BIRLESIM_2021_ANNUAL REPORT

BİRLEŞİM MÜHENDİSLİK 2021 ANNUAL REPORT 200 Birleşim Mühendislik Isıtma Soğutma Havalandırma Sanayi Ticaret A.Ş. and Its Subsidiary (All amounts expressed in Turkish Lira (“TL”)) Notes to the Consolidated Financial Statements For the Year Ended 31 December 2021 30. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS a) Capital Risk Management While trying to ensure the continuity of its activities in capital management, the Group also aims to increase its profits by using the debt and equity balance in the most efficient way. The Group’s capital structure consists of cash and cash equivalents and equity items including capital and retained earnings. The Group’s cost of capital and risks associated with each capital class are evaluated by the board of directors and senior management. In line with the aforementioned assessments, it is aimed to keep the capital structure in balance by making decisions about capital increase or the Group’s acquisition of new debt. As of 31 December 2021 and 2020, The Ratio of Net Debts to Equity is as follows; 31 December 2021 31 December 2020 Total Financial and Trade Payables 369.716.907 248.883.859 Minus: Cash and Cash Equivalents (180.095.042) (49.062.023) Net Debt 189.621.865 199.821.836 Total Equity 342.414.967 149.693.253 Debt/Capital Ratio 0,55 1,33 b) Financial Risk Factors The Group’s finance department; Responsible for identifying, measuring and proactively managing the financial risk that the Group is exposed to. For this purpose, it is responsible for ensuring regular access to domestic and foreign financial markets and monitoring and managing the financial risks faced by companies related to their activities through risk reports that show the analysis according to the level and size. These risks are; market risk (including currency risk, interest rate risk and price risk) includes credit risk, liquidity risk and cash flow interest rate risk. The Group does not trade financial instruments including derivative financial instruments for speculative reasons.