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TRUSTCO GROUP HOLDINGS LIMITED - Unaudited Condensed Consolidated Interim Results for the Six Months ended 30 September 2017

Release Date: 07/12/2017 13:04
Code(s): TTO     PDF:  
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Unaudited Condensed Consolidated Interim Results for the Six Months ended 30 September 2017

Trustco Group Holdings Limited
Incorporated in the Republic of Namibia
(Registration number 2003/058)
NSX Share code: TUC
JSE share code: TTO
ISIN Number: NA 000A0RF067
("the Group")

UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017

NATURE OF THE BUSINESS

Trustco is a diversified dual listed financial services group that invests and operates in sustainable high growth assets in emerging markets.

BUSINESS REVIEW AND OUTLOOK

During the past year, Trustco weathered increasingly difficult conditions in the Namibian economy. With Q1 and Q2 growth in Namibian GDP both showing negative growth of
1.7%, and economists predicting a similar picture for Q3, the country remained in a technical recession for the entire reporting period. This resulted in an average private sector
credit extension (PSCE) growth of 7.4% as at 31 August 2017, a reduction of 4.7% from 12.1% for the 2016 corresponding period. The slow PSCE growth, evidenced by reduced
growth in credit advanced to the household and corporate sectors, impacted mortgage and instalment credit the most.

Only two economic sectors in Namibia, namely mining and agriculture, managed to register strong growth for the first 8 months of 2017, which offset the negative growth for
the construction, wholesale and retail trade and transport sectors.

Although growth projections for the economies of Namibia and southern Africa remain weak, the growth projections for the global economy reflect an increase of 0.4% from
3.2% to 3.6% for 2018.

A weakened ZAR/USD exchange rate further negatively impacted the growth of Namibia, given that the country remains a net importer. This exposure to a domestic economy
where so many of its inputs, such as exchange rate, food prices, drought and global liquidity remain outside of the control of government as well as private sector, shows that
Trustco's pursuit of cross border expansion and US dollar based revenues remains key for continued growth.

Notwithstanding the above, Trustco's operations continued to demonstrate reliable performance coupled with resilience, even in the face of adverse financial conditions.

The Board of Directors will continue to exercise its mandate to aggressively repurchase its shares as approved by the Shareholders.

INSURANCE

Insurance premiums decreased from the previous reporting period by 10%, mostly due to a reduction in Credit Life policies written. The remaining life products and short term
policies continued with a measured and steady organic growth. A decline in claims and its resultant provisioning (39% decrease from the 2016 corresponding period) has
favourably affected the insurance segment results. South African operations also continued with their push towards profitability with the development of a new mobile product
initiative.

BANKING & FINANCE

The strategy of the banking and finance segment remains on track with its strategic plan to target mortgage lending, student loans, SME financing and all savings and deposit
products.

Trustco Bank is poised to capitalise on the synergies that exist in the group, and has successfully implemented a new core banking system. Trustco Bank is also in the
process of finalising electronic cell phone banking as well as card systems. Trustco Bank remains well capitalised with a Tier 1 capital ratio of 57.37% as at September 2017
with the group injecting NAD 80 million as equity into Trustco Bank after the reporting period.

Trustco Finance, regulated by Namfisa, provides loans to students. The current economic circumstances together with stricter credit processes have resulted in tempered
growth. The student loan book is still performing well despite a slight increase in non-performing book from 4.4% in the 2016 corresponding period to 5.5%.

INVESTMENTS (OF THE INSURANCE SEGMENT)

As mentioned above, the reduced growth in private sector credit extension, alongside a reduction of liquidity in the Namibian banking sector, has resulted in a slowdown in
property development, especially in the central region of Namibia. However, during this time, there still remains a strong demand in the housing sector, with specific focus on
the lower to middle-income group and first time buyers. Despite the liquidity pressure currently experienced in the country, there has been a slight improvement in the
granting of credit by the banking sector. The slowdown was also driven by the lack of serviced land in Windhoek as opposed to the general belief that water restrictions were
the cause thereof.

