PEILCC Annual Report 2025-2026

PRINCE EDWARD ISLAND LIQUOR CONTROL COMMISSION Notes to Financial Statements March 31, 2026

18. FINANCIAL RISK MANAGEMENT continued) (c) Liquidity risk

Liquidity risk is the risk that the Commission would be unable to meet its obligations. The Commission manages liquidity needs by monitoring scheduled debt servicing payments for long term financial liabilities as well as cash inflows and outflows due in day-to-day business. The data used for analysing these cash flows is consistent with that used in the contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 30 day outlook. Net cash requirements are compared to available borrowing facilities in order to determine any surplus or shortfall. The Commission's objective is to maintain cash and marketable securities to meet its liquidity requirements for a minimum 60 day period. This objective was met for the reporting period. Funding for long term liquidity needs are secured by adequate amounts of committed credit facilities. The Commission's existing cash resources, trade receivables, and cash generated from operations significantly exceed the current cash outflow requirements. The Commission's contractual financial liabilities as at March 31, 2026 matures as follows:

Current

Non-Current

6-12 months

Within 6 months

1-5 Years

After 5 Years

Accounts payable and accrued liabilities Due to the Province Lease liabilities

$ - $15,362,869 400,317 $15,763,186

$5,641,286 - 448,902 $6,090,188

$ - - 3,256,541 $3,256,541

$

- - 1,016,001 $1,016,001

19. CAPITAL MANAGEMENT

The capital structure of the Commission currently consists of amounts due to related parties and lease liabilities. The Commission manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Commission may arrange more loans or advances from related parties. Management reviews its capital management approach on a regular basis. The Commission is not subject to externally imposed capital requirements.

50 | PEILCC 2025-2026 Annual Report