LensCrafters 2015 Annual Report Download

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Annual Report as of
December 31, 2015
Luxottica Group S.p.A., Piazzale L. Cadorna, 3, 20123 Milano - C.F. Iscr. Reg. Imp. Milano n. 00891030272 - Partita IVA
10182640150
IFRS

Table of contents

  • Page 1
    Annual Report as of December 31, 2015 IFRS Luxottica Group S.p.A., Piazzale L. Cadorna, 3, 20123 Milano - C.F. Iscr. Reg. Imp. Milano n. 00891030272 - Partita IVA 10182640150

  • Page 2
    Corporate bodies BOARD OF DIRECTORS In office until the approval of the financial statements as of and for the year ending December 31, 2017 Executive Chairman Deputy Chairman Chief Executive Officer Product & Operations Directors Leonardo Del Vecchio Luigi Francavilla Massimo Vian Marina Brogi* (...

  • Page 3
    ... TO ART.154 OF THE LEGISLATIVE DECREE 58/98 11. AUDITORS' REPORT 12. BOARD OF DIRECTORS PROPOSAL 13. BOARD OF STATUTORY AUDITORS' REPORT ON THE SEPARATE AND CONSOLIDATED FINANCIAL STATEMENTS Luxottica Group S.p.A., Piazzale luigi Cadorna,3, 20123 Milano - C.F. Iscr. Reg. Imp. Milano n. 00891030272...

  • Page 4
    1. MANAGEMENT REPORT

  • Page 5
    Luxottica Group S.p.A. Headquarter and registered office: Piazzale Luigi Cadorna, 3 - 20123 Milan, Italy Capital Stock â,¬ 29.019.199,98 Authorized and issued MANAGEMENT REPORT AS OF DICEMBER 31, 2015 1. OPERATING PERFORMANCE FOR THE YEAR ENDED DECEMBER 31, 2015 The Group's growth continued ...

  • Page 6
    ... 2014). 2. SIGNIFICANT EVENTS DURING 2015 January On January 19, 2015 the Board of Directors appointed Adil Mehboob-Khan as the Group CEO for Markets and Massimo Vian as the Group CEO for Product and Operations. The appointment of a CEO for Markets and a CEO for Product and Operations, entrusting...

  • Page 7
    ... production and worldwide distribution of sunglasses and prescription frames under the Dolce&Gabbana brand. The agreement was extended to December 31, 2025. 3. FINANCIAL RESULTS We are a global leader in the design, manufacture and distribution of fashion, luxury and sport eyewear, with net sales...

  • Page 8
    ... order to represent the Group's operating performance on a consistent basis in this Management Report, net sales and operating expenses as represented in the Group's Consolidated Financial Statements have been adjusted in the tables below to take into account the following events: Management Report...

  • Page 9
    ... cost of sales Adjusted income from operations Adjusted EBITDA Adjusted net Income attributable to Group's Stockholders 2015 9,010.8 3,009.0 1,442.8 1,919.7 854.0 % of net sales 100% 33.4% 16.0% 21.3% 9.5% 2014 7,698.9 2,621.3 1,177.6 1,561.6 687.4 % of net sales 100% 34.0% 15.3% 20.3% 8.9% % change...

  • Page 10
    ...the United States and Canada) comprised 21.9% of our total net sales in the retail distribution segment and increased by 13.2% to Euro 1,146.8 million in 2015 from Euro 1,013.1 million, or 22.7% of our total net sales in the retail distribution segment, in 2014, mainly due to an increase in consumer...

  • Page 11
    ...65.7 million related to the reorganization of Oakley and other minor projects and, for 2014, non-recurring expenses of Euro 20.0 million related to the termination of the employment of the former Group CEOs. As a percentage of net sales, adjusted operating expenses decreased to 50.6% in 2015 from 50...

  • Page 12
    ... of Euro) Operating expenses - Adjustment for the employment termination of the former Group CEOs - Adjustment for the reorganization of Oakley and other minor projects Adjusted operating expenses 2015 4,624.7 (65.7) 4,559.0 2014 3,920.0 (20.0) 3,900.0 Selling and advertising expenses (including...

  • Page 13
    ... and administrative expenses - Adjustment for the employment termination of the former Group CEOs - Adjustment for the reorganization of Oakley and other minor projects Adjusted general and administrative expenses 2015 1,087.5 (60.1) 1,027.4 2014 906.6 (20.0) 886.6 Income from Operations. For the...

  • Page 14
    ...of the period B) C) D) E) F) Net cash provided by operating activities Cash provided/(used) used in investing activities Cash provided/(used) in financing activities Effect of exchange rate changes on cash and cash equivalents Net change in cash and cash equivalents As of December 31 2015 2014 1,453...

  • Page 15
    ... the payment of existing debt, (iii) Euro (308.3) million used to pay dividends to the shareholders of the Company, (iv) Euro 70.0 million related to the exercise of stock options and (v) Euro 135.7 million related to the increase in bank overdrafts. Management Report as of December 31, 2015 Page...

  • Page 16
    ... the following: (i) increase in trade payables (Euro 103.7 million) mainly due to the increase in sales during 2015; (ii) increase in inventory (Euro 104.9 million) aimed at improving the quality of the customer experience by having inventory levels in line with Management Report as of December 31...

  • Page 17
    ... due to the payment made by Luxottica S.r.l. and related to a tax audit for fiscal years 2008 through 2011; (iii) an increase in trade payables (Euro 182,9 million) mainly due to the growth of the business and to the strengthening of the foreign currencies in which the Group operates compared to the...

  • Page 18
    ....2 million in 2015 and Euro 32.6 million in 2014) and related, for both 2015 and 2014, to the opening of new stores, the remodeling of older stores, and to projects for upgrading the management information system. Intangible assets of Euro 5,039.1 million primarily reflect the Group's investment in...

  • Page 19
    5. HUMAN RESOURCES Group workforce As of December 31, 2015, Luxottica Group had 78,933 employees, of which 60.7% were dedicated to the retail business, 12.7% to the wholesale business and 25.9% to production and distribution activities. Central Corporate services based in Milan represent 0.7% of ...

  • Page 20
    ... and positive impact on employee engagement, the Group decided to continue the work started in 2014 to develop a ''Culture of Feedback'', which aims to strengthen the relationship between managers and their staff. Top managers, in partnership with local HR teams in each geography and business unit...

  • Page 21
    ... our products and services. Discretionary spending is affected by many factors, including general business conditions, inflation, interest rates, consumer debt levels, unemployment rates, availability of consumer credit, conditions in the real estate and mortgage markets, currency exchange rates and...

  • Page 22
    ... our results of operations and financial condition. Risks Relating to Our Business and Operations e) If we are unable to successfully introduce new products and develop and defend our brands, our future sales and operating performance may suffer. Management Report as of December 31, 2015 Page 18...

  • Page 23
    ..., cost savings and other benefits from the acquisition, (iii) the lack of success by the acquired business in its markets, (iv) the loss of key employees of the acquired business, (v) a decrease in the focus of senior management on our operations, (vi) difficulty integrating human resources systems...

  • Page 24
    ... costs and royalty payments to designers. For the years ended December 31, 2015 and 2014, no single license agreement represented greater than 5.0% of total sales. i) As we operate in a complex international environment, if new laws, regulations or policies of governmental organizations, or changes...

  • Page 25
    ...by, U.S. laws and regulations related to conducting business with the U.S. government. These laws and regulations may impose various additional costs and risks on our business. For example, Oakley and Eye Safety Systems are required to obtain applicable governmental approvals, clearances and certain...

  • Page 26
    ...our business, results of operations and financial condition could suffer. The mid- and premium-price categories of the prescription frame and sunglasses markets in which we operate are highly competitive. We believe that, in addition to successfully introducing new products, responding to changes in...

  • Page 27
    ... to properly process information and increased costs of operating our business. We rely on information technology systems both managed internally and outsourced to third parties across our operations, including for management of our supply chain, point-of-sale processing in our stores and various...

  • Page 28
    ..., our future growth and profitability may suffer. In October 2014, we announced the introduction of a management structure based on a co-CEO model, pursuant to which two co-chief executive officers are appointed to manage the principal executive officer responsibilities of the Group, with one chief...

  • Page 29
    ... collect payments from our customers and, potentially, increased costs due to reserves for doubtful accounts and a reduction in sales to customers experiencing credit-related issues. A substantial majority of our outstanding trade receivables are not covered by collateral or credit insurance. While...

  • Page 30
    ... exchange rates and our annual profitability to grow at a rate that is more than proportional to sales growth. The Group expects to benefit from continued development across its various businesses in new and established markets, with notable contributions from Ray-Ban, Oakley and Sunglass Hut...

  • Page 31
    ...July 28, 2006, were undertaken during 2015. The information required by Section 123-bis par.1 of Italian Legislative Decree 58 dated February 29, 1998, is disclosed in the corporate governance report forming an integral part of the annual financial report. The Company is not subject to direction and...

  • Page 32
    ...Dec 31, 2015 Net income 541.171 (91.655) (47.134) (39.326) 443.817 (2.753) 804.119 (In thousands of Euro) PARENT COMPANY FINANCIAL STATEMENTS Elimination of intragroup dividends Trademarks and other intangible assets (*) Elimination of internal profits on inventories (*) Difference between value of...

  • Page 33
    ... with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board and endorsed by the European Union. The Group believes that these adjusted measures are useful to both management and investors in evaluating the Group's operating performance compared...

  • Page 34
    ...Luxottica Group (in millions of Euro) Reported - EyeMed Adjustment - Adjustment for Former group's CEOs - Adjustment for the accrual for the tax audit relating to Luxottica S.r.l. (fiscal years from 2008 to 2011) Adjusted Net Cost of Sales sales 7,652.3 (2,574.7) 46.6 (46.6) EBITDA 2014 Operating...

