LensCrafters 2013 Annual Report Download - page 219

Footnotes to the statutory financial statements as of December 31, 2013 Page 52 of 71
Risks assumed by the company for sureties
The following table summarizes the commitments relating to minimum royalties and finance lease payments
according to maturity:
As of December 31, 2013 Less than 1 year From 1 to 5
years
More than 5
years
Minimum royalties and advertising contributions
97,267,071 314,607,133 116,240,000
Finance lease payments 24,078,305 27,211,725 -
Risks assumed by the company for sureties
These are designed to guarantee loans used by subsidiaries; most of the remunerated guarantees given, jointly with
the subsidiary Luxottica S.r.l., refer to debt obligations of the subsidiary Luxottica U.S. Holdings Corp. relating to
the Cole National Group acquisition, to a private bond placement of USD 255 million (about Euro 184.9 million), to
a private bond placement of USD 175 million (about Euro 126.9 million) and to a new private bond placement of
USD 350 million (about Euro 253.8 million).
Minimum royalties and advertising contributions
Luxottica Group S.p.A. has signed licensing agreements with various designers for the production, design and
distribution of sunglasses and eyeglasses.
Under these licensing agreements, which typically have a duration from 4 to 10 years, Luxottica Group is required to
pay royalties between 6% and 14% of net sales. Certain contracts also provide for the payment of the guaranteed
minimum annual contribution and a mandatory marketing contribution (the latter estimated to be between 5% and
10% of net sales). Typically these agreements may be terminated by either party for various reasons such as, but not
limited to, non payment of royalties, failure to achieve the minimum required net sales amount, unauthorized
modification of the product and, under certain conditions, the change in ownership of Luxottica Group S.p.A..
Contingent liabilities
There are no contingent liabilities such as described in IAS 37.