52 128
Employee risks
As a service company, Kinepolis Group largely depends on
its employees to provide high-quality service. Hiring and
retaining the right managers and employees with the
requisite knowledge and experience in all parts of the
Company is therefore a constant challenge. Kinepolis accepts
this challenge by offering attractive terms of employment,
good knowledge management and a pleasant working
atmosphere. Kinepolis measures employee satisfaction on
the basis of employee surveys and where necessary
improves its policies.
Risks arising from exceptional events
Events of an exceptional nature, including but not limited
to extreme weather, political unrest and terrorist attacks,
in a country where Kinepolis Group is active and that result
in material damage to one of the multiplexes, a fall in the
number of customers or disruption in the delivery of
products can have a negative impact on activities. Kinepolis
strives to minimize the potential impact of such risks
through a combination of preventive (such as construction
decisions, evacuation planning) and detection measures
(such as fire detection systems) and by taking out proper
insurance.
Environmental liability and property risks
The property that Kinepolis Group owns and leases is subject
to regulations with regard to environmental liability and
potential property risks. In addition to the above mentioned
measures to control political and regulatory risks, Kinepolis
will take appropriate measures to prevent environmental
damage and limit property risks.
Other risks
After the acquisition by KP Immo Brussel NV (a subsidiary of
Kinepolis Group NV) of the premises in Galerie Toison d’Or
(Guldenvlieslaan/Avenue de la Toison d’Or 8) in Brussels
(Belgium), which are leased to the cinema operator UGC
Belgium, Kinepolis Group NV and its subsidiary were served
with a summons by the aforementioned tenant before the
Commercial Court in Brussels to declare the aforementioned
transaction null and void due to alleged breaches of the
Economic Law Book and one of the conditions imposed on
Kinepolis Group by the Belgian Competition Authority in 1997.
UGC Belgium also filed a complaint with this Competition
Authority at year-end 2014. The Commercial Court ruled in
favor of Kinepolis at the end of 2016, with UCG Belgium then
lodging an appeal at the Court of Appeal in Brussels.
The other risks stated in 2015 (the Luxembourg competition
case and the lack of an operating license for an acquired
cinema) were also resolved successfully in 2016.
Lastly, it can be reported that Kinepolis is currently involved
in proceedings relating to a tax ruling applied to it in 2012.
On 11 January 2016 the European Commission published its
decision that the Belgian tax rulings with regard to excess
profit are considered to be unlawful state aid. The decision of
the European Commission obliges the Belgian government to
make an additional claim for tax that would have been owed
if such tax rulings had not been applied. As a consequence of
the decision of the European Commission, in accordance with
IAS 12 Kinepolis has set up a provision of € 9.4 million for a
Kinepolis Enschede (NL)
03 / MANAGEMENT REPORT
52
KINEPOLIS GROUP
ANNUAL REPORT 2016