BSK Bershka | STR Stradivarius | OYS Oysho | ZH Zara Home

49,305 contact forms received.
In the case of Zara, 42.2% of the queries
referred to the attention received in our stores.

4000 In 2004, The Customer Service Department
PB
dealt with more than1,947
3,600
OYScalls,
ZH giving a
2000 direct, personalized response
1,435 1,405
to all
of them.
STR
6,57

0

I Inditex | Z Zara | PB Pull and Bear | MD Massimo Dutti
BSK Bershka | STR Stradivarius | OYS Oysho | ZH Zara Home

Sustainability Report INDITEX CUSTOMERS 25

We grow alongside the people
in our team.
An enthusiastic team is a guarantee for our growth.
Developing channels for promotion and building relations
with our employees based on confidence and innovation is
our responsibility.

06_0 Employees

06_1 Our people
06_2 Our objectives, policies and activities

26

Sustainability Report INDITEX EMPLOYEES 27

The company’s growth determines the principles of
our Human Resources policies. Launching new
markets, quick decision-making, involving
employees or always providing new solutions are
some of the current requirements set by the

organisation which we fulfil through targets and dayto-day tasks. Our corporate values and our way of
handling people are decisive factors in developing
the organisation and ensuring that it goes from
strength to strength.

us t o

m e rs

1

1

rofil

4 E m p l o y e es |
7 Environment

e

5 Su

pp

s
li e r

o
con
l8E

|

|
my

y

re

ci
et

ha

6

So

9G

o

od

ve
rn
a

p
Business

S
|2

nc
e

ho
ld

er

s|

3C

06_1 Our people

go

47,046 employees

Sales activities: 88%

20% more than in 2003
and we just keep on growing

Logístics: 5%
Central Services: 3%
Manufacturing: 4%

Evolution number of employees per activity and totall
50000
40000

% store employees per chain
Zara Home 1%
Oysho 2%

Kiddy’s Class 3%
Stradivarius 5%

30000
Total employees per activity

20000

Massimo Dutti 6%

Inditex employs 47,046 people in
30 countries, 7,867 more than
last year. The characteristics of
our staff are in line with the
characteristics of our business:
young people –the average age is
26 years-, who have been
working for the company for less
than three years –this year we
have opened 332 new storesand a female majority in all of
our organisation’s areas, with the
exception of logistics –where
female employees represent
41%-. Females hold 54% of the
managerial, technical and
administration posts and they
also represent 82% of shop
managers.

Bershka 10%

10000
Logistics 5%

Pull and Bear 7%

Central services 3%

2004

Zara 68%

who

we are

who we are
Young people: Average age:
83.5 % females / 16.5% males

what

we do

20,000
18,000
16,000
14,000

10,000
8,000
6,000
4,000
2,000
0
16

25
year 2002

35

45

55

year 2003

65
year 2004

total

stores

2002

logístics

2003

2004

central services and sites

factories

88 % commercial activity
in 30 countries

where

The countries with the highest of employees

26 years old

2001

Our growth in staff is directly proportional to the opening of
new stores.

47,046 employees
young people

12,000

31/1/04 growth% 03-04

26,719
Spain
3,474
Portugal
3,017
France
1,890
Mexico
1,752
United Kingdom
1,332
Germany
1,326
Grecia
1055
Italy
690
Belgium
640
Venezuela
575
Turkey
499
Brazil
449
United States
436
Canada
433
Japan
370
Chile
386
Holland
340
Ireland
316
Argentina
291
Switzerland
235
Austria
139
Sweden
133
Denmark
112
Uruguay
99
Hungary
107
Czech Republic
73
Luxembourg
69
China & Hong Kong
59
Puerto Rico
30
Norway

21,933
3,265
2,523
1,723
1,449
1,165
1,239
745
629
617
532
470
357
341
314
367
238
65
313
190
179
101
121
110
55
70
9
47
12

21.82
6.40
19.58
9.69
20.91
14.33
7.02
41.61
9.70
3.73
8.08
6.17
25.77
27.86
37.90
0.82
62.18
423.08
0.96
53.16
31.28
37.62
9.92
1.82

47,046

39,179

20,08

Total
28

2000

Stores 88%

31/1/05

The head offices of Inditex and
the Group’s chains, logistics
centres and factories are all
located in Spain. This country
also has the most stores (1,321)
and employees (26,719). In the
overall ranking, Spain is followed
by Portugal, France, Mexico,
United Kingdom, Germany and
Greece.

0

Factories 4%

94.55
4.29
666.67
25.53
150.00

we are

In 30 of the 56 countries

legal environment
attract

link

selectión

hiring

promote
professional
growth

+ motivate

training
development
internal promotion

internal communication
compensation
risk prevention
occupational health
acknowledgement
fringe benefits

social environment

Our objectives, policies and activities
Sustainability Report INDITEX EMPLOYEES 29

06_2 Our objectives, policies and activities

we create a

great team

225.000
new candidates

We aim to give the broadest national
and international coverage to Inditex‘s
job offers in order to ensure that
candidates have the fullest access
possible, in accordance with the
principles of non-discrimination and
equal opportunities.
Inditex publishes its job vacancies via
two channels: the permanent and
world-wide job site, accessed through
the Group’s company websites, and the
media. In 2004, 225,000 candidates
from 56 different countries posted their
CV spontaneously on our job site, which
already has more than half a million
active users. This is the main database
used in recruitment processes. 1,870
job vacancies were published in
newspapers and on the Internet.

flexible
job offers

we have

we create
multinational
management teams
we take on

young
professionals
with strong
managerial
potential

In collaboration with prestigious
Business Schools from different
countries, we have devised a
program targeted at young people
with managerial potential who
become involved different areas
and projects in our organisation
and follow an individual career
plan.

attract

In collaboration with prestigious
Business Schools from different
countries, we have devised a program
targeted at young people with
managerial potential who become
involved different areas and projects
in our organisation and follow an
individual career plan.

Our international expansion policy
that prompted us to open 8 new
markets in 2004 has also led to the
creation of multinational business
management teams. At the head
offices of the chains and of the
Inditex Group in Spain there are
employees with 27 different
nationalities. Their point of view
brings us closer us to the cultural
values of each region.

hiring
hiring

link

we give

priority to our
employees

In the selection processes, priority is
given to employees in stores and
for promotion logistics centres or central services. If
we take Zara España as an example,
which is the company with the most
employees, 34.5% of the newlycreated posts have been filled by
internal promotion in stores and 43.5%
in Central Services (sales and product
areas). Internal promotion in the group
is based on an internal system of
publishing vacancies and a program
that identifies potential.

we emply

local
professionals

As part of our international
expansion policy, we entrust
management to professionals
from each of the countries in
which we carry out our business
activities. This is because they
are familiar with the market,
customers and the local culture
and values, and we trust in them
to adapt our business model and
corporate values accordingly.

promote
stable
employment

We increase stable hiring levels
each year. Whereas in 2004 net
employment growth was 20%,
permanent contracts rose by
24.9 %. This year we have created
25,000 long-term contracts.

we

70%

more than half
of our store manager positions
come from promotións

of employees
have a long-term
contract

recruitment
recruitment
30

Sustainability Report INDITEX EMPLOYEES 31

internal
communication
internal
communication
we inform
on a
continuous
basis

training
training
development
development
focus
on customer
service
we identify
employees with
potential

Specific programs in 27 countries
Helping the business to spot
talent among its employees is an
ongoing objective of the Human
Resources teams. This year,
talent-spotting programs have
specific programs in been introduced in 27 out of 30
countries. 23.4% of the
participants have been given an
internal promotion and 54.2% are
following an individual training
plan.
This program aims to develop
knowledge and skills and
establishes a tracking system and
career plan.

27 countries

all

zara employees around the world
have completed their training

we provide
ongoing training

210.000

hours this year

All the countries have introduced
the customer service training
program, which is aimed at
consolidating one of the factors of
our business. Sales management
has been intensely involved in the
tracking of the program.

We continue to develop ongoing
training actions for all job profiles
(shop assistants, cashiers, window
dressers, manual workers, sales
reps, etc), for all activities (logistics,
stores, sales) and in a wide range
of subject matters, both job-specific
and general –languages, computer
skills, accountancy, etc.-. The
challenge is to improve
employability in order to encourage
internal promotion.

promote professional growth
we promote
functional mobility

the logistics managers

are trained
we combine different

learning
methods

Our training activities are
essentially practical. We
incorporate new methods to
achieve maximum employee
participation, such as Blend
Learning. All logistics and central
services employees receive
language and computer training
by using the Blend Learning
method which combines the
advantages of e-learning with a
computer and at one’s own pace,
and with direct, personal tutors.

in stores

we adapt
compensation to the
bussines

personal
contact
model

promotion
promotion
32

we encourage

open and direct
communication

we incorporate

interactive
communication systems

Our internal magazine (IN) allows
employees around the world to keep
abreast of the business and it brings
them closer to our philosophy and
values. It is a means of informing,
advertising and raising awareness.
Four issues were brought out in 2004.
There has been an increase in
employee participation and
international content.
This is one of Inditex’s main values
and a factor of the management
model. The non-hierarchical structure
and the focus of the people guarantee
direct and almost daily contact with
employees and the constant
exchange of opinions.

hazards
and
safety
hazards
and safety

Taking a global approach, we use
several Internet-based
communication systems to
communicate with the employees of
the central services of the chains
and of Inditex in Spain and the
branches of our subsidiaries. These
two interactive applications
–Inditexnet and Gesdoc- allow
information to be exchanged and
resources to be optimised promoting
the awarenses of organizational
change.

+

Due to more sales outlets and
broader geographical coverage,
the sales network in contact with
stores has expanded, and a
proximity organisation model has
been set up with more
resources. Permanent contact
with shop assistants is one of the
functions of this model.

to different
employee groups and
countries

we guarantee a

safe
environment

Our compensation policies aim to
provide employees with incentives
and recognise their contribution to the
business. Variable pay is present in all
sales duties (86% of all employees)
All the managers and supervisors of
an area or duty participate in the
management by objectives system.

Looking after the health and safety of
employees is our priority. This year’s
objective has been to consolidate the
Health Supervision area with external
resources by developing specific
protocols per risk and task. There
are two main actions: setting up
emergency plans and training the
staff of Inditex, the chains and the
logistic centres in Spain.

motivate
we launch

Knowing the business and face-toface customer contact through
working in the stores has been the
purpose of a highly ambitious
training project during which all the
managers of the Zara logistics
centres became shop assistants for
one week and learnt about other
areas of the organisation. This
experience was extremely useful,
leading to changes in work
processes and giving the chance to
acknowledge other people’s jobs.

we adapt

financial reward

participation and
awareness
campaings

During the course of 2004,
communication campaigns were
developed to involve employees in the
organisation’s objectives in terms of:
_Customer service (advertising
campaign with the minimum customer
service requirements in the internal
magazine)
_Environment (choosing the corporate
mascot’s name using the magazine
and Intranet).
_Solidarity (promoting corporate
activities using the magazine)
_Sales promotion (customer debit
cards, presenting collections,…)
_Health and safety

we adapt Our compensation policies aim to
provide employees with incentives and
to business recognise their contribution to the
business. Variable pay is present in all
sales duties (86% of all employees) All
the managers and supervisors of an
area or duty participate in the
management by objectives system.

compensation

compensation
compensation

we reduce
absenteeism and
accidents

we promote

health
campaigns

We use two indicators to analyse the
results of health and safety
campaigns: the absenteeism and
accident rates.
Although the workforce has increased
by 21%, absenteeism has dropped by
7.6% (hours lost/hours in contract)
and the occupational accident rate by
1.8% (no. of processes/no. of hours
worked x 100).

Over and above the actions
recommended by legal regulations in
force, we promote the improvement of
installations and working conditions
and we carry out health promotion
campaigns. This year an ergonomic
study has been conducted on the
group’s factories for all posts and
specific campaigns for different
groups. Campaigns for participation in
medical examinations, giving up
smoking or donating blood have been
posted in all work centres.

health
healthan
and safety
safety
Sustainability Report INDITEX EMPLOYEES 33

protecting
candidate
data

This year we have made an effort to
improve our personal data management
systems to guarantee the fulfilment of
legal requirements and cultural factors
in all the countries in which the Group
is present, adapting the recruitment
tools to these requirements.

hazards
safety
legislation
and

legal environment
attract

social
dialogue

freedom of
association

In Spain we have a Joint Prevention
Service, which meets legal regulations.
This service covers Occupational Health
and Safety, Industrial Hygiene,
Psychosociology and Ergonomics. The
organisation establishes the
relationships with the workers’
representatives in accordance with the
frequency and requirements set by
Spanish Law.

The right to freedom of association
is respected, with employees
encouraged to participate in
accordance with the legislation of
each country.
In Spain there are employee
representation bodies in almost all
companies and provinces. There
are a total of 406 representatives
including works committees,
employee representatives and trade
union representatives.
In 2004, the majority of the
employee representation bodies
were re-elected in trade union
elections.

promote professional growth + motivate

link

social contribution

we provide

we promote For stores of several chains that are
opened in the same shopping
centre, we centralise the
recruitment process so as to extend
the offer to job-seekers. We work
with local agencies –employment
agencies, organisations and
institutions–, thereby promoting
employment and local development.

local
employements

34

Employees from all over the world are covered by
collective bargaining processes.
In Spain, the provincial Collective Agreements apply
in the branch of trade, and manufacturers are
covered by the General Collective Agreement for the
Textiles and Clothing Industry.
In Spain for all factory workers an agreement has
been signed with the communist labour union
Comisiones Obreras, in which, apart from better
economic conditions than those established in the
Agreement, fringe benefits are introduced.
In the Logistics sector, three Agreements have been
signed with the Works Committees of Zara Logística
(Arteixo), Pull and Bear (Narón) and Plataforma
Europa (Zaragoza), which lay down considerably
better labour conditions than those established in the
applicable provincial Collective Agreements.
Listening to employees through the organisation’s
open, permanent channels and anticipating
expectations and needs prevents any disputes.

we build up

relationships
with
educational
centres

In order to encourage international
expansion, we use a development
program for young people with
managerial potential, in
collaboration with Business Schools
from different countries. These
professionals join our organisation
and follow an individual training
program.
Likewise, we build up relationships
with international Fashion Design
schools and centres that award
qualifications similar to our
business profiles. We collaborate in
the teaching activity, make
company presentations and employ
recent graduates in our companies.

students
with their
first professional
experiencie
through
trainee
programmes
institutional
and
international
relationships

We develop teaching activities at
the training schools near our stores
and take on students on work
experience. This year, in Spain
alone, 822 students took part in
the program. This has been an
opportunity for them to gain access
to their first job.

Regardless of the usual
collective bargaining
processes, participation and
dialogue processes are also
held with both the employee
representation bodies in the
company and with the most
representative Trade Unions on
an institutional level.

Sustainability Report INDITEX EMPLOYEES 35

We are committed to our suppliers
and employees
with a Code of Conduct that guarantees dignified working
conditions. We have completed more than 2,600
independent audits in factories in more than 30 countries.

07_0 Suppliers

07_1 Our social Responsibility model
07_2 Programmes for checking the degree of Compliance with the Code of
Conduct for External Manufacturers and Workshops
07_3 Internal and External Social Capital Creation programmes

36

Sustainability Report INDITEX SUPPLIERS 37

Inditex has a wide network of external suppliers
around the world, who act as business partners by
contributing towards the sustained growth of the
organization. From the standpoint of shared responsibility and participation, Inditex designs, develops
and supervises different programmes aimed at
supporting and helping these collectives, and
requires full respect for Human Rights in all of their
production centres, whether factories or workshops.
These are the production chain strengthening
programs. These programmes include actions in the
factories of the suppliers and through the social and
economic development of the communities in which
their employees and families live.