  • Page 35
    ... reader in better understanding the operational performance of the Group. The Group cautions that these measures are not defined terms under IFRS and their definitions should be carefully reviewed and understood by investors. Investors should be aware that our method of calculating EBITDA may differ...

  • Page 36
    ... in better understanding the operational performance of the Group. The Group cautions that this measure is not a defined term under IFRS and its definition should be carefully reviewed and understood by investors. Investors should be aware that our method of calculation of free cash flow may differ...

  • Page 37
    ...to refinance our debt as it matures and incur additional indebtedness to invest in new business opportunities. The ratio also allows management to assess the cost of existing debt since it affects the interest rates charged by the Company's lenders. EBITDA and the ratio of net debt to EBITDA are not...

  • Page 38
    ... eyeglasses, fluctuations in exchange rates, changes in local conditions, our ability to protect our proprietary rights, our ability to maintain our relationships with host stores, any failure of our information technology, inventory and other asset risk, credit risk on our accounts, insurance...

  • Page 39
    ... the date hereof, and we do not assume any obligation to update them. ************ Milan, March 1, 2016 Luxottica Group S.p.A. On behalf of the Board of Directors Leonardo Del Vecchio (Executive Chairman) Massimo Vian (C.E.O for Product and Operations) Management Report as of December 31, 2015...

  • Page 40
    2. REPORT ON CORPORATE GOVERNANCE

  • Page 41
    ... CONSOLIDATED FINANCIAL LAW YEAR 2015 APPROVED BY THE BOARD OF DIRECTORS ON MARCH 1, 2016 TRADITIONAL ADMINISTRATION AND CONTROL SYSTEM LUXOTTICA GROUP S.P.A. REGISTERED OFFICE: MILAN, PIAZZALE LUIGI CADORNA, 3 WEBSITE: www.luxottica.com Report on corporate governance and ownership structure as...

  • Page 42
    ... design, development and manufacturing take place in six production facilities in Italy, three in the People's Republic of China, one in India, one in Brazil and one in the United States devoted to sports and performance eyewear. Luxottica is listed on the New York Stock Exchange ("NYSE") and on the...

  • Page 43
    ..., according to the highest standards of corporate governance. The values established in the Code of Ethics of Luxottica Group bind all employees to ensure that the activities of the Group are performed in compliance with applicable law, in the context of fair competition, with honesty, integrity and...

  • Page 44
    ... of Luxottica. In particular, in the aforesaid Board meeting it was deemed that no management and coordination activities on the part of the parent holding company existed as: (a) the parent holding company does Report on corporate governance and ownership structure as of December 31, 2015 Page...

  • Page 45
    ...to integrate a form of direction in the management of the Company. Information on the stock option plans, the share capital increases approved by stockholders and reserved to stock option plans, and the performance share plans assigned to employees is available in the annual financial report, in the...

  • Page 46
    ... in the event that the Company obtains an investment grade credit rating. On January 20, 2014 the Standard & Poor's rating agency awarded the Long Term Credit Rating "A-" to the Company. On February 10, 2014 the Company issued a bond listed on the Luxembourg Stock Exchange (code ISIN XS1030851791...

  • Page 47
    ... to in article 123-bis, paragraph 2, letter b) of the Italian Consolidated Financial Law, are listed below in Section II of this Report, which describes the Risk Management and Internal Control System. Report on corporate governance and ownership structure as of December 31, 2015 Page 7 of 45

  • Page 48
    ... positions with strategic roles ("Strategic Managers"): Chief Financial Officer; Group Human Resources Officer; Group Investor Relations and Corporate Communications Officer; Group Manufacturing Officer; Group Design Officer; Corporate Business Services Officer; President Wholesale; President Retail...

  • Page 49
    ... organizational, administrative and accounting structure of Luxottica and of the strategically relevant subsidiary companies through the examination of a report prepared each fiscal year, as well as the adequacy of the internal control and risk management system. The Board of Directors reviews and...

  • Page 50
    ... the Board of Statutory Auditors and top management, aimed at providing Directors with more in-depth knowledge of the business operations and dynamics of the Group. The first meeting, organized at "Luxottica Days" in Cernobbio - namely the days dedicated to exhibiting new collections and selling to...

  • Page 51
    ...Board of Directors in office until April 24, 2015 was comprised of eleven members. For more detailed information please refer to the previous corporate governance report available on www.luxottica.com in the Company/Governance/Corporate Governance Report section of the website. Detailed information...

  • Page 52
    ... an employee of the Company. Set out below is a brief profile of each member of the Board of Directors in office. Information is provided regarding the initial year each director was appointed to the Board and the offices held in other listed companies, in financial, banking and insurance companies...

  • Page 53
    ... appointed Chief Financial Officer, Global Prestige Products and lastly in 2014 Vice President and General Manager of Global Luxury Brands. He is currently President of Value Retail Management Ltd, a company that develops and manages luxury shopping villages in Europe and China. Report on corporate...

  • Page 54
    ... as Senior Director in charge of the "Nuovo Mercato". In 2003 she joined Standard & Poor's, McGraw Hill Financial Group, where she was appointed Chief Executive Officer of S&P CMSI, Managing Director, Head of Southern Europe, until March 2015. Ms. Pierdicchi is a member of the Board of Directors of...

  • Page 55
    ... appointed Chief Executive Officer of Stefanel S.p.A. Since September 2013 he has been Chief Corporate Officer of Moncler S.p.A. Cristina Scocchia Ms. Scocchia has been a member of the Board of Directors of Luxottica Group S.p.A. since April 24, 2015. After graduating in Management of International...

  • Page 56
    ... a member of the Board of Directors of Luxottica Group S.p.A. since April 24, 2015. He holds a degree in Business and Economics and began his career at Procter & Gamble, where he served as European Group Marketing Manager. From 1996 to 2001 he held the position of Global Sales and Marketing Director...

  • Page 57
    ... with the office of Director at Luxottica, the Board of Directors confirmed the following criteria at the Board meeting held on April 24, 2015: MAXIMUM NUMBER OF APPOINTMENTS AS DIRECTOR OR AUDITOR IN OTHER COMPANIES Listed companies, financial companies, banks, insurance companies or companies of...

  • Page 58
    ... do not fall within the Reserved Decisions, with regard to the following corporate functions: Accounting, Finance and Control, Human Resources and Internal Communications, Corporate and Legal Affairs, Investor Relations and Corporate Communications. He was also granted the powers of management and...

  • Page 59
    ... provisions of the Company's by-laws, the executive bodies report to the Board of Directors and to the Board of Statutory Auditors promptly and regularly and, in any case, at least quarterly, on the general performance of the business and on the procedures to exercise the managing powers granted to...

  • Page 60
    ...the Code of Conduct. Appointment of Directors The Board of Directors in office was appointed by the Meeting of Stockholders held on April 24, 2015. The minimum percentage of share capital required to present a list, as established by CONSOB resolution no.19109 dated January 28, Report on corporate...

  • Page 61
    ...as the non-executive Director Mr. Mario Notari to be members of the Human Resources Committee, all of whom are in possession of the knowledge and experience of financial matters or remuneration policies required by the Code of Conduct. The Human Resources Committee in office until April 24, 2015 was...

  • Page 62
    ...general organizational structures and the corporate governance of the Company and the Group, is aimed at enabling the Group's primary risks to be identified, measured, managed and monitored, as well as ensuring that financial reporting is reliable, accurate and disclosure is made promptly. Luxottica...

  • Page 63
    ... better defined and Main features of the internal control and risk management system in relation to the financial reporting process System Structure and Phases (I) Structure and Phases As mentioned above, the structure of the ICFR System was defined consistently with the model provided by the COSO...

  • Page 64
    ...the new structure of the ICFR System. The policy sets forth the principles and rules for the management and monitoring of financial risk and pays particular attention to the activities carried out by the Luxottica Group to minimize the risks deriving from the fluctuations of interest rates, exchange...

  • Page 65
    ... and communicated to the Group's Executive Chairman, Chief Executive Officer of Product and Operations (CEO) and Chief Financial Officer (CFO), so that they may make appropriate and timely decisions about the information to be disclosed to the market. ii. internal control system that supervises...

  • Page 66
    .... In 2010, Luxottica appointed a Chief Risk & Compliance Officer ("CR &CO") of the Group who at the time reported directly to the Group's Chief Executive Officer. The CR&CO was called upon to work together with the corporate functions of the Group through his/her organizational structure in order to...

  • Page 67
    ... of the Company's financial reports Directors in charge of the Internal Control and Risk Management System In January 2015, the Board of Directors, in consideration of the decision to adopt a governance model based on the appointment of two Chief Executive Officers (Co-CEO Model) with the...

  • Page 68
    ...the ICFR System. 5. reviews the work plan prepared by the Manager of the Internal Audit Department. On January 29, 2016, in compliance with the comment referred to in article 4 of the Code of Conduct for Listed Companies, which was introduced in July 2015, the Board of Directors resolved to entrust...

  • Page 69
    ..., the Internal Audit Manager performed his role through the implementation of an activities and verification plan which is related to Luxottica Group S.p.A. and its main subsidiaries. Such actions, which the Executive Chairman, the Chief Executive Officer and the Board of Directors were informed of...

  • Page 70
    ..., the Board of Directors, in consideration of the choice to adopt a simplified governance model to be entrusted to an Executive Chairman for the Markets Division and a Chief Executive Officer for the Product and Operations Division, specified that the Executive Chairman, within his role of providing...

