Interim Results for Half Year ended 30 September 2016 The Development Bank of Southern Africa (Registration number 1600157FN) JSE Company code: BIDBS Reviewed interim results for the half year ended 30 September 2016 Preparation of this report The Chief Financial Officer, Kameshni Naidoo CA (SA) was responsible for the preparation of the interim results. Basis of preparation Accounting policies adopted and methods of computation are consistent with those applied to the annual financial statements at 31 March 2016. The condensed interim financial statements are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: derivative financial instruments, financial instruments at fair value through profit and loss, available-for-sale financial assets, land and buildings, post- retirement medical benefit and funeral benefit obligations measured at actuarial values. The interim financial statements are in conformity with IAS 34, Interim Financial Reporting. The preparation of interim financial statement requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. Key financial performance - Total assets declined by 1.1% from 31 March 2016 - Development bonds and loan book net growth of 0.4% from 31 March 2016 - Profit for the interim period R1.04bn - Included in profit is foreign exchange loss amounting to R474m - Cash flow from operations R1.8bn Six months overview The DBSA generated a profit of R1.04bn, a 27% decrease from the profit reported as at 30 September 2015. The decrease in profit was primarily due to foreign exchange losses amounting to R474m as well as the revaluation losses on financial instruments which amounted to R131m. Total assets declined by 1.1% from R82.3bn (March 2016) to R81.4bn (Sept 2016). This was due to a sale of O3b Networks equity investment and excess cash surplus which was used to fund disbursements. 1 Independent review of results by Auditors The condensed interim financial results of DBSA for the six months ended 30 September 2016 have been reviewed by the Bank’s auditor, Nkonki Inc. In their review report, which is available for inspection at the Company's registered office, Nkonki Inc. stated that the review was conducted in accordance with International Standard on Review Engagements 2410, Review of Interim Information Performed by the Independent Auditor of the Entity, and have expressed an unmodified conclusion on the condensed interim financial statements. Outlook The success to the year ending 31 March 2017 hinges on the DBSA’s ability to continue delivering on its mandate, within the uncertain economic environment. The responsive initiatives that have been put in place would see the targeted results been achieved. Condensed Income Statement for the six months ended 30 September 2016 Six months Six months in thousands of rand ended ended 30 Sept 2016 30 Sept 2015 Reviewed Reviewed Net interest income 1 777 647 1 406 102 Other income 673 471 235 873 Net foreign exchange (loss)/gain (473 714) 680 261 Grants (7 299) (6 858) Net impairment loss on financial assets (442 768) (453 978) Personnel expenses (335 149) (320 436) Other expenses (133 642) (96 020) Depreciation and amortisation (17 688) (15 299) Profit for the period 1 040 858 1 429 645 Condensed Statement of Comprehensive Income for the six months ended 30 September 2016 Six months Six months ended ended 30 Sept 2016 30 Sept 2015 Reviewed Reviewed Profit for the period 1 040 858 1 429 645 Other comprehensive profit/(loss) 69 375 (56 243) Total comprehensive income 1 110 233 1 373 402 2 Statement of Financial Position as at 30 September 2016 As at As at in thousands of rand 30 Sept 31 March 2016 2016 Reviewed Audited Assets Cash and cash equivalents 1 806 468 2 084 565 Other receivables 124 084 138 533 Investment securities 1 021 167 1 265 218 Derivative assets held for risk management 1 020 910 1 163 533 Post-retirement medical benefits investment 46 126 49 978 Equity investments 5 853 128 6 278 575 Development bonds 1 290 490 1 290 296 Development loans 69 744 654 69 494 954 Property and equipment 493 125 501 202 Intangible assets 74 300 79 142 Total assets 81 474 452 82 345 996 Liabilities Other payables 887 339 894 795 Provisions 144 513 152 533 Liability for funeral benefits 3 100 3 100 Liability for post-retirement medical benefits 88 508 239 289 Funding: debt securities 33 310 064 35 271 135 Funding: lines of credit 16 541 288 16 371 534 Derivative liabilities held for risk management 124 349 148 551 Total liabilities 51 099 161 53 080 937 Equity Share capital 200 000 200 000 Retained earnings 15 632 263 14 544 861 Permanent government funding 11 692 344 11 692 344 Revaluation reserve on land and buildings 269 256 269 256 Hedging reserve 192 796 123 050 Reserve for general loan risks 2 389 814 2 436 358 Fair value reserve (1 182) (810) Total equity 30 375 291 29 265 059 Total liabilities and equity 81 474 452 82 345 996 3 Condensed statement of changes in equity for the six months period ended 30 September 2016 Six months Six months in thousands of rand ended ended 30 Sept 2016 30 Sept Reviewed 2015 Reviewed Balance at beginning of the year 29 265 059 23 682 685 National Treasury capital injection 1 000 000 Profit for period 1 040 858 1 429 645 Net unrealized gain on cash flow hedges 69 746 (55 608) Change in value of available for sale financial assets (372) (635) Total equity at end of the period 30 375 291 26 056 087 Condensed statement of cash flow for the six months period ended 30 September 2016 Six months ended Six months 30 Sept 2016 ended Reviewed 30 Sept 2015 Reviewed Cash flows generated from operating activities 1 856 545 1 178 393 Cash flows used in development activities (1 084 132) (6 009 365) Cash flows (used in)/generated from investing activities (329 787) 505 971 Cash flows (used in)/ generated from financing activities (705 321) 4 193 794 Effect of exchange rate movement on cash balances (15 403) 24 969 Net decrease in cash and cash equivalents (278 098) (106 237) Cash and cash equivalents at the beginning of the year 2 084 565 3 901 663 Cash and cash equivalents at the end of the period 1 806 468 3 795 426 25 November 2016 Debt sponsor: The Standard Bank of South Africa Limited 4 Date: 25/11/2016 08:00:00 Produced by the JSE SENS Department. 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