4 Employees |
7 Environment

|

5S

u

l8E

ie
p pl

rs

om
co n

|6

y|

9

e
nc

y

iet

rn
a

2

ve

e
rofil

Go

1 Business p

Sh

e
ar

So
c

ho
ld

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us t o

m er s

1

od
Go

Group production per geographic area (units)
Main countries where we produce

North Africa 3%
Morocco, Tunisia

Latin America 3%
Mexico, Peru, Venezuela,
Brazil, Argentina

Non-EU Europe 12%
Romania, Turkey, Lithuania,
Bulgaria

European Union 59%
Spain, Portugal, France, United
Kingdom, Italy, Greece

Asia 23%
China, India, Bangladesh,
Thailand, Cambodia, Vietnam,
Pakistan, Indonesia, Sri lanka,
South Korea

07_1 Our Social Responsibility model
We believe that being citizens of the
world implies working actively towards
the respect and progress of Human
Rights, as defined in the principal
conventions of the United Nations.
We help our suppliers to implement
Inditex’s Code of Conduct for External
Suppliers and Workshops. We demand
their dedication and regularly verify their
level of compliance using independent
inspectors, following the guidelines
defined by international standards.
We believe that the process of implanting
these Codes of Conduct has given us the
opportunity to make changes that have
improved social and working conditions
both inside and outside of our suppliers’
factories.

We believe that intervention should not
be limited to our suppliers’ factories, but
that we should also include the communities in which they are based, in order
to transmit and encourage values of
solidarity, respect and good citizenship
We believe that by working together –
distributors, manufacturers and social
and trade union organizations – by developing common platforms of standardization for pan-European Codes of
Conduct, such as the Business Social
Compliance Initiative (BSCI), we have the
opportunity to develop an awareness that
allows us to produce and at the same
time consume goods and services,
without this process having a negative
effect on other people or environments.

Programmes for checking the degree of
Compliance with the Code of Conduct for
External Manufacturers and Workshops

38

<<

Production chain
strengthening programmes

Internal and External Social
Capital Creation Programmes

Sustainability Report INDITEX SUPPLIERS 39

07_2 Programmes for checking the degree of
Compliance with the Code of Conduct for
external manufacturers and workshops
Inditex requires that all of its suppliers
comply with the Code of Conduct for
External Manufacturers and
Workshops, which it approved in
2001. This code includes a series of
basic principles to guarantee
respecting the Human Rights of the

BSCI aims and working system
1
Supplier’s awareness
Stages

employees of our suppliers’ factories
and workshops. In 2004, after
auditing, the Group has decided to
reduce the number of suppliers, from
2,662 at the start of the financial year,
to 1,318 as of 31st. January.

Scope

1,250

During 2004-2005, and to help achieve this goal, the
BSCI platform has offered round table working
meetings in Belgium, China, India, Peru and Morocco,
and in particular Inditex has taken part in activities
such as training suppliers in subjects related to the
implantation and control of Human Rights, in areas
such as Lima in Peru, and Tangier in Morocco, and in

The BSCI principles
BSCI provides that all supplies shall comply, as
far as possible, with current local, regional and
international employment legislation, and in
particular with the following Convenants and
Declarations:

Inditex is committed to offering full compliance
with applicable local legislation in the countries in
which its manufacturers operate, particularly in
relation to:
_Working timetables
_Salaries
_Social Security payments
_Minimum ages for workers
_The prohibition of forced labour
_Cautionary and disciplinary measures
_Freedom of association and collective
bargaining
_Non-discrimination
_Safe and healthy working conditions
_Dormitorios
_Basic environmental requirements

Inditex is committed to offering full compliance
with all international regulations defined in the
main Conventions of the International Labour
Organization (ILO). www.ilo.org

Other regulations and guidelines:
The BSCI also includes:
Directive 62 of the ISO/IEC
SAI MethodologySocial Accountability 8000 (SA
8000)

The BSCI Code of Conduct

Social audit. First assessment
The social audit is aimed at helping the management of
Inditex’s suppliers to improve compliance with all applicable employment, social and environmental legislation.

diagnosis of the level of compliance with the Code;
secondly, listing a catalogue of improvements that will
have to be made via Corrective action plan; and
thirdly, it establishes a calendar for putting them into
practice and making corrections.

This is the most important part of the BSCI’s verification
and standardization process. It firstly involves making a
Score

Below is a definition of the main sections of the
Code, as well as the respective legislation:
1. Compliance with applicable local and international legislation. Mainly placing special
emphasis on compliance with applicable local
and sectorial law, as well as the Conventions
of the ILO and the United Nations.
2. Freedom of association and the right to
collective bargaining. With particular reference
to Conventions 87, 98 and 135 of the ILO.
3. Prohibition of discrimination due to sex, age,
religion, race, social profile, disability, country
of origin, trade union or political affiliation and
sexual orientation. With particular reference to
Conventions 100 and 111 of the ILO.
4. The right to receive just payment for the work
carried out. With particular reference to
Conventions 26 and 131 of the ILO.
5. Working timetable. With particular reference to
Conventions 1 and 14 of the ILO.
6. Health and safety at work. With particular
reference to Convention 155 and recommendation 164 of the ILO.
7. Prohibition of child labour. With particular
reference to Conventions 79, 138, 142 and
182 of the ILO.
8. Prohibition of forced labour. With particular
reference to Conventions 29 and 105 of the
ILO.
9. Compliance with local legislation, or instead
with applicable international legislation
concerning environmental issues and safety at
work.

What does it involve?
All of the suppliers participating in the process of
standardization and implantation of the BSCI are
informed about the scope of the social audit.
Information is also passed on to all of the other parties
involved – NGO’s, trade unions and non-governmental
institutions – that are either directly or indirectly linked
with the development of the process.

The supplier prepares for the audit by carrying out a
voluntary series of measures and activities that will
allow the social audit to be made.

Planned in all the workshops

Business Social Compliance Initiative

the design of training materials and ‘improved working
practices’.

Self-assessment

3

International legislation

40

2,662

Carried out in 2,662 workshops

National legislation:
In March 2003, this association created the
Business Social Compliance Initiative (or BSCI)
involving diverse business association and an
extensive network of retailers, distributors,
importers and producers of mainly clothing,
accessories, footwear and toys.

2003

<

Its work has led to a standardized system for
the implantation, verification and control of the
level of compliance with the Code of Conduct
for suppliers of the main European manufacturers.

2004

2

We subscribe to the
BSCI (Business Social)
Compliance and
methodology
Based in Brussels, the Foreign Trade
Association was created in 2002 with the aim of
firstly creating a pan-European organization
charged with developing a Code of Conduct for
External Manufacturers and Workshops –
according to the SA 8000 methodology – and
secondly with designing systems for verifying
their level of implantation in factories and
workshops by external and independent
auditors.

The main objective we share with the BSCI is to bring
about gradual and sustainable development in the
shape of social and labour improvements in our
suppliers’ factories.

Workshops’number

4

Analysis

2
1

Good
Needs to improve

0

Critical

The audit did not discover any failure to comply with the standards of the BSCI
The audit discovered failure to comply with less than 50%
of the areas considered as “non-essential”
The audit discovered failure to comply with the majority
of the areas considered as “essential”

Correctictive action plan

A decision was made to concentrate production in a smaller
number of external manufacturers
and workshops, going from 2,662
workshops in 2004 to 1,318 in
2005

5

Six months after the audit, checks are made to ensure
that these corrective action plans have been put into
effect.

By applying the BSCI standards in the review
processes, it is possible to coherently compare the
conclusions derived from the different review
processes, and to carry out monitoring through the
Corrective action plan.

Second social audit

1.318 worshops during
2005-2006
In line with the methodology of the BSCI, the process of
verifying the degree of compliance with the Code may
only be carried out by external and independent
auditors, duly accredited and certified by Social
Accountability International (SAI).

Social audits are carried out
by independent experts

Number of workshops
2002-2004
Rejected 2005
Operating May 2005
Second audit programmed
(With corrective action plan)
Start of RSC programme
Certified Auditors (SAI)
Non-certified Auditors

European Union

Non-EU

North Africa

1,761
-901
860
214

189
-89
100
12

148
-81
67
22

2002
INTERTEK
PWC
KPMG

2002
INTERTEK

2002
INTERTEK

Below is a list of the geographic areas in which audits
have been carried out, and the auditors who carried
them out. This team will also be responsible for the
second audits .

Asia

Latin America

487
-239
248
87

77
-34
43
9

2003
INTERTEK

Totales
2,662
-1,344
1,318
344

2004
INTERTEK
IPEDEHP

Sustainability Report INDITEX SUPPLIERS 41

07_3 Internal and External Social Capital
Creation Programmes

Peru

Scope
Context

15 factories (Lima) with 2,500 employees
Lack of trade union representatives.
Little knowledge of Human Rights in the factories of Inditex suppliers.
Strong community and association bonds outside of the factories
Gender discrimination outside of the factories

Involving

IPDEHP
Antonio Ruiz de Montoya University
Local Peruvian businessmen

respect amongst the workers in the
factories of INDITEX’s suppliers, and
which in general bring about an
increase in their welfare in social and
employment terms.
External Social Capital means developing new formulas for association
and cooperation that increase civic
participation in the communities
where workers from the factories of
Inditex suppliers live together with
their families

Creation of
internal social
capital

Stage 1. 2004-2005

Presentation to the factory directors of Inditex’s RSC strategy, the BSCI initiative, the Code of
Conduct for External Manufacturers and Workshops, and the programme for creating social capital.

Stage 2. 2004-2005

Questionnaire to evaluate the internal social capital present in the factories. Identifying and capacitating
male and female employees – potential social leaders – who are trusted and relied on by their workmates.
Results:
_Identification of the factories’ internal social capital index
_Selecting social leaders capable of channelling internal demands with regard to Human Rights,
and connecting the situation of the factories with the main social organizations of the
communities where they live.

Stage 1. 2004-2005

Questionnaire on the human needs of the employees of the factories and their families.
Identifying the vulnerability factors that have a negative effect on the Human Development of the
employees and their families, giving priority to those having the greatest effect at social and employment level.

Creation of
external social
capital

Stage 2. 2004-2005

Geographical location of vulnerability factors. The following communities were identified – San Juan de
Lurigancho, ATE-Vitarte and San Martín de Porras – and the vulnerability factors, in order to be able to offer
an effective and efficient response to their needs.

Stage 3. 2005-2006

Identification and strengthening of social institutions capable of organizing programmes of social investment
in order to respond to the vulnerability factors.
Results:
_Identifying the external social capital index of the social organization.
_List of organizations and leaders sufficiently capacitated to deal with the Human Rights demands
of the employees and their families in the communities where they live.

1. Providing education on respect and
citizenship, developing a strong civil
society, with a public and participative voice
in the processes of designing and implementing transformational policies that
strengthen respect towards Human Rights.
2. A practical way of encouraging collaboration and respect at the same time
encouraging the development of cooperative and associative activities inside and
outside of our suppliers’ factories.
3. Practising education for the people from
the ground up, which trains managers of
daily events, as the success or failure of
these activities and programmes will largely
depend on the existence of a population
that is capable of expressing its expectations in terms of co-habitation.
4. Designing instruments and spaces that
help to improve the living and health conditions of women employed in complex social
and working environments.

Morocco

Creating social capital means:

<

The Internal and External Social
capital Creation Programmes have
been designed to help train committed
people both inside and outside our
suppliers’ factories in Lima and
Tangier, who can feel that their fate is
linked both to the evolution of their
surrounding enviroment and to the
improvement of their equals’ social
and working conditions.

These are programmes designed to
encourage formulas for collaboration,
solidarity, respect and good
citizenship amongst the employees
working in the factories of Inditex’s
suppliers – known as internal social
capital – and in the communities
where their families live – known as
external social capital.
Internal Social Capital means developing a series of networks which,
based on trust and shared beliefs and
standards, facilitate cooperation and

Scope
Context

15 factories (Tangier) with 4,500 – 5,000 beneficiaries
Absence of trade union representatives.
Little knowledge of Human Rights inside and outside the factories.
Weak associative and community bonds inside and outside of the factories.
Gender discrimination inside and outside the factories.

Involving

Intertextil Marroquí (AMITH)
Local Moroccan businessmen
Moroccan social institutions

Creation of
internal social
capital

Stage 1. 2002-2005

Presentation to the factory directors of Inditex’s RSC strategy, the BSCI initiative, the Code of Conduct
for external manufacturers and workshops, and the action programme.

Stage 2. 2005-2006

Questionnaire to evaluate the internal social capital of the factories. Identifying and capacitating women
– potential health promoters – trusted by their co-workers. Results:
_Identification of the factories’ internal social capital index
_Having health promoters on hand capacitated to:
_Develop a health programme for women inside the factories
_Implant health awareness programmes in the communities
_Collaborate with the main social organizations in the community

Stage 1. 2002-2004

Creation of
external social
capital

Questionnaire on the human needs of the employees and their families. Identifying the vulnerability
factors that have a negative effect on the Human Development of the employees and their families,
giving priority to those of greater social-labour importance.

Stage 2. 2002-2004

Geographical location of the vulnerability factors. The following communities in Tangier were identified:
Ain Hayani, Mesnada, Mouatina and Ben Kirane, and the vulnerability factors were identified,
in order to give an efficient and effective response to their needs.

Stage 3. 2005-2006

Identification and strengthening of social institutions capable of organizing social investment
programmes in order to respond to the vulnerability factors.

Internal and external social capital
project investment in 2004:
341,142 euros

42

Results:
_Identifying the external social capital index of the social organizations identified.
_Community associations are strengthened to respond to the demands for health
and services from the communities of the employees and their families.

Sustainability Report INDITEX SUPPLIERS 43

We are committed to Society
in the defense of Human Rights and economic
development everywhere we work.

08_0 Society

08_1
08_2
08_3
08_4
08_5
08_6

44

Our social commitment
Community development programmes
Emergency programmes
Sponsorship and patronage programmes
Platforms for dialogue
Open to Society

Sustainability Report INDITEX SOCIETY 45

m er s

We believe in the duty to Through our sponsorship and
patronage Programmes we have
worked to provide resources for
cultural spaces at national and
international level.

rofil

4 Employees |
7 Environment

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a

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3C

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promote culture

d
oo

education as a driving
social change to build a
respect and
equality

We believe in
force for
shared world based on

Through Community Development Programmes
we have worked on developing actions that
make it possible to train people who feel part of
the community and that their future is linked
with the collective welfare of their equals in
terms of rights and opportunities.

dialogue
transparency

We believe in
and

We are open to society through a series of
channels, to listen to our different interest groups
and to share our values and activities with them.

08_1 Our

Social Commitment

We believe in the active For this reason we have concentrated all of our
social investment strategy in non-government
organizations (NGO’s) capable of developing
network cooperation, such as ‘Fe y Alegria’ and
programmes the Carolina Foundation in Latin America, and
Cáritas and the Red Cross in Spain.

participation of
companies in
cooperation

We believe in the
and

life

right to
safety

By taking part in Emergency Programmes we have
worked to help the victims of natural disasters, offering
them aid immediately after the event and developing
short and long-term sustainability programmes.

We believe in By participating in different forums supporting
the respect of Human Rights at local and
as tool of work international level, we have developed activities
aimed at bringing about changes in social and
labour policies, business practices and ideas and
beliefs at different levels and in different realities.

participation

Each project specifies the capital inverted and consumed temporalised in
each fiscal year. The content and scope of the project in this chapter is
based on the follow-up reports provided by our partners. Web pages are
provided to extend information.

46

Sustainability report INDITEX SOCIETY 47

08_2 Community development programmes
Latin America is one of the priority areas of intervention, in countries such
as Brazil, Peru, Venezuela and Argentina, through programmes
directed by associations and other bodies with extensive experience in the
field. Fully aware of our economic and social commitment with the
communities in which we operate, we maintain an active participation in
different local development programmes in Galicia, the Spanish region in
which Inditex has its head offices and concentrates much of its own
production. The ‘Unirisco’ entrepreneur programme is just one example.

At Inditex we believe in the defence of education as a
Fundamental Human Right and as an intermediary
stage towards a greater objective; personal dignity,
citizenship and the development of different peoples.
In this sense Inditex supports a range of programmes that
foster education and learning as formulas to benefit Human
Development in the communities connected with our
activities.