To a large extent, the lack of available serviced land has contributed to an increase in the number of plans for additions and alterations (of existing structures) being applied
for to the City of Windhoek Municipality over the last 15 years, and therefore, lessening the plans for newly built properties. As such, during the past year, the City of
Windhoek Municipality reported the lowest number of building plans submitted for approval for new residential, commercial and industrial development for the past 20 years.
The amount of building plans approved by the City of Windhoek Municipality for the 2017 year to date increased in value by 17.4% to NAD 1.83 billion. Approximately
NAD260 million of the approved plans pertain to the Elisenheim Development, the prime property development of the group.

Trustco Properties thus remains ideally placed to alleviate the pressures with regard to mixed use land development in the Central and Northern areas of Namibia.

The Elisenheim Development will benefit from increased levels of liquidity in the commercial banks and in Trustco Bank. This will increase Trustco's footprint of homeowners
on the Elisenheim Development and enables Trustco to explore other ventures. Elisenheim currently has approximately 4 265 residents and construction workers that enter
the estate on a daily basis. This number is growing by the month as Elisenheim Development is becoming the “area to live in” in the Windhoek basin.

RESOURCES

During the first half year of 2018, Trustco Resources primary focus was establishing operational readiness at Meya Mine in Sierra Leone and executing phase 1 of the
exploration programme within the ambitious 18 month project schedule. In anticipation of fulfilment of the final CPs related to the Huso transaction, management initiated
optimisation initiatives that will enable Northern Namibia Development Company (Pty) Ltd (NNDC) to improve processing efficiency and effectiveness. Both the
aforementioned focus areas underpin our vision to establish a vertically integrated diamond business across the complete diamond value chain.
MEYA MINING
Based on managements experience and understanding of the geological setting within Meya Mines area of operation, Trustco Resources is confident that the geo-economic
potential within EL 07/2015 will achieve the initial expectations. Thus, notwithstanding Meya Mine starting off as a greenfield exploration programme, the plan is to establish
an optimal mine configuration that will enable Trustco Resources to evaluate the geo-economic potential of the resource within the exploration license, but then also to
transition into trial mining immediately after phase 1 of the exploration programme has been completed. This includes: delineation drilling, establishing mine infrastructure,
mobilising the mining fleet, constructing a bespoke processing plant, conducting an environmental impact assessment study and extracting / processing three bulk samples.
Apart from determining the economic viability, the results will enable Meya Mine to apply for a long term large-scale mining licence.

DRILLING
As reported in the Integrated Annual Report (IAR) for FY 2017, the Phase 1 drilling programme focused on delineating Dyke Zone B only. The drilling results confirmed
continuation of the Dyke over a 12 000 meter strike down to a vertical depth of 450 meters. Phase 2 will recommence in December 2017. It will target deep intersections,
supplemented with wedges in each hole, in order to recover sufficient material for micro diamond analysis in support of formulating the initial resource statement. A total of 6
700 meters of material is planned to be completed by January 2018.

MAPPING AND SAMPLING
Petrographic and micro diamond samples were collected from core that was extracted during the first phase delineation drilling. A total of 250kgs of core was sampled and
submitted to the Saskatchewan Research Council (SRC) laboratory in Canada. Initial results received were positive and these were used in part to plan Phase 2.

All of the core from the 38 holes drilled was logged by Meya Mine and SRK. This included; geological, geotechnical mapping and density tests. Favourable feedback was
received from SRK, Meya Mines appointed Competent Person, who regularly visited the site and reviewed all the work completed.

Two out of three bulk sample sites have been opened and the kimberlite dyke exposed. These two sites are labelled Meya River, which is located on the eastern boundary of
the licence, and Bardu, which is located in the middle of the Dyke Zone B strike. Both areas were mapped in detail and chip samples were collected and submitted to SRC
laboratory in Canada. A total of 484kgs of sample material was sent to SRC laboratory in Canada for analysis. These results are still outstanding.

BULK SAMPLING (MINING)
Mining commenced with stripping of overburden and weathered kimberlite material at all three bulk sample sites. At the time of writing this report, 950 000 tonnes were
stripped of which 290 000 tonnes were mined prior to April 2017. This included 23 039 tonnes of weathered kimberlite, 17 134 tonnes from Bardu and 5 905 tonnes from
Meya River, which were processed during August / September 2017.

The first kimberlite exposure was at the Bardu site on 8 April 2017 and at Meya River on 15 May 2017. At each sample a 300m strike has been exposed for extraction. On
20 October 2017 Meya reached another milestone when it successfully executed the first blast targeting the first competent kimberlite sample. A total of 144 148 tonnes was
mined from the first blast, 5 492 tonnes of kimberlite and 138 656 tonnes of waste (granite).

