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| 77 <
Set out below is a description of the Corporate Governance framework adopted by the group of joint-
stock companies reporting to Luxottica Group S.p.A. and designed to ensure that all companies in the
Group are appropriately managed and controlled. This report has been prepared in compliance with the
relevant directions and recommendations of Borsa Italiana S.p.A. (hereinafter, “Borsa Italiana”) and also
takes into account the provisions of the guidance note issued by Assonime and Emittente Titoli S.p.A.
in February 2004 (“Guida alla compilazione della relazione sulla Corporate Governance”).
I. INTRODUCTION
1. The Luxottica Group, a world leader in ophthalmic eyewear, implements its business strategy via
subsidiaries based in the many different countries in which it operates. The business strategy is the
same throughout the Group.
2. The Luxottica Group comprises 144 companies operating in Europe, America, Australia and New
Zealand, Asia-Pacific, China, South Africa and the Middle East. Its business operations, in terms of
sales and personnel, are particularly significant in Europe, North America, Australia and Asia.
3. Luxottica Group, the Parent Company, is listed on both the NYSE and the telematic stock market
organized and managed by Borsa Italiana, and must therefore comply with the U.S. and Italian
requirements applicable to companies listed on these exchanges and, in particular, with the
provisions issued by both the SEC and CONSOB.
4. With the objective of delivering overall profits and sustainable results for the Luxottica Group, the
Parent Company manages and co-ordinates the activities of all companies in the Group, whether
directly or indirectly controlled.
5. The following business tools are used to ensure that the Group is subject to the direction of a single
managing entity:
• preparation of business plans and sales forecasts;
• preparation of budgets and identification of specific targets to be achieved and projects to be
implemented;
• establishment of rules providing for the communication of certain information necessary for the
effective management and control of the Group;
• examination and approval of certain extraordinary or particularly significant transactions;
• implementation of certain financial policies across the Group (e.g., indebtedness tests and cash
investment criteria);
• establishment of central Group services which provide professional support and advice for all
companies in the Group;
• adoption of codes of conduct and procedures which apply to the entire Group;
• specification and adoption of common organizational models; and
• adoption of guidelines on the composition, operation and roles of the Boards of Directors,
including authority levels, for subsidiaries. These guidelines are consistent with those adopted by
the Parent Company.
Luxottica Group’s Corporate Governance framework is designed to apply to the entire Group and has
been devised on the basis of the mutually compatible recommendations made by Borsa Italiana,
CONSOB, the SEC and the NYSE and in compliance with the highest Corporate Governance standards.
The Corporate Governance framework of the Luxottica Group is based on five key principles:
1. a set of clearly defined, acknowledged and shared values;
2. the central role played by Luxottica Group’s Board of Directors;
ANNUAL REPORT
ON CORPORATE GOVERNANCE 2005
AND SARBANES-OXLEY PROJECT