The Carolina Foundation, created on an
initiative by the Spanish Government at the
end of 2000 and controlled through the
Ministry of Foreign Affairs, is an institution to
promote cultural relations and cooperation in
the educational and scientific fields between
Spain and Latin American countries.

Inditex’s social investment has focused
on three areas of activity:
Programme of

A programme of grants, extended studies and
training teaching teams, who mainly come
from this region.

Visitors’
Programmes

Visitors’ programmes aimed at relevant foreign
individuals with a future projection in their
respective countries.

Grants

Latin America
education

as a priority for

development

When we refer to Latin America, we refer to a
series of highly diverse nations with major
differences between segments of society and
the distribution of wealth.

Hispanic
culture

In terms of education,
it is important to note that:

Latin America Programmes

with two expert partners:
In order to intervene in education we have had
to provide answers to the following questions:
We believe in

education
as a driving force for
social change

1 What type of people do we
want to help educate? We are
seeking to educate people whose outlook, in
terms of expectations, goes beyond their own
individual fortune and that of their immediate
surroundings.

2 What model of society are we
seeking to build? We believe in training
people in values and attitudes that go far
beyond mere working instruments. Values and
attitudes are instruments of social change, for
people individually and as a collective.

3 What framework of reference
do we want to use in order to
develop our strategy of social
investment? Over the last three years,

_ although there has been a significant increase
in educational coverage for basic education,
this has still not become universal
_ although there is a progressive incorporation
of pre-school education in public policies, less
than 50% of children are educated in schools
before the age of five.
_ secondary education continues to be affected
by the high percentage of children who have
to repeat a year or who are forced to leave
school, by the system itself.
_ if we examine the quality of education given
we discover a highly devalued teaching
system: educators with insufficient training
and poor salaries, meaning that they are
unable to dedicate themselves to teaching on
a full time basis.

Supporting studies into Hispanic culture and
its influence on the world through the Centre
for Hispanic and Latin American Studies.

www.feyalegria.org
www.entreculturas.org

Entreculturas
Fe y Alegría
provision by Inditex

2,301,880

The ‘Entreculturas - Fe y Alegría’ Foundation,
formed in 2001, supports more than 130
projects and is present in 127
countries in Latin America, Africa and
Asia. More than 1,200,000 people
have benefited from its programmes.

www.fundacioncarolina.org

Fundación Carolina
provision by Inditex

180,212

Since 2001, and in line with the operational
framework of Dakar, collaboration between
Inditex and Entreculturas has made it possible
to interrelate two networks:

business model

Inditex

Fe y Alegría
popular education network

Inditex’s distribution and sales chains and the
popular education network ‘Fe y Alegría’ that is
present in 14 countries in Latin America, and
at the same time developing the quality of
education in the most vulnerable communities
in the countries in which we produce and/or
market our products.

Inditex has decided to support an integral
improvement plan for educational conditions for
vulnerable groups in Venezuela, Peru, Argentina
and Brazil.

48

Sustainability Report INDITEX SOCIETY 49

The programmes of social investment we have
financed for the third year running are focused on
responding to the objectives of the Dakar
Framework for Action, which have taken shape in
most cases in extending educational possibilities,
training educators and promoting vocational and
technical training.

Project evolution
and investments

Inditexshares
the Objectives
ofDakar
www.unesco.org

Argentina
Brazil
Peru
Venezuela
Central America

Peru
Venezuela

1,386,204

2002

Investment by Inditex in Euros

To comprehensively extend and improve

2003

2,139,363

Argentina
Brazil
Peru
Venezuela

1,001,620 used 2003
1,137,743 accrued 2004

Investment by Inditex in Euros

_ Home nursery network in Natal (Brazil).

education in early childhood

2004

2,301,880

1,170,957 used 2004
1,130,923 accrued 2005

Investment by Inditex in Euros

_ Female educators’ network in the Home Nursery Network (Natal, Rio Grande do
Norte, Brazil).

1
To ensure that all children,
particularly the most disadvantaged,
have access to free, compulsory
and high quality primary
education by 2015

_ Building educational infrastructures for elementary education in

_ Construction of 6 basic education classrooms in northern Argentina.
_ Extension and improvement of coverage in marginal areas of Lima (Peru).

Cuzco, Illo, Tacna and Lima (Peru).
_ Producing bilingual texts in Cuzco (Peru).

_ Improving educational conditions for 1,200 children in Ilheus (Brazil).

_ Providing educational spaces –classrooms and libraries– for children

_ Full time accompaniment for 200 children between 6 and 12 from marginal areas
(Formosa, Argentina).
_ Extension of the educational offer for 120 children in marginal areas (Resistencia,
Argentina).

and teenagers in different parts of Venezuela.

_ Financing the AVA TAVA Social Promotion Centre: Programme fighting sexual abuse
and violence against children (San Miguel, Argentina).
_ Improving educational conditions for 1,200 children from the district of Nossa Señora
da Vitoria (Ilheus, Brazil). Stage II.

2

3

_ Programme for strengthening high social risk sectors (Peru).

To ensure that all the learning needs of
young people and adults are satisfied
through equal access to
education and training,
enabling them to have access to a

_ Social and educational support for 190 children and teenage
workers. Awareness for families and schools on child labour
_ University education for young Peruvians.
_ Training and support for 100 community organization leaders.

_ Building and equipping workshops for training young people in Estado Bolívar and
Cumaná (Venezuela)
_ One hundred young people from Natal -Brazil- at social risk take part in educational
and cultural activities

_ Support for the creation of community centres (Rio de Janeiro, Brazil).
_ Support for work in defence of the rights of tribes living in the Amazon carried out by
the Comisión Pastoral de la Tierra (Brazil).
_ Construction and equipping of teaching workshops in poor communities in Oriente

_ Support for more than 200 young people involved in the Community Cultural Centre in (Venezuela).

decent active life

Rio de Janeiro (Brazil).

_ Strengthening educational quality by building and equipping workshops (Venezuela).
_ Programme supporting higher education (Peru).
_ Programme for creating social capital in the factories of Inditex suppliers and the
communities where their workers and families live (Peru).

To increase by 50% the number
of literate adults,
particularly women, by 2015

4
To

5

50

in primary and secondary education
for 2005, achieving gender equality to
education by 2015

To improve all qualitative aspects of
education in order to achieve

What is
Dakar?
UNESCO defined its commitment
towards the international community
in a document known as the Dakar
Framework for Action, aimed at
supporting a worldwide educational
strategy entitled Education for All.

remove gender inequalities

_ Teaching proposals in the rural network in Cuzco (Peru).

_ Equal gender opportunities programmes have been included in the social investment
programmes that develop the other five objectives of the Dakar Frame work.

_ Programme for strengthening sectors at high social risk (Peru).
_ Programme supporting higher education (Peru).

recognised and
quantifiable results

6

mainly in areas related to reading,
writing, arithmetic and practical skills

Sustainability Report INDITEX SOCIETY 51

Throughout 2003, following the serious social and economic crisis
suffered in recent years, Argentina has slowly set out on the road
to recovery.
Within this context, projects financed by Inditex have focused on
supporting those groups who have directly suffered the
consequences of the situation the country has experienced in the
last few years, placing specific emphasis on Objective 2
of the Dakar Framework for Action.

In Brazil, Inditex has collaborated in financing
social investment projects with a strong
community bias, related to Objectives 1,2
and 3 of the Dakar Framework for Action.

470boys and girls
Project duration12months
Beneficiaries

212,629
144,437
Accrued in 2004-2005
68,192
Provision by Inditex in FY 2004

Dakar Objectives

Argentina

young people, educators and peasant
1,890 children,
communities in 27 autonomous districts
Project duration12months
Provision by Inditex in FY 2004
347,441
Used in 2004
147,008
Accrued in 2004-2005
200,433

Beneficiaries

Used in 2004

Dakar Objectives
To comprehensively extend and improve

education in early childhood

Brazil

Organization of the Women’s Teaching Group in the Home Nursery
Network (Natal, Rio Grande do Norte)
This programme is helping to develop activities to reinforce children’s education in the outskirts
of the city with the creation of ‘home nurseries’ and training educators to run them.

Comprehensive mentoring for 200 children of school age (6 to 12)
from deprived areas in Formosa
To ensure that all children,
particularly the most disadvantaged,
have access to free, compulsory
and high quality primary
education by 2015

1
Improving educational conditions
for 1,200 children in the district of
Nossa Señora da Vitoria (Ilheus).
Stage II

To ensure that all children,
particularly the most disadvantaged,
have access to free, compulsory
and high quality primary
education by 2015

Formosa is Argentina’s poorest and most marginal province. Some 650,000 people live in the capital who
feel that their most basic needs have been ignored for years. For more than 10 years a group of nuns
known as the ‘Missionaries of Mary’ have worked in the city, setting up a support programme so that
children of school age improve their results, to avoid the high percentage of children who drop out of
school or repeat academic years. This programme will form part of the ‘Fe y Alegria’ network. Thanks to

More than 60% of the 20,000 families who live in

this project, work will continue offering educational support that will directly benefit 200 children at

this district have salaries below the basic wage

primary level.

(some 60 Euros). For many children of school age
who live in this district, the ‘Fe y Alegría’

2

2

Extending the educational
offer for 120 children in
deprived areas (Resistencia)
The district of Alberdi (in the city of

educational centre is a point of reference for them
in terms of learning and sharing with others. In

To ensure that all the learning needs of
young people and adults are satisfied
through equal access to
education and training,
enabling them to have access to a

Support for creating community
centres (Rio de Janeiro)

poverty. The ‘Fe y Alegría’ school offers

AVA TAVA Centre for
Social Promotion: a
programme fighting
sexual abuse and
violence against children
(San Miguel)

quality education to 390 children, although

In the second peripheral zone of

Marambaia with a capacity to attend to more than

it must be extended to accept all of the

Buenos Aires we find some of the

200 children and young people, together with their

children who need to be educated. The

severest cases of poverty in the

families.

project will help construct two new

whole country. Here an estimated

classrooms, offering the possibility for

88% of the population is poor, and

decent basic education to a further 120

more than half of the children suffer

children.

from malnutrition. In these hostile

Resistencia) is a clear example of the
situation suffered by numerous outlying
districts in Argentina. Most of its inhabitants
are emigrants who have arrived from the
countryside, with 70% living in conditions of

3

decent active life

These centres, situated in communities with very low
incomes, represent an alternative of leisure and
recreational activities in the face of the urban violence

this second stage of the project, the Centre aims
at becoming a point of reference to give impetus
to cultural activities in the area, as a meeting
point, and a centre offering training in different
skills.

ad lack of community areas in the city. For this
reason in this financial year Inditex has supported the
construction of a new centre in the district of

circumstances, cases of domestic

Supporting work in defence of native
peoples in the Amazon carried out
by the ‘Comisión Pastoral de la Tierra’
(CPT)

violence and sexual abuse to

The CPT has teams who travel the rivers offering

children flourish. The project is

support to rural communities cut off from the rest

directly focused at fighting this

of society, providing legal experts for indigenous

problem by offering art workshops to

communities to help them register land ownership

prevent episodes of abuse or

and protect themselves against potential violations

violence. A team of psychologists

of Human Rights.

and educators work with the
children and their families to prevent
incidents of this type being repeated
that may have an irreversible effect
on the child.

52

Sustainability Report INDITEX SOCIETY 53

In Venezuela, Inditex has collaborated in
financing social investment projects directly
related to Objective 3 of the Dakar Framework
for Action.

In Peru, Inditex has collaborated in financing
social investment programmes directly related to
Objectives 3 and 6 of the Dakar Framework
for Action.

40,000
Project duration12months
Beneficiaries

Dakar Objectives

3

To ensure that all the learning needs of
young people and adults are satisfied
through equal access to
education and training,
enabling them to have access to a

decent active life

To improve all qualitative aspects of
education in order to achieve

recognised and
quantifiable results
mainly in areas related to reading,
writing, arithmetic and practical skills

6

Peru

Approximately 40,000 people (students and teachers
in rural and deprived urban areas)

1,020,361
502,585
Accrued in 2004-2005
517,776

840students
Project duration12months
Beneficiaries

721,449
376,927
Accrued in 2004-2005
344,522

Provision by Inditex in 2004

Provision by Inditex in 2004

Used in 2004

Used in 2004

Dakar Objectives

Programme for creating social capital in the
factories of Inditex suppliers and in the
communities where their employees and their
families live
‘Entreculturas’ supports the initiative for creating social
capital that Inditex has set underway in its production
centres in Peru, collaborating through the Peruvian
Institute of Human Rights and Peace (IPEDEPH) and the
Antonio Ruiz de Montoya University in Lima. This Project
focused on designing and creating networks is aimed at
allowing its beneficiaries to have a say in the development
proposals, and to improve the level of compliance with
Human Rights in the locations where Inditex is present.
The studies currently underway will lead to a diagnosis
of requirements that will be of major use in the planning
of new joint projects.

Programme for strengthening
high social risk sectors

Support programme for higher
education

The aim of the programme is to
improve living conditions for children,
teenagers and young adults in Cuzco,
Ilo, Tacna and Lima, supporting their
educational possibilities and free time
activities, through four main activities:
building educational infrastructures,
buying school materials, offering
preventative attention and support,
and finally the publication and
provision of educational materials.
The project also supports the rural
educational network in the province of
Quispicanchi (Cuzco).

This Project includes a grant programme so that
30 students from the poorest areas of Peru who
have studied at ‘Fe y Alegría’ centres may
receive a total of $650 per term, allowing them
to complete degrees at the Antonio Ruiz de
Montoya University (UARM). The other part of
the project involves setting up a process for
ensuring the teaching knowledge of educators
at the ‘Fe y Alegría’ centres is brought up to
university level. These courses will be designed
by the Education faculty of the UARM to be
distributed for distance learning. Once
validated, a total of 100 teachers at the Fe y
Alegría schools in Peru will benefit from the
programme.

3

To ensure that all the learning needs of
young people and adults are satisfied
through equal access to
education and training,
enabling them to have access to a

decent active life

Venezuela

Building and equipping didactic workshops in
poor communities in eastern Venezuela
This project has been designed to reduce the negative
effects on education derived from the serious political and
administrative crisis in Venezuela that has mainly affected
the poorest districts in the large cities.
As a result, the construction and subsequent equipping of
didactic workshops means that the educational offer for
young people from the poorer neighbourhoods is
improved, helping them to find jobs.

Improving educational
quality by building and
equipping workshops
Through this project, 2 workshops
and 21 classrooms have been
provided for the ‘Fe y Alegría’
network in the Andes, Caracas,
Central and Guayana regions,
making it possible for them
to offer training in IT, carpentry,
electricity, ironworking, fish farming
and agricultural activities.

2,635,769
180,304

Unirisco Project
Unirisco is a

Venture Capital Company

authorized by the National Stock Market

Equity
Inditex’s holding
As of 31st January 2005 a commitment was made
for an additional payment of

Spain

500,000

Our internal code of conduct includes in the section

Unirisco operates through temporary and minority

entitled ‘Society’ a clear commitment towards the

capital investments (between

backed by the three
Galician universities (A Coruña, Santiago de

development of those communities that are directly or

Compostela and Vigo) with the support of the

distribution or sales. Through Unirisco we continue to

Commission and

region’s main institutions (Caixanova,
Banco Pastor, the Caixa Galicia Corporation,

indirectly affected by our activities, either of production,
support and finance projects for creating new businesses
with the following aims:

30,000 and

300,000, although there is no fixed minimum), in
business initiatives that:
_ Are clearly

linked to the University, either as a

result of their activities being based on knowledge
generated within the university, or as a result of the

Grupo San José, BPI, the R Foundation, Vigo’s

entrepreneurs of the initiative coming from a

Free Port Consortium and Inditex)
_ To facilitate the

transfer of ‘know how’ created by

universities to Society in general.
_ To stimulate the creation and consolidation of jobs
for researchers and university graduates.
_ To help create an

entrepreneurial culture within the

universities.

university background.
_ Are backed by people

who are wholly
committed to their initiative, and with technical

and managerial abilities.
_ Are generated in any Spanish

or Portuguese
university, although special attention is paid to

projects from Galicia and the north of Portugal.
_ Have not yet been formalized or have only been
recently created, and which have a

www.unirisco.org

54

high potential

for growth and profitability.