  • Page 71
    ...on the website www.luxottica.com in the Company/Governance/Model 231 section. The Supervisory Board appointed on April 24, 2015 is composed of two external professionals, Mr. Enrico Maria Bignami and Mr. Ugo Lecis, and by the Internal Audit Manager, Mr. Alessandro Nespoli. The Board of Directors, at...

  • Page 72
    ... appropriateness of the Company structure with respect to the areas of responsibility; (v) the ICFR System and the administrative accounting system; (vi) the reliability of the latter in the correct reporting of the management-related issues; (vii) the financial information process pursuant to the...

  • Page 73
    ... on the members of the Board of Statutory Auditors currently in office is provided below, with an indication of the year of their first appointment to the Board and the primary offices held in other companies as at December 31, 2015. Report on corporate governance and ownership structure as of...

  • Page 74
    ... in article no. 148, paragraph 3, of Italian Consolidated Financial Law, and are independent in accordance with the assessment criteria set forth in article 3 of the Code of Conduct for Listed Companies. Report on corporate governance and ownership structure as of December 31, 2015 Page 34 of 45

  • Page 75
    ... of the Company's financial reports On April 24, 2015, the Board of Directors confirmed the Chief Financial Officer Mr. Stefano Grassi's position as the manager responsible for the preparation of the Company's financial reports. The appointed manager remains in office until: (a) termination...

  • Page 76
    ...-Laws. Code of Ethics and Procedure for handling reports and complaints regarding Violations of Principles and Rules Defined and/or Acknowledged by Luxottica Group The Code of Ethics of Luxottica Group ("Code of Ethics") represents the values underlying all of the Group's business activities and is...

  • Page 77
    ... Financial Law. This Procedure was last updated on February 16, 2015. The Procedure is available on the website www.luxottica.com, in the Company/Governance/Documents and Procedures section. Internal Dealing Procedure On March 27, 2006, in order to implement internal dealing regulatory changes...

  • Page 78
    ... 26, 2012. The parent company's external auditor is the main auditor for the entire Luxottica Group. The limitations on the appointment contained in this policy derive from current regulations in Italy and in the United States, by virtue of the fact that the Company's shares are listed both on the...

  • Page 79
    ... that may be of interest to the financial community. In order to facilitate knowledge of Luxottica's business strategies and development, information on senior management and other relevant matters, Investor Relations also utilizes financial communications tools, such as roadshows, conference calls...

  • Page 80
    ... events have been described in the paragraphs above. After December 31, 2015 the Board of Directors of the Company: a) approved the annual report concerning the organizational and accounting corporate structure of Luxottica Group, in accordance with paragraph 3 of art. 2381 of the Civil Code...

  • Page 81
    ..., 2015 BOARD OF DIRECTORS Control and Risk Committee Date of first appoi ntme nt 1961 Independent Pursuant to Civil Code Executiv Nonand e executive Consolidate d Financial Law X Other position s in office held ** Human Resources Committee Position Members/Year of birth In charge from In charge...

  • Page 82
    ...auditor performed by the directors in office in other listed companies, banks, financial, insurance companies or companies of a significant size, in compliance with the criteria implemented by the Company and described in section II of this Report. ***An "X" indicates that the member of the Board of...

  • Page 83
    ...24, 2015 Board of Directors Date of first appointment 2003 2006 1986 2009 2012 2006 Nonexecutive X X X X X X X X X Independent Pursuant to Code and Italian Consolidated Financial Law X X Control and Risk Committee Executive * 100% 33% 100% 100% 100% 100% X X 100% 100% *** X * 100% Human Resources...

  • Page 84
    ...IN OFFICE AS AT DECEMBER 31, 2015 Board of Statutory Auditors Members Date of first Year of birth appointment 1958 1946 1960 1965 1954 2009 2009 2012 2015 2015 In charge from 24/04/2015 24/04/2015 24/04/2015 24/04/2015 24/04/2015 In charge until Chairman, taken from the minority FRANCESCO list...

  • Page 85
    ... of 2014 Financial Statements Approval of 2014 Financial Statements *Indicates the number of offices as director or auditor performed by the interested party in other listed companies indicated in book V, title V, paragraphs V, VI and VII of the Italian Civil Code, with the number of offices held...

  • Page 86
    3. CONSOLIDATED FINANCIAL STATEMENTS

  • Page 87
    ... which related parties (note 29) CURRENT LIABILITIES: Short-term borrowings Current portion of long-term debt Accounts payable Income taxes payable Short-term provisions for risks and other charges Other liabilities Total current liabilities NON-CURRENT LIABILITIES: Long-term debt Employee benefits...

  • Page 88
    ...Ref. (in thousands of Euro) Net sales Cost of sales of which non-recurring Gross Profit Selling of which non-recurring Royalties Advertising General & Administrative of which non-recurring Total Operating expenses Income from operations Interest Income Interest Expense Other - net Total other Income...

  • Page 89
    ... defined benefit plans related tax effect Total items that will not be reclassified to profit or loss Total other comprehensive income/(loss)-net of tax Total comprehensive income for the period of which attributable to: - Luxottica Group stockholders - Non-controlling interests Note Ref. 2015 806...

  • Page 90
    ... Income as of December 31, 2015 Exercise of stock options Nonâ€'cash stockâ€'based compensation Excess tax benefit on stock options Increase in Treasury shares Granting of treasury shares to employees Contributions received from Delfin S.à .r.l. Change in the consolidation perimeter Dividends...

  • Page 91
    ... assets Financial expenses Other non-cash items Changes in accounts receivable Changes in inventories Changes in accounts payable Changes in other assets/liabilities Total adjustments Cash provided by operating activities Interest paid Taxes paid Net cash provided by operating activities Additions...

  • Page 92
    ... credit Exercise of stock options Purchases of Non-controlling interests (**) Purchase of Treasury Shares Dividends Net cash provided by (used in) financing activities Increase/(decrease) in cash and cash equivalents Cash and cash equivalents, beginning of the period Effect of exchange rate changes...

  • Page 93
    ************ Milan, March 1, 2016 Luxottica Group S.p.A. On behalf of the Board of Directors Leonardo Del Vecchio (Executive Chairman) Massimo Vian (C.E.O for Product and Operations) Consolidatred financial statement sas of December 31, 2015 Pagina 7 di 7

  • Page 94
    4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

  • Page 95
    ...-priced prescription frames and sunglasses, as well as of performance optics products. Through its retail operations, as of December 31, 2015, the Company owned and operated 6,589 retail locations worldwide and franchised an additional 676 locations principally through its subsidiaries Luxottica...

  • Page 96
    ...December 31, 2015 have been prepared in accordance with the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") as of the date of approval of these consolidated financial statements by the Board of Directors of the Company. IFRS are...

  • Page 97
    ... the date that control ceases. The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is measured as the fair value of the assets transferred, the liabilities incurred and the equity interests issued...

  • Page 98
    ... fair value. Changes in fair value are recorded in the consolidated statement of comprehensive income. Translation of the financial statements of foreign companies The Group records transactions denominated in foreign currency in accordance with IAS 21-The Effect of Changes in Foreign Exchange Rates...

  • Page 99
    ... sales price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Provisions for write-downs for raw materials, work in process and finished goods which are considered obsolete or slow moving are computed taking into account...

  • Page 100
    ... that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. Repair and maintenance costs are charged to the consolidated statement of income during the financial period in...

  • Page 101
    ... using the straight-line method to allocate the cost of trademarks and licenses over their estimated useful lives. Contractual customer relationships acquired in a business combination are recognized at fair value at the acquisition date. The contractual customer relations have a finite useful life...

  • Page 102
    ... or management intends to dispose of it within 12 months of the end of the reporting period. Financial assets available for sale are initially measured at their fair value plus transaction costs. After initial recognition, financial assets available for sale are carried at fair value. Any changes in...

  • Page 103
    ... market data as opposed to internal sources of information. At each reporting date, the Group assesses whether there is objective evidence that a financial asset is impaired. In the case of investments classified as financial assets held for sale, a prolonged or significant decline in the fair value...

  • Page 104
    ... to market at the end of each reporting period, with changes in fair value recognized in the consolidated statement of income. Accounts payable and other payables Accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers...

  • Page 105
    ...-service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate...

  • Page 106
    ...18-Revenue. Revenue includes: (i) sales of goods (both wholesale and retail); (ii) rendering of services such as insurance and administrative fees associated with the Group's managed vision care business, eye exams and related professional services; and (iii) sales of goods to franchisees along with...

  • Page 107
    ... included in operating expenses. Retail division revenues are recognized upon receipt of the goods by the customer at the retail location. In some countries, the Group allows retail customers to return goods for a period of time and, as such, the Group records an accrual for the estimated amounts to...

  • Page 108
    ... plans. The Group participates in benefit plans in various countries. The present value of pension liabilities is determined using actuarial techniques and certain assumptions. These assumptions include the discount rate, the Notes to the consolidated financial statement as of December 31, 2015...

  • Page 109
    ... issued after the applicable effective date. New standards and amendments that are effective for reporting periods beginning on January 1, 2015. The adoption of the new accounting principle and the amendments did not have any significant impact on the consolidated financial statements of the Group...

  • Page 110
    ... January 1, 2015 and not early adopted. The Group is assessing the impact of the accounting principles and the amendments and on its consolidated financial statements. Amendments to IAS 19-Defined Benefit Plans: Employee Contributions. The amendment reduces current services costs for the period by...

  • Page 111
    ...basis of the model which a company has adopted in order to manage its financial activities and on the basis of the cash flows from financing activities; (ii) initially measured at fair value plus any transaction costs in the case of financial assets not measured at fair value through profit and loss...

