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KD Holding Group
Notes to Consolidated Financial Statements as at and for the year ended 31 December 2007
2.3 Segment reporting
in compliance with Council Regulation (EU) No.
1086/2006 and Article 123(5). The official exchange
Business and geographical segments are parts of the
Group’s operations that are subject to different rates of
profitability, opportunities for growth, future prospects,
rate was used as the basis for the calculation of items
in financial statements for 2006 (comperative year)
from tolar to euro.
and risks. A business segment is a distinguishable
component of the Group that is engaged in providing
a group of related products or services and that is
subject to risks and returns that are different from
those of other business segments. A geographical
segment is a distinguishable component of the Group
that is engaged in providing products or services within
a particular economic environment and that is subject
to risks and returns that are different from those of
segments operating in other economic environments.
Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such
transactions and from the translation of
year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are
recognised in the income statement.
2.4 Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of
the Group’s entities are measured using the currency of
the primary economic environment in which the entity
operates (the “functional currency”). The consolidated
financial statements are presented in Slovenian tolars,
which is the Group’s presentation currency.
The functional and presentation currency of the Group
was the Slovenian tolar until 31 December 2006,
while on 1 January 2007 the Group introduced the
euro as the functional and presentation currency,
following the changes in legislation in the Republic
of Slovenia introducing the euro as the legal local
currency. The official exchange rate of 239.64
tolars for one euro was appointed on 11 July 2006
Foreign currency monetary items are translated on the
balance sheet date using the reference rate of the ECB
or the Bank of Slovenia exchange rates (for currencies
for which the ECB does not publish reference rates)
on the last day of the year. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are translated using the mean exchange
rate of the Bank of Slovenia applicable at the date of
transaction and non-monetary items that are measured
at fair value in a foreign currency are translated using
the reference rate of the ECB applicable at the date
when the fair value was determined.
Changes in the fair value of monetary securities
denominated in foreign currency classified as available
for sale are analysed between translation differences
resulting from changes in the amortised cost of the
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