Sustainability Report INDITEX SOCIETY 55

08_3 Emergency programmes
Through its Emergency Programmes, Inditex plays an active role in

helping the victims of natural disasters, offering immediate aid
programmes and sustainability in the short and long term. Our involvement
goes far beyond financing. We are directly involved in the supervision
and joint control of the projects, which are carried out in the field
by NGO’s and other institutions.
We treat these projects as if they were our own, applying the same criteria of stringency
and responsibility we apply to any other project within our organization. Our aim is to
help those affected by these disasters to gradually recover their former social and
economic conditions.

Inditex has contributed in
total to the Singra project

4.000.000
4,000,000

Global provision
by Inditex in 2004

1,000,000
Victims

tsunami
Helping from the Beginning

Programme

and Contributing towards Mid and Long Term

Development

Singra Prestige

TheSingra
Emergency
Programme

Victims of the

tsunami
The SINGRA Emergency Programme,
planned to help alleviate the consequences
of the sinking of the oil tanker ‘Prestige’ off
the Galician coast, was our first project. Our
work will continue for a number of years, as
part of a series of programmes.

56

In 2004 we began
a new Emergency Programme,
this time aimed at providing aid for
the victims of the tsunami that
devastated south east asia at the end
of 2004.

Sustainability Report INDITEX SOCIETY 57

The sinking of the oil tanker Prestige in
November of 2002 close to the Galician

Terra de Soñeira

coastline led to an oil slick of several thousand
tons of fuel and residues. This disaster has had
serious economic, social and environmental
consequences for the area.
In March 2004 Inditex established a social
intervention plan together with the Red Cross.
This was the SINGRA (Singladura) programme, which
from October 2003 and until 2007 will work on
improving living conditions for the most vulnerable
people living in the area of the catastrophe, focusing
its activities in three areas: education, society
and employment. Our priority is focused on the least
attended collectives who are unable to obtain any
other types of benefits.

Five priority areas have been
established in the most affected areas:
Bergantiños, Fisterra, Terra de Soneira
and O Barbanza in the province of La
Coruña, and the area of O Morrazo in
Pontevedra. The first results have
already taken shape in a long list of
projects, from the creation of
businesses and associations, to direct
aid being given to individuals (looking
for work, training, support, etc.) Inditex
has made
4,000,000 available for
this project.

Fisterra
_ Adapting houses for the sick and elderly in
Fisterra.
_ A forestry engineering company in Cee.
_ Creating a community radio station in Corcubión.
_ Supporting the hostelry sector in Corcubión.
_ Workshops on the environment, education of
values and study techniques for young people in
secondary schools in Cee.
_ Radio programme offering employment openings
in stations on the Costa da Morte.
_ Adapting houses for the sick or elderly and a
bed-lending service.

101Collaborating
companies

_ A computer company in Vimianzo.
_ Recovering the collective memory
of those who work at sea.
_ A course to transmit knowledge for
craftsmen and women in Vimianzo.
_ Supporting the ‘Cherinkas’ youth
association.
_ Creating a centre for associations in
Camariñas.
_ Setting up a centre for social
intervention for children in
vulnerable situations.
_ First aid courses throughout the
whole region.

109 Projects
53 Courses
Offered

1,291 Students
187 Jobs
filled

37 Future

entrepeneurs

11 Companies
founded

701 People guided
and informed

Bergantiños
_ Associations of ‘Redeiras’ dedicated to
the repair of fishing nets and tackle
(Laxe and Porto do Son).
_ Searching for new cash crops in the
area of Traba and strengthening
agricultural resources in (Laxe).
_ Improving the working conditions of
female shellfish gatherers in Baldaio.
_ Boosting tourism for the port of Laxe
School garden project in Laxe.

The

Sustainable
results

Singra
emmergency programme
www.singra.org

Ferrol

Who do

Malpica
de Bergantiños
Ponteceso

_Children and young people
_The unemployed
_The elderly
The beneficiaries _Women
we work with? _Associations

Coristanco

Camariñas

1
Vimianzo

A CORUÑA

2

Cee

3
Corcubión

Lugo

Fisterra

O Barbanza

Chronology
November 2002

December 2002

March 2003

October 2003

September 2003

January 2004

The disaster. The tanker
“Prestige” sinks close
to the Galician coast.
Immediate action taken
by the Red Cross: boats
helping set up barriers,
setting up posts for
logistical support.
Support also offered
to volunteers, giving out
food, water, and providing
medical services.

The oil slick extends all
the way down to the south
of Galicia. The barriers
and sanitary controls must
be extended as far south
as Vigo and as far north
as Cedeira. Inditex’s Board
of Directors gives its
approval to providing aid
to those affected.

Inditex and the Red Cross
sign a financing agreement
which leads to the Singra
project. The project is
designed, and the
headquarters and
personnel are chosen.

The Singra Project gets
underway with an initial
stage of contacting the
institutions in each of the
five affected areas in order
to establish a networking
system. The employment
service for those affected is
established.

A coordination office is
created in each of the
areas with a team of
professionals – career
advisors, social workers,
educators and sociocultural workers, dedicated
to the project on a full-time
basis.

Start of the programme
offering consultancy and
economic aid for
entrepreneurs and the
full range of projects.

58

Red Cross A Coruña
Coordination

A Laracha

Laxe

Santiago de
Compostela

Carnota
4

Muros
_ A sculpture company in Ribeira.
_ A nursery in Muros.
4
Boiro
_ Preventive programmes for Alzheimer in Ribeira.
A
Pobra
do
Caramiñal
_ Work by students in Ribeira with seamen.
Ribeira
_ Pedagogical information on fish species with the Mar de Lira
association, in O Barbanza.
_ Child welfare service for the children of shellfish gatherers and
women working at sea.
Bueu
_ Support network for immigrants.
_ Repairing houses for elderly or disabled people.
Cangas
_ Supporting the Association of Net Repairers of Porto do Son.

Rianxo

Pontevedra
5
Ourense

O Morrazo
_ Gas fitting and plumbing course.
_ Cognitive stimulation workshops for the elderly.
_ Supporting the work of associations in O Morrazo.
_ Creation of the Association of Net Repairers of Bueu.
_ Programmes for the prevention of Alzheimer in Cangas.

Sustainability Report INDITEX SOCIETY 59

In December 2004 Indonesia, India, Thailand
and Sri Lanka suffered the effects of a tsunami

Indonesia

that devastated the region, an unprecedented
catastrophe that left thousands of dead and missing
in its wake, and millions of people homeless and
without any type of income.
Inditex joined the international aid campaign with a donation of
1,000,000, which the Spanish charity organization Cáritas materialized
as technical support to those affected in the region. Cáritas is a recognized
NGO with a well-established trajectory in managing emergency projects, and
with previous experience in the affected areas. The solidarity of Inditex was
especially offered to the families of suppliers with businesses in the affected
areas, through a series of specific aid projects that will take shape throughout
2005.

Work is underway on offering primary
health care to those who have lost

India
During the initial stage of the
emergency, Cáritas dealt with some
125,000 people, organizing

their homes and means of support. Many
people were already living in highly
precarious situations before the tsunami.
The emergency stage will continue for
several months.

100 humanitarian camps
and offering temporary
accommodation, basic foodstuffs,
medical attention, drinking water
and sanitary services. The
reconstruction plan, which
will be rolled out next 30 months,
includes offering personalized
attention to all those whose basic
needs have not been covered, and
those who remain in refugee camps,
as well as executing programmes for
building houses, reconstructing
drinking water pipelines and sewage
systems, supporting public health
projects and distributing school
materials to a total of 34,500
families.

Thailand
Work is underway to deal with the
most vulnerable victims: fishing
communities who have lost their
source of income. The plan is
aimed at guaranteeing the basic

and psychological needs
of some 3,000 people,
and distributing emergency aid for
9 months to some 1,000 people
considered at particular risk, while
rehabilitation programmes are being
organized.

Sri Lanka
Once the humanitarian aid effort
had been established and all
primary needs covered, refugee
camps were established for those
who had lost everything and who
could not demonstrate ownership of
their properties. In order to carry
out its programmes, Cáritas Sri
Lanka has 1,000
community groups. The
reconstruction plan has been
divided into two stages: the first,
lasting throughout 2005, will cover
basic needs such as

accommodation,
drinking water, schools
and sanitation for 33,000
families: the second, which will
focus on building houses, will
directly benefit some 21,000
families.

www.caritas.org

The emergency programme

in South-East-Asia

India

Sri Lanka
Indonesia

Tailandia

Intervention plans:
from the emergency to
the reconstruction
In the most affected areas (Indonesia, Thailand, India and Sri Lanka) the regional
delegations of Cáritas who were already operating in the region started to offer
humanitarian aid immediately, supported on the ground by some 5,000 volunteers.
Initial efforts were focused on setting up temporary shelters, distributing essential items,
food and drinking water, as well as offering medical and psychological assistance

60

Sustainability Report INDITEX SOCIETY 61

08_4 Sponsorship and patronage programmes
Through its Sponsorship and Patronage
Programmes, Inditex makes social investments
aimed at supporting different initiatives in the field
of the innovation and promotion of culture. As in the
previous year, the Sponsorship and Patronage
Commission comprised of Inditex’s Chairman and

08_5 Platforms for dialogue

General Secretary, the Director of Corporate Social
Responsability and the Director of Corporate
Communications, has been responsible for dealing
with the different requests for support received at
corporate level, and supervising investments made
in the selected projects.

Sharing and encouraging activities aimed at
promoting Corporate Social Responsibility is also
one of our aims. We consider that participating in
dialogue, encouraging debate and promoting
models of corporate responsibility, their principles,
aims and methodology is also a way of contributing
towards society. Inditex takes an active role in
national and international forums, and is at the
forefront of a series of a range of initiatives.

Promotional
activities
Amount:

75,000

With the aim of sharing our
experiences in the field of Corporate
Social Responsibility with other
organizations and institutions, we
have played an active role in
numerous forums organized by
bodies of recognized prestige:

inSpain The Business and Society

Foundation (Madrid), Esade
(Barcelona), Spanish Accountancy
and Administration Association, AECA
(Madrid), IESE (Barcelona), the
Corporate Reputation Forum
(Madrid), the Alternatives Foundation
(Madrid), the Tecnomoda Foundation
(Madrid), and the European
Transatlantic Business Forum
(Barcelona)
inLatin

America The Ruiz de Montoya
University (Lima, Peru) and
the Andrés Bello Catholic University
(Caracas, Venezuela)

Helping Promote

culture and encourage innovation

Art collection
founding

In 2004, and as part of our strategy for social
investments in this area, a total of
57,070 were
dedicated to collaborations with the following institutions:

Platforms for dialogue

european
workgroups and the

Participation in

development

standardisation
and verification models
of

_Serralves Foundation www.serralves.pt
_Modern Art Collection
Valladolid Museum of Modern Art

Patio Herreriano
Investments in other

educational
spaces

During this financial year we have played an
active role in different activities raising
awareness of and promoting the BSCI initiative
in Spain, France, Morocco and Peru.

Amount:

8,000

www.museopatioherreriano.com

As part of our collaboration with other cultural institutions,
we have financed a wide range of initiatives, the most
important of which include:

_ The Galician Symphony Orchestra www.sinfonicadegalicia.com
_ Sala Tiflológica www.aytolacoruna.es
_ Prince of Asturias Foundation www.fpa.es
_ Cantábile Musical and Cultural Association
http://usuarios.lycos.es/cantabile
_ Albéniz Foundation www.fundacionalbeniz.com
_ Historical Archive of the Diocese
of Santiago de Compostela

62

Nations’ Global Compact,
and has contributed towards
publicising its 10 principles in
Spain. We are currently members of
the UN Global Compact executive
committee in Spain.
This platform brings together
Spanish multinational companies,
SMSE’s, trade unions, associations,
public bodies and institutions.
It is an initiative for ethical
commitment so that companies
throughout the world adopt the

Investment:

669,726

Inditex was the first Spanish
company to join the United

10 principles of conduct
and action as an integral part of
Promoting the UN
Global Compact
in Spain

their strategy and operations, with
regard to Human Rights,
employment and the environment.

www.unglobalcompact.org

www.archicompostela.org

Sustainability Report INDITEX SOCIETY 63

08_6 Open to Society.
Spain 65%

Inditex has made a commitment to transparency when carrying
out its activity. This commitment is aimed at transmitting a true
external image, not only fulfilling its obligations to market
regulations, but also the requirements of its Corporate

Liability Policy with all of the interest groups with
which it is involved.

The media is the main channel of transmitting information
between companies and the general public, and plays a
decisive role in developing our transparency policy. Inditex
assumes its responsibility with the media as an independent
and critical mediator that is also committed to the principle of
transparency. Inditex’s relations with the media are through its
Corporate Communication Department. This corporate
department maintains constant and fluid contact with journalists
in more than 60 countries.

Inditex keeps in close contact with the
media, different bodies and institutions
with one of its main objectives being an
‘open door’ policy towards educational
institutions such as Universities and
Business Schools.

Corporate
information

Financial
reports

20

7

Espansion and
development of business

15

Press releases
distributed in 2004

In 2004, the Corporate Communication
Department sent out a total of 42
press releases and other
company-related news,
and answered more than 5,000

The media

Japan 7%
Germany 3,5%
France 3,5%
UK 10,5%

Visits to
our headquarters

Scandinavia 3,5%
Mexico 3,5%

Companies

Media

Educational
institutions

Bodies and
institutions

68

28

39

20

Inditex opens its doors to society. The
policy of approaching and opening up to
different target audiences took off in 2004
with more than 150 visits to our sites.
Apart from the media, this policy
is aimed at national and international
educational centres, organisations and all
kinds of institutions, and of course
the business world.

Hong Kong 3,5%

Visits
by the media

Visits from
educational centres
Secondary education
Higher education/Spain
Higher education/international
Vocational training

56%
18%
7%
18%

public bodies

and institutions

other organizations

requests for information
via media all around the world, more
than 70% from international media.
In 2004, more than 20,000 press
releases on the Group appeared
in the press and on the radio
and television in the countries where
Inditex has the most number of stores.

Germany 7,5%

France 7,4%

Portugal 8,7%

Holland 6,2%

UK 24,7%

Greece 3,8%

Italy 6,3%

Turkey 4,9%

Information about Inditex
published in the written press
31% Spain

Belgium 3,7%
Switzerland 3,6%
Others 7,8%
USA 2,3%

Denmark 3,5%
Mexico 2,5%
Austria 2,4%

Rest of world 69%

We develop stable links with different non-government organizations who share
our objectives for sustainable social, economic and environmental development.
We trust in their experience in managing projects in order to bring our support
projects to fruition in the field. They serve as objective validators of our social
audits, and as collaborating partners in emergency programmes.

One of the most significant activities in this financial
year was the creation of the Inditex Chair at the
University of La Coruña. Its purpose is to
foster and promote the study and development of
Corporate Social Responsibility, viewed as
the commitment businesses have to apply criteria of
good governance, sustainable social development
and protection of the environment.

Universities
and business schools
As far as collaboration with the educational media is concerned, Inditex gives
priority to Spanish and foreign universities and business schools. The interest
shown by this field in analysing our group’s business model has been met by
Inditex, which has contributed to preparing educational material and case
studies, and has given speeches at conferences and seminars, for example as
part of the XX World Garment Industry Convention organized by the

Apparel Federation (IAF)

Sweden 2,4%
Japan 2,3%

The UK, Portugal, Germany,
France and Italy are the countries
that have shown most interest in
Inditex, representing 54.6% of all
reports in the media outside of Spain.