  • Page 112
    ... 9 aligns hedge accounting with risk management activities undertaken by companies when hedging their financial and non-financial risk exposures. The new standard enables an entity to use information produced internally as a basis for hedge accounting. IFRS 9 is applicable to periods beginning on or...

  • Page 113
    ... hedging activities, in compliance with the Financial Risk Management Policy guidelines approved by the Board of Directors, and in accordance with the Group operational units. The Policy defines the guidelines for any kind of risk, such as the exchange rate risk, the interest rate risk, credit risk...

  • Page 114
    ... entered into an agreement with an insurance company in order to cover the credit risk associated with customers of Luxottica Trading and Finance Ltd. in those countries where the Group does not have a direct presence. Starting from October 2015 the business in those countries was transferred among...

  • Page 115
    ...financial charges; and monitors, through the Treasury Department, forecasts on the utilization of liquidity reserves of the Group based on expected cash flows. The following tables include a summary, by maturity date, of assets and liabilities at December 31, 2015 and December 31, 2014. The reported...

  • Page 116
    ... 2014 Debt owed to banks and other financial institutions Derivatives payable Accounts payable Other current liabilities (*) Excludes the balance of the amortized costs of Euro (9.2) million. Interest rate risk The interest rate risk to which the Group is exposed primarily originates from long-term...

  • Page 117
    ... and loss for sale Financial liabilities at Hedging fair value derivatives through profit and loss 4,376 - - Total Note(*) Cash and cash equivalents Accounts receivable Other current assets Other non-current assets Short-term borrowings Current portion of long-term debt Accounts payable Other...

  • Page 118
    ...would result in default. Fair value In order to determine the fair value of financial instruments, the Group utilizes valuation techniques which are based on observable market prices (Mark to Model). These techniques therefore fall within Level 2 of the hierarchy of Fair Values identified by IFRS 13...

  • Page 119
    ...traded by the Group. The models applied to value the instruments are based on a calculation obtained from the Bloomberg information service. The input data used in these models are based on observable market prices (the Euro and USD interest rate curves as well as official exchange rates on the date...

  • Page 120
    ... is managed. In particular, the disclosures are consistent with the information regularly reviewed by the Group's Chief Executive Officers, in their roles as Chief Operating Decision Makers, to make decisions about resources to be allocated to the segments and assess their performance. Total assets...

  • Page 121
    ... segment is related to net sales to third-party customers only, excluding the "manufacturing profit" generated on the inter-company sales to the Retail Distribution segment. Income from operations of the Retail Distribution segment is related to retail sales, considering the cost of goods acquired...

  • Page 122
    .... Net sales recorded in the United States were Euro 4.9 billion and Euro 3.9 billion in 2015 and 2014, respectively. (3) Long-lived assets located in China represented 15% and 14% of the Group's total fixed assets as of December 31, 2015 and 2014, respectively. Notes to the consolidated financial...

  • Page 123
    ... 7. ACCOUNTS RECEIVABLE Accounts receivable consist exclusively of trade receivables and are recognized net of allowances to adjust their carrying amount to the estimated realizable value. Accounts receivable are due within 12 months (amounts in thousands of Euro): As of December 31 2015 2014 895...

  • Page 124
    ... of the Retail segment Total 587,109 11,902 28,797 165,402 793,210 (5,516) (1,590) (26,016) (5,782) (38,904) The accounts receivable in the retail division are mainly related to the insurance business of the Group. Notes to the consolidated financial statement as of December 31, 2015 Page 30...

  • Page 125
    ... 18.1 million). The increase in prepaid expense is mainly relate to: (i) prepaid rents for North America retail operations (Eur 10.1 million); (ii) marketing expenses related to the 2016 Olympics (Eur 2.5 million). Notes to the consolidated financial statement as of December 31, 2015 Page 31 di 68

  • Page 126
    ... December 31, 2015 (Euro 31.0 million as of December 31, 2014). The net book value of financial assets is approximately equal to their fair value and this value also corresponds to the maximum exposure of the credit risk. The Group has no guarantees or other instruments to manage credit risk. Notes...

  • Page 127
    ... in 2014) is included in general and administrative expenses. Capital expenditures in 2015 and 2014 mainly relate to technology upgrades associated with manufacturing capacity, enhancements to IT infrastructure, opening of new stores and the remodeling of older stores. In 2015 increases include...

  • Page 128
    ... (Euro 141.7 million 2014) is included in general and administrative expenses, Euro 19.0 million (Euro 13.0 million in 2014) is included in selling expenses and Euro 6.3 million (Euro 4.7 million in 2014) is included in cost of sales. Other intangible assets includes internally generated assets of...

  • Page 129
    ... market information on the cost of money and the specific risk of the industry (Weighted Average Cost of Capital, WACC). In particular, the Group used a methodology to determine the discount rate which was in line with that utilized in the previous year, considering the rates of return on long-term...

  • Page 130
    ...(Euro 61.2 million as of December 31, 2014). The balance mainly related to the investment in Eyebiz Laboratories Pty Limited (a joint venture formed in 2010 between Luxottica and Essilor International that provides most of the Australian lab requirements) for Euro 6.0 million (Euro 5.4 million as of...

  • Page 131
    ... in the deferred income tax accounts is as follows: (in thousands of Euro) As of January 1 Exchange rate difference and other movements Business combinations Income statements Tax charge/(credit) directly to equity At December 31 2015 78,697 43,463 - (13,609) (5,658) 102,894 2014 95,455 29,345 535...

  • Page 132
    ...,059 Inventories Self-insurance reserves Net operating loss carry-forwards Rights of return Deferred tax on derivatives Employee-related reserves Occupancy reserves Trade names Fixed assets Other Total Exchange rate Tax As of Business Income difference charged/(credited) December 31, combinations...

  • Page 133
    ... 22,761 13,273 7,976 101,600 The Group does not provide for an accrual for income taxes on undistributed earnings of its non-Italian operations to the related Italian parent company of Euro 3.6 billion and Euro 2.9 billion in 2015 and 2014, respectively, that are intended to be permanently invested...

  • Page 134
    ... in 2015 as compared to 2014 is mainly due to the growth of the business and to the strengthening of the foreign currencies in which the Group operates compared to the Euro. The carrying value of accounts payable is approximately equal to their fair value. Notes to the consolidated financial...

  • Page 135
    ... course of business. Self-insurance includes provisions for certain self-insured losses relating to workers' compensation, general liability, auto liability, and employee medical benefits for claims filed and for claims incurred but not reported. The Company's liability is estimated using historical...

  • Page 136
    ... in salaries payable is mainly due to the strengthening of the foreign currencies in which the Group operates, to higher salaries and bonuses earned by employees in 2015 and liabilities related to non-recurring transactions as reported in Note 33. Notes to the consolidated financial statement as of...

  • Page 137
    ...,098 2,315,203 The Group uses debt financing to raise financial resources for long-term business operations and to finance acquisitions. The Group continues to seek debt refinancing at favorable market rates and actively monitors the debt capital markets in order to take action to issue debt, when...

  • Page 138
    ... to which Luxottica Group S.p.A. may from time to time offer notes to investors in certain jurisdictions (excluding the United States, Canada, Japan and Australia). The notes issued under this program are listed on the Luxembourg Stock Exchange. On February 10, 2014, the Group completed an offering...

  • Page 139
    ...million as of December 31, 2014). The fair value of the debt equals the present value of future cash flows, calculated by utilizing the market rate currently available for similar debt and adjusted in order to take into account the Group's current credit rating. The above fair value does not include...

  • Page 140
    ... net financial position presented in the Management Report is as follows: As of December 31, 2015 2014 1,016,287 1,005,702 2,055 1,008 - - (2,173) (4,376) - - 1,005,584 1,012,918 (in thousands of Euro) Net Financial Position, as presented in the Notes Hedging instruments on foreign exchange rates...

  • Page 141
    ... Unit Credit Cost method. The main assumptions utilized are reported below: Economic Assumptions Discount rate Annual TFR increase rate Mortality tables: 2015 2014 Retirement probability: 2.00% 1.50% 2.81% 2.81% Those determined by the General Accounting Those determined by the General Accounting...

  • Page 142
    ...interest rate risk. The Lux Pension Plan exposes the Company to market (investment) risk. The following tables provide key information pertaining to the Lux Pension Plan and SERPs (amounts in thousands of Euro). (In thousands of Euro) Lux Pension Plan At January 1, 2014 Service Cost Interest expense...

  • Page 143
    ... Moody's Investor Services or at least an Aa rating by Standard & Poor's. Each bond issue is required to have at least USD 250 million par outstanding. The yield curve compares the future expected benefit payments of the Lux Pension Plan to these bond yields to determine an equivalent discount rate...

  • Page 144
    ... making decisions on the management and investment of assets of the Plan. The Plan's long-term investment objectives are to generate investment returns that provide adequate assets to meet the Plan's benefit obligations and to maintain sufficient liquidity to pay benefits and administrative expenses...

  • Page 145
    ...U.S. Oakley associates with at least six months of service. The cost for contributions incurred in 2015 and 2014 was Euro 2.9 million and Euro 2.3 million, respectively. In Australia and Hong Kong, the Group makes mandatory contributions to superannuation retirement funds. The plans provide benefits...

  • Page 146
    ... on the consolidated statement of financial position. The cost of this plan in 2015 and 2014 as well as the 2016 expected contributions are immaterial. For 2016, a 7.2% (8.0% for 2015) increase in the cost of covered health care benefits was assumed. This rate was assumed to decrease gradually...

