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33. Capital management
The objective of the LOTOS Group financial policy is to maintain long-term liquidity, while using an appropriate level of financial leverage to support the achievement of the principal objective of maximising the return on equity for shareholders.
This is achieved through constant effort to develop the desired capital structure at the Group level.
The LOTOS Group uses the debt to equity ratio, calculated as net debt to equity, to monitor its financing structure.
Net debt comprises bank and non-bank borrowings, notes and liabilities under finance leases less cash and cash equivalents and restricted cash earmarked for the implementation of the objectives of the issue of Grupa LOTOS S.A. Series D shares (see Note 18). Equity includes equity attributable to owners of the Parent plus non-controlling interests.
| PLN '000 | Note | Dec 31 2015 | Dec 31 2014 |
|---|---|---|---|
| Non-current liabilities | |||
| Bank borrowings | 27.1 | 4,197,008 | 4,098,225 |
| Non-bank borrowings | 27.2 | 80,966 | 92,146 |
| Notes | 27.3 | - | 195,892 |
| Finance lease liabilities | 27.4 | 176,486 | 109,299 |
| Total | 4,454,460 | 4,495,562 | |
| Current liabilities | |||
| Bank borrowings | 27.1 | 2,284,026 | 2,117,387 |
| Non-bank borrowings | 27.2 | 11,180 | 10,637 |
| Notes | 27.3 | 218,100 | 17,587 |
| Finance lease liabilities | 27.4 | 31,542 | 22,495 |
| Total | 2,544,848 | 2,168,106 | |
| Restricted cash − issue of shares (1) | 18 | (438,329) | (996,939) |
| Cash and cash equivalents | 20 | (859,699) | (348,215) |
| Net debt | 5,701,280 | 5,318,514 | |
| Equity attributable to owners of the Parent | 7,712,060 | 8,258,288 | |
| Non-controlling interests | 26 | 138 | 175 |
| Total equity | 7,712,198 | 8,258,463 | |
| Net debt to equity | 0.74 | 0.64 |
(1) As at December 31st 2015, cash earmarked for the EFRA Project (see issue objectives in Note 18). As at December 31st 2014, cash proceeds from the issue of Series D shares in Grupa LOTOS S.A. were deposited in a separate bank account of the Central Securities Depository of Poland (see Note 21) until the registration of the share capital increase.
The Notes to the consolidated financial statements are an integral part of the statements.
(This is a translation of a document originally issued in Polish)
