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TRUSTCO GROUP HOLDINGS LIMITED - Response to Misleading Statements in the Media on Trustco's Reviewed Financial Statements

Release Date: 25/06/2019 16:50
Code(s): TTO     PDF:  
Wrap Text
Response to Misleading Statements in the Media on Trustco's Reviewed Financial Statements

Incorporated in the Republic of Namibia
(Registration number 2003/058)
Registered as an external company in South Africa
(External registration number 2009/002634/10)
NSX share code: TUC
JSE share code: TTO
ISIN Number: NA000A0RF067
(“Trustco” or “the Company” or “the group”)


It has come to the board’s attention that misleading statements were published by certain financial
commentators and media practitioners regarding note 4 of the Provisional Reviewed Condensed
Consolidated Financial Statements dated 31 March 2019, as published on SENS on 13 June 2019.

It is with concern that the Company takes note of the ill-informed opinions of some commentators
who have maliciously labelled the reclassification, as referred to above, as unethical or insinuated
similar practices to recent corporate failures in South Africa. It has been the policy of the Company
not to respond to media critics but the malicious nature of certain of these recent publications demand