PROCESSING
The consultant (Consulmet) completed construction of the 50 tonnes per hour DMS Processing Plant, designed specifically to process Meya Mines kimberlite, in August
2017. The first diamond was recovered on 18 August 2017, during the C4 commissioning phase, from the weathered kimberlite material. The C4 commissioning, with
weathered kimberlite only, was completed on 26 September 2017. Despite being highly diluted, the yield from this relatively small sample of weathered material was 2 885
carats.

Until the blast of the 20th of October 2017, the plant feed was only weathered material. Processing of competent kimberlite ore only commenced on 26 October 2017. A
total of 9 180 tonnes run-of-mine ore was treated over a 20-day period. This included 39% waste that had to be carried as part of the mining slot development. The total yield
from the first 5 492 tonnes of ore (kimberlite) was 3 365 carats at an average stone size of 0.36 carats. This includes the recovery of an exceptional 476.8 carat Type IIA
diamond, labelled as the Meya Prosperity Diamond, which was recovered on 9 November 2017, just five days after the final plant sign off. Another significant stone of 27.97
carats of exceptional colour and quality was recovered on 10 November 2017.

MARKETING AND SALES
Meya Mine signed an off-take agreement with Morse Investments, who opted to make use of an independent tender house in Antwerp, to market and sell Meya Mines diamonds
through a closed tender process. The tender process presents a transparent and real time market insight at the time of tender/sale and transactions are strictly cash based. All
Meya Mines diamonds have been exported in accordance with industry best practices and the Kimberley Certification Scheme (KPC) to Antwerp, which offers easy access to the
global market.

The first diamond parcel of 2 646 carats recovered from the weathered material sold for USD 394 363 or at an average of USD 149 per carat.

Three more parcels were exported in November 2017, including the 476 carat Meya Prosperity Diamond, a 27.98 carat stone and a 3 058 carat parcel, all recovered from the
competent kimberlite extracted from the Meya River sample. The parcel will be sold in December 2017.

FUTURE
Meya Mines initial results are encouraging, however, management will remain on course to finalise phase 1 of the exploration programme in order to formulate a Resource
Statement that would be compliant with international mining codes. Meya Mine will apply for a long term mining licence as soon as the Resource Statement is completed.
Notwithstanding this process, proactive steps are taken to ensure a smooth transition from exploration to steady state mining.

NNDC AND MORSE INVESTMENTS (KUNENE RIVER DIAMOND OPERATION AND POLISHING FACTORY IN NAMIBIA)
A decision was made to temporarily suspend operations at NNDC and Morse Investments until the Mining Licence, ML156, has been secured from the Ministry of Mines and
Energy in Namibia.

NNDC received a “Preparedness to Grant” letter for Mining Licence 156 from the Ministry of Mines and Energy on 25 October 2017. The Mining Licence is inter alia
conditional to approval of an Environmental Clearance Certificate which in turn requires a Scoping Study and an Environmental Management Programme. A project to initiate
the environmental work commenced during November 2017. At the time of publishing, other conditions were under negotiations with the Ministry of Mines. When the Mining
Licence is issued, a SENS announcement in this regard will be published, which will perfect the Huso transaction.

DIVIDENDS

The board of directors has decided to defer the declaration of any 2018 interim dividend.

INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS), STANDARDS AND INTERPRETATIONS NOT YET EFFECTIVE

IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS
The standard is effective for years commencing on or after 1 January 2018. The standard will be adopted by the group for the financial reporting period commencing 1 April
2018.
IFRS 15 requires an entity to recognise revenue in such a manner as to depict the transfer of the goods or services to customers, at an amount representing the consideration
to which the entity expects to be entitled in exchange for those goods or services.

The standard has a 5-step process which is required to be applied to all contracts with customers. The standard provides guidance for identifying the contract with the
customer, identification of the deliverables (performance obligations), determination of the transaction price (including the treatment of variability in the transaction price, and
significant financing components), how to allocate the transaction price, and when to recognise revenue. The group is in the process of assessing their significant revenue
streams in line with the new standard. The group is still to make a decision on the transition method to be applied.

