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KD Holding Group
Notes to Consolidated Financial Statements as at and for the year ended 31 December 2007
- Net income – financial assets for trading and
financial assets at initial recognition – dividends,
interests have been reclassified from net income
- financial assets at fair value through P&L to
investment income;
- Impairment – intangible assets (goodwill) has been
reclassified from other expenses to depreciation
and impairment expenses;
- Expenses from other liabilities have been
reclassified from finance costs to other expenses;
- Income tax receivable and liability are presented as
The strategic risk refers to the Group’s
long-term development as much as to the each
of its subsidiaries. The management of the Group
manages these risks defining its vision and strategy
and monitoring their appropriateness on a regular
basis. According to the variety of Group’s businesses
the appropriate long-term investment decisions are
the key factor when managing strategic risks. The
corporate governance of the Group helps it to follow
the long-term business development and growth to
achieve the required rate of return.
a separate line in the balance sheet.
236
Income statement
(in EUR)
2006
adjusted
2006
reported
Investment income 14,401,754 12,791,790
Net income-at fair value through
P&L
18,425,773 20,035,737
Depreciation, amortisation and
impairment charges
(6,917,704) (8,486,709)
Other expenses (6,408,821) (5,683,799)
Finance costs (5,513,800) (4,669,817)
Operating profit/(loss) 29,863,341 29,019,358
Balance sheet
(in EUR)
2006
adjusted
2006
reported
Assets
Loans and other receivables 132,080,595 133,845,743
Income tax receivable 1,765,148 -
Liabilities
Trade and other payable 54,020,158 65,882,444
Income tax liability 11,862,286 -
5. Risk management
The Group's activities expose it to a variety of
risks: strategic risks, insurance and financial risks,
operating risks and general business risk.
The Group is exposed to financial risks through
its financial assets and liabilities, reinsurance
receivables and insurance liabilities. The principal
financial risk is the possibility that the inflows from
financial investments will not be sufficient to cover
the outflows arising from insurance contracts.
The most significant components of this risk are
the change in the interest rate risk, the prices of
securities risk, currency and credit risk.
The purpose of financial risk management process
is above all to maintain the stability of operations
and reduce the exposure to individual risks to an
acceptable level. Because of highly diversified
activities, the Group is mainly faced with insurance
and financial risks.
Risk management is a continuous cyclical process,
which can be divided into three stages. At the first
stage, potential risks are identified. At the second
stage, individual risks are modelled and measured.