The purpose of capital management is to maintain safe and effective financing structure, which take into account the operational risk, investment expenditures and interests of shareholders and debt investors. The capital management takes place at the Group level.

According to common practice, the Group monitors the net debt/EBITDA ratio. Net debt comprises current and non-current financial debt (bank credits and loans bearing interest, bonds issued, other debt securities and lease liabilities) reduced by cash and cash equivalents as well as short-term deposits. Restricted cash is not included in the calculation of net debt.

The Group assumes that the maximum level of net debt to EBITDA ratio which allows to maintain credit ratings on investment level amounts to 3.0x.

Taking into accout the scale of of the whole PGE Group, net debt ratio was relatively low during 2016: net debt to EBITDA ratio remains lower than 1.

Due to continuation of investment program, gradual increase of financial leverage is planned, whereby the Group will intensify analysis of the ratio described above. Net debt to EBITDA ratio is the key element of Group’s forecasts and financial strategies.