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Overview of activities, risk factors
2.7 Risk factors
DANONE
REGISTRATION DOCUMENT 2015
37
RISK IDENTIFICATION
RISK MONITORING AND MANAGEMENT
•
tax: Danone is subject to income tax as well as various other
expenses, taxes and duties related to its activity, the repa-
triation of dividends, social security contributions, etc. Any
change in tax regulations through increases in existing taxes
or the establishment of new taxes involving in particular tax
rates, transfer prices, dividends, social security contributions,
special tax plans or tax exemption rules could adversely
affect Danone's results. As described in the above section
related to
Economic situation in Danone's principal markets
,
efforts from some countries to reduce their indebtedness
could lead to increases in existing taxes or the creation of
new taxes, which could adversely affect Danone's results;
•
accounting: the consolidated financial statements of Danone
and its subsidiaries are prepared in accordance with Inter-
national Financial Reporting Standards (IFRS) as adopted
by the European Union. The standards and interpretations
applied to prepare these consolidated financial statements
are also consistent with IFRS as determined by the Inter-
national Accounting Standards Board (IASB). Standards,
amendments and interpretations that may be prepared
and/or become applicable could have an adverse impact
on Danone's consolidated financial statements.
Finally, Danone is involved, or could be involved, in litigation
associated with its normal course of business. This litigation
may result in criminal and/or civil consequences (including
financial consequences) on Danone. Should the result of such
litigation be unfavorable for Danone, this could adversely affect
Danone's financial situation and its image or reputation. Danone's
exposure to actual or potential major litigation, if applicable,
is presented in Note 14.2 of the Notes to the consolidated
financial statements.
Natural, industrial and environmental risks
RISK IDENTIFICATION
RISK MONITORING AND MANAGEMENT
Natural and industrial risks
Danone's geographic expansion sometimes leads it to be
present in regions exposed to natural risks, notably seismic.
Natural disasters could therefore (i) cause damage to persons,
property or the environment, and (ii) directly affect Danone or
its consumers or the regions where it is present and poten-
tially have a negative impact on the Group's activities, financial
situation and image.
Like any industrial activity, Danone's sites are exposed to various
risks: fire, explosion, equipment failure, security systems failure
or human error in equipment operation or works management.
Such events could cause damage to persons, property or the
environment and possibly have a negative impact on Danone's
activities, financial situation and image.
For its new site development projects, Danone conducts a risk
exposure analysis for such risks in order to choose the site with
the least possible exposure. If, however, the site chosen (or the
existing site in the case of an expansion) is exposed to these
risks, the building construction and equipment installation take
into account recommendations from prevention/protection
experts to limit the potential impacts of these natural risks.
In order to reduce, if not eliminate, these risks and their poten-
tial impact, Danone has decided to elevate personal safety and
industrial plant and environmental protection to core values of its
policy. These values are “measured” through various programs
with ambitious targets and action plans monitored by Danone
departments, notably the Divisions' industrial departments.
Moreover, Danone's insurance policy also helps to reduce the
potential financial impact from a natural disaster (see section
hereafter).