IFRS 16 LEASES
The standard is effective for years commencing on or after 1 January 2019. The standard will be adopted by the group for the financial reporting period commencing 1 April
2019.
IFRS 16 requires a lessee to recognise a right of use asset and lease obligations for all leases except for short term leases, or leases of low value assets which may be
treated similarly to operating leases under the current standard IAS 17 if the exceptions are applied. A lessee measures its lease obligation at the present value of future
lease payments, and recognises a right of use asset initially measured at the same amount as the lease obligation including costs directly related to entering into the lease.
Right of use assets are subsequently treated in a similar way to other assets such as property, plant and equipment or intangible assets dependent on the nature of the
underlying item.

The group has a number of property rental agreements in place. In accordance with the standard, right of use assets and lease obligations associated with these rentals
would be recognised in the statement of financial position, the extent thereof is yet to be determined.

The group is still to make a decision on the transition method to be applied or the application of exceptions related to short term and low value asset leases.

IFRS 9 FINANCIAL INSTRUMENTS
The standard is effective for years commencing on or after 1 January 2018. The standard will be adopted by the group for the financial reporting period commencing 1 April
2018.

IFRS 9 provides guidance on the classification, measurement and recognition of financial assets and financial liabilities and replaces IAS 39.

The standard establishes three measurement categories for financial assets: amortised cost, fair value through other comprehensive income and fair value through profit and
loss. Classification of financial assets into these categories is dependent on the entity's business model (which depicts its objectives with respect to the management of
financial assets as a whole) and the characteristics of the contractual cash flows of the specific financial asset. There were no significant changes to the classification
guidance for financial liabilities.

IFRS 9 introduces a new expected credit loss impairment model that replaces the incurred loss impairment model used in IAS 39.

The group will have to adjust its impairment models to incorporate new principles such as 12 months expected credit loss, lifetime expected credit loss, forward looking
information and time value of money in order to comply with expected credit loss impairments under IFRS 9. The group is still in the process of quantifying the impacts of this
change.

The group is still to make a decision on the transition method to be applied.

BASIS OF PREPARATION AND PRESENTATION STATEMENT OF COMPLIANCE

The unaudited interim results have been prepared in accordance with the framework concepts and measurement and recognition criteria of IFRS and comply with IAS34
Interim Financial Reporting and are in accordance with the SAICA Financial Reporting Guides as issued by the Financial Reporting Standards Council, the Namibian
Companies Act, No 28 of 2004 (as amended) and the Listings Requirements of the JSE Limited and the NSX.

BASIS OF PREPARATION

The unaudited condensed consolidated financial statements are prepared in thousands of Namibian Dollars (“NAD`000”). The group`s functional and presentation currency is
Namibian Dollars. At 30 September 2017, NAD 1 was equal to ZAR 1.

These interim results are unaudited and have not been reviewed by the auditors. The accounting policies applied are in accordance with IFRS and are consistent with those
of the previous annual financial statements.

The preparation of the interim results has been supervised by the Group Financial Director, Floors Abrahams, BCom (Acc).

ACKNOWLEDGEMENTS

The board of directors of Trustco acknowledge with gratitude the efforts and commitment from stakeholders and staff.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION



                                                                                                     30 Sep 2017            31 Mar 2017             30 Sep 2016
                                                                                                       Unaudited                Audited               Unaudited
                                                                                                        NAD’000                NAD’000                  NAD’000
                                                                       Notes
ASSETS
Cash and cash equivalents                                                                                  21 029                 46 017                   36 898
Advances                                                               1                                1 820 602              1 818 811                1 195 434
Trade and other receivables                                            2                                  923 282                762 225                1 081 951
Current tax assets                                                                                          7 510                  7 534                    7 494
Inventories                                                                                               358 723                339 278                  334 389
Property, plant and equipment                                          3                                  644 332                609 419                  496 734
Investment property                                                                                     1 042 684              1 010 812                  843 894
Intangible assets                                                                                         573 764                467 579                  205 905
Deferred tax assets                                                                                       113 202                 94 718                  154 457
Total assets                                                                                            5 505 128              5 156 390                4 357 156