  • Page 147
    ...capital of Luxottica Group S.p.A. as of December 31, 2014 amounted to Euro 28,900,294.98 and was comprised of 481,671,583 ordinary shares with a par value of Euro 0.06 each. Following the exercise of 1,981,750 options to purchase ordinary shares granted to employees under existing stock option plans...

  • Page 148
    ... December 31, 2015 2014 8,315,968 7,138,541 382,828 388,126 113,461 105,860 19,790 24,321 8,836,578 7,652,317 (in thousands of Euro) Sales of products Vison care business Eye-exam and related professional fees Franchisee revenues Total net sales Notes to the consolidated financial statement as of...

  • Page 149
    ... of Euro) Cost of sales Selling and advertising General and administrative Total expenses by function Employee benefits expense Consumption Production costs Logistics costs Depreciation and amortization Operating lease expense Advertising media and promotion expenses Trade marketing Royalties Share...

  • Page 150
    ...fiscal year 2007 and subsequent periods) Adjustment for the reorganization of Oakley and other minor projects Aggregate other effects Effective rate For an analysis of the main changes in 2015 as compared to 2014 please refer paragraph 3 "Financial Results" of the "Management Report." Notes to the...

  • Page 151
    ... specified levels of sales volume. The Group also operates departments in various host stores, paying occupancy costs solely as a percentage of sales. Certain agreements which provide for operations of departments in a major retail chain in the United States contain short- term cancellation clauses...

  • Page 152
    ...,785 Other commitments The Group is committed to pay amounts in future periods for endorsement contracts, supplier purchase and other long-term commitments. Endorsement contracts are entered into with selected athletes and others who endorse Oakley products. Supplier commitments have been entered...

  • Page 153
    ... have a material adverse effect on the Company's consolidated financial position or results of operations. 29. RELATED PARTY TRANSACTIONS License Agreements The Group executed an exclusive worldwide license for the production and distribution of Brooks Brothers brand eyewear. The brand is held by...

  • Page 154
    ... plans to the principal shareholder of the Company in an off-market transaction at a price of Euro 41.50 per share. On October 13, 2014, Enrico Cavatorta resigned from the Board of Directors and stepped down as the Group's chief executive officer. He resigned from his position as General Manager...

  • Page 155
    ...-dilutive Options not included in calculation of dilutive shares as the average value was greater than the average price during the respective period or performance measures related to the awards have not yet been met Notes to the consolidated financial statement as of December 31, 2015 Page...

  • Page 156
    ... by the Consob communication n. 6064293 dated July 28, 2006, that occurred in 2015 or 2014. 32. DERIVATIVE FINANCIAL INSTRUMENTS Derivatives are classified as current or non-current assets and liabilities. The fair value of derivatives is classified as a long-term asset or liability for the...

  • Page 157
    ... the Board of Directors to effectively execute, in one or more installments, the stock capital increases and to grant options to employees. The Board can also: 1 1 1 1 establish the terms and conditions for the underwriting of the new shares; request the full payment of the shares at the time of...

  • Page 158
    ... are achieved over the three-year period from 2014 through 2016. Management expects that the target will be met. As of December 31, 2015, 126,720 of the maximum units granted had been forfeited. On May 4, 2015, the Board of Directors granted certain of the Group's key employees 1,318,300 rights to...

  • Page 159
    ...755 Luxottica treasury shares. The gift was accounted for as a share-based payment under IFRS 2 based on which the Group recorded a total expense of Euro 7.4 million. The information required by IFRS 2 on stock option plans is reported below. The fair value of the stock option grant was estimated on...

  • Page 160
    ...With regards to the options exercised during the course of 2015, the weighted average share price of the shares in 2015 was equal to Euro 59.35. The Group has recorded an expense for the ordinary stock option plans of Euro 1.6 million and Euro 6.1 million in 2015 and 2014, respectively. For the 2010...

  • Page 161
    ... provide returns to shareholders and benefit to other stockholders and to maintain an optimal capital structure to reduce the cost of capital. Consistent with others in the industry, the Group also monitors capital on the basis of a gearing ratio that is calculated as net financial position divided...

  • Page 162
    ...will be available in 2017. ************ Milan, March 1, 2016 Luxottica Group S.p.A. On behalf of the Board of Directors Leonardo Del Vecchio (Executive Chairman) Massimo Vian (C.E.O for Product and Operations) Notes to the consolidated financial statement as of December 31, 2015 Page 68 di 68

  • Page 163
    5. ATTACHMENT

  • Page 164
    Attachment 1 EXCHANGE RATES USED TO TRANSLATE FINANCIAL STATEMENTS PREPARED IN CURRENCIES OTHER THAN THE EURO Average exchange rate as of December 31, 2015 Final exchange rate as of December 31, 2015 Average exchange rate as of December 31, 2014 Final exchange rate as of December 31, 2014 Argentine...

  • Page 165
    6. CERTIFICATION OF THE CONSOLIDATED FINANCIAL STATEMENTS PERSUANT TO ARTICLE 154 BIS OF THE LEGISLATIVE DECREE 58/98

  • Page 166
    ...Decree 58/98 1. The undersigned Leonardo Del Vecchio, as Executive President, Massimo Vian, as chief executive officer for Product and Operations, and Stefano Grassi, as chief financial officer of Luxottica Group SpA, having also taken into account the provisions of Article 154-bis, paragraphs 3 and...

  • Page 167
    ... 1, 2016 Luxottica Group S.p.A. On behalf of the Board of Directors Leonardo Del Vecchio (Executive Chairman) Massimo Vian (C.E.O for Product and Operations) Stefano Grassi (Manager charged with preparing the Company's financial reports) Certification of the consolidated financial statements as...

  • Page 168
    7. AUDITORS' REPORT

  • Page 169
    ... of significant accounting policies and the notes. Directors' responsibility for the consolidated financial statements The directors are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards...

  • Page 170
    ... and fair view of the financial position of the Luxottica Group as of 31 December 2015 and of the result of its operations and cash flows for the year then ended in compliance with International Financial Reporting Standards as adopted by the European Union, as well as with the regulations issued to...

  • Page 171
    8. SEPARATE FINANCIAL STATEMENTS

  • Page 172
    ...office in Piazzale Luigi Cadorna 3 - 20123 Milan (Italy) Capital stock Euro 29,019,199.98 Authorized and issued SEPARATE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015 STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2015 AND 2014 (in euro) ASSETS Notes 12/31/2015 of which related... associates ...

  • Page 173
    ...LIABILITIES Current portion of long-term debt Short-term provisions for risks and other charges Accounts payable Income taxes payable Derivative financial instruments Other liabilities Total current liabilities Notes 12/31/2015 of which related parties 12/31/2014 of which related parties 15 16...

  • Page 174
    ... Notes 12/31/2015 of which related parties 2,705,847,742 145,165,705 12/31/2014 of which related parties 2,376,165,401 127,203,082 Net sales Other revenue and income Changes in inventories Cost of goods purchased Service costs License and lease costs Amortization and depreciation Personnel...

  • Page 175
    ... INCOME (in euro) STATEMENT OF COMPREHENSIVE INCOME Notes 12/31/2015 of which related parties 12/31/2014 of which related parties Net income for the period Other comprehensive income: Actuarial gains/(losses) on defined benefit pension plans of which tax effect: 541,170,762 548,026,086 24...

  • Page 176
    STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (in euro) Capital stock Number of shares Balances at January 1, 2014 Net income for the period Other comprehensive income for the period: 477,560,673 Additional paid-in capital Legal Extraordinary reserve reserve IAS Other...

  • Page 177
    Capital increase Non-cash stock based compensation Granting of treasury shares Recharge of treasury shares to subsidiaries Dividends paid (Euro 1.44 per share) Allocation of prior year net income Other changes Balances at December 31, 2015 1,981,750 118,905 47,560,390 49,738,731 (12,117,646) 7,...

  • Page 178
    .../31/2015 of which related parties 12/31/2014 of which related parties Income before provision for income taxes, net of dividend income Stock-based compensation Amortization, depreciation and impairment Finance expense Finance income Changes in accounts receivable Changes in accounts payable Changes...

  • Page 179
    Milan, March 1, 2016 Luxottica Group S.p.A. On behalf of the Board of Directors Leonardo Del Vecchio Executive Chairman Massimo Vian CEO Product and Operations Separate financial statements as of December 31, 2015 Page 8 of 8

  • Page 180
    9. NOTE TO THE SEPERATE FINANCIAL STATEMENTS

  • Page 181
    ....98 authorized and issued NOTES TO THE SEPARATE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015 GENERAL INFORMATION Luxottica Group S.p.A. (the "Company") is a corporation listed on the Italian Stock Exchange and on the New York Stock Exchange, with its registered office located at Piazzale Cadorna...

  • Page 182
    ... for the design, manufacture and exclusive worldwide distribution of prescription frames and sunglasses under the Dolce&Gabbana brand. The present separate financial statements were authorized for publication by the Board of Directors of Luxottica Group S.p.A. in its meeting on March 1, 2016...

  • Page 183
    ... statements as of December 31, 2015 in conformity with the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and endorsed by the European Union at the date of approving the financial statements. The term "IFRS" is also understood to...

  • Page 184
    ... March 3, 2010 concerning disclosures in financial reports about impairment tests, terms of credit agreements, debt restructuring and the "fair value hierarchy"; • Bank of Italy/Consob/Isvap joint statement no. 5 dated May 15, 2012 concerning the accounting treatment of deferred tax assets arising...

  • Page 185
    ... the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The reserves to write down obsolete or slow-moving raw materials and finished goods are calculated taking into account their expected future use...

