Notes to the financial statements

45. Capital Management

The objective of the LOTOS Group’s financial policy is to maintain long-term liquidity, while using an appropriate level of financial leverage to support the achievement of the principal goal of maximising the return on equity attributable to the shareholders.

The achievement of the above objectives is done by striving to develop the desired financing structure at the Group level.

The LOTOS Group monitors its financing structure using a debt to equity ratio calculated as net debt by equity.

Net debt is the sum of interest-bearing loans and borrowings less cash and cash equivalents. Equity includes equity attributable to owners of the Parent increased by non-controlling interests.​​​​​ ​​​​​ ​​​​​ ​​​​​ ​​​​​ ​​​​​ ​​​​​ ​​​​​ ​​​​​ ​​​​​ ​​​​​ ​​​​​

PLN ‘000 Year ended
Dec 31 2010
Year ended
Dec 31 2009
Non-current interest-bearing loans and borrowings 4,403,453 4,942,590
Current interest-bearing loans and borrowings 1,932,006 758,481
Cash and cash equivalents (391,266) (355,054)
Net debt 5,944,193 5,346,017
Equity attributable to owners of the Parent 7,498,819 6,809,393
Non-controlling interests 14,658 36,752
Total equity 7,513,477 6,846,145
Net debt to equity 0.79 0.78

The Group monitors its financing structure in order to achieve the goal set in Strategy for the LOTOS Group for the years 2011–2015, providing for a reduction of debt in order to achieve a debt to equity ratio of no more than 0.4 at the end of the Strategy term.

This is a translation of a document originally issued in Polish
The notes to the financial statements, presented on following pages, are their integral part.