The Group KD Group and KD Group dd

The Group KD Group Annual Report 2009
Notes to Consolidated Financial Statements as at and for the year ended 31 December 2009
Key assumptions used in 2009 for the property insurance segment are:
- the income approach (discounted cash flows) and market approach methods were used to calculate a range of
values for the property insurance business;
- the best management projections and estimates regarding the future premium were used for the period 2009-2014.
For the following years, decreasing growth rates consistent with market growth were used. The forecasted growth of
Slovenian general insurance market is approximately 7% annually;
- unearned premium reserve projection is based on the premium earning patterns applied to the gross premium
amount for each calendar year and line of business separately;
- ceded premium assumptions range from 0% to 35% of the gross earned premium depending on the line of
business. Ceded claims assumptions range from 0% to 50% of the gross claims incurred depending on the line of
business;
- ultimate loss ratio assumptions for future accident years range from 35% to 110% depending on the line on
business;
- The risk discount rate of 12.6% was derived based on CAPM ("Capital Asset Pricing Model").
Based on the results of the valuation, which was performed by an independent qualified expert, the Group assessed that the
goodwill related to the property insurance segment does not require impairment. Even if there was a change (within
reasonable limits) in the assumprions, impairment would not be required.
The goodwill was assessed using an internal method of evaluation. Goodwill does not require impairment according to this
assessment.
10. Investments in associates
(in EUR) 2009 2008
Balance at 1 January 81,077,285 71,687,821
Acquisitions 4,018,887 14,571,598
Disposals (21,601,237) (3,060,605)
Increase in stake from associate to subsidiary (51,872) -
Increase in stake from AFS investment to associate - 31,288,510
Share of profit and revaluation (11,621,213) (27,407,028)
Other revaluation 548,374 (128,586)
Dividends (61,473) (5,874,425)
Exchange differences - -
Impairment - -
Balance at 31 December 52,308,751 81,077,285
In December 2009 the Group disposed ofan associated company BIG. The largest part of the loss on disposal was realised
by the sale of BIG in the amount EUR 10,634,685, which is recognised in the income statement under financial expenses
from shares in associated companies. Also, the Group recognised the largest part of losses attributed to BIG in the amount
EUR 13,539,434.
In July 2009 the Group partially disposed of its investment in associate MIG (26.48%), reducing its stake to only 3.73%, which
means that MIG is no longer an associated comapny. The Group realised EUR 172,003 of gains on dispoal of MIG, which is
recognised in the income statement under financial revenues from shares in associated companies.
The Group in 2009 recognised profit from its share in KD ID in the amount EUR 1,357,457.
In 2009, the Group invested EUR 1,625,698 in KD Group mutual funds, and sold EUR 3,187,210 of mutual funds.
The Group increased the capital of KD Private Equity Netherlands in November 2009 in the amount of EUR 481,790 the
Group’s equity share in this company has not changed.
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