64

Sustainability Report INDITEX SOCIETY 65

Guaranteeing the sustainable
growth of our business
reducing to the minimum our environmental impact
by optimizing the consumption of resources and the
creation of waste materials.

09_0 Environment

09_1
09_2
09_3
09_4
09_5

66

Our sustainable growth model
Strategic plan 2002-2005
Environmental management
Indicator’s System
Relationships with interest groups

Sustainability Report INDITEX ENVIROMENT 67

Development during FY2004 has allowed us to consolidate our sustainable growth strategy in all areas of
activity: products, own factories, suppliers, distribution,
stores and raising staff awareness. In some of these areas,
we have anticipated the goals set for 2005.

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7 Environme

09_1 Our sustainable growth model

In the case of our industrial centres (chain head offices, own
factories and logistics centres) we have fully introduced and
certified our Environmental Management System, in accordance
with the ISO 14001 standard. Consolidating this environmental
management and control model has allowed us to achieve an
important victory: breaking the link between growth and waste
generation, which is without a doubt the basis of sustainable development.
We have also made considerable progress in achieving the Oeko-tex
certificate for our products, which in 2004 reached 24% of clothing
for children aged 0 to 16 years. Furthermore, as far as our products
are concerned, the foundations have been laid to develop a Life
Cycle Assessment program for textiles, as part of a R&D project with
the University of Santiago de Copostela. This will enable us in the
future to work towards optimising our consumption of resources for
each product that we manufacture.
We have also taken an important step forwards as far as raising
awareness and management are concerned. Firstly, we have
completed direct training (on-line or traditional) of the staff of our
chain head offices, logistics centres and factories. Secondly, the

joint effort from different departments last year has allowed us to set
up an innovative and original training course that will provide traditional training for all the employees of our stores in Spain during the
course of 2005. We will base this on using a new sustainable
mascot and releasing the company’s magazine.
Important actions taken during the year have included controlling
our emissions, especially greenhouse gases. We have made
substantial progress on supplier evaluations, and we have continued
to increase our energy efficiency. In this respect, we have dedicated
2004 to optimising the use of wind and solar energy, and to
planning new facilities for 2005.
Having marked out these paths, our work during 2005 will be
focused on completing actions relating to suppliers and stores, and
to optimising our consumption of resources and waste generation.
This will allow us to consolidate our sustainable growth model, and
will be the basis for developing improvement actions over the years
to come as far as the international expansion of our activity is
concerned.

Head office

Deputy chaiman
Enviroment Manager

Head offices of chain
and
logistics centres

Stores

Chain
managers

Chain
managers

Factories

Factory
managers

Environmental policy
We believe that the development of Inditex’s activity should include a set of sustainable development criteria, which guarantee the proper
management of resources and environmental protection, as well as meeting society’s needs.
In order to put the above into practice, we undertake to fulfil and enforce the following principles, which form our environmental policy:

HR Dept
Legal Dept

Enviromental
Representatives

Enviromental Mngmnt
Systems certified in
accordance with UNE
ISO 14001
_Legislative control
_Operational control
(waste, atmosphere, water)
_Liability control
_Cost control

MA Dept
Head of stores

Enviroment
Management
model in stores

Training

Enviroment
indicators
system

Enviromental
Representatives

Enviromental Mngmnt
Systems certified in
accordance with UNE
ISO 14001
_Legislative control
_Operational control
(waste, atmosphere, water)
_Liability control
_Cost control

1. We undertake to consider the environment factor when planning and developing our activities and those of our business partners, encouraging the environmental awareness of our staff, suppliers and society in general.
2. We undertake to fulfil the environmental regulations that apply to our activities, as well as any other obligations laid down. We will
endeavour to prevent pollution and reduce the environmental impact of our activities to the minimum.
3. We work towards continuously improving our Management System, thereby increasing its efficiency and ensuring a more efficient
consumption of resources.
4. We undertake to inform all of our employees and society about this policy, establishing a fluid communication policy with the authorities,
local communities and agencies.

These principles apply to all of Inditex’s companies and work centres, being established under an Environmental Management System in
accordance with the ISO 14001 standard at the Inditex’s head office, logistics centre and factory in Arteixo, and in the factories in Narón and
Ferrol, all in A Coruña; as well as in the head offices and logistics centres of Zara, Zara Home and Kiddy´s Class chains in Arteixo; Pull and
Bear in Narón; Massimo Dutti, Bershka, Oysho and Kettering in Tordera; Stradivarius in Cabrianes and in the Plataforma Europa in Zaragoza,
all of which are in Spain.

Action
and
improvement plans

68

José María Castellano Ríos
Deputy Chairman

Sustainability Report INDITEX ENVIRONMENT 69

09_2 Strategic plan 2002-2005

Complying with the goal set in 2003, we have implanted the
Sustainable Store Management Model, carrying out internal
environmental audits in 40% of our stores in Spain, and a
further series of evaluations in all of the countries in which we
operate.

We have advanced in standardizing our Environmental
Management System, anticipating our objectives for 2005 by
incorporating in this financial year all of our industrial centres,
company head offices and logistics centres.
* Audits in all centres, factories and
logistics centres.
* Audits in supplier centres.
* Pilot audit in stores

2. Audit plan for fulfilment of
environmental legislation in
all centres

2001

2002

1. Develop a plan to control
environmental parameters
and follow-up indicators

2003

2. Encourage external
communication with parties
involved

Audits in all
stores in Spain

2004

2005

Environmental control of all parameters waste, emissions, GHG*,
dumping, energy consumption...)
in all centres (Dec.2004)

2001

Indicators for all
stores in Spain

A

2002

2003

1. Promote, raise
awareness and provide
internal training on
sustainability

2004

Development of Internal
Communication Plan with
support of Sustainable
Mascot

2005

Traditional Training Plan
for store employees in
Spain

Lines of action

Lines of action

Strategies

Meetings with local administrations in towns where
Inditex is present

Evaluate, control, and
guarantee fulfilment of
environmental legislation in all
work centres

Introduce management practices
that allow improved environmental behaviour and increased
energy efficiency

B

Strategies

C

Strategies

Transmit internally and externally
Inditex’s environmental commitment
and effort, involving all staff in this
commitment

Incorporate the
environment factor in
all strategies and
actions

Lines of action

Renewable energy plan in
Plataforma Europa

2005

Improved Environmental
Management System
adapted to new ISO
14001:2004 standard

1. Assess replacement alternatives for raw energy
material. Renewable energy
sources

Breaking link between
business growth and waste
generation

2004

2003

Oeko-tex certificate for all
clothing for children between
0 - 16 years

2002

2001

Strategies

Lines of action

Product Life Cycle
Assessment PLan to integrate
the environment factor

1. Implement a global
sustainability indicators
system

Management of Chain
Indicators in corporate
Intranet

Software for sustainability
indicators management

2005

2. Eco-efficiency studies in
processes and work centres

D

2004

2003

Integrate environment factor
in distribution process of
logistics suppliers

2002

2001

2. Integrate economic, environmental and social factors, and
develop environmental and
sustainability reports

We offer training and awareness programmes for all of our working teams at our head offices, logistical
centres and factories in environmental issues.
(*) GHG= Green House Gases

70

Sustainability Report INDITEX ENVIRONMENT 71

09_3 Environmental management

In
Anticipating the goal set for 2005, we have
integrated all the industrial centres, chain head
offices and logistics centres into the
Environmental Management System, all of them
achieving the ISO 14001 certificate (the
Plataforma Europa in Zaragoza and the fashion
designer company Kettering in Tordera
achieved this in 2004). Our aim for 2005 is to
adapt the entire System to the ISO 14001:2004
standard. This will guarantee that 100% of our
management, manufacturing and distribution
processes are carried out with a high level of
environmental control.

In

In

During 2004 we
incorporated the
certification system in
Plataforma Europa and
Kettering offering
compliance with the ISO
1400 standard,
guaranteeing the
sustainable development
of our activity in 100%
of our working processes.

Environmental Requirements
Evaluation of Logistics Suppliers:
_Environmental Commitment
and Policy
_Types and characteristics of
methods of transport
_Atmospheric emission levels,
especially GHG
_Management of waste
generated during
maintenance operations

100%

suppliers
fulfil environmental
requirements,
especially control of
GHG

100% Logistics
Centres with ISO
14001
100% of stores
comply with the
Enviromental
Management Model

sites
With suppliers
All of our internal and external
suppliers have agreed to follow
the Code of Conduct that
guarantees good environmental
practices.

24%
product
certified with

We optimize to the maximum
the capacity and routes used
by our transportation systems,
thereby reducing enviromental
impact

Estimate of GHG
emissions by air
transportation
suppliers1,019 T CO2
Estimate of GHG
emissions by road
transporters suppliers

12,319 T CO2
50,000,000 hangers

Environmental Requirements
Evaluation Industrial
Subcontractors:
_Environmental Commitment
and Policy
_Atmospheric emission levels,
especially GHG

All of our internal and external suppliers have agreed
to follow the Code of Conduct that guarantees good
environmental practices.

100% of suppliers fulfil environmental

legislation and good practice, by signing the Code
of Conduct for External Manufactures and
Workshops

_Management of waste
generated during
maintenance operations

Oeko-tex
( 0 -16 years)

In

training
With the aim of encouraging participation and
awareness of employees, we have designed a
sustainable mascot that will be used to boost all of
Inditex’s sustainable initiatives, both those that the
company promotes and those promoted by the
employees.
Its name “Grindi” is a combination of green and Inditex,
and it was chosen by holding an international
competition for all employees through the company’s
magazine.
The training programs have continued developing,
with the result that 100% of the staff of head offices,
logistics centres and factories have been trained on
environmental issues.

72

Sustainable management criteria are applied
to stages of the cycle, including the
introduction of the ISO 14001 standard in all
logistics centres, the evaluation of suppliers
and their commitment to the environment,
and the proper environmental management
of store employees. All the above is based on
an intense awareness campaign and training.

distribution

reused

product

In line with our commitment to
protect the environment and the
health of our customers, we have
continued to make progress on
the Oeko-tex Standard 100
certificate program for all clothing
worn by children aged 2 to 16
years (this was guaranteed for 02 years in 2003), guaranteeing
this for 24% of our products by
the end of 2004.

Our textile distribution cycle covers all the
processes from when we receive the garments
from the manufacturers at our logistics
centres, including distribution to our stores
via aeroplane or lorry, and the subsequent
management of returned projects from the
stores, also via lorry.

As planned, during 2004 the Sustainable Store Management
Model was introduced, which is based on the four lines of action
set in 2003 with the following results:
_Legislative evaluation has been established at a local and
regional level for 75% of stores in Spain.
_The legal requirements regarding waste, containers and
packaging have been evaluated for 100% of the countries in
which we have a presence.
_Specific Environmental Management and Occupational Health
and Safety training manuals have been developed to train store
employees in Spain using the traditional method, which
represents 55% of the Group’s stores.
_Internal environmental audits have been conducted on 40% of
stores in Spain, assessing energy and water consumption
indicators and integrating these in the Sustainability Indicators
System.
_A new waste collection program has been introduced in stores,
which will improve the control of waste management and
generation, previously through municipal collection systems.

stores
All of the store staff working
in Spain have received
specific training in relation
to Environmental
Management and
Occupational Health and
Safety

Sustainability Report INDITEX ENVIRONMENT 73

Comparativo de evolución anual de emisiones atmosféricas en centros fabriles y logísticos

We have implanted
the Indicators
System in all of our
stores

Comparison of annual evolution of air emissions in factories and logistics centres
Absolute data of emissions in t/year

Relative data in terms of no. of items manufactured

T/year

09_4 Indicators System

500
441.895

On closing FY2003, the Indicators System has
given us data from the past three-year period
which show the trends taking place in the field
of environmental management.

marketing), except where waste is concerned,
in which data is only given on waste generation
in head offices, logistics centres and factories
(what we call industrial centres).

0.002

The indicators show data that reflect our overall
activity (manufacture, distribution and in-store

As planned in 2004, the indicators system was
introduced in the stores of all our chains. This
has given us data on the energy and water
consumption of each of these. As far as waste
is concerned, the complex nature of controlling
it has forced us to conduct a pilot waste
management and collection experiment in 50
stores in Spain. The results have been
successful. In 2005, this plan will be extended
to the 1,349 stores in Spain, which will give us
direct waste management data for 55% of
Inditex’s stores world-wide.

0.00187

SO2

SO2
300

0.00114

NOx

0.001

176.145
131.51

0.00007

0

0.00004

0.00003

0
2001

2002

2003

0.00035
0.00019
0.00001

0.00034

4.378

10.189

0.00063

0.0005

69.22
10.887

NOx

0.00105

0.00072

123.569
97.179

100
14.46

CO

0.0015

CO

250.149
208.48

200

As in past years, we continue to present the
data in relative (*) (the number of items put on
the market) and absolute terms, since we
believe that this gives a better picture of the
real situation. Given the growth in our
production, the relative indicators allow us to
assess our environmental efficiency, showing
whether we reduce our environmental impact
for each item put on the market.

T.year/ no. items

400

2001

2004

2002

2003

2004

Number of garments commercialized
181,935,742

236,201,643

278,976,771
2001
2002
347,596,458
2003
2004

Air emissions indicators
Air emissions are controlled according to the
source (our own or external) and our ability to
control generation thereof.
We carry out a thorough control and a minimisation and energy efficiency plan for our
sources (cogeneration plants and boilers for our
factories and logistics centres). This includes

Greenhouse gas emissions (GGE)
using renewable energy sources which allow us
to considerably reduce our emission levels.
At present, the electricity system does not
enable us to control external sources (electricity
network). We are therefore channelling all of
our efforts into improving the energy efficiency
of our facilities, especially our stores.

As far as controlling and generating GGEs is
concerned, we have made progress on the
accurate calculation both of direct and indirect
emissions, estimating which are generated by
the transport activities of our logistics suppliers.
We have included the estimate of the emissions

*Industrial centres:
226,660

250,000
200,000
T/year

T CO2

Concept

CO2 Emissions

150,000

Natural gas consumption

15,127

Propane consumption

26

Gas-oil consumption

5,677

Electricity consumption

10,903

Total for industrial centres

31,733

71,000

100,000

*Transport:
13,338

Emissions caused by transport

13,338

Total for transport

13,338

es

or

50,000

St

The energy efficiency and emissions control
plan has allowed us to reduce emissions
linked to combustion processes, both in
absolute and relative terms.

that could be caused by electricity consumption
in stores. The reduction of emissions in
factories is based on increased energy
efficiency and the considerable increase in
generating our own renewable energy sources.

a
Tr

44,540

0

ns

31,733

rt

po

2003

*Stores:
Electricity consumption in stores

226,660

Total for stores

226,660

TOTAL

271,371

s

tre

en

lc

ria

2004

st

du

In

2002

(*) The ratio has been calculated by using the following formula:
Ratio= (absolute value of the year/number of garments put on the market during the year) x 1000.
The value used in the ratios are:
Number of garments commercialized:
2001: 181,935,742, 2002: 236,201,643, 2003: 278,976,771, 2004: 347,596,458

74

Includes head office, and all of Inditex’s factories: (Choolet, Denllo, Fios, Glencare, Goa, Hampton, Indipunt, Jema, Kenner, Nikole, Samlor, Sircio, Stear, Trisko, Zintura, Inditex
Cogeneración) and the head offices and logistics centres of Zara, Zara Home, Kiddy´s Class, Pull and Bear, Bershka, Oysho, Massimo Dutti and Stradivarius. All emission sources undergo
strict and frequent controls by an authorised inspection company, each in accordance with the parameters established by legislation in force. The data shown here has been taken from the
analysis of these reports.

