LensCrafters 2007 Annual Report Download - page 78

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Set out below is a description of the management and control structure adopted by the companies
owned by Luxottica Group S.p.A. (hereinafter, “Luxottica” or the “Company”). Luxottica complies, as
described in more detail below, with the code of conduct, as amended in March 2006 (hereinafter,
the “Code of Conduct”), issued by the Corporate Governance Committee for listed companies
promoted by Borsa Italiana S.p.A. (hereinafter, “Borsa Italiana”). This report (the “Report”) complies
with the relevant directions and recommendations of Borsa Italiana and, in particular, with the
“Guidelines to prepare the annual report on the Corporate Governance” issued by Borsa Italiana and
also follows the “Guidance to prepare the report on the Corporate Governance” issued by Assonime
and Emittente Titoli S.p.A. (“Guida alla compilazione della relazione sulla Corporate Governance”).
SECTION I - GENERAL INFORMATION
I. INTRODUCTION
1. The group of companies owned by Luxottica (hereinafter “Luxottica Group” or the “Group”), a
global leader in the design, manufacturing and distribution of premium fashion and luxury
eyewear, is guided by a single business strategy implemented through the subsidiaries based
in the different countries in which it operates.
2. As of December 31, 2007, the Group comprises of 167 companies operating in Europe, the
Americas, Australia and New Zealand, China, South Africa and the Middle East. The business
of the Group, in terms of sales and personnel, is particularly significant in Europe, North
America, Australia and China.
3. Luxottica is listed on the New York Stock Exchange (“NYSE”) and the Mercato Telematico
Azionario (“MTA”) organized and managed by Borsa Italiana; thus, it must comply with the U.S.
and Italian rules applicable to the companies listed on such markets and, in particular, the
regulations issued by the U.S. Securities and Exchange Commission (“SEC”) and
Commissione Nazionale per le Società e la Borsa (“CONSOB”). In the United States, the
Company is subject to the provisions of the Sarbanes-Oxley Act (“SOX”), which pertain to the
Company’s current governance structure with respect to internal controls over financial
reporting. In particular, certain responsibilities that, according to the Code of Conduct, are to be
performed by an Internal Control Committee are for Luxottica instead performed by the Board
of Statutory Auditors as the equivalent of the Audit Committee under SOX.
4. Luxottica, the parent company, manages and coordinates the activities of all companies in the
Group, whether directly or indirectly controlled, aiming at delivering overall profits and
sustainable results for the Group.
5. Through the following activities, Luxottica guides and coordinates the Group:
• preparation of business and sales forecasts;
• preparation of budgets and identification of specific targets to be achieved and projects to
be implemented;
• establishment of specific rules to assure an adequate flow of information for the effective
management and control of the Group;
• examination and approval of extraordinary or particularly significant transactions;
• implementation of certain financial policies (e.g., definition of indebtedness and cash
investment criteria);
• implementation of central structures to provide professional services and support to all
companies of the Group;
ANNUAL REPORT
ON CORPORATE
GOVERNANCE 2007