12 Months Financial Report - Turkish Airlines

TÜRK HAVA YOLLARI ANONİM ORTAKLIĞINOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE PERIOD ENDED 31 DECEMBER, 200937 RELATED PARTY TRANSACTIONS (cont’d)Transactions between the Group and Sun Express are codeshare operations; transactions between theGroup and Turkish DO&CO are catering services and loan financing. Receivables from related parties arenot collateralized and maturity of trade receivables is 30 days.The total amount of salaries and other short term benefits provided for the Chairman and the Member ofBoard of Directors, General Manager, General Coordinator and General Deputy Managers are TL3.693.289 (2008: TL 3.003.116).38 NATURE AND LEVEL OF RISKS DERIVED FROM FINANCIAL INSTRUMENTS(a) Capital risk managementThe Group manages its capital to ensure that entities in the Group will be able to continue as a goingconcern while maximizing the return to stakeholders through the optimization of the debt and equitybalance.The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 8,cash and cash equivalents and equity attributable to equity holders of the parent, comprising issuedcapital, reserves and retained earnings.The Board of Directors of the Group periodically reviews the capital structure. During these analyses, theBoard assesses the risks associated with each class of capital along with cost of capital. Based on thereview of the Board of Directors, the Group aims to balance its overall capital structure through the issueof new debt or the redemption of existing debt.The overall strategy of the Group remains the same since the year 2008.31 December 2009 31 December 2008Total debts 3.595.046.545 3.697.403.926Less: Cash and cash equivalents (1.096.111.869) (504.905.721)Net debt 2.498.934.676 3.192.498.205Total shareholders' equity 3.444.880.226 2.986.587.096Total capital stock 5.943.814.902 6.179.085.301Net debt/total capital stock ratio 0,42 0,52b. Financial Risk FactorsThe risks of the Group, resulted from operations, include market risk (including currency risk, fair valueinterest rate risk and price risk), credit risk and liquidity risk. The Group’s risk management programgenerally seeks to minimize the potential negative effects of uncertainty in financial markets on financialperformance of the Group. The Group uses a small portion of derivative financial instruments in order tosafeguard itself from different financial risks.Risk management, in line with policies approved by the Board of Directors, is carried out. According torisk policy, financial risk is identified and assessed. By working together with Group’s operational units,relevant instruments are used to reduce the risk.61