Sustainability Report INDITEX ENVIRONMENT 75

Comparison of annual urban or similar waste generation

Despite the growth in the last three
years, with the opening of 960 stores
and 17 new countries, increasing our
number of garments by 72.5%, the
creation of industrial waste has
increased by 65%

Relative data in terms of number of items manufactured

Absolute data
1,293,840
589,465
393,337

2004

3.72
1.70
1.13

2004
5,191,590

14.93
5.50

1,913,205

4.78

1,334,751
265,012
339,040

2003

0.94
1.21

2003

7.97
7.39

2,224,782
2,063,764

6.40

1,513,430
192,050
189,400

2002

0.81
0.80

2002

10.46
10.04

2,472,221
2,373,420

12.90

2,347,056

Waste indicators

2001

124,356
41,307

2001

0.68
0.22
8.05
8.98

1,465,469
1,635,200

The significant increase in waste generation
shown by the graphs is explained by Inditex’s
considerable growth in 2004 and above all
since the Plataforma Europa logistics centre has
been working at full capacity. A high volume of
products from factories and workshops abroad
is received and distributed at this centre, which
generates large amounts of cardboard and
plastic.

sustained growth over the last three years,
which has even allowed us to break the link
between business growth and waste generation.
This proves a considerable effort in terms of
control, efficiency and recycling, based on a
significant reduction in generating other types
of waste (hazardous, urban, etc).

0

Other urban waste

Wood

2

4

6

8

10

12

Cardboard and paper

Plastic

14

16

Kg/Mil items

Textile waste

The waste is classified in accordance with the European Waste Catalogue (EWC) and its transposition into national and regional legislation.

Comparison of annual hazardous waste generation

Our work over the years to come will be
focussed on maintaining this sustainable
growth.

In spite of this growth as a result of increased
activity, we have managed to maintain

0

800,000 1,600,000 2,400,000 3,200,000 4,000,000 4,800,000 Kg

Comparison of annual hazardous waste generation

Kg
16,000

Evolution of industrial waste generation

14,000

Evolution of industrial waste generation

12,000

Kg

10,000

9,000,000

2001

8,000

8,000,000

Total

6,000

7,000,000

Cardboard and paper

4,000

Textile waste

2,000

6,000,000

2002
2004
2002
2001

0

pa
ck
.
.p
nt
Co

ts
Pa
in

am
Co
nt

la
s.

.a
bs

.

ed

pa
ck
us

et
.
in
M

Co
nt

am

.o
ils

.m

s
lf

ilt

er
s

en
t

Fl

Oi

m

uo
re
sc

fic
e

tte
Ba

Wood
3,000,000

Of

rie
s

Plastic
4,000,000

at
er
ia
l

.

Other urban waste

5,000,000

2003
2004

2003

RPs

2,000,000

Destination of waste according to type and treatment type
1,000,000

The last stage of our Waste Plan is recycling, as shown in the following graph.

0
Dec. 2001

Dec. 2002

Dec. 2003

Dec. 2004
55.25%
55.25%

Comparison of garments put on the market with total industrial waste generated

Comparison of items put on the market with total industrial waste generated

Comparison of items put on the market with total industrial waste generated

24.6 %
Total garments put on market

Other urban waste sent to treatment plant and

4.19%
24.6 %

compost
Other urban waste
sent to treatment plant and
compost

4.19%

18.1%

Total garments put on market

29.8%

Wood sent to recycling plant

18.1%

Total Waste from industrial centres

Wood sent to recycling plant

29.8%

Plastic sent to recycling plant

Total Waste from industrial centres

Plastic sent to recycling plant

50.3%
Three-year increase of garments: 72.5%

16.7%

2%

6.27%
6.27%
50.3%
Three-year increase of garments: 72.5%

Three-year increase of waste: 65%

16.7%

and
paperplant
sent to recycling plant
Cardboard andCardboard
paper sent to
recycling

2%

Textile
waste sent
Textile waste sent
to recycling
plant to recycling plant

Three-year increase of waste: 65%

Dec. 2001

Dec. 2002

Dec. 2003

Hazardous waste
sent to authorised
waste
Hazardous
waste sent
to authorised waste
treatment planttreatment plant

13.77%

Dec. 2004
Dec. 2001

Dec. 2002

Dec. 2003

13.77%
Dec. 2004
0.16%

0.16%
20.36%

20.36%

76

Sustainability Report INDITEX ENVIRONMENT 77

09_5 Relationships with interest groups

Energy consumption indicators
Annual evolution of energy consumption (includes factories and stores world-side)

The increased use of our own renewable energy
sources has allowed us to reduce energy
generated from fossil fuels.

The 2005 plan envisages new renewable energy
facilities that will make it possible to continue
with this trend.

Renewable energy

2002

2003

Kwh

500,000,000
400,000,000
300,000,000
200,000,000
100,000,000
0

1,803,000 kwh

2001

Official communication channels have been established for all these groups, in order to answer their
demands or queries, as shown at the end of this Sustainability Report.

Electricity (public network)

4,278,489 kwh

492,738,250
447,267,982
295,574,280
Table I: Environmental aspects according to interest group

233,007,223

Shareholders

2001

2004

The analysis of our environmental impact with interest groups has enabled us to identify and meet
their main environmental needs.

2002

2003

2004

Control of environment risks of the business

Administration
Cogeneration gas consumption
Tep
8,000
6,000

4,000

10,000
5,684

5,517

6,472

Customers

7,650
5,936
3,728

4,000

2,000

1,848

2,000

0
2001

8,000
6,000

2,273

Fulfilment of environmental legislation

Gas-oil consumption

Tep

0
2002

2003

2004

2001

2002

2003

Lack of local environmental problems
Continuous improvement in eco-efficiency
Fulfilment of regulations and standards for environmental quality of product

2004

Community
Control and reduction of impacts locally and on nearby towns
Application of environmental criteria to suppliers

Water consumption and use
In the case of factories and logistics centres,
the waste consumption data are taken from
direct consumption measurements and from
supplier bills (public supply networks). In the
case of stores, the data is obtained by sampling
supplier bills for a group of stores and extrapolating them to the total stores.

Following the considerable effort to optimise
consumption in 2003, work in 2004 consisted
of consolidating the practices established.

Employees
Facilities and training to fulfil the commitment to the environment

Suppliers
Defining environmental criteria
Targets for their actions and technical support

115,016 m3
115,884 m3
161,790 m3

2004
2003
2002

Wastewater from all of our sites is dumped into
sewage systems, with the relevant administrative authorisation in all cases. Frequent
analyses are conducted to guarantee

78

compliance with applicable legislation, not
requiring specific treatment processes in any
case due to the low level of pollution.

Sustainability Report INDITEX ENVIRONMENT 79

Our activity contributes towards the
social-economic development
of the communities we interact with. We open new work
centres, generate business opportunities and invest in
development plans.

10_0 Economy

10_1
10_2
10_3
10_4
10_5
10_6
10_7

80

Basic scope
International expansion
Segmented information
Inditex format by format
Corporate cash flow
Indicators of economic performance
Extra indicators

Sustainability Report INDITEX ECONOMY 81

m er s
us t o

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p
5 Su
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7

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no
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m

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10_2 International expansion

In 2004, Inditex kept up the expansion of its
sales formats both in terms of the number of
establishments and the number of markets in
which it is present. At the year-end, Inditex had
2,244 stores in 56 countries, 322 more than a
year earlier. The increase in turnover rose to
23% and net profit increased by 41%. Like-forlike sales grew by 9%.

o
Go

During 2004, Inditex’s first stores were opened in
Morocco, Hong Kong, Hungary, Romania, Panama,
Estonia, Latvia and Lithuania. The proportion of
sales in franchised stores stayed at 10%.

2003

2004
Format
Zara
Kiddy's Class
Pull and Bear
Massimo Dutti
Bershka
Stradivarius
Oysho
Zara Home
Total

Company-managed

Franchises

Total

Company-managed

Franchises

Total

649
129
333
228
295
183
102
62

74

38
98
7
44
2


723
129
371
326
302
227
104
62

567
103
314
199
247
154
74
26

59

36
98
6
37
2


626
103
350
297
253
191
76
26

1,981

263

2,244

1,684

238

1,922

Own and franchised stores

10_1 Basic scope
With a view to projecting a faithful and clear image
of the economic dimension of Inditex’s activities,
this chapter of the 2004 Sustainability Report will
describe Inditex main economic indicators. These
indicators include the data relating to FY2004, as
well as comparisons with previous financial years.
As in previous years, the company’s cash-flow is
also presented, prepared in accordance with the
classification of the flows by interest group and by
the financial nature thereof. Almost all of the data
given is taken from Inditex’s consolidated financial
statements, management report or Inditex books.

Financial evolution over recent years
TACC
Description

2004

2003

2002

2001

2000

04/00

* Results:
Sales
Interanual variation

5,670.4
23%

4,598.9
16%

3,974.0
22%

3,249.8
24%

2,614.7
28%

21%

EBITDA
Interanual variation

1,239.7
42%

873.5
1%

868.1
23%

704.5
35%

521.5
27%

24%

EBIT
Interanual variation

925.2
48%

627.0
-5%

659.5
27%

517.5
36%

379.9
28%

25%

Attributed net profit
Interanual variation

628.1
41%

446.5
2%

438.1
29%

340.4
31%

259.2
27%

25%

Equity
Interanual variation

2,502.7
19%

2,105.9
20%

1,761.3
19%

1,486.2
27%

1,170.9
31%

21%

Balance total
Interanual variation

4,209.2
20%

3,510.4
16%

3,013.8
16%

2,588.6
23%

2,107.6
19%

19%

508.1

268.3

245.6

57.5

(50.6)

2,244

1,922

1,558

1,284

1,080

322

364

274

204

158

56

48

44

39

33

55%

54%

54%

54%

52%

9%

1%

11%

9%

9%

27%

23%

27%

26%

25%

* Balance:

Inditex’s 2004 annual accounts (from 1 February
2004 to 31 January 2005) have been prepared in
accordance with the generally accepted accounting
standards and principles in Spain and have been
audited by KPMG, which issued a report without
reservations that has been published together with
these annual accounts and the consolidated
management report in a separate document,
entitled Inditex 2004 Annual Report.

Net financial position

Stores:
Number of stores at year-end
Net openings
Number of stores with stores opened

Other information:
% of sales in international stores
Variation of like-for-like sales
ROE
ROCE
Number of employees

40%

32%

41%

39%

34%

47,046

39,760

32,535

26,724

24,004

*millions of euros

82

Sustainability Report INDITEX ECONOMY 83

Country
Andorra
Arab Emirates
Bahrain
Belgium
Cyprus
Ireland
Israel
Jordan
Kuwait
Lebanon
Malta
Mexico
Poland
Portugal
Qatar
Saudia Arabia
Spain

Franchised stores
3
16
3
16
10
1
25
5
11
7
5
17
7
39
4
26
34

Country

Franchised stores

Dominican Republic
El Salvador
Estonia
Finland
Holland
Iceland
Latvia
Lithuania
Luxembourg
Malaysa
Morocco
Panama
Roamnia
Russia
Singapore
Slovakia
Slovenia

1
1
1
3
1
1
1
1
1
3
2
1
2
4
3
1
2

TOTAL: 263

Sales in stores controlled by Inditex or franchised stores List of sales in own and franchised stored
2004
Format

Franchises 10 %

Zara

Zara remains the format with the highest
international presence: almost 80% of its net
openings in 2004 took place outside Spain,
and international sales exceeded 65.8% of the
total, the highest percentage out of all the
chains. The following table shows the markets
in which Zara has started its activity over
recent years.

91%

9%

92%

Kiddy's Class

100%

0%

100%

0%

Pull and Bear

91%

9%

91%

9%

Massimo Dutti

68%

32%

65%

35%

Bershka

98%

2%

97%

3%

Stradivarius

82%

18%

80%

20%

Oysho
Zara Home
Company or joint
management 90 %

2003

Company-managed Franchise Company-managed Franchise

Total

8%

98%

2%

98%

2%

100%

0%

100%

0%

90%

10%

90%

10%

New markets
2004

2003

2002
Companymanaged

2001

Companymanaged

Franchises

Companymanaged

Hong Kong

Morocco

Sweden

Russia

Italy

Finland

Holland

Hungary

Panama

Ireland

Malaysia

Switzerland

Malta

Luxembourg
Czech Republic

Franchises

Franchises

Romania

Slovenia

Singapore

Estonia

Jordan

Dominican Republic

Latvia

Companymanaged

2000

Franchises
Iceland

Companymanaged

Franchises

Denmark

Andorra

Austria

Qatar

El Salvador

Lithuania
8 new countries

84

6 new countries

7 new countries

4 new countries

4 new countries

Sustainability Report INDITEX ECONOMY 85

Importance of each format in terms of turnover

10_3 Segmented information

Kiddy’s Class 2,1 %
Pull and Bear 6.7 %

The different level of development of each of
Inditex’s formats is represented both by their
sales volume and their weighting in the
Group, and by the level of internationalisation
reached, as shown in the following tables
and graphs.

Massimo Dutti 8.5 %

Bershka 9.1 %
Zara 67.4 %
Stradivarius 4.3 %
Oysho 1.3 %

Zara Home 0.7 %

Sales by format
Specific weighting

millions of euros
2003

Var % 04/03

2004

2003

3,819.6

3,219.6

19%

67.4%

70.0%

Kiddy’s Class

120.6

689.7

35%

2.1%

1.9%

Pull and Bear

378.9

287.9

32%

6.7%

6.3%

Massimo Dutt

48.3

388.9

24%

8.5%

8.5%

Bershk

516.0

395.0

31%

9.1%

8.6%

Stradivarius

241.9

162.0

49%

4.3%

3.5%

Oysho

71.7

45.1

59%

1.3%

1.0%

Zara Home

40.4

10.6

279%

0.7%

0.2%

Sales total

5,670.4

4,598.9

100.0%

100.0%

23%

Percentage of sales in international/national
stores per chain 2004

All the formats have a clear international
focus. The percentage of sales in stores in
Spain and abroad of each format over the
last two years is as follows:

10_3_1 Seasonal nature of
business in 2004

Bershka

35.7

64.3

Stradivarius

15.4

84.6

Oysho

31.5

68.5

Zara Home

12.7

87.3

International

EBIT per quarter 03/04

Sales per quarter 03/04

National

32%

58.1

35%

41.9

34%
32%

53.9%

Massimo Dutti

16%

54.5%

69.8

14%

Total

30.2

20%

63.5%
13.4%
31.0%
40.9%
33.8%
16.6%
35.1%
8.5%

Pull and Bear

17%

65.8%
12.8%
30.2%
41.9%
35.7%
15.4%
31.5%
12.7%

87.2

30%

Zara
Kiddy's Class
Pull and Bear
Massimo Dutti
Bershka
Stradivarius
Oysho
Zara Home

12.8

30%

2003

Kiddy's Class

28%

2004

34.2

27%

Format

65.8

22%

Percentage of sales in international stores

Zara

The percentage of sales and the
year’s profit in each quarter of the
year is not uniform. The seasonal
nature of sales, due to the effect that
climate has on sales habits,
generates a higher proportion of
sales and the majority of the year’s
profit during the second half of the
year. This second half (from 1
August to 31 January) coincides with
the Autumn-Winter Season in the
Northern Hemisphere where the vast
majority of Inditex’s sales outlets are
located.

