We build business networks and relationships ... - skupina kd group

1.5
Risk Management
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The Management Board of KD Holding d. d.
manages risks at the company and for the entire
Group. Since the company is a holding company,
it is extremely important that risks at subsidiaries
are also appropriately managed. The controlling
company establishes guidelines regarding the
ratios between risks, return and capital, carries
out periodic reviews and provides guidelines for
implementing business policies and strategies for
individual Group companies.
Strategic risk
Strategic risks related to the long-term development
of the Group include the risk of loss arising
from incorrect business decisions, inappropriate
implementation of adopted decisions and
insufficient responsiveness to changes in the
business environment. Strategic risks are managed
through the implementation and regular review of
the adequacy of defined strategies of the company
and its subsidiaries. The adoption of investment
decisions for specific areas and activities is of vital
strategic importance given the extremely diverse
activities of the companies owned by KD Holding.
The corporate governance system is adapted to the
development and growth of individual areas and
to achieving expected returns. All projects that are
reasonable in terms of synergy effects are carried
out and coordinated at the Group level. These are
primarily development projects, projects introducing
information solutions and other projects important
for strategic development. Risks in this area are
mitigated through planning and the continuous
monitoring of project progress in accordance with
Project Management Rules.
General business risks
Our activities have no direct impact on
developments in economic, legislative and other
environments. Thus risks are more difficult to
measure and model. We manage these risks by
regularly monitoring legislation, capital markets
and macroeconomic parameters. Amendments
to legal regulations which significantly affect our
business environment are quite frequent. A series of
legislative changes have occurred in Slovenia and
the countries of South Eastern Europe in the past
year that have affected our key areas of operations
and required numerous activities to adapt them.
Financial risks
The primary purpose of financial risk management
is to achieve stable operations and reduce exposure
to specific risks to an acceptable level. The Group is
exposed to financial risks through its financial assets
and liabilities, reinsurance receivables and insurance
liabilities. The possibility that inflows from financial
investments will not be sufficient to cover outflows
from insurance contracts represents the main risk.
Given that most companies in the Group are involved
in regulated activities, this area is already controlled