  • Page 186
    ...; the amount recognized is estimated by management, taking account of any vesting conditions. The fair value of stock options is determined using the binomial model. Under IFRS 2 - Share-Based Payment, the total grant date fair value of stock options granted to employees of subsidiaries must be...

  • Page 187
    ...market conditions and in compliance with the Financial Risk Policy revised by the Board of Directors on February 28, 2013. Credit risk Credit risk exists in relation to accounts receivable from customers outside the Group, cash and cash equivalents, financial instruments and deposits held with banks...

  • Page 188
    ... sources of bank financing, but also keeps a reserve of liquidity for promptly satisfying cash needs; takes part in a cash pooling system which helps manage the Group's cash flows more efficiently, by preventing the dispersion of liquidity and minimizing borrowing costs; • monitors, through...

  • Page 189
    ... Company is exposed to two types of risk: a) Interest rate risk The interest rate risk to which the Company is exposed mainly originates from its long-term debt, which carries both fixed and floating interest rates. Based on various scenarios, the Company calculates the impact of a change in rates...

  • Page 190
    .../31/2014 Notes Financial assets/liabilities at fair value through profit or loss Loans and receivables/Debt Derivatives Cash and cash equivalents Accounts receivable Other current assets Current derivative financial instruments (assets) Other non-current assets Current portion of long-term debt...

  • Page 191
    ... Model) to determine the fair value of its financial instruments; such techniques therefore fall into Level 2 of the fair value hierarchy identified by IFRS 13. IFRS 13 identifies a three-level hierarchy of valuation techniques as follows: • • Level 1: inputs are quoted prices in active markets...

  • Page 192
    .../2014 703 597 4,524 Fair Value at the reporting date using: Level 1 Level 2 Level 3 703 597 4,524 As of December 31, 2015, none of the Company's financial instruments was valued using Level 3 fair value measurements. The Company maintains policies and procedures that aim to measure the fair value...

  • Page 193
    ... the use of market observable inputs such as interest rates, yield curves and foreign exchange spot prices. The following disclosures report the fair value and information about the size and nature of each category of derivative financial instrument entered into by the Company and analyzed according...

  • Page 194
    ... See Notes 8 and 19 In November 2015, the Company entered into a jet fuel commodity swap transaction to hedge fuel costs relating to the Group's shipments, expected to be paid during 2016. The notional amount of this contract is Euro 1 million, while the fair value is Euro 0.2 million. The contract...

  • Page 195
    ... differ from those estimates. Accounting estimates are periodically reviewed and the effects of any change are reflected in profit or loss in the period the change occurs. The most significant accounting policies requiring greater judgment on the part of management when making estimates are briefly...

  • Page 196
    ... are reviewed annually; • Pension plans. The present value of pension liabilities depends on a number of factors that are determined with actuarial techniques using specific assumptions. These assumptions relate to the discount rate, the expected return on plan assets, the rate of future salary...

  • Page 197
    ... balances on bank accounts. Description Cash at banks and post offices Cash and cash equivalents on hand Total 12/31/2015 223,177,287 3,853 223,181,140 12/31/2014 390,567,806 5,038 390,572,844 The value of cash and cash equivalents is in line with their fair value at the reporting date. There are...

  • Page 198
    ... Balance at 12/31/2015 18,529,406 Balance at 12/31/2014 20,556,876 "Taxes receivable" mainly consist of Euro 11,825,332 for the transfer to the Company of Luxottica S.r.l.'s credit for IRES (Italian corporate income tax) arising on the deduction of IRAP (Italian regional business tax) paid in...

  • Page 199
    ...as from October 1, 2015 Luxottica Group S.p.A. is now in charge of cash pooling activities. 9.2 Sundry advances Balance at 12/31/2015 26,455,223 Balance at 12/31/2014 32,880,642 Sundry advances mostly comprise Euro 19,467,611 in advance payments for royalties (relating to future years), Euro 4,199...

  • Page 200
    ... 2,167,591 6,530,337 12/31/2014 967,327 638,111 600,000 2,790,388 4,995,826 "Prepaid expenses" refer to costs that will be accounted for in profit or loss in 2016 and 2017. 9.5 Loans to Group companies These comprise Euro 1,983,673 for the loan to the subsidiary Oakley Japan KK, Euro 1,917,048 for...

  • Page 201
    9.6 Sales tax transferred by Group companies This refers to sales taxes payable by subsidiaries that have been transferred to the Company for settlement on a group basis. The balance at December 31, 2015 refers to: • Luxottica S.r.l. for Euro 2,675,225; • Luxottica Leasing S.r.l. for Euro 1,841,...

  • Page 202
    ... hub's industrial premises. "Transfers from other categories" relate to the reclassification of "Assets under construction" reported at the end of the previous year following completion of work on the Sedico premises. Notes to the separate financial statements as of December 31, 2015 Page 22 of 77

  • Page 203
    ...,842 44,624 5,035 211,634 "Transfers from other categories" relate to the reclassification of "Assets under construction" reported at the end of the previous year following completion of work on plant and machinery. Notes to the separate financial statements as of December 31, 2015 Page 23 of 77

  • Page 204
    ... in the year mainly refer to new equipment purchases in Sedico for Euro 56,798 and in Milan for Euro 171,765. "Transfers from other categories" relate to the reclassification of "Assets under construction" reported at the end of the previous year following completion of work on industrial and...

  • Page 205
    ... costs have been capitalized (since none were incurred) and no property, plant and equipment has been provided as collateral. The depreciation rates applied and representing the useful lives of the related assets are as follows: Description Furniture and fittings Buildings Building structures...

  • Page 206
    ...; Generico 2015, for Euro 1,580,241, amortized over 3 years; PACE (Planning Activation for a Collaborative Execution), for Euro 1,378,855, amortized over 3 years; Business Intelligence, for Euro 1,337,958, amortized over 3 years; Price List, for Euro 893,820, amortized over 3 years; NFS New System...

  • Page 207
    ... Balance at 12/31/2015 3,525,878,694 Balance at 12/31/2014 3,499,216,848 The following disclosures about the investments held are provided in accordance with Section 2427 point 5) of the Italian Civil Code: Notes to the separate financial statements as of December 31, 2015 Page 27 of 77

  • Page 208
    ... LTDA LUXOTTICA CANADA INC LUXOTTICA COLOMBIA SAS LUXOTTICA FASHION BRILLEN VERTRIEBS GMBH LUXOTTICA FRAMES SERVICE SA DE CV LUXOTTICA FRANCE SASU LUXOTTICA GOZLUK ENDUSTRI VE TICARET ANONIM SIRKETI LUXOTTICA HELLAS AE LUXOTTICA HOLLAND BV LUXOTTCA HONG KONG SERVICES LIMITED LUXOTTICA IBERICA...

  • Page 209
    ... SRL OAKLEY SPORT INTERNATIONAL SRL OPTICAS GMO CHILE SA OY LUXOTTICA FINLAND AB RAYBAN AIR SALMOIRAGHI & VIGANO' SPA SGH BRASIL COMERCIO DE OCULOS LTDA SUNGLASS DIRECT GERMANY GMBH SUNGLASS DIRECT ITALY SRL SUNGLASS FRAMES SERVICE SA DE CV SUNGLASS HUT (THAILAND) CO LTD SUNGLASS HUT DE MEXICO...

  • Page 210
    ...long-term, strategic investments by the Company and are recognized at purchase or subscription cost, as required by IAS 27 - Consolidated and Separate Financial Statements. The increase in "Investments in subsidiaries" mainly refers to Euro 20,050,000 for the formation of Oakley Sport International...

  • Page 211
    ... and taxable temporary differences between the accounting value of assets and liabilities and the corresponding value recognized for tax purposes. The movements in net deferred tax assets during 2015 are shown in the following tables: 01/01/2015 Taxes recognized in profit or loss Taxes recognized in...

  • Page 212
    ... the amount that will be expensed to income in 2016. The "Long-term loans to subsidiaries" reported at December 31, 2014 referred to a loan to the subsidiary Sunglass Hut de Mexico SA de CV, reclassified from long to short-term during 2015. Notes to the separate financial statements as of December...

  • Page 213
    ...Long-term debt". 16. SHORT-TERM PROVISIONS FOR RISKS AND OTHER CHARGES Balance at 12/31/2015 13,031,719 Balance at 12/31/2014 8,279,804 All of the above balance refers to the "Provision for future licensing obligations" for advertising costs accounted for in the current period but that the Company...

  • Page 214
    ...; Mikli Diffusion France, for Euro 3 million; Oakley Sport International S.r.l., for Euro 3 million; Luxottica U.S. Holdings, for Euro 1.4 million; Oliver People, for Euro 1.8 million. "Accounts payable to suppliers" are presented net of trade discounts and consist of Euro 129.6 million, owed to...

  • Page 215
    ...group tax consolidation, the liability for IRAP (Italian regional business tax) and tax withheld from employee income. 19. DERIVATIVE FINANCIAL INSTRUMENTS Balance at 12/31/2015 2,053,891 Balance at 12/31/2014 5,121,268 The balance at December 31, 2015 consists of Euro 1,065,248 for the fair value...

  • Page 216
    Description Luxottica Trading and Finance Limited Luxottica France Sasu Luxottica Leasing S.r.l. Luxottica Retail Uk Ltd Oakley Sport International S.r.l. Luxottica North Europe Ltd Luxottica Nederland Bv Sunglass Hut Ireland Limited Sunglass Hut Netherland BV Oakley Uk Ltd Sunglass Hut France Sasu ...

  • Page 217
    ...31, 2014). The fair value of debt is equal to the present value of future cash flows, calculated using the market rates currently available for similar debt, as modified to take account of the Company's credit standing. This fair value does not include lease liabilities (Euro 0.9 million). Long-term...