EQUITY AND LIABILITIES
Liabilities
Bank overdraft                                                                       14 903             12 640          17 699
Borrowings                                                           4            1 699 455          1 657 445       1 431 951
Trade and other payables                                                            514 942            477 513         143 508
Current tax liabilities                                                              28 018             28 018          10 262
Amounts due to related parties                                                        3 429              2 678               -
Other liabilities                                                                    55 198             82 609          22 066
Deferred tax liabilities                                                            301 905            308 687         323 943
Insurance contract liabilities                                                       94 222             94 350          85 376
Total liabilities                                                                 2 712 072          2 663 940       2 034 805

Capital and reserves
Share capital                                                                       177 595            177 595         177 595
Share premium                                                                        46 300             46 300          46 300
Deemed treasury shares                                               5            (178 358)          (178 358)           (775)
Other reserves                                                                       48 891             47 875          87 917
Equity loan                                                          6              250 000                  -               -
Distributable reserves                                                            2 448 621          2 399 031       2 011 314

Reserves for parent company                                                       2 793 049          2 492 443       2 322 351
Non controlling interest                                             8                    7                  7               -
Total capital and reserves                                                        2 793 056          2 492 450       2 322 351
Total equity and liabilities                                                      5 505 128          5 156 390       4 357 156



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                                             6 Months ended     6 Months ended      Year ended
                                                                                30 Sep 2017        30 Sep 2016     31 Mar 2017
                                                                                  Unaudited          Unaudited         Audited
                                                                                   NAD’000            NAD’000         NAD’000
                                                                     Notes

Revenue                                                                              408 066            560 171      1 246 762
Investment income                                                                     41 184              34 436       225 467
Income from operations                                                               449 250            594 607      1 472 229
Insurance benefits and claims                                                       (16 309)           ( 27 486)       (48 292)
Operating expenses                                                                 (284 051)         ( 339 228)      (668 791)
Finance costs                                                                      (121 114)           ( 78 171)     (173 669)
Profit before taxation                                               9                27 776            149 722        581 477
Taxation                                                                              25 266              16 796       (51 525)
Profit for the period                                                                 53 042            166 518        529 952

Other comprehensive income, net of tax                                               (2 436)                635       (15 124)
Items that will not be subsequently reclassified to profit or loss
- Revaluation of property, plant and equipment                                              -           (2 537)       (23 904)
Items that may be subsequently reclassified to profit or loss
- Foreign currency translation adjustment                                            (2 436)             3 172           8 780
Total comprehensive income for the period                                            50 606            167 153         514 828

Earnings per share:
Basic earnings per share                                                                7.11             21.57           69.11
Diluted earnings per share                                                              6.55             21.43           68.67

CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                             6 Months ended     6 Months ended      Year ended
                                                                                30 Sep 2017        30 Sep 2016     31 Mar 2017
                                                                                  Unaudited          Unaudited         Audited
                                                                                   NAD’000            NAD’000         NAD’000
Cash generated by operations
before working capital changes                                                       159 790            275 861        651 326
Changes in working capital                                                         (143 073)          (395 070)      (219 286)
Interest received                                                                       1 160             2 834            432
Finance costs                                                                      (121 114)           (78 171)      (170 456)
Net advances disbursed                                                                (4 848)          (13 704)      (642 579)
Proceeds from funding liabilities for advances                                              -           410 179        308 810
Taxation received / (paid)                                                                 24                 1          (861)
Net cash from operating activities                                                 (108 061)            201 930       (72 614)

Cash flows from investing activities
Additions to property plant and equipment                                           (38 739)           (79 102)       (27 790)
Proceeds from property plant and equipment                                               611             27 114         42 729
Additions to investment property                                                           -                  -          (212)
Additions to intangible assets                                                     (120 031)            (8 937)       (53 946)
Proceeds from intangible assets                                                            -                  -          1 369
Acquisition of subsidiary net of cash acquired                                             -                  -       (14 146)
Proceeds from investment property                                                          -                 36              -
Net cash from investing activities                                                 (158 159)           (60 889)       (51 996)

