63 INTEGRATED ANNUAL REPORT 2026 NCT Forestry Agricultural Co-operative Limited and its subsidiaries (Registration number: 1949/000002/24) Consolidated & Separate Annual Financial Statements for the year ended 28 February 2026 Directors' Report 4. Events after the reporting period An armed conflict escalated between the United States and Iran, following military action initiated on 28 February 2026 and subsequent retaliatory responses in the Middle East region. The conflict has continued beyond the reporting date, including disruptions to shipping routes and increased volatility in global energy and commodity markets. The potential impact of the conflict on the group includes: - increased volatility in fuel prices which may increase transportation and operating costs; - disruption to international shipping routes and logistics, including congestion and delays in export shipments; - increased freight and insurance costs on NCT customers which in turn may have an impact on NCT in the form of pricing structures and orders; - exchange rate volatility; - availability and cost of consumable inputs on farms and in export customers' plants. Given the evolving nature of the situation, at the date of this report, the financial impact of the conflict cannot be reliably estimated. The directors are closely monitoring developments and do not currently believe that the matter affects the groups ability to continue as a going concern. The directors are not aware of any other material event which occurred after the reporting date and up to the date of this report. 5. Going concern The financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. The directors believe that the group has adequate financial resources to continue in operation for the foreseeable future and accordingly the financial statements have been prepared on a going concern basis. The directors have satisfied themselves that the group is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of any new material changes that may adversely impact the group. The directors are also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the group. 6. Liquidity and solvency The directors have performed the required liquidity and solvency tests required by the Co-Operatives Act no. 14 of 2005. 7. Litigation statement TWK Agri (Pty) Ltd (TWK) served summons on NCT and BayFibre, claiming damages of R150 million from either party. It is claimed that the damages emanated from the fire which took place at the Richards Bay Mills in 2023. NCT and BayFibre have entered appearance to defend and are actively opposing the litigation. Based on legal advice received, the Boards believe that it is not probably that an outflow of economic resources will be required. Accordingly, while the respective Boards remain confident in the defences of NCT and BayFibre and have not recognised a provision, the matter is disclosed as a contingent liability which may adversely affect the cashflow of NCT and / or BayFibre if TWK were successful. It is anticipated that the matter will only be before court during 2027 or 2028 depending on the availability of court dates and any interim proceedings. 8. Auditors Colenbrander Incorporated continued in office as auditors for the co-operative and its subsidiaries for 2026. At the AGM, the members will be requested to reappoint Colenbrander Incorporated as the independent external auditors of the co-operative and to confirm Mr Matthew Black as the designated lead audit partner for the 2027 financial year. 9. Secretary The company secretary is Jean Simpson.
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