  • Page 218
    ... 22. LONG-TERM PROVISIONS FOR RISKS AND OTHER CHARGES Balance at 12/31/2015 738,958 Balance at 12/31/2014 811,790 The balance at December 31, 2015 consists of provisions recognized as a result of events that could give rise to future liabilities for the Company. 23. EMPLOYEE BENEFITS Balance at...

  • Page 219
    ... is estimated to be 3.00% per year. Inability rate: Retirement rate: In order to take into account the current uncertainty of the financial markets, the Company has decided to use a discount rate for the valuation of liabilities at December 31, 2015, that is based on the iBoxx Eurozone Corporates...

  • Page 220
    ... Total stockholders' equity 24.1 Capital stock Balance at 12/31/2015 29,019,200 Balance at 12/31/2014 28,900,295 Capital stock is made up as follows: Shares Ordinary Number 483,653,333 Nominal value in Euro 0.06 At December 31, 2015, the capital stock of Luxottica Group S.p.A. amounted to Euro 29...

  • Page 221
    ... of 116,673 treasury shares. As a result of the above, the number of treasury shares went from 3,647,725 as of December 31, 2014 to 3,145,865 as of December 31, 2015. Other reserves The change reflects Euro 49,738,731 to account for stock options in accordance with IFRS 2, and Euro 363,441 in net...

  • Page 222
    ... - Employee benefits - IAS 19 IAS reserve - Stock options - IFRS 2 (*) IAS reserve - FTA IAS 36 IAS reserve - stock options Merger/demerger...required to be allocated to the legal reserve to make it equal to 20% of capital stock. Notes to the separate financial statements as of December 31, 2015...

  • Page 223
    INFORMATION ON THE SEPARATE STATEMENT OF INCOME 25. NET SALES 2015 2,721,277,830 2014 2,384,243,964 Change 337,033,866 Net sales by product category Description Finished product sales Spare part sales Direct material sales Accessories sales Total 2015 2,697,166,323 20,028,909 3,225,789 856,809 2,...

  • Page 224
    ... 28. COST OF GOODS PURCHASED 2015 1,365,895,092 2014 1,160,771,831 Change 205,123,261 The cost of goods purchased is analyzed by category as follows: Description Purchase of finished eyeglasses Purchase of materials Purchase of spare parts Purchase of eyeglass accessories Customs fees Shipping and...

  • Page 225
    ...,153 2014 199,108,426 Change 34,860,727 The principal types of cost included in this line in both periods are as follows: Description Marketing costs Other services costs Legal and consulting fees Travel expenses Personnel search and training Directors' fees Hardware maintenance Insurance expenses...

  • Page 226
    ... found in Note 10. 32. PERSONNEL COSTS 2015 169,032,853 2014 156,089,034 Change 12,943,819 Details of these costs are provided below. "Non-cash stock-based compensation" reflects the cost for the year of stock options granted to the Company's top management. Description Wages and salaries Non-cash...

  • Page 227
    34. INCOME AND EXPENSE FROM INVESTMENTS 2015 19,865,776 2014 108,074,660 Change (88,208,884) "Dividend income" is analyzed as follows: Description Luxottica Trading & Finance Luxottica France S.A.S. Luxottica Iberica S.A. Luxottica Korea Ltd Luxottica Gozluk Endustri Ve Ticaret Anonim Sirketi ...

  • Page 228
    ... of bonds (for additional information see the note on long-term debt in the Notes to the consolidated financial statements). "Interest on loans from subsidiaries" relates to loans from the subsidiary Luxottica U.S. Holdings to the parent company. "Other finance expense" mostly comprises Euro 227...

  • Page 229
    ... IRAP (Italian regional business tax), the charge for the year is Euro 45,849,149, calculated on the value of net production for the year. The Company has also recognized Euro 150,000 in taxes under Section 167 of the Italian Income Tax Code. In terms of deferred tax, the Company has recognized Euro...

  • Page 230
    ...Italy Effect of dividends Other permanent differences Effective tax rate 2015 27.5% (3.09)% (1.33)% 23.08% 2014 27.5% (3.75)% (0.89)% 22.86% Reconciliation between reported tax charge and theoretical tax charge (IRAP) December 31 2015 2014 5.57% 3.90% (0.66)% (0.56)% 0.95% 0% 1.07% 1.00% 6.93% 4.34...

  • Page 231
    ... to, non-payment of royalties, failure to achieve minimum sales targets, unauthorized modifications of the products and, under certain conditions, the change in ownership of Luxottica Group S.p.A. Contingent liabilities The French subsidiaries Luxottica France SASU, Alain Mikli International SASU...

  • Page 232
    pursue, and that the outcome of such claims, individually or in the aggregate, will not have a material adverse effect on the Company's financial position or results of operations. Notes to the separate financial statements as of December 31, 2015 Page 52 of 77

  • Page 233
    ..., parents and other Group companies are as follows: Trade and other transactions and balances Company 2015 2015 Costs Receivables ALAIN MIKLI INTERNATIONAL SASU COLLEZIONE RATHSCHULER SRL DELFIN S.A.R.L. GLASSES.COM INC GUANGZHOU MING LONG OPTICAL TECHNOLOGY CO LTD LUNETTES GROUP LIMITED LUXOTTICA...

  • Page 234
    ... LUXOTTICA FRAMES SERVICE SA DE CV LUXOTTICA FRANCE SASU LUXOTTICA GOZLUK ENDUSTRI VE TICARET ANONIM SIRKETI LUXOTTICA HELLAS AE LUXOTTICA HOLLAND BV LUXOTTICA HONG KONG WHOLESALE LIMITED LUXOTTICA IBERICA SAU LUXOTTICA INDIA EYEWEAR PRIVATE LIMITED LUXOTTICA INTERNATIONAL DISTRIBUTION SRL LUXOTTICA...

  • Page 235
    ... NORTH EUROPE LTD LUXOTTICA OPTICS LTD LUXOTTICA POLAND SP ZOO LUXOTTICA PORTUGAL-COMERCIO DE OPTICA SA LUXOTTICA RETAIL AUSTRALIA PTY LTD LUXOTTICA RETAIL HONG KONG LIMITED LUXOTTICA RETAIL NEW ZEALAND LIMITED LUXOTTICA RETAIL NORTH AMERICA INC LUXOTTICA RETAIL UK LTD LUXOTTICA RETAIL UK LTD...

  • Page 236
    ... LUXOTTICA WHOLESALE MALAYSIA SDN BHD MDD OPTIC DIFFUSION GMBH MDI DIFFUSIONE OTTICA SRL MIKLI ASIA LIMITED MIKLI DIFFUSION FRANCE SASU MIKLI JAPON KK MIRARI JAPAN CO LTD OAKLEY (SCHWEIZ) GMBH OAKLEY EDC INC OAKLEY EUROPE SNC OAKLEY GMBH OAKLEY ICON LIMITED OAKLEY INC OAKLEY IRELAND OPTICAL LIMITED...

  • Page 237
    OAKLEY SPORT INTERNATIONAL SRL OAKLEY UK LTD OLIVER PEOPLES INC ONE SIGHT LUXOTTICA FOUNDATIONONLUS OPTICAS GMO CHILE SA OPTICAS GMO COLOMBIA SAS OPTICAS GMO ECUADOR SA OPTICAS GMO PERU SAC OY LUXOTTICA FINLAND AB RAY BAN SUN OPTICS INDIA PRIVATE LIMITED RAYBAN AIR SGH BRASIL COMERCIO DE OCULOS LTDA...

  • Page 238
    ... HUT HONG KONG LIMITED SUNGLASS HUT IBERIA SLU SUNGLASS HUT IRELAND LIMITED SUNGLASS HUT MIDDLE EAST GENERAL TRADING LLC * SUNGLASS HUT NETHERLANDS BV SUNGLASS HUT RETAIL NAMIBIA (PTY) LTD SUNGLASS HUT RETAIL SOUTH AFRICA (PTY) LTD SUNGLASS HUT TURKEY GOZLUK TICARET ANONIM SIRKETI SUNGLASS TIME...

  • Page 239
    Financial transactions and balances Company Receivables Payables 2015 Guarantees Commitments 2015 Expense Income ALAIN MIKLI INTERNATIONAL SASU GUANGZHOU MING LONG OPTICAL TECHNOLOGY CO LTD LUNETTES GROUP LIMITED LUXOTTICA (SWITZERLAND) AG 7,693,006 14,162,701 118,030 LUXOTTICA BELGIUM NV ...

  • Page 240
    ...MEXICO SA DE CV LUXOTTICA NEDERLAND BV 18,006,834 5,137,407 4,229,559 LUXOTTICA NORDIC AB 1,523,478 LUXOTTICA NORGE AS 520,671 LUXOTTICA NORTH EUROPE LTD LUXOTTICA PORTUGALCOMERCIO DE OPTICA SA LUXOTTICA RETAIL UK LTD LUXOTTICA RETAIL HONG KONG LIMITED LUXOTTICA RUS LLC LUXOTTICA SOUTH EAST ASIA PTE...

  • Page 241
    ... JAPAN KK 1,983,673 OAKLEY SPORT INTERNATIONAL SRL 11,034,948 OAKLEY UK LTD OPTICAS GMO CHILE SA OPTICAS GMO COLOMBIA SAS OPTICAS GMO ECUADOR SA OPTICAS GMO PERU SAC OY LUXOTTICA FINLAND AB RAYBAN AIR SOCIETA' CINESI (***) SGH BRASIL COMERCIO DE OCULOS LTDA SPV ZETA Optical Trading (Beijing) Co Ltd...