Cash flows from financing activities
Proceeds of equity loan                                                                   250 000                          -              -
Proceeds from borrowings                                                                    42 010                    21 216        391 972
Repayment of borrowings                                                                          -                 (136 161)      (202 636)
Repayment of other liabilities                                                            (53 792)                  (19 972)       (52 379)
Dividends paid                                                                                   -                  (33 091)       (33 091)
Proceeds from related party loans                                                              751                         -              -
Advances to related parties                                                                      -                  (35 645)       (27 690)
Purchase of deemed treasury shares                                                               -                     (775)          (775)
Net cash from financing activities                                                        238 969                  (204 428)         75 401
Net change in cash and cash equivalents                                                   (27 251)                  (63 387)       (49 209)
Cash and cash equivalents at the beginning of the period                                    33 377                    82 586         82 586
Cash and cash equivalents at the end of the period                                           6 126                    19 199         33 377

CONDENSED CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY

Balance at the beginning of the period                                                   2 492 450                2 189 064      2 189 064
Deemed treasury shares purchased                                                                 -                     (775)     (178 358)
Dividends for the period                                                                         -                  (33 091)       (33 091)
Total comprehensive income for the period                                                   50 606                  167 153        514 828
Equity loan advanced                                                                       250 000                         -              -
Minority interest                                                                                -                         -              7
Balance at the end of the period                                                         2 793 056                2 322 351      2 492 450



CONDENSED SEGMENT ANALYSIS

                                                             Total      Insurance-         Investments           Resources     Banking and
                                                           NAD’000        NAD’000             NAD’000             NAD’000          Finance
                                                                                                                                  NAD’000
6 Months 30 September 2017 - unaudited
Revenue                                                      511 664       76 955                 292 081              2 700       138 928
External revenue                                             408 066       70 461                 208 552              2 700       126 353
Intersegment revenue                                         103 598        6 494                   83 529                 -        13 575
Net profit/(loss) after tax                                   53 042       23 738                 (33 278)           (7 770)        70 352
Taxation                                                      25 266            -                   25 266                 -             -
Total assets                                               5 505 128      215 394               2 729 964           620 767      1 939 003
Total liabilities                                          2 712 072      124 768               1 692 858           319 101        575 345

6 Months 30 September 2016 - unaudited
Revenue                                                      671 317       84 852                 487 568                  -        98 897
External revenue                                             560 171       78 496                 403 383                  -        78 292
Intersegment revenue                                         111 146        6 356                  84 185                  -        20 605
Net profit/(loss) after tax                                  166 518       14 722                 128 912            (3 072)        25 956
Taxation                                                      16 796            -                  16 796                  -             -
Total assets                                               4 357 156      228 290               2 490 993                187     1 637 686
Total liabilities                                          2 034 805      102 446               1 087 316                 95       844 948

Year ended 31 March 2017 - audited
Revenue                                                    1 446 809      184 344               1 035 789                  -       226 676
External revenue                                           1 246 762      159 686                 874 047                  -       213 029
Intersegment revenue                                         200 047       24 658                 161 742                  -         13 647
Net profit /(loss) after tax                                 529 952       40 370                 440 131           (11 142)         60 593
Taxation                                                     (51 525)      (3 602)                (16 497)                 -       (31 426)
Total assets                                               5 156 390      210 432               2 554 628           482 460      1 908 870
Total liabilities                                          2 663 940      114 571               1 651 152           292 305        605 912

RECONCILIATION OF HEADLINE EARNINGS PER SHARE

                                                                           6 Months ended                    6 Months ended     Year ended
                                                                              30 Sep 2017                       30 Sep 2016    31 Mar 2017
                                                                                Unaudited                         Unaudited        Audited
                                                                                 NAD’000                           NAD’000        NAD’000

Profit attributable to ordinary shareholders                                          53 042                        166 518        529 952
Adjustments:                                                                              (7)                         (172)         12 565
(Profit)/Loss on disposal of property, plant & equipment                                 (11)                         (253)         18 393
Fair value adjustments on investment properties                                                                           -              80
Tax effect                                                                                 4                             81         (5 908)
Headline earnings                                                                     53 035                        166 346        542 517

EARNINGS PER SHARE
Earnings per share
Basic earnings per share                                                                7.11                          21.57          69.11
Diluted earnings per share                                                              6.55                          21.43          68.67
Headline earnings per share                                                             7.11                          21.54          70.75
Diluted headline earnings per share                                                     6.55                          21.41          70.30
Dividends per share                                                                        -                           8.40           5.00

