DRAVA, KUPA, RJE»INA, LOKVARKA, LI»ANKA LIKA, DOBRA ...

NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS OF THE HEP GROUP (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2010
37. FINANCIAL INSTRUMENTS
CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the
return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Company consists of debt, which includes the borrowings and issued bonds disclosed
in Note 24 and 28, cash and cash equivalents and equity attributable to equity holders of the parent, comprising
issued capital, legal and other reserves and retained earnings.
GEARING RATIO
The Group’s risk management committee reviews the capital structure on a semi-annual basis. As part of this review,
the committee considers the cost of capital and the risks associated with each class of sources of funding. The gearing
ratio at the yearend can be presented as follows:
(HRK’000) 31 December 2010 31 December 2009
Debt 5,512,390 6,026,596
Cash and cash equivalents (762,157) (143,834)
Net debt 4,750,233 5,882,762
Equity 19,679,852 18,248,114
Net debt to equity ratio 24% 32%
SIGNIFICANT ACCOUNTING POLICIES
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis
of measurement and the basis on which income and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument are disclosed in Note 2 to the financial statements.
CATEGORIES OF FINANCIAL INSTRUMENTS
(HRK’000)
Financial assets
31 December 2010 31 December 2009
Loans and receivables (including cash and cash equivalents) 3,022,637 2,267,846
Other non-current assets
Financial liabilities
111,029 270,103
Non-current liabilities 5,672,893 5,318,504
Current liabilities 2,713,686 3,658,396
121
HEP ANNUAL REPORT 2010
CHAPTER 6 - FINANCIAL STATEMENTS