Annual Review 2012 - Luxottica

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ANNUAL REPORT 2012
beginning on or after January 1, 2013. The Group believes that the amendment will not
have a material impact on its consolidated financial statements.
On May 17, 2012 the IASB issued the Improvements to IFRS, which are summarized below.
The Group believes that these amendments will not have a significant impact on its
consolidated financial statements The amendments are applicable to reporting periods
beginning on or after January 1, 2013. Early adoption is permitted, however, the Group has
not elected to early adopt any of the following:
• Amendment to IFRS 1 - “First time adoption of IFRS”. The amendment clarifies that
an entity may apply IFRS 1 more than once under certain circumstances. An entity that
previously applied IFRS but then stopped is permitted but not required to apply IFRS
1 when it recommences applying IFRS;
• Amendment to IFRS 1 - “First time adoption of IFRS”. The amendment clarifies that an
entity can choose to adopt IAS 23, “Borrowing costs”, either from its date of transition
or from an earlier date;
• Amendment to IAS 1 - “Presentation of Financial Statements”. The amendment clarifies
the disclosure requirements for comparative information when an entity provides
a third balance sheet either as required by IAS 8, “Accounting policies, changes in
accounting estimates and errors” or voluntarily;
• Amendment to IFRS 1 as a result of the above amendment to IAS 1. The consequential
amendment clarifies that a first-time adopter should provide the supporting notes for
all statements presented;
• Amendment to IAS 16 - “Property, Plant and Equipment”. The amendment clarifies that
spare parts and servicing equipment are classified as property, plant and equipment
rather than inventory when they are used for longer than one period;
• Amendment to IAS 32 - “Financial Instruments Presentation”. The amendment clarifies
the treatment of income taxes relating to distributions and transaction costs. Income
taxes related to distributions are to be recognized in the income statement, and
income taxes related to the costs of equity transactions are to be recognized in equity;
• Amendment to IAS 34 - “Interim Financial Reporting”. The amendment clarifies that a
measure of total assets and liabilities is required for an operating segment in interim
financial statements if such information is regularly provided to the “Chief Operating
Decision Maker” and there has been a material change in those measures since the
most recent annual financial statements.
3. FINANCIAL RISKS
The assets of the Group are exposed to different types of financial risk: market risk (which
includes exchange rate risks, interest rate risk relative to fair value variability and cash flow
uncertainty), credit risk and liquidity risk. The risk management strategy of the Group aims
to stabilize the results of the Group by minimizing the potential effects due to volatility in
financial markets. The Group uses derivative financial instruments, principally interest rate
and currency swap agreements, as part of its risk management strategy.
Financial risk management is centralized within the Treasury department which identifies,
evaluates and implements financial risk 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