SHARES
Total number of ordinary shares in issue („000s)                                     772 142                        772 142        772 142
Weighted number of ordinary shares in issue („000s)                                  745 806                        772 100        766 785
Contingently issuable shares as a result of business acquisition                                      4 922                         4 922                    4 922
(„000s)
Convertible equity loan („000s)                                                                      58 824                             -                       -
Weighted number of ordinary shares for diluted earnings per                                         809 552                       777 022                 771 707
share („000s)

NOTES TO THE CONDENSED INTERIM RESULTS



                                                                                          6 Months ended                6 Months ended                 Year ended
                                                                                             30 Sep 2017                   30 Sep 2016                31 Mar 2017
                                                                                               Unaudited                     Unaudited                    Audited
                                                                                                NAD’000                       NAD’000                    NAD’000
1. Advances
Gross loans advanced                                                                              1 860 924                     1 859 635                1 233 760
Provision for bad debts                                                                             (40 322)                      (40 824)                ( 38 326)
Net advances                                                                                      1 820 602                     1 818 811                1 195 434
Short-term portion                                                                                  212 085                       561 980                  399 950
Long-term portion                                                                                 1 608 517                     1 256 981                  795 484

2. Trade and other receivables
VAT receivables                                                                                      40 695                        44 517                   55 501
Property and other receivables                                                                      882 587                       717 708                1 026 450
                                                                                                    923 282                       762 225                1 081 951

3. Property, plant and equipment
Property acquired                                                                                    65 120                      275 041                    79 102
Disposals                                                                                             (600)                      (61 122)                 (27 114)

4. Borrowings
Term loans                                                                                        1 206 863                     1 186 020                  814 249
Bonds issued                                                                                        157 499                       159 057                  285 000
Mortgages and other borrowings                                                                      335 093                       312 368                  332 702
                                                                                                  1 699 455                     1 657 445                1 431 951

5.Deemed treasury shares
The carrying value of treasury shares as at 30 September 2017 is NAD 178 m (2016: NAD 0.78 m). The group purchased nil treasury shares (2016: 0.25m shares) during the
period.

6. Equity loan
The company (Trustco Group Holdings Ltd) entered into a convertible loan agreement with Riskowitz Value Fund LP (“the Fund”) dated 6 July 2017. In terms of the
agreement, the Fund lend the company NAD250 000 000 (two hundred and fifty million). The majority shareholder signed an irrevocable undertaking to vote in favour of the
transaction.

As further set out in note 11.1, the equity loan has been converted into ordinary Trustco shares at a conversion price of NAD4.25. This agreement does not constitute a
change in control.

The company obtained shareholders approval for this transaction on 26 October 2017.

                                                                                   30 Sep         30 Sep           31 Mar
                                                                                     2017           2016             2017
                                                                                Unaudited      Unaudited          Audited
                                                                                 NAD’000        NAD’000          NAD’000

7. Fair value hierarchy
Level 2
Land and buildings                                                                         -              -       128 396
Aircraft                                                                                   -              -       286 940
Investment property                                                                        -              -       843 894
Level 3
Financial assets
Advances                                                                         1 820 602      1 818 811       1 195 434
Trade and other receivables                                                        882 587        717 705       1 081 951
Cash and cash equivalents                                                           21 029         46 017          36 898
Financial liabilities
Insurance contract liabilities                                                    (94 222)        (94 350)        (85 376)
Trade and other payables                                                         (506 614)       (472 599)       (143 508)
Other liabilities                                                                 (55 198)        (82 609)        (22 066)
Borrowings                                                                     (1 699 455)     (1 699 455)     (1 431 951)
Bank overdraft                                                                    (14 903)        (12 640)               -
Related party balances                                                             (3 429)         (2 678)               -
Non-financial assets
Investment property                                                              1 042 684      1 010 812                -
Land and buildings                                                                 133 510        133 981                -
Aircraft                                                                           214 342        217 707                -

Advances, trade and other receivables, trade and other payables and borrowings are carried at amortised cost using the effective interest method. The group applies market
related discount rates where appropriate and hence all carrying values approximate fair values.

Non-financial assets were moved out of level 2 into level 3 in the 2017 financial year as variables used to determine their fair values are not observable by the public.
There were no transfers between level 1 and level 2 in the reporting period.

Managements policy for recognising transfers between levels is to recognise the transfer at the end of reporting period.

