LensCrafters 2010 Annual Report Download - page 191

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BOARD OF
STATUTORY
AUDITORS’ REPORT
ON THE STATUTORY
AND CONSOLIDATED
FINANCIAL
STATEMENTS
BOARD OF STATUTORY AUDITORS’ REPORT OF LUXOTTICA GROUP S.P.A. AS AT DECEMBER, 31
2010 PURSUANT TO ARTICLE 2429 OF THE ITALIAN CIVIL CODE AND ARTICLE 153 OF ITALIAN
LEGISLATIVE DECREE 58/1998
Dear Stockholders,
During the 2010 financial period we performed our supervisory activities as required by the law and in accordance with the
Rules of Conduct of the Board of Statutory Auditors, recommended by the Italian National Board of Chartered Accountants
(Consigli Nazionali dei Dottori Commercialisti e degli Esperti contabili).
With regard to the activities performed during the year and in compliance with the instructions provided by CONSOB through
the announcement of April 6, 2001 and subsequent amendments and supplements, we hereby report the following:
we verified that the deed of incorporation and statute of the company comply with the law;a)
we obtained regular information from the Directors on the activities carried out and the main transactions with a b)
significant impact on the Company’s financial position or results of operations approved and carried out during the
year, also through the subsidiaries. In particular, we draw your attention to the following:
1) on January 29, 2010, our subsidiary Luxottica U.S. Holdings Corp. (“U.S. Holdings”) completed a private placement
of US$ 175 million of senior unsecured guaranteed notes, issued in three series (Series D, Series E and Series F).
The aggregate principal amount is US$ 50 million for each of the Series D and Series E Notes and US$ 75 million
for the Series F Notes. The Series D Notes mature on January 29, 2017, the Series E Notes mature on January 29,
2020 and the Series F Notes mature on January 29, 2019. Interest on the Series D Notes accrues at 5.19 percent
per annum, interest on the Series E Notes accrues at 5.75 percent per annum and interest on the Series F Notes
accrues at 5.39 percent per annum;
2) on 30 September 2010 the company completed a private placement of Euro 100 million, of senior unsecured
guaranteed notes, issued in two series (Series G and Series H). The aggregate principal amount is Euro 50 million
for both Series G and Series H. The Series H Notes mature on September 15, 2017, the Series H Notes mature
on September 15, 2020. Interest on the Series G Notes accrues at 3.75 percent per annum, interest on the Series
H Notes accrues at 4.25 percent per annum The Notes contain certain financial and operating covenants. The
Company was in compliance with those covenants as of December 31, 2010;
3) on November 10, 2010, the Company issued senior long–term notes to institutional investors (Eurobond dated
November 10, 2015) for an aggregate principal amount of Euro 500 million. The notes mature on November
10, 2015 and the fixed gross coupon is equal to 4.00 percent. The notes are listed on the Luxembourg Stock
Exchange;
4) on 30 November 2010 the Company renegotiated the final maturity of the Euro 300 million Facility that was
originally granted in 2009 by four credit institutes (Mediobanca, Calyon, UniCredit and Deutsche Bank). The final
maturity of the Term Facility is November 30, 2014. The margin were also revised based on the current market
conditions. The Facility contains certain financial and operating covenants. The Company was in compliance with
those covenants as of December 31, 2010;
5) during the year the company set up a joint venture with Essilor International for the Australian and New Zealand
markets; the company renewed the licensing contract with the Jones Apparel Group by three years for the design,
production and global distribution of glasses and sunglasses frames for the Anne Klein New York brand; the
company extended the licensing contract with Retail Brand Alliance Inc., a subsidiary company of Claudio Del
Vecchio, director of Luxottica Group S.p.A., until 2014 with the option to renew the contract for a further five year
period under the same conditions of contract; the Company extended the licensing agreement for the design,
production and distribution of glasses and sunglasses frames for the Bvlgari brand for a further ten year period; the
Company signed a new licensing contract with Coach Inc., for the production, design and global distribution of
BOARD OF STATUTORY AUDITORS’
REPORT ON THE STATUTORY
AND CONSOLIDATED FINANCIAL
STATEMENTS