LensCrafters 2005 Annual Report Download - page 84

ANNUAL REPORT ON
CORPORATE GOVERNANCE 2005
AND SARBANES-OXLEY PROJECT | 83 <
The Sarbanes-Oxley Act - Section 404. The implementation of an efficient internal controls system and
the continuous improvement and adjustment of a company’s activities within the applicable regulatory
framework are the basic elements that help to ensure complete, true and correct financial reporting.
The adoption by U.S. regulators of the Sarbanes-Oxley Act (“SOA”) in July 2002, which aimed to
reform the Corporate Governance system of companies listed in the United States and to protect
investors through more accurate and reliable company reporting, has provided added motivation to
ensure the quality of internal controls.
Luxottica Group, as a New York Stock Exchange-listed company, is obligated to comply with the
requirements of SOA, which if not observed could result in significant civil and criminal penalties. In
complying with the requirements of SOA, the Group has sought to improve its own administrative and
financial governance and the quality of its internal controls system by making it more systematic and
constantly monitored as well detailed and duly documented.
Beginning with Luxottica Group’s Annual Report on Form 20-F for the year ended December 31,
2006, the Group’s Chief Executive Officer and Chief Financial Officer will be required to express their
assessment of the effectiveness of the internal controls systems that govern financial reporting. This
evaluation will be subject to an assessment by the Group’s independent auditors, who will release a
formal report on their findings.
To-date the project of evaluation of Luxottica Group’s internal controls, which began at the end of 2004,
has already achieved important results and is expected to continue to improve the Group’s financial
reporting process. In particular, the analysis of the Group’s processes and sub-processes has enabled
a complete mapping of the critical junctions that require careful monitoring in order to guarantee the
reliability of the internal controls system, and as a result, the Group’s financial reporting.
The Group also utilizes management policies and information technology tools to develop and
maintain information that allows for the “dynamic” representation of its processes. This approach
enables the Group to efficiently use this information across its entire structure, also in compliance with
the relevant Italian law, ensuring consistency at the Group level in those activities that are continuously
adapting to internal and/or external changes.
Board of Statutory Auditors. The Board of Statutory Auditors was appointed by the Shareholders’ Meeting
on June 25, 2003 and will remain in office until the financial statements for fiscal year 2005 are adopted. It
comprises three regular Statutory Auditors (Messrs. Giancarlo Tomasin, who is also the Chairman, Walter
Pison, Mario Medici) and two Alternate Auditors (Messrs. Giuseppe Tacca and Mario Bampo).
According to the Company by-laws, Statutory Auditors are appointed by list voting.
As provided for by the Italian regulations applicable to listed companies, the Board of Statutory Auditors
supervises: the observance of law as well as Company by-laws; compliance with proper management
principles; appropriateness of the Company’s organizational structure and Internal Control System; and
the suitability and reliability of the accounting system in correctly representing operational items.
The Board of Statutory Auditors expresses its opinion in respect of the three-year audit assignment
granted by the Shareholders’ Meeting to External Auditors.
As permitted by the SEC pursuant to rule 10A3, which applies to foreign issuers listed on the NYSE, the
Board of Directors, in its meeting held on April 28, 2005, nominated the Board of Statutory Auditors as
the appropriate body to act as the “Audit Committee”, as defined in the Sarbanes Oxley Act and SEC