Liquidity risk means that the Group may not have liquid funds to fulfil its financial obligations in a timely manner.
The objective of the Group is to maintain a balance between the financial needs and financial possibilities of the Group. Cash flow planning is used as a means to manage the liquidity risk. To manage liquidity risk as effectively as possible, the bank accounts of the Parent Company and its subsidiaries comprise one group account (cash pool) which enables the members of the group account to use the finances of the Group within the limit established by the Parent Company. The group account operates in Estonia, but foreign subsidiaries in Latvia and Lithuania are also part thereof. According to the policy of the Group, all subsidiaries and joint ventures prepare long term cash flow projections for the following year, which are adjusted on a quarterly basis. For monitoring short-term cash flows the subsidiaries prepare thirteen-week cash flow projections on a weekly basis.
To manage the liquidity risk, the Group uses different financing sources which include bank loans, overdraft, continuous monitoring of trade receivables and delivery contracts.
Overdraft credit is used to finance working capital, long-term bank loans and lease agreements are used to make capital expenditures to acquire non-current assets. The Group’s overdraft loan is long-term and related to the term of the loan contract. This essentially works as a long-term line of credit, the use of which the Group can regulate at its own discretion.
|31.12.2022 (EUR thousand)||<= 1 month||> 1 month and <=3 months||> 3 months and <= 1 year||>1 year and <=5 years||>5 years||Total||Carrying amount|
|Bank loans||176||358||1 782||14 485||0||16 804||14 646|
|Notes||0||0||340||6 720||0||7 060||5 000|
|Lease payments||161||316||1 418||4 338||0||6 233||5 695|
|Trade payables||3 347||252||48||0||0||3 647||3 647|
|Other payables||2 142||0||0||43||0||2 185||2 185|
|TOTAL||5 829||926||3 588||25 586||0||35 930||31 174|
Analysis of undiscounted financial liabilities (principal and future interest payments) by payment term
|31.12.2021 (EUR thousand)||<= 1 month||> 1 month and <=3 months||> 3 months and <= 1 yea||>1 year and <=5 years||>5 years||Total||Carrying amount|
|Bank loans||158||315||1 411||10 148||0||12 032||11 350|
|Notes||0||0||300||1 200||5 300||6 800||5 000|
|Lease payments||140||280||1 207||4 452||0||6 079||5 869|
|Trade payables||2 775||124||0||0||0||2 899||2 899|
|Other payables||3 540||0||0||601||0||4 141||4 141|
|TOTAL||6 613||719||2 918||16 401||5 300||31 951||29 259|