LensCrafters 2011 Annual Report Download - page 247

| 171 >CONSOLIDATED FINANCIAL STATEMENTS - NOTES
LITIGATION
French Competition Authority Investigation
Our French subsidiary Luxottica France S.a.s., together with other major competitors in
the French eyewear industry, has been the subject of an anti-competition investigation
conducted by the French Competition Authority relating to pricing practices in such
industry. The investigation is ongoing, and, to date no formal action has yet been taken
by the French Competition Authority. As a consequence, it is not possible to estimate or
provide a range of potential liability that may be involved in this matter. The outcome of
any such action, which the Company intends to vigorously defend, is inherently uncertain,
and there can be no assurance that such action, if adversely determined, will not have a
material adverse effect on our business, results of operations and financial condition.
Other proceedings
The Company and its subsidiaries are defendants in various other lawsuits arising in the
ordinary course of business. It is the opinion of the management of the Company that
it has meritorious defenses against all such outstanding claims, which the Company will
vigorously pursue, and that the outcome of such claims, individually or in the aggregate,
will not have a material adverse effect on the Company’s consolidated financial position
or results of operations.
LICENSING AGREEMENTS
The Group executed an exclusive worldwide license for the production and distribution of
Brooks Brothers brand eyewear. The brand is held by Brooks Brothers Group Inc., which
is owned and controlled by a director of the Company, Claudio Del Vecchio. The original
license expired in 2009 and was renewed for an additional five years on March 31, 2010.
The Group paid royalties under the license to Brooks Brothers Group Inc. of Euro 0.6
million in 2011 and Euro 0.8 million in 2010.
PURCHASE OF BUILDING
On November 7, 2011, the Company acquired a building next to its registered office
in Milan for a purchase price of Euro 21.4 million from “Partimmo S.r.l.,” a company
indirectly controlled by the Company’s Chairman of the Board of Directors. The purchase
price is in line with the fair market value of the building based on a valuation prepared
by an independent expert appointed by the Board’s Internal Control Committee. The
Company recorded this asset at cost. As of December 31, 2011, about Euro 2.9 million
of improvements were made to the space, a portion of which (equal to Euro 0.4 million
plus VAT) were paid by the Company to Partimmo S.r.l. as a reimbursement of part of
the renovation works. The amount related to the transaction are reported in the line item
“others” in the below table.
28. RELATED PARTY
TRANSACTIONS