10.10 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 lease liabilities less cash and cash equivalents. Equity includes equity attributable to owners of the Parent plus non-controlling interests.
As at December 31st 2021 and December 31st 2020, the ratio of debt to equity was significantly more favourable than the maximum level of the ratio assumed by the Group for its financing structure.
| Note | Dec 31 2021 | Dec 31 2020 | |
|---|---|---|---|
| Non-current liabilities | |||
| Bank borrowings | 10.9.1 | 683.1 | 1,641.4 |
| Borrowings | 10.9.2 | 18.8 | 27.4 |
| Notes | 10.9.3 | 137.2 | – |
| Leases | 10.9.4 | 1,352.0 | 1,048.9 |
| Total | 2,191.1 | 2,717.7 | |
| Current liabilities | |||
| Bank borrowings | 10.9.1 | 741.0 | 918.4 |
| Borrowings | 10.9.2 | 8.7 | 8.2 |
| Notes | 10.9.3 | 90.9 | 231.7 |
| Leases | 10.9.4 | 207.5 | 197.5 |
| Total | 1,048.1 | 1,355.8 | |
| Cash and cash equivalents | 10.7 | (2,572.1) | (2,145.6) |
| Net debt | 667.1 | 1,927.9 | |
| Equity attributable to owners of the Parent | 14,793.8 | 11,573.7 | |
| Non-controlling interests | 0.1 | 0.1 | |
| Total equity | 14,793.9 | 11,573.8 | |
| Net debt to equity | 0.05 | 0.17 | |