29. 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 to the Consolidated financial statements for 2015). Equity includes equity attributable to owners of the Parent plus non-controlling interests.
|Note||Dec 31 2016||Dec 31 2015|
|Finance lease liabilities||23.4||141,386||176,486|
|Finance lease liabilities||23.4||38,117||31,542|
|Restricted cash − share issue objectives (1)||16||-||(438,329)|
|Cash and cash equivalents||18||(744,616)||(859,699)|
|Equity attributable to owners of the Parent||8,610,786||7,712,060|
|Net debt to equity||0.56||0.74|
(1) As at December 31st 2015, cash earmarked for the EFRA Project (see issue objectives in Note 18 to the Consolidated financial statements for 2015).