59 INTEGRATED ANNUAL REPORT 2022 to inflationary increases with higher increases on items such as medical aid benefits along with some disclosure and re-allocation variances. Plantation adjustments are indicative of higher sales volumes from the farms as they assisted to meet the higher volumes required by our customers. The group and co-operative balance sheets remained strong, with the group showing a net worth of R1,8 billion and current assets exceeding current liabilities by R723,5 million. Receivables have decreased over last year, mainly due to large VAT refunds that were outstanding last year, while payables have increased as better market conditions resulted in more money owing to members at year end. High cash holdings are a source of dissatisfaction among members as they would prefer NCT to distribute this money through timber prices. However, over the last year, we have become acutely aware of how important our cash reserve policy has been and how it has averted potentially undesirable situations. Aside from allowing us to hold prices for longer when the SA Rand is strong against the US Dollar, cash surpluses provide liquidity when receipts are unexpectedly delayed, whether this be the result of a change in shipping schedule or other operational factor. The balance sheet reflects the cash position at year end, whereas we monitor ongoing cash flow requirements. In the environment in which we operate where monthly payments are as significant as our timber payments are, we need to ensure that our reserves are adequate to continue to pay members timeously, and in full each month. The challenges we face in the new year again include exchange rate volatility in addition to rising fuel prices and inflation, resource limitations and the need to balance these against the continually squeezed margins faced by timber growers. Over the last few years, we have been reviewing the structure of the NCT group to streamline operations and administration as well as maximise distributable income for our members. In previous years, we deregistered dormant companies and in the last financial year, we paid out preference shareholders in two subsidiaries which allows more control over operational decisions. In the next financial year, we will streamline farming operations and continue to reduce the number of companies in the group. The first step has been taken with the sale of the Lenjane farms held in Forest Resources (Pty) Ltd to NCT in March 2022. These farms have been amalgamated with the Enyathi farms and we are excited at the efficiencies this will create in operations and accounting in the year ahead. KERRY MOFFETT | CHIEF FINANCIAL OFFICER
RkJQdWJsaXNoZXIy MjgyNjA0