Luxottica Group, S.p.A. (LUX)

I. INTRODUCTION

1.       The group of companies owned by Luxottica (hereinafter “Luxottica Group” or the “Group”), a global leader in the design, manufacturing and distribution of premium fashion and luxury eyewear, is guided by a single business strategy implemented through the subsidiaries based in the different countries in which it operates.

2.       As of December 31, 2007, the Group comprises of 167 companies operating in Europe, the Americas, Australia and New Zealand, China, South Africa and the Middle East. The business of the Group, in terms of sales and personnel, is particularly significant in Europe, North America, Australia and China.

3.       Luxottica is listed on the New York Stock Exchange (“NYSE”) and the Mercato Telematico Azionario (“MTA”) organized and managed by Borsa Italiana; thus, it must comply with the U.S. and Italian rules applicable to the companies listed on such markets and, in particular, the regulations issued by the U.S. Securities and Exchange Commission (“SEC”) and Commissione Nazionale per le Società e la Borsa (“CONSOB”). In the United States, the Company is subject to the provisions of the Sarbanes-Oxley Act (“SOX”), which pertain to the Company’s current governance structure with respect to internal controls over financial reporting. In particular, certain responsibilities that, according to the Code of Conduct, are to be performed by an Internal Control Committee are for Luxottica instead performed by the Board of Statutory Auditors as the equivalent of the Audit Committee under SOX.

4.       Luxottica, the parent company, manages and coordinates the activities of all companies in the Group, whether directly or indirectly controlled, aiming at delivering overall profits and sustainable results for the Group.

5.       Through the following activities, Luxottica guides and coordinates the Group:

·      preparation of business and sales forecasts;

·      preparation of budgets and identification of specific targets to be achieved and projects to be implemented;

·      establishment of specific rules to assure an adequate flow of information for the effective management and control of the Group;

·      examination and approval of extraordinary or particularly significant transactions;

·      implementation of certain financial policies (e.g., definition of indebtedness and cash investment criteria);

·      implementation of central structures to provide professional services and support to all companies of the Group;

I. INTRODUCTION

1.          The group of companies owned by Luxottica (hereinafter the “Luxottica Group” or the “Group”), a world leader in ophthalmic eyewear, is guided by a single business strategy implemented through the subsidiaries based in the different countries in which it operates.

2.          Luxottica Group comprises 130 companies operating in Europe, the Americas, Australia and New Zealand, China, South Africa and the Middle East.

The business of the Group, in terms of sales and personnel, is particularly significant in Europe, North America, Australia and China.

3.          Luxottica is listed on the NYSE and the Electronic Share Market (MTA) organized and managed by Borsa Italiana; thus it must comply with the US and Italian rules applicable to the companies listed on such markets and, in particular, the regulations issued by the SEC and CONSOB.

4.          Luxottica, the parent company, manages and co-ordinates the activities of all companies in the Group, whether directly or indirectly controlled, aiming at delivering overall profits and sustainable results for the Luxottica Group.

5.          Through the following activities, Luxottica guides and coordinates the Group:

·             Preparation of business and sales forecasts;

·             Preparation of budgets and identification of specific targets to be achieved and projects to be implemented;

·             Establishment of specific rules to assure an adequate flow of information for the effective management and control of the Group;

·             Examination and approval of extraordinary or particularly significant transactions;

·             Implementation of certain financial policies (e.g., definition of indebtedness and cash investment criteria);

·             Implementation of central structures to provide professional services and support to all companies of the Group;

·             Adoption of codes of conduct and procedures binding the entire Group;

·             Adoption of common organizational models;

·             Adoption of guidelines on the composition, operation and role of the subsidiaries’ Boards of Directors - including guidelines regarding the delegation of management activities - consistent with those adopted by Luxottica.

Luxottica’s corporate governance framework is applied to the entire Group.

Such governance is implemented in accordance with the mutually compatible recommendations issued by Borsa Italiana, CONSOB, SEC and NYSE and in compliance with the highest corporate governance standards.

The corporate governance of the Group is based on five key principles:

1)         Overall values clearly defined, acknowledged and shared;

2)         Central role of the Board of Directors;

3)         Effectiveness and transparency of management decisions;

4)         Adoption of an adequate internal control system;

5)         Adoption of proper and transparent rules governing related parties transactions, internal dealing, infra-group transactions and treatment of inside information.

With reference to the first key principle above, Luxottica Group’s Code of Ethics commits all those working for Luxottica to ensure that the overall activities of the Group are carried out: in compliance with all relevant laws; in fair competition; with honesty, integrity and correctness; and, in the legitimate interests of shareholders, employees, customers, suppliers, sales and financial partners, as well as in the interest of the communities in which Luxottica operates.