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ANNUAL REPORT ON
CORPORATE GOVERNANCE 2005
AND SARBANES-OXLEY PROJECT | 85 <
This procedure covers reports and complaints concerning cases of alleged fraud, violation of the ethical
principles and rules of behavior set out by the Group’s Code of Ethics, and irregularities or negligence
in book-keeping, internal controls and auditing.
Complaints from both employees and persons outside the Group will be taken into consideration; the
Group undertakes to protect the anonymity of relators, and to ensure that any employees reporting
violations will not suffer any form of retaliation.
The procedure applies to all the Companies in the Group.
Code of Corporate Governance practice. In accordance with the provisions of Art. 124-bis of Legislative
Decree No. 58/1998 (hereinafter, “TUF”), the Company hereby declares it conforms to the principles
contained in the Code of Ethics and in Borsa Italiana’s Code of Corporate Governance Practice.
The provisions of the Code of Corporate Governance Practice are summarized in tables prepared in
compliance with the directions of Borsa Italiana, Assonime and Emittente Titoli.
Rules of behavior for transactions with related parties. On March 27, 2006, the Board of Directors
approved the new “Guidelines on transactions with related parties,” which superseded the former
“Guidelines on significant transactions and those with related parties.”
The new document sets out the broader definition of related parties as provided for by the IAS 24 accounting
principle, which was introduced into our law by CONSOB by virtue of Resolution No. 14990 (April 14, 2005).
The current Guidelines identify two different categories of transactions with related parties, and set out
a different procedure for each of them.
Approval by the Board of Directors of Luxottica Group S.p.A. is required for “extraordinary” transactions
with related parties made by any company of the Group.
No prior approval by the Board of Directors is required for “ordinary” transactions with related parties, as
these fall within the authority delegated by the administrative body to individual members of the Board
of Directors or their appointees; therefore, these transactions will be periodically submitted to the Board
of Directors by the Directors having authority.
The Board of Directors, which is called upon to approve the transaction, must be adequately informed
about the nature of the relation, how the transaction will be executed, when and upon what economic
conditions it will be completed, the assessment procedure which was followed, the underlying interest
and grounds, and any risks for the Group.
The Board may, if appropriate, be assisted by one or more independent and competent experts
expressing an opinion on the conditions, lawfulness and technical aspects of the transaction.
Finally, (i) pursuant to the provisions of Art. 2391-bis of the Italian civil code, the Board of Directors of the
company concerned shall (if recourse is had to the capital market) disclose these transactions in its
management report as per Art. 2428 of the Italian civil code; (ii) pursuant to the provisions of Art. 71-bis
of the Regolamento Emittenti, if any of the companies of the Group makes any transactions with related
parties “which, because of their purposes, considerations, methods or time of execution, may affect the
protection of corporate assets or the completeness and correctness of information, including accounting
information,” concerning Luxottica Group, the latter shall make available to the public an information
document drawn up in compliance with the provisions in force.