  • Page 242
    ...given by Luxottica Group S.p.A. are split between Luxottica Hong Kong Wholesale Ltd, Luxottica Retail Hong Kong Ltd and Sunglass Hut Hong Kong Ltd. (**) The guarantees of Euro 8,950,000 given by Luxottica Group S.p.A. are split between Luxottica India Eyewear Private Ltd. and Rayban Sun Optics India...

  • Page 243
    ... the cost charged by the service provider; • In the case of licenses or sub-licenses of brands - relating to both point-of-sales signs and product brands - the license fee is established using the method of comparable price on the open market from an internal or external perspective. The Group...

  • Page 244
    ...: Information about ownership structure and corporate governance is contained in a specific document forming an integral part of the annual financial report. No atypical and/or unusual transactions, as defined by Consob Communication 6064293 dated July 28, 2006, were undertaken during 2015 or 2014...

  • Page 245
    ... interaction between members of the supply chain. Decree no. 00098MI01 issued by Italy's Ministry for Economic Development on December 21, 2012 recognized a total grant of Euro 13,747,949 towards the cost of this project along with other benefits of Euro 4,247,627. The Luxottica Group's share of...

  • Page 246
    ... of his office as Director and Chief Executive Officer of Luxottica Group S.p.A.. On the same day, the Board of Directors approved a change in the governance model aimed at simplifying the management structure and it delegated the responsibilities of the position of CEO Markets, previously held...

  • Page 247
    ... company Registered office AIR SUN MASON-OHIO SUNGLASS HUT TRADING LLC LUXOTTICA GROUP SPA LUXOTTICA US HOLDINGS CORP ALAIN MIKLI INTERNATIONAL SASU SPV ZETA Optical Trading (Beijing) Co Ltd LUXOTTICA RETAIL AUSTRALIA PTY LTD BUDGET EYEWEAR AUSTRALIA PTY LTD THE UNITED STATES SHOE CORPORATION...

  • Page 248
    ... EYEMED VISION CARE LLC OPSM GROUP PTY LIMITED LUXOTTICA US HOLDINGS CORP LUXOTTICA (CHINA) INVESTMENT CO LTD OF PTY LTD OF PTY LTD LUXOTTICA RETAIL AUSTRALIA PTY LTD THE UNITED STATES SHOE CORPORATION 100 100 1,000 USD 1,000 MACQUARIE PARK-NSW 100 100 399,219 AUD 798,438 GLASSES.COM...

  • Page 249
    ...MIKLI INTERNATIONAL SASU LUXOTTICA TRADING AND FINANCE LIMITED LUXOTTICA HOLLAND BV LUXOTTICA GROUP SPA LUXOTTICA SRL LUXOTTICA GROUP SPA OPSM GROUP PTY LIMITED LUXOTTICA SRL LUXOTTICA GROUP SPA LUXOTTICA GROUP SPA OAKLEY CANADA INC LUXOTTICA SRL LUXOTTICA GROUP SPA LUXOTTICA HOLLAND BV SUNGLASS HUT...

  • Page 250
    ...-NSW LUXOTTICA RETAIL AUSTRALIA PTY LTD LUXOTTICA NORTH AMERICA DISTRIBUTION LLC LUXOTTICA GROUP SPA LUXOTTICA SRL LUXOTTICA LEASING SRL LUXOTTICA HOLLAND BV SUNGLASS HUT NETHERLANDS BV LUXOTTICA GROUP SPA LUXOTTICA GROUP SPA LUXOTTICA GROUP SPA LUXOTTICA TRADING AND FINANCE LIMITED LUXOTTICA GROUP...

  • Page 251
    ... INDUSTRIES PTY LTD THE UNITED STATES SHOE CORPORATION LUXOTTICA GROUP SPA SUNGLASS HUT OF FLORIDA INC 43.82 100 12,671 CAD 5,553 LUXOTTICA RETAIL FRANCHISING AUSTRALIA PTY LIMITED MACQUARIE PARK-NSW 100 100 2 AUD 2 LUXOTTICA RETAIL HONG KONG LIMITED HONG KONG-HONG KONG 100 100 149...

  • Page 252
    ... ASIA LIMITED LUXOTTICA HOLLAND BV LUXOTTICA GROUP SPA 100 100 460,000,001 AUD 460,000,001 LUXOTTICA SRL AGORDO 100 100 10,000,000 EUR 10,000,000 LUXOTTICA SUN CORP DOVER-DELAWARE 100 100 1 USD 100 LUXOTTICA TRADING AND FINANCE LIMITED LUXOTTICA TRISTAR (DONGGUAN) OPTICAL CO LTD...

  • Page 253
    ...LTD 100 100 35,785,000 AUD OLIVER PEOPLES INC 100 100 1 USD 1,000 OPSM GROUP PTY LIMITED MACQUARIE PARK-NSW 100 100 67,613,044 AUD 135,226,087 OPTICAL PROCUREMENT SERVICES LLC DOVER LUXOTTICA RETAIL NORTH AMERICA INC LUXOTTICA GROUP SPA SUNGLASS HUT IBERIA SLU 100 100 100 USD...

  • Page 254
    ...228,372,710 RUP 1 RAY BAN SUN OPTICS INDIA PRIVATE LIMITED BHIWADI SUNGLASS HUT TRADING LLC 0 100 228,372,710 RUP 1 RAY BAN SUN OPTICS INDIA PRIVATE LIMITED BHIWADI THE UNITED STATES SHOE CORPORATION LUXOTTICA SUN CORP LUXOTTICA GROUP SPA LUXOTTICA SRL 0 100 228,372,710 RUP 1 RAY...

  • Page 255
    ... CO LTD LUXOTTICA GROUP SPA LUXOTTICA GROUP SPA SUNGLASS HUT DE MEXICO SAPI DE CV LUXOTTICA GROUP SPA LUXOTTICA HOLLAND BV LUXOTTICA GROUP SPA LUXOTTICA SRL SUNGLASS HUT RETAIL SOUTH AFRICA (PTY) LTD OPSM GROUP PTY LIMITED LUXOTTICA GROUP SPA LUXOTTICA TRADING AND FINANCE LIMITED LUXOTTICA GROUP SPA...

  • Page 256
    ...4,100,000 SUNGLASS TIME (EUROPE) LIMITED ST ALBANSHERTFORDSHIRE 100 100 10,000 GBP 10,000 SUNGLASS WORLD HOLDINGS PTY LIMITED THE OPTICAL SHOP OF ASPEN INC THE UNITED STATES SHOE CORPORATION MACQUARIE PARK-NSW SUNGLASS HUT AUSTRALIA PTY LIMITED OAKLEY INC LUXOTTICA USA LLC LUXOTTICA RETAIL...

  • Page 257
    ********** Milan, March 1, 2016 Luxottica Group S.p.A. On behalf of the Board of Directors Leonardo Del Vecchio Executive Chairman Massimo Vian CEO Product and Operations Notes to the separate financial statements as of December 31, 2015 Page 77 of 77

  • Page 258
    6. CERTIFICATION OF THE CONSOLIDATED FINANCIAL STATEMENTS PERSUANT TO ARTICLE 154 BIS OF THE LEGISLATIVE DECREE 58/98

  • Page 259
    ... entries in the accounting books and records; c) is capable of providing a true and fair representation of the assets and liabilities, profits and losses and financial position of the issuer. officer for Product and Operations, and Stefano Grassi, as chief financial officer of Luxottica Group SpA...

  • Page 260
    Milan, March 1, 2016 Leonardo Del Vecchio Executive Chairman Massimo Vian C.E.O for Product and Operations Stefano Grassi (Manager charged with preparing the Company's financial reports) Certification of the separate financial statements as of December 31, 2015 Page 2 of 2

  • Page 261
    11. AUDITORS' REPORT

  • Page 262
    ... of significant accounting policies and other explanatory notes. Directors' responsibility for the financial statements The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted...

  • Page 263
    ... and fair view of the financial position of Luxottica Group SpA as of 31 December 2015 and of the result of its operations and cash flows for the year then ended in compliance with International Financial Reporting Standards as adopted by the European Union, as well as with the regulations issued to...

  • Page 264
    12. BOARD OF DIRECTORS PROPOSAL

  • Page 265
    Luxottica Group S.p.A. Registered office at Piazzale Luigi Cadorna 3 - 20123 Milan Share capital â,¬ 29.020.114,98 Authorized and issued Board of Directors' proposal The Board of Directors, in consideration of the prospects for the Group development and its expectations of future income, recommends...

  • Page 266
    13. BOARD OF STATUTORY AUDITORS' REPORT ON THE SEPARATE AND CONSOLIDATED FINANCIAL STATEMENTS

  • Page 267
    ... 16, 2015, the Company and Dolce&Gabbana announced the renewal of an exclusive license agreement for the development, production and worldwide distribution of sunglasses and prescription frames under the Dolce&Gabbana brand. The agreement was extended to December 31, 2025. Based on the information...

  • Page 268
    ...to fairly represent operating events. This was achieved through: i) ii) the review of reports issued by the manager responsible for the preparation of the Company's accounting recordsaccording to the provisions stated in article 154-bis of Italian Legislative Decree 58/98; the review of the internal...

  • Page 269
    ... the correct and strict application of above mentioned procedure. The Related Party Transactions Committee had to express an opinion on the renewal of the license agreement for the development, production and worldwide distribution of sunglasses and prescription frames under the Brooks brothers...

  • Page 270
    ... Risk and Control Committee met eleven times. Finally, we express our assent, within the limits of our responsibility, to the approval of the financial statements together with the Management Report for the 2014 fiscal year as presented by the Board of Directors, and to the consequent proposal, made...