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KD Holding Group
Notes to Consolidated Financial Statements as at and for the year ended 31 December 2007
The global market in 2007 was very changeable. In
second half of the year, the real estate crisis in the
USA was bigger that was expected, causing distrust in
the money market; short term interest rates increased,
and liquidity in the inancial market decreased.
in Slovenia; a decision on dividends distribution is
taken by the shareholders’ meeting.
KD Holding has no specific aims about ownership by
employees and has no program for share options. In the
Group there were no changes in managing capital in
5.5 Capital managment
2007.
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Management Board takes decisions for maintenance of
significant (large) capital scope to ensure the confidence of
all participants and development of KD Holding. As one of
the strategic indicators, the Group defines return on equity
as the ratio between net profit for the year of the majority
ownerʼs and the average value of majority owner equity.
The Group seeks to keep the balance of large returns
which can be reached by higher indebtedness, and the
advantages and safety of powerful capital structure.
According to the shareholders’ meeting decision, the
parent company KD Holding has established its own
share fund. On 31 December 2007 there were 62,601
ordinary shares with the mark KDHR, which is 2.11%
of issued capital, and 51,306 preference shares with
the mark KDHP, which is 1.74% of issued capital.
The investment plan, optimal capital structure
policy, expectation and the interests of shareholders
are basis for the development of dividend policy.
The entity distributes a dividend once a year.
Management and Supervisory Boards of the
parent company take a decision on the amount of
proposed dividends. Dividends are distributed from
accumulated profit of the parent company which
is regulated with compliance of valid regulations
The parent company is not a subject to the capital
requirements which could be set by the regulatory
authority.
An entity has subsidiaries in the field of financial and
insurance segment, the capital requirements of which are
provided by the regulatory authority. The management
of the entities provides the proper amount of capital
(capital adequacy) according to the scope and type
of operation, which are managed by management
and according to the risk which are they exposed to.
5.6 Fair value of financial assets and liabilities
Fair value is the amount for which an asset could be
exchanged or a liability settled, between knowledgeable,
willing parties in an arm’s length transaction.
The Group establishes the fair value of financial
assets in the following way:
- The fair value of investments in equity instruments
that have a quoted market price in an active market
is determined as the product of the number of units of
the instrument and its quoted market price.
- If there is no active market for the financial
instruments, the methods of assessing the fair