Land and buildings, aircraft and investment property which are fair valued or revalued are valued either by independent experts or by reference to quoted similar assets. The
techniques and inputs used have not changed since the period end. Technical provisions and policyholder liabilities under insurance contracts remain calculated on a forecast
modelling and/or pre-identified factor. Such factors have not been adjusted since financial year end.

8.Non-controlling interest
On 11 November 2016 the group acquired 51% of the voting equity interest of Meya Mining Ltd (Meya Mine) which resulted in the group obtaining control over Meya Mine.
Meya Mine is incorporated in Mauritius and is the holder of Exploration Licence No. EL 07/2015 granted under the Provisions of the Mines and Minerals Act 2009, of the
Republic of Sierra Leone.

Non-controlling interest, which is a present ownership interest, entitles their holders to a proportionate share of the entitys net assets in the event of liquidation, it is measured
at the present ownership interests proportionate share of the acquirees identifiable net assets. There are no other components of non-controlling interests.

                                                                                    30 Sep         30 Sep          31 Mar
                                                                                      2017           2016            2017
                                                                                 Unaudited      Unaudited         Audited
                                                                                  NAD’000        NAD’000         NAD’000
9. Profit before taxation

This is arrived at after taking the following into account:
Profit on forex differences                                                            1 608           3 536        25 179
Salaries and directors remuneration                                                 (67 601)      ( 77 216)      (151 130)
Amortisation and depreciation                                                       (32 700)      ( 27 733)       (54 492)
Non-performing loan charge                                                           (3 057)        ( 2 333)       (7 831)

10. Transactions with related parties
Next Investments (Pty) Ltd
Management fees paid                                                                       -          (546)       (14 407)
Guarantee fee paid                                                                  (11 718)      ( 10 884)       (21 694)
Charter income received                                                                1 182          1 267          1 367

Northern Namibia Development Company (Pty) Ltd
Charter income received                                                                  127          1 117            738
Rental received                                                                        2 700          1 548          1 239
Advertising income received                                                                -              -             24

Portsmut Hunting Safaris (Pty) Ltd
Charter income received                                                                  191               -           467

Morse Investments (Pty) Ltd
Advertising income received                                                                 -              -              5

11. Post balance sheet events

11.1 Issue of shares
The Company (Trustco Group Holdings) shareholders approved the specific issue of shares for cash to Riskowitz Value Fund (the Fund) on 26 of October 2017. The
transaction related to the issuance of 58 823 529 Trustco Shares to the fund, by way of the conversion of an amount of NAD 250 000 000 at a conversion price of NAD 4.25
per share. At the time of signature of the agreements the transaction was closed at a 3.16% premium to the 30 day VWAP. Of the total 58 823 529 Trustco shares, 55 000
000 Trustco shares have already been issued. The balance will be issued in due course. The issue of shares does not constitute a change in control.

11.2 Sale of shares subsidiary
On 24 November 2017 the group entered into an agreement with the Fund in terms whereof the group sells of 20% of its interest in Legal Shield Holdings (Pty) Ltd (Legal
Shield Holdings) for a purchase price of NAD 1.2 Billion (One Billion Two Hundred Million Namibia Dollars). Legal Shield Holdings is the holding company of the Namibian
insurance segment and a portion of the investments segment (including the property division, air services division and the media segment). The SENS announcement
providing more information on the transaction was published on 24 November 2017. The first NAD 600 000 000 (Six Hundred Million Namibia Dollars) has already been
received by the group as a deposit for the payment of the purchase price. An irrevocable undertaking to vote in favour of the transaction was received from the majority
shareholder of Trustco. The transaction does not constitute a change in control in Trustco or Legal Shield Holdings.

11.3 Rotation of Auditors
The Audit and Risk Committee together with the Board was considering implementing a formal rotation policy for the independent auditors of the group at the time of
publishing. BDO has been appointed as the independent auditors of the group for more than 10 years.

12. Changes to the board
Ms Marizanne van Niekerk resigned as the financial director with effect from, 5 April 2017.
Mr Floors Abrahams was appointed as the group financial director from 5 April 2017.

By order of the board
A Bruyns
Company Secretary
7 December 2017

JSE Sponsor
Sasfin Capital: (a member of the Sasfin group)

NSX Sponsor
Simonis Storm Securities (Pty) Ltd

Date: 07/12/2017 01:04:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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