LensCrafters 2007 Annual Report Download - page 91

> 90 | ANNUAL REPORT 2007
Committee in order for it to perform its role during the 2008 fiscal year. The same amount was
allocated for the 2007 fiscal year for the same purpose. More details can be found in Section III of this
document.
II. THE INTERNAL CONTROL SYSTEM
The internal control system consists of specific procedures concerning each activity carried out,
which are set forth in the manuals updated and distributed within the Group.
The control systems structure, defined on the basis of the COSO model report, which represents
the international best practice protocol in the evaluation of the adequacy of an internal control
system, is particularly important. It governs the preparation and circulation of the financial reports
and it has been additionally strengthened in recent years to ensure compliance with the guidelines
set by the SOX.
In compliance with the provisions of Art. 2381 of the civil code, the Board of Directors establishes
the guidelines of the internal control system and evaluates its adequacy so that the major risks for
the Group may be correctly identified, on the basis of the information received by the appointed
bodies responsible for the organizational, administrative and accounting structure.
To this end, the Board consults the Internal Control Committee in addition to the Person in Charge
of Internal Control, the Internal Auditing function, and the Supervisory Body established in
accordance with the organizational model provided for by Legislative Decree No. 231/2001.
The Internal Auditing function has not been assigned to any external entity, not even for portions of
its activities. By the resolution taken on February 19, 2007, the Person in Charge of Internal
Auditing must not only report to the Chairman, but also to the Chief Executive Officer.
Supervisory and control duties, reserved by law to the Board of Statutory Auditors, remain
unprejudiced, while the external auditing activity is assigned to an external auditing company in
accordance with the applicable Italian regulations.
The Board of Directors, in the meeting that took place on February 19, 2007, appointed the Chief
Executive Officer as the executive administrator with supervisory responsibility over the
performance of the internal control system and with duties and functions described in the Self-
Regulatory Code.
In carrying out this assignment, the Chief Executive Officer has focused on the identification of the
major corporate risks, utilizing also a risk assessment process expanded to the major companies
that belong to the Group. Periodically and pursuant to specific requests, the Chief Executive
Officer has supplied reports to the Board of Directors concerning any identified risks and corrective
measures undertaken.
In addition, the Chief Executive Officer has initiated the implementation of the guidelines established
by the Board, organizing the design, implementation and management of the internal control
system and constantly verifying its overall adequacy, effectiveness and efficiency. The Chief
Executive Officer, in addition, has handled the adjustment of such system to changing operational
conditions and the legal and regulatory framework, relying on the support of the relevant corporate
structures.
The fiscal year 2007 has been the first year of full implementation of the Financial Risk
Management Policy, approved in November 2006 by the Company’s Board of Directors, and
applicable to all companies that are owned by Luxottica.
The policy sets forth the management and monitoring principles and rules pertaining to the
financial risks, with particular reference to the activities implemented by Luxottica Group to
minimize the risks associated with interest and exchange rate fluctuations.