3. PPECB Annual Report 2009-2010

Financial assets, cash and equivalents increase by R15,1million to R86,7 million. The PPECB has adequate cashreserves to meet its future commitments. PPECB holdsdeposits at banks with Fitch ratings of AA and higher.Accounts receivables of R19,6 million decreased by R1,3million (6%) on last year’s R20,8 million. This reduction wasachieved through a focused attention on outstanding debt.The total amount outstanding for longer than 60 daysdecreased from R585 207 in 2009 to R46 833 in 2010. Aprovision of R218 466, or 1% of total debtors, has beenmade for irrecoverable debt.Trade payables of R23,3 million are R1,7 million higher thanthe previous year. The increase is largely due to accruedexpenses on the replacement of field and laboratoryequipment at the end of the financial year.The realised surplus increased the reserve funds by R19,5million to R95,5 million that meets PPECB’s reserve plan.These reserves are accumulated to fund shortfalls duringtimes of economic and seasonal downturns, realisation ofuninsured risks as well as to provide for future capital outlaysin replacing laboratory, technical and information technologyequipment.Cash FlowsCash and equivalents decreased by R2,1 million to R23,1million, mainly due to increased investments. Operatingactivities generated cash of R16 million as compared toR21 million in the previous year. Significant focus on thecollection of outstanding debt resulted in an inflow of anadditional R1,2 million.Capital expenditure for the year amounted to R1,1 million(2009: R4,1 million). Last year significant investments weremade to replace critical information technology and laboratoryequipment. The decrease in capital expenditure comparedto the prior year can be attributed to the reprioritisation ofcapital projects due to the possible impact of the recessionon exports and PPECB’s cash flow. Capital investments areplanned for replacing and expanding critical informationtechnology as well as laboratory equipment. The capitalreplacement and investment plan is aimed at supportingPPECB’s strategic plan.Surplus cash of R17,2 million has been invested in interestbearinginvestments held to maturity.Credit Risk on DebtorsAlthough there is an increased risk of default by trade debtorsin the current economic climate, to date we have notexperienced any adverse consequences in this regard. Inorder to manage this risk as effectively as possible, we havetightened our credit criteria, particularly in those areas wherewe experience default in payments.Debtor balances will continue to be closely monitored andmanaged going forward, both from the perspective ofminimising the risk of bad debts and maximising collections.ConclusionThere have been no events after the reporting period datathat would have a material impact on reported results.We expect that the global and local markets will continueto show signs of slow recovery. Consequently, it is forecasteda somewhat strengthened demand for South Africanperishable products.PPECB will continue to explore opportunities to add publicvalue to its stakeholders but balance it with prudent andconservative measures to maintain financial stability.We would like to thank all of the financial and administrativestaff in PPECB for their sterling efforts in the last year and,in particular, for all their hard work in delivering these financialresults and this annual report. Their commitment and ongoingsupport has enabled us to consistently deliver quality financialinformation to our stakeholders.PPECB | annual report | 2009 - 2010 33