21%

Zara

2004

21%
21%

Format

(%)

2004

2004

2003

2003

1Q

86

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Sustainability Report INDITEX ECONOMY 87

Var
Zara
Net sales
EBIT operation profit
EBIT margin
Stores
ROCE (%)

(*) Antes de Fondo de Comercio

Massimo Dutti

04

03

04/03

3,819.6

3,219.6

19%

Net sales

647.8

476.1

36%

EBIT operation profit

17.0%

14.8%

723

626

38%

33%

EBIT margin
97

03

Var
04/03

481.3

388.9

24%

75.1

60.1

25%

15.6%

15.5%

04

Stores
ROCE (%)

Pull and Bear

Kiddy’s Class

03

Var
04/03

378.9%

287.9

32%

EBIT operation profit

6.2

8.9

198%

14.8%

6.6%

371

350

44%

16%

04

Net sales
EBIT operation profit
EBIT margin
Stores
ROCE (%)

Net sales
EBIT margin

04

ROCE (%)

89.7

35%

21.7

18.0

21%

18.0%

20.0%

129
61%

103

297
56%

26

80%

Inditex
Net sales

10_4 Inditex format by format

EBIT operation profit

Data before botton of commerce

EBIT margin
Stores
ROCE (%)

EBIT operation profit
EBIT margin
Stores
ROCE (%)

71.1

45.1

59%

EBIT operation profit

15.6

2.1

633%

21.8%

4.7%

EBIT margin
Stores
ROCE (%)

88

Net sales

Net sales

104
52%

76
7%

EBIT operation profit
EBIT margin

28

Stores
ROCE (%)

03

322

n/a

62

26

36

ROCE (%)

2%

253

04

32

Stores

302

EBIT margin

Stradivarius

1,922

40%

n/a

14.5%

Var
04/03

2,244

(4.5%)

16.0%

03

13.6%

0.8%

EBIT operation profit

04

48%

16.3%

279%

Net sales

44%

Oysho

23%

627.0

10.6

31%

57.3

46%

4,598.9

925.2

(O.5)

395.0

82.5

52%

5,670.4

0.3

516. 0

49

Var
04/03

40.4

Zara Home

Net sales

03

Var
04/03

Var
04/03

04

04

03

03

Bershka

29

Var
04/03

120.6

Stores
21

03

326
50%

04

Var
04/03

241.9

162.0

49%

38.9

4.4

784%

16.1%

2.7%

227

191

43%

5%

36

Sustainability Report INDITEX ECONOMY 89

10_5 Corporate cash flow
Bearing in mind the targets of the cash flow
generated during the year, we have established
the company’s cash flow over the last two
years, as well as the variation between the two.

FY 2004*

FY 2003 *

Variation % 04/03

10_6 Economic indicators
Net cash received for sale of products and services

5,674.2

4,601.5

23%

Flow received from investments made

14.4

11.8

22%

Cash received for sales of assets

18.8

16.3

15%

5,707.4

4,629.6

23%

Total value-added flow
Distribution of value-added flow

Growth

Employee wages

821.4

678.2

21%

Tax payments

247.5

157.4

57%

Debt return

(22.3)

27.8

n.a.

Dividends paid out to shareholders

220.2

89.3

147%

Cash withheld for future growth

288.6

(19.6)

n.a.

2004

5,670.4

23%

2003

4,598.9

16%

3,974.0

2002
3,249.8

2001

External payments made for purchasing goods
and raw materials

2,636.2

2,293.0

15%

External payments made for services rendered
and investments

1,509.0

1,403.5

8%

5,700.6

4,629.6

23%

24%

2,614.7

2000

22%

28%

*In million of euros

*In million of euros

Sales indicators
10_6_1 Sales by geographical area

Distribution of value-added flow

Employee wages
14 %

Tax payments
4%
Debt return
0%
Dividends paid out to shareholders
4%
External payments made for services
rendered and investments
26 %

2004

The strategy to strengthen the
Group’s commercial presence in
European markets has led to an
increase in the percentage that this
continent represents of the overall
sales. This has risen to 82.8% of
the total, compared to 81.6% in
2003. The reduction in the
percentage of the American
continent is due to the weakening
of the currencies in these countries
during FY2004.

America 11.7%

Rest of world 6.7%

Rest of world 6.7%

America 10.5%

2004

2003

Spain 46.1%

Cash withheld for future growth
5%
Rest of Europe 37.3%
External payments made for purchasing
goods and raw materials
46 %
Spain 45.5%

90

Rest of Europe 35.5%

Sustainability Report INDITEX ECONOMY 91

Rest of world 1 %

America 6 %

10_6_2 Cost of sales and gross margin
Percentage
of consolidated
net sales
2004

53.5%

2003

50.1%

2002

51.5%

2001

51.9%

2000

51.2%

10_6_4 Geographical distribution
of staff in 2004
2004

Spain 61 %

Rest of Europe 32%

* In million of euros

Descrition

2004

2003

Var% 04/03

Fixed and variable salaires

649.1

532.0

22.0%

Inditex national insurance contributions

172.3

146.2

17.9%

Staff costs total

821.4

678.2

21.1%

*Million of euros

10_6_3 Collection and payment
periods
The following tables show the average
period of collection from customers and
payment to suppliers. The reduced
collection period is due to most of the
sales being made in company-managed
stores in which customers pay by cash or
credit cards. The payment periods are in
line with the standards for the industry and
have not undergone significant changes
over recent years.

10_6_5 Providers of capital
Description
Final balance of debtors for sales and services
Turnover
Debtors turnover from sales
Average collection period (days)

Description
Final balance of trade creditors

2004

2003

2002

2001

2000

134.8

129.5

97.7

95.9

71.0

5,670.4

4,598.9

3,974.0

3,249.8

2,614.7

42.0

35.5

40.7

33.9

36.8

9

10

9

11

10

2004

2003

2002

2001

2000

784.2

652.9

510.3

426.3

322.9

Sales cost for year

2,636.2

2,293.0

1,926.2

1,563.1

1,277.0

Operating costs for year

1,794.5

1,432.5

1,179.7

982.3

816.2

Total costs generated by trade creditors

4,430.7

3,725.5

3,105.8

2,545.3

2,093.2

5.65

5.71

6.09

5.97

6.5

65

64

60

61

56

Supplier balance costs
Average collection period (days)

At the last two year-ends, Inditex had a positive
new cash position, that is, the balance in its
favour was higher than the debts held with
financial institutions. However, Inditex has credit
transactions granted by the financial system,
although many of the authorised limits were not
available. With regard to the total risk allowed as
at 31 January 2005, the main providers of
Inditex’s capital are:

Institution

% of risk allowed

SPAIN

25%

SCH

SPAIN

18%

BNP

FRANCE

5%

SPAIN

5%

HOLLAND

6%

CAIXA GALICIA
FORTIS

92

Nationality

BBVA

Sustainability Report INDITEX ECONOMY 93

10_7 Extra indicators
10_6_6 Reserve variations

10_7_1 Like-for-like sales

The following table shows the variation of
Inditex’s reserves (consolidated group) during
FY2004:

Increase of like-for-like sales
2004
First half
Second half

Item

Balance 01/02/2004

Paid-in capital
Unrestricted reserves of parent company
Restritec reserves of parent company
Revaluation reserves

Additions

Reductions

Transfers

Dividends

Balance31/01/2005

20,379

0

0

0

0

20,379

852,582

0

0

(11,550)

0

841,032

18,945

0

0

0

0

18,945

1,692

0

0

0

0

1,692

799,755

4,747

(1,470)

238,999

0

1,042,031

Full year

2003

2002

2001

2000

8%

6%

12%

9%

13%

10%

(2%)

10%

9%

9%

9%

1%

11%

9%

9%

Reserves in consolidated companies due to global
and proportional integration
Reserves in companies accounted for
by the equity method
Conversion differences

(540)

(129)

0

(75)

0

(486)

(126,817)

3,893

(20,518)

0,911

0

(142,531)

FY2003 resuts

446,451

0

0

(228,285)

(218,166)

0

FY2004 resuts

0

628,130

0

0

0

628,130

2,012,447

636,899

(21,988)

0

(218,166)

2,409,192

Total

10_7_2 Stock turnover
10_6_7 Taxes paid

Description
Sales cost

Tax on profit accrued in 2004

Rest of world 3%

2004

2003

2002

2001

2000

2,636.2

2,293.0

1,926.2

1,563.1

1,277.0

Initial stock

486.4

382.4

353.8

245.0

188.5

Final stock

514.0

486.4

382.4

353.8

245.0

Average stock

500.2

434.4

368.1

299.4

216.7

Turnover (times)

5.3

5.3

5.2

5.2

5.9

Turnover (days)

69

69

70

70

62

America 7%

10_7_3 Working capital
Rest of Europe 22%

2004

Spain 68 %

In 2004, as in previous years, Inditex had a
negative working capital, as a result of the

periods of lower sales collections compared to
periods of payment to suppliers.

million of euros
2004

2003

Stock

514.0

486.4

Debtors

282.5

328.9

Accurued expenses

12.3

9.3

Short-term creditors

(1,208.1)

(1,011.2)

(399.3)

(186.6)

Working capital

94

Sustainability Report INDITEX ECONOMY 95

We believe in transparency as a strategic
management and good governance tool.
We encourage shareholders to take part in the organisation’s
decisions, under the one-share one-vote equality principle.
The removal of the minimum share requirement to attend
General Meetings was approved by Inditex at its General
Meeting in 2004.

11_0 Good Governance

11_1 Corporate Governance Structure
11_2 Risk Management

96

Sustainability Report INDITEX GOOD GOVERNANCE 97

This section summarises the information contained in the
Corporate Governance Report, which is published jointly
with this Sustainability Report.

m er s

11_1 Corporate Governance structure
us t o

Board of Directors

4 Employees |

5S

7 Environment

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no
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6

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ie
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c
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rn

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3C

9th June 2005

|9

Go

The Corporate Governance Report, which received Board
approval on 9th June 2005, was prepared following the
guidelines and requirements contained in the texts
gradually introduced by the good governance rulings

Amancio Ortega Gaona

Carlos Espinosa de los Monteros
Bernaldo de Quirós

Domanial Executive Director

Founding member and Chairman of Inditex. He incorporated
Confecciones Goa, S.A in 1972 and created Zara España, S.A. in
1975. He is 68 years old.

José María Castellano Ríos

Executive Director

He is the Deputy Chairman of the Board and its Executive
Committee, and CEO of Inditex since 1997. He has a PhD in
Economics and Business Studies, and is a Professor of Financial
Economics and Accounting at La Coruña Economics and Business
Studies Faculty and a Scholar at the Royal Academy of Economics
and Business studies. He is currently a Member of the Board of
Fadesa, S.A. and La Voz de Galicia, S.A. He is 57 years old.

Irene Ruth Miller

Independent Director

She has been an Independent Director since April 2001. She has
a Science Degree and a Master’s Degree in Chemistry. In 1993
she was appointed Financial Director of Barnes & Noble, where
she also served as Executive Deputy Chairman and Board
Member. She is currently the CEO of Akim, Inc. She is 53 years
old.

He has been an Independent Director since May 1997. He has a
Degree in Law and Business Studies, and is a State Economist
and Sales Engineer (Técnico Comercial y Economista del Estado).
He has an MBA from Northwestern University. He has been
Chairman of Iberia and AVIACO. He is currently Chairman of the
Board of Daimler Chrysler España, Fraternidad – Muprespa and
González Byass, S.A., and Board Member of Acciona, S.A. He is
61 years old.

Juan Manuel Urgoiti López de Ocaña
GARTLER, S.L.

• Spanish Law 44/2002 of 22 November 2002
(Financial Law - Ley Financiera),
• Spanish Law 26/2003 of 17 July 2003
(Transparency Law - Ley de Transparencia)
• Order ECO/3722/2003 of 26 December 2003 and
Circular 1/2004 of 17 March 2004 of the Spanish

Pablo Isla Álvarez de Tejera

Independent Director

He has been an Independent Director since January 1993. He has
a Degree in Law. He is currently President of the Banco Gallego
bank, Deputy Chairman of Acciona, S.A., Board Member of
Necso, S.A. and member of Citigroup Global Markets’ European
Advisory Council. He is 65 years old.

Domanial Director

Represented by Flora Pérez Marcote

issued in our legal system and business culture:
• Olivencia Commission and Aldama Report

Independent Director

Executive Director
José Luis Vázquez Mariño

He has been Chief Executive Officer of Inditex since June 2005.
He was appointed by the Board of Directors by cooptation to fill
the vacancy left by independent Director Fred Langhammer, who
resigned from his Board Member position on 8th June 2005. He
has a Degree in Law and is a legal representative of the State. He
was Chairman of the Board and Joint Chairman of the Altadis
Group from July 2000 to May 2005. He is 41 years old.

National Securities Market Commission (Comisión

Francisco Luzón López

Independent Director

Independent Director

He has been an Independent Director since March 2005. He was
appointed director by the Board of Directors, by cooptation, to fill
the vacancy left by Executive Director Juan Carlos Rodríguez
Cebrián, who resigned from his position as Board Member on 11th
February 2005. He has a degree in Economics and Business
Studies and is currently a Board Member of the Banco Pastor
bank and La Voz de Galicia, S.A. He is 60 yeas old.

He has been an Independent Director since February 1997. He
has a degree in Economics and Business Studies. He was
President of the Banco Exterior de España bank from 1988 to
1996, and is currently in charge of the Banco Santander Central
Hispano bank’s Latin America area. He is 57 years old.

Nacional del Mercado de Valores, CNMV),
implementing the above mentioned Transparency
Law.
The Report is being released into the market due to its
relevant fact status, following notification to the CNMV in
accordance with the provisions of article 82 of Spanish
Law 24/1988 of 28 July 1988 on the Securities Market

Antonio Abril Abadín

Executive Director

He has been General Secretary of the Board since January 1993,
and of the Executive Committee since its creation. He has been a
director since December 2002. He has a Degree in Law and is a
legal representative of the State. He joined Inditex as Manager of
the Legal Department in 1989. He is currently a Member of the
Board of Banco Gallego, S.A. He is 47 years old.

Definitions of the various
categories of Director:

Executive Directors:
They perform management
responsibility tasks within the
Company.

Domanial Directors:
They are the holders or
representatives of the
holders of significant
shareholdings in the
Company’s share capital.

Independent Directors:
Prestigious professionals with no links to
the executive team or to significant
shareholders, who meet the necessary
conditions to ensure their impartiality and
objectivity.

Members:

10
Meetings 2004:

5

(Ley del Mercado de Valores). The Report may be read on
the Inditex corporate website at http://www.inditex.com,
among other places.

Members of the Committees and their duties

Inditex’s Corporate Governance practices are included

9th June 2005

Nominations and Remuneration Committee
Members

Audit and Control Committee

Office

and regulated in detail through the company's various
regulatory instruments: the Company’s Articles of

Members

Executive Committee

Association, Board and General Board of Shareholders’
Regulations, and the Internal Rules of Conduct relating to
Securities Markets. In addition, Inditex has created a
Social Council which will be the company’s advisory body
for Corporate Social Responsibility issues. Its By-Law
received Board approval in December 2002. Inditex also
has an Ethical Code of Conduct for the Group, which has
also received Board approval.
The above company rules have been amended several
times to adapt them to corporate governance
recommendations and conclusions and to incorporate
them into the new transparency, information and
investment protection obligations introduced by the
Financial and Transparency Laws and their implementing

Members

Office

Amancio Ortega Gaona
Chairman
José María Castellano Ríos
Deputy Chairman
Pablo Isla Álvarez de Tejera*
Board Member
Antonio Abril Abadín
Board Member Secretary
Carlos Espinosa de los Monteros Bernaldo de Quirós
Board Member
Francisco Luzón López
Board Member
Juan Manuel Urgoiti López de Ocaña
Board Member
José Luis Vázquez Mariño*
Board Member
Duties:
It has all the Board’s powers save for those which
cannot be delegated either by law or under the Articles
of Association and those which are necessary for the
responsible exercise of the Board’s general supervisory
function.

regulations.

Members::

8
Meetings
2004:

0

Francisco Luzón López
Carlos Espinosa de los Monteros Bernaldo de Quirós
Irene Ruth Miller
Juan Manuel Urgoiti López de Ocaña
José Luis Vázquez Mariño*

Office
Chairman
Board Member
Board Member
Board Member
Board Member

Antonio Abril Abadín acts as a Non-Audit and Control Committee Member Secretary.

Duties:
• To report at General Meetings on any issues raised
by shareholders at such meetings on matters
concerning them.
• To propose to the Board the appointment of the
external financial auditors who will check the annual
accounts. Such appointments are then submitted to
a vote at a General Meeting of Shareholders.
• To supervise the internal audit services.
• To be familiar with the financial information
process and the Company’s internal control systems.

