11.2.5 Liquidity risk
The liquidity risk management process at the Group consists in monitoring projected cash flows and the portfolio of financial assets and liabilities, matching maturities of the assets and liabilities, analysing working capital, and optimising cash flows within the Group. This process requires that units operating in different business areas closely cooperate in activities undertaken in order to ensure safe and effective allocation of the liquidity.
The majority of the Group’s Polish subsidiaries participate in a physical cash pooling arrangement, whereby the Parent manages the structure on an on-going basis to optimise liquidity and interest balances.
In the period covered by the budget, liquidity is monitored on an ongoing basis across the Group as part of the financial risk management process. In the mid- and long term, it is monitored as part of the planning process, which helps to develop a long-term financial strategy.
In the area of financial risk, in addition to active management of market risk, the Group observes the following liquidity management rules:
- no margins in derivative financial instrument trading on the OTC market,
- limited possibility of early termination of financial transactions,
- limits for low-liquidity spot financial instruments,
- credit risk limits for counterparties in financial and trade transactions,
- ensuring adequate availability of diversified sources of funding of appropriate structure and quality,
- internal control processes and organisational efficiency facilitating prompt contingency
Below are presented contractual maturities of financial liabilities as at December 31st 2021 and December 31st 2020.
Contractual maturities of financial liabilities:
| Dec 31 2021 | Nota | Carrying amount | Contractual cash flows |
Up to 6 months | 6–12 months | 1–2 years | 2–5 years | Over 5 years |
|---|---|---|---|---|---|---|---|---|
| Bank borrowings (other than overdraft facilities) | 10.9.1 | 1,424.1 | 1,449.9 | 585.2 | 173.4 | 348.9 | 342.4 | – |
| Borrowings | 10.9.2 | 27.5 | 30.1 | 4.7 | 4.8 | 9.9 | 10.7 | – |
| Notes | 10.9.3 | 228.1 | 232.3 | 46.3 | 46.3 | 139.7 | – | – |
| Leases | 10.9.4 | 1,559.5 | 2,167.5 | 119.4 | 114.2 | 249.3 | 453.4 | 1,231.2 |
| Trade payables | 10.13 | 2,360.1 | 2,360.1 | 2,359.3 | 0.8 | – | – | – |
| Other financial liabilities | 10.13 | 410.8 | 410.8 | 390.4 | 0.8 | 2.9 | 11.8 | 4.9 |
| Total | 6,010.1 | 6,650.7 | 3,505.3 | 340.3 | 750.7 | 818.3 | 1,236.1 | |
| Dec 31 2020 | ||||||||
| Bank borrowings (other than overdraft facilities) | 10.9.1 | 2,337.6 | 2,493.6 | 450.6 | 290.3 | 897.2 | 855.5 | – |
| Overdraft facilities | 10.9.1 | 222.2 | 222.2 | 222.2 | – | – | – | – |
| Borrowings | 10.9.2 | 35.6 | 38.1 | 4.6 | 4.6 | 9.3 | 19.6 | – |
| Notes | 10.9.3 | 231.7 | 236.3 | 59.3 | 177.0 | – | – | – |
| Leases | 10.9.4 | 1,246.4 | 2,138.8 | 118.9 | 103.6 | 206.3 | 364.0 | 1,346.0 |
| Trade payables | 10.13 | 1,636.0 | 1,636.0 | 1,635.4 | 0.6 | – | – | – |
| Other financial liabilities | 10.13 | 286.0 | 286.0 | 263.8 | 2.9 | 3.2 | 8.8 | 7.3 |
| Total | 5,995.5 | 7,051.0 | 2,754.8 | 579.0 | 1,116.0 | 1.247.9 | 1,353.3 | |
Contractual maturities of derivative financial instruments:
| Dec 31 2021 | Note | Carrying amount* | Contractual cash flows |
Up to 6 months | 6–12 months | 1–2 years | 2–5 years | Over 5 years |
|---|---|---|---|---|---|---|---|---|
| Commodity swap | 10.11 | 22.1 | 22.1 | 3.8 | 12.8 | 5.5 | – | – |
| Currency forward and spot contracts | (9.7) | (9.7) | (10.6) | 0.9 | – | – | – | |
| Currency swap | (4.2) | (4.2) | (8.6) | 4.4 | – | – | – | |
| Futures (CO2 emissions) | 176.4 | 176.4 | (0.2) | 48.0 | 54.1 | 74.5 | – | |
| Total | 184.6 | 184.6 | (15.6) | 66.1 | 59.6 | 74.5 | – | |
| Dec 31 2020 | ||||||||
| Commodity swap | 10.11 | 27.9 | 27.9 | 7.5 | 20.3 | 0.1 | – | – |
| Currency forward and spot contracts | 1.0 | 1.0 | 1.0 | – | – | – | – | |
| Interest rate swap (IRS) | (8.2) | (8.2) | (4.0) | (4.2) | – | – | – | |
| Currency swap | 12.1 | 12.1 | 12.1 | – | – | – | – | |
| Futures (CO2 emissions) | 14.8 | 14.8 | 14.8 | – | – | – | – | |
| Total | 47.6 | 47.6 | 31.4 | 16.1 | 0.1 | – | – | |