Members::

5
Meetings
2004:

6

Carlos Espinosa de los Monteros Bernaldo de Quirós
Francisco Luzón López
Irene Ruth Miller
Juan Manuel Urgoiti López de Ocaña
José Luis Vázquez Mariño*

Chairman
Board Member
Board Member
Board Member
Board Member

Antonio Abril Abadín acts as a Non-Appointments and Remuneration Committee
Member Secretary.

Duties:
• To formulate appointment proposals for Board
Members and to internal offices of the Board of
Directors.
• To propose to the Board possible members for
each Committee.
• To formulate the criteria to be followed for
selecting the Company’s senior managers, and to
inform of the appointment or removal of such
managers.
• To inform the Board, on an annual basis, of the
performance assessment and remuneration of the
Company’s senior managers and directors, and
particularly of the CEO.

Members::

5

Meetings
2004:

4

(*) since 9th June 2005

98

Sustainability Report INDITEX GOOD GOVERNANCE 99

Risk map

These pages contain a brief summary of the strategic
and operational risks, and of the main action plans
designed to reduce their potential impact, as detailed in
the 2004 Corporate Governance Report.

INTERNAL

EXTERNAL

Strategic

11_2 Risk Management
It includes details of the most relevant risks, specifying the
assessment and control systems set up to mitigate their potential
impact:

1 Business environment
2 Regulations
3 Image and reputation



4 Human resources
5 Operations
6 Financial
7 Information for decision making
8 Technology and information systems
9 Governance and management




external

internal

1 Business environment:

4 Human Resources:

Risks caused by external factors related to
the Group’s activities.

Lack of staff motivation and loyalty, or excessive
staff turnover.

The impact related to the Group’s potential inability to adapt to the
environment/market in which it operates, and to the Group's
eventual inability to keep up with, and respond to, the evolution of
its objective market. This involves making decisions to enter new
markets and countries and to launch new business lines, which
helps spread the risk.

Risks derived from inappropriate human resource flexibility, an
inadequate working environment and excessive reliance on key
personnel.

Operational














Risk management in the Inditex Group is
based on the following principles:
_ it is an instrument aimed at providing
reasonable security in the
achievement of the Group’s aims
_ it is the responsibility of each and
every one of the Organisation’s
members
_ it is an integrated system which
focuses control activities on the
prevention of relevant risks
The identification and assessment of the
Group’s risks is represented on a "risk map”.

Risk is reduced by carrying out a feasibility analysis in each new
market. The business model also increases the effectiveness and
efficiency of the existing markets and business lines, supplementing
growth with the growth of the current business.

In financial year 2004 we continued making
progress in this process. The Inditex “risk map”
was updated and a new risk classification
system was defined. The distinction between
strategic and operational risks has been kept in
this new classification system.

2 Regulations:

The Human Resources Department is continually selecting and
recruiting new staff. It has implemented specific systems to

reconcile employee performance quality with job
exchangeability.
Loyalty programmes and training are examples of actions which
prevent these risks.

5 Operations:
Basic business activities, from designing
the idea to selling the finished product in
shops. Examples of this include failing to hit
the right design in collections, and bad
supply management.

Inditex reduces its exposure to this risk by means of a manufacture
and supply system which ensures reasonable flexibility of response
to unforeseen changes in demand.
This requires a high turnover of the finished product. Before each
campaign, the different Departments set the maximum initial supply
levels twice a week (in the case of Zara) shop orders.

Compliance with the various laws and
regulations.
The diversity of existing legal systems and the complexity
involved in managing multiple legal realities simultaneously.
The Legal, Tax and Employment departments coordinate with the
various managers and external legal advisors of each country or
geographic area.
The Corporate Responsibility Department carries out social
audits with independent professionals who master the local
language and local employment and environmental law.

6 Financial:
Monetary asset management and administration.

7 Decision-making information:
Adequate information at all levels.

Although these risks are relatively insignificant, Inditex regularly
reviews the management information provided to the various
managers.

8 Technology and information systems:
3 Imagen y reputación:

Technical infrastructure with effective information
management.

Direct influence on the way the Group’s
customers, employees, shareholders and
suppliers, and society in general, see the
Group.

Risk of inadequate technology infrastructure. Technology system
reliability is essential to the Group’s activities.

Potential breach of Corporate Governance and Social
Responsibility issues. Breach of the Group’s ethical code would
also involve a breach of Social Responsibility issues.
The Corporate Communication Department is responsible for
managing communications with third parties.

100

The IT Department keeps constant control of the systems'
rationalisation and coherence.

9 Governance and management:
This affects the Company’s governance
This affects the Company’s governance. It includes significant
risks such as the potential lack of adequate management and
leadership. The management structure has been redesigned in
order to be able to successfully respond to new scenarios. The

appointment policy is supervised by the Appointments and
Remuneration Commission, which is comprised solely of
independent directors.

Sustainability Report INDITEX GOOD GOVERNANCE 101

This Report has been produced according to the Reporting
Guide GRI 2002 (www.globalreporting.org), as specified in the
Independent Report prepared by SGS, June 2005.

12_0 Annexes

12_1 GRI Summary
12_2 Independent Report

102

Sustainability Report INDITEX ANNEXES 103

Pages

12_1 Summary of GRI Indicators
Pages

Chapters

5

02_0

7

01_0

5

01_0

3.9 Basis for the identification and selection of stakeholders

8 and 9

02_0

3.10 Approaches to stakeholder’s consultation

17 and 18
25
41
63

04_2
05_2
07_2
08_5

3.11 Type of information generated by stakeholder consultations

17 and 18
25
41
63

04_2
05_2
07_2
08_5

3.12 Use of the information obtained

17 and 18
25
41
63

04_2
05_2
07_2
08_5

1.VISION AND STRATEGY
1.1 Statement of the organisation’s vision and strategy regarding its contribution to sustainable development

1.2 Chairman’s statement

Chapters

COMMITMENT WITH STAKEHOLDERS

2.PROFILE
ORGANISATION´S PROFILE
2.1 Name of the reporting organisation

12 and 13

03_0

2.2 Main products and/or services

12 and 13

03_0

2.3 Operational structure of the organization

12 and 13

03_0

3.13 Explanation of whether and how the precautionary approach or principle addressed by the organisation

82

10_1

2.4 Description of the major divisions, operating companies, subsidiaries and joint ventures

12 and 13

03_0

3.14 Externally developed commitments or other voluntary initiatives that the organisation supports

56-62

08_3

85

10_2

3.15 Membership in business and industrial associations and / or national and international advocacy organisations

63

08_5

13

03_0

3.16 Policies for managing upstream and downstream impacts

47-55

08_1

3.17 Reporting organisation’s approach to managing indirect economic, environmental and social impacts resulting from its
activities

4
6
40

01_0
02_0
07_3

3.18 Major decisions during the reporting period regarding the location of, or changes in, operations

N/A

N/A

3.19 Programmes and procedures pertaining to economic, environmental and social performance

91-95

10_6

10_1

74-78

09_4

01_0

41

07_2

02_0

82

10_1

02_0

68-72

09_0

40 and 41

07_2

12 and 13

03_0

82-89

10_1

13

10_1

84-86

10_3

91

10_6

EC.3 Costs of all goods, materials and services purchased

92 and 95

10_6

EC.4 Percentage of the contracts paid in accordance with agreed terms, excluding agreed penalty arrangements

92

10_6

93

10_6

EC.6 Distribution to providers of capital

93

10_6

EC.7 Increase / Decrease in retained earnings

94

10_6

EC.8 Total sum of taxes of all types paid, broken down by country

94

10_6

EC.9 Subsidies received, broken down by country
EC.10 Donations to community, civil society or other groups, in cash and in kind donations, broken down per type of group

(3)

N/A

47

08_1

2.5 Countries in which the organisation’s operations are located

85

10_2

2.6 Nature of ownership; legal form

16

04_0

2.7 Nature of markets served

13

03_0

82 - 89

10_2

12

03_3

2.8 Scale of the reporting organisation
2.9 List of stakeholders, key attributes of each and relationship to the company

82
4 and 5
7
8 and 9

GLOBAL POLICIES AND MANAGEMENT SYSTEMS

3.20 Status of certification pertaining to economic, environmental management systems

SCOPE OF THE REPORT
2.10 Contact person(s) for matters related to the Report

Back flat

2.11 Reporting period for information provided

Front flat

2.12 Date of most recent previous Report

108

2.13 Boundaries of Report and any specific limitations on scope

Front flat

2.14 Significant changes in size, structure, ownership, products/services that have occurred since the previous Report

(1)

4. INDICATORS OF ECONOMIC PERFORMANCE
12_0

EC.1 Net sales
N/A

2.15 Basis for reporting on joint Reports, partially owned subsidiaries and other situations that could affect comparability from period
to period

102

2.16 Description of any re-statements of information provided in previous reports reasons

N/A

N/A

2.17 Decisions to not apply GRI principles in the preparation of the Report

102

12_0

2.18 Criteria used in the accounting of economic, environmental and social costs and benefits

82

10_0

40 and 41

07_2

69

09_1

N/A

N/A

4

01_0

102

12_0

2.21 Policy and current practice with regard to providing independent mechanisms for the verification of the Report

109

12_2

2.22 Means by which report users can obtain additional information

16 and 17

04_0

24 and 25

05_2

12_0

REPORT´S PROFILE

2.19 Changes with respect to previous years in the measurement methods
2.20 Policies and internal practices to guarantee the completeness and accuracy the information presented in the Report

CLIENTS

EC.2 Geographic breakdown of markets

SUPPLIERS

Back flat

3.GOVERNANCE STRUCTURE AND MANAGEMENT SYSTEMS

EMPLOYEES
EC.5 Total salary costs broken down by country or region

CAPITAL SUPPLIERS

ADMINISTRATION

5. INDICATORS OF ENVIRONMENTAL PERFORMANCE

STRUCTURE AND GOVERNMENT

RAW MATERIALS

3.1 Governance structure and management systems

98 and 99

11_1

EN.1 Total raw material used other than water, by type

77 and 78

09_4

3.2 Percentage of the board of directors that are independent, executive directors

98 and 99

11_1

EN.2 Percentage of raw materials used which are wastes derived from sources external to the reporting organisation

77

09_4

3.3 Process for determining the expertise board members need to guide the strategic direction of the organisation in matters such as
environmental and social opportunities risks

98 and 99

11_1

3.4 Board-level processes for overseeing the identification and management of economic, environmental and social opportunities and risks

09_4

11_1

EN.3 Direct energy use, segmented by primary sources

78

98 and 99

EN.4 Indirect energy use

78

09_4

EN.5 Total water use

78

09_4

(4)

N/A

N/A

N/A

3.5 Linkage between executive compensation and achievement of financial and financial goals

(2)

N/A

3.6 Organisational structure and key individual responsible for oversight, implementation and audit of economic, environmental and social
policies

98 and 99

11-1

3.7 Mission and value statement, internally developed codes of conduct and policies relevant to economic, environmental and social
performance and the status of implementation

4
6 and 7
36,40 and 41
69
98

01_0
02_0
07_0
09_1
11_1

16-19

04_0

3.8 Mechanisms for shareholders to provide recommendations to the Board of Directors

(1) Data on corporate acquisitions available in the 2004 Annual Report, edited jointly with this Sustainability Report for 2004 (2) Data available in the 2004 Corporate Governance Report,

ENERGY

WATER

BIODIVERSITY
EN.6 Location and size of land owned, rented or managed in biodiversity-rich habitats
EN.7 Analysis of the main impacts on biodiversity associated with activities or products in terrestrial, fresh water and marine
environments

(3) Immaterial figure (4) See Sustainability Report for 2003, page 132

edited jointly with this Sustainability Report for 2004

104

Sustainability Report INDITEX ANEXOS 105

EMISSIONS, SPILLAGE AND WASTE

Pages

Chapters

EN.8 Green house gas emissions

75

09_4

EN.9 Use and emission of ozone-depleting substances

75

09_4

EN.10 NOx, SOx and other significant air emissions, by type

75

09_4

EN.12 Total amount of waste, broken down by type and destination

76 and 77

09_4

EN.12 Significant discharges to water, by type

N/A

N/A

EN.13 Significant spillage of chemicals, oils and fuels, expressed in total figures and volume

78

09_4

EN.14 Significant environmental impact of principal products and service

72 and 73

09_3

EN.15 Percentage of the weight of the products sold that is reclaimable at the end of the products’ useful life and percentage
that is actually reclaimed

(5)

N/A

(6)

N/A

LA.1 Breakdown of workforce

28 and 29

06_1

LA.2 Net employment creation and average turnover broken down broken down by country

28

06_1

LA.3 Percentage of employees represented by trade unions broken down geographically or percentage of employees covered
by collective bargaining agreements by countries

35

06_2

LA.4 Policy and procedures of information, consultation and negotiation with employees on the changes in the company’s
operations

33

06_2

LA.5 Methods for registration and notification of occupational accidents and diseases

33

06_2

LA.6 Description of the joint committee on health and safety

33

06_2

LA.7 Absentee, accident and occupational injury and lost day rates and number of work-related fatalities

33

06_2

LA.8 Description of policies and programmes on HIV/AIDS

(7)

N/A

32

06_2

30

06_2

40

07_2

99

11_1

HR.1 List of policies and guidelines as regards human rights relevant to the operations

40 and 41

07_2

HR.2 Evidence that impacts on human rights are taken into consideration when investing or choosing suppliers

40 and 41

07_2

HR.3 List of the policies for evaluating the action on human rights in the supply chain.

40 and 41

07_2

No discrimination
HR.4 List of the global policies dedicated to preventing all forms of discrimination in operations

40 and 41

07_2

40 and 41

07_2

40 and 41

07_2

40 and 41

07_2

(8)

N/A

(9)

N/A

(9)

N/A

PR.1 Description of the policy on customer health and safety during the use of products / services

77

09_3

PR.2 Description of policies and mechanisms for compliance referring to product information and labelling

(5)

N/A

(5)

N/A

12_2 Independent Report

PRODUCTS AND SERVICES

COMPLIANCE
EN.16 Incidents of and fines associated with non-compliance with applicable international agreements and local regulations
associated with environmental matters

6. INDICATORS OF SOCIAL PERFORMANCE
WORK PRACTICES AND DECENT WORK
Work

Relationship company / employees

Health and safety

Training and education
LA.9 Average of hours of training per year per employee
Diversity and opportunity
LA.10 Description of equal opportunities policies and programmes

LA.11 Composition of senior management departments and corporate governance bodies including the female / male ratio
or other indicators of diversity
Strategy and management

Freedom of association and collective bargaining
HR.5 Analysis on the policy of freedom of association and the extent of its application (apart from the local laws)
Child labour
HR.6 Presentation of the policy of rejection of child labour
Forced and compulsory labour
HR.7 Presentation of the policy of rejection of forced and compulsory labour
SOCIETY
Community
SO.1 Description of policies to manage impacts on communities in the regions affected by the activities
Corruption
SO.2 Description of compliance policies as regards corruption and bribes, directed at both the organisation and employees
Political contributions
SO.3 Description of policy and management systems / procedures, and compliance mechanisms dedicated to political
lobbying and contributions
PRODUCT RESPONSIBILITY
Health and safety of customers

Respect for intimacy
PR.3 Description of policies and compliance mechanisms concerning customer privacy

(5) Data not available (6) Inditex was not sanctioned in financial years 2003 and 2004 for any failure to comply with internationally applicable agreements or local legislation in relation to environmental issues (7) Not put into effect in this financial year, 2004 (8) The evolution of Inditex’s business model does not produce any significant negative impact (9) In accordance with the
stipulations of the International Chamber of Commerce, the anticorruption policy will be published in the financial year 2005

106

Sustainability Report INDITEX ANEXOS 107

This Sustainability Report 2004 is printed on
chlorine-free paper and has been manufactured following
environmentally friendly processes
©June 2005, Inditex S.A. All rights reserved
Legal Deposit: C-1486/2004
Inditex S.A.
Edificio Inditex
Avda. de la Diputación, s/n.
15142 Arteixo
A Coruña, Spain
The Sustainability Report 2003, printed on June 2003, is
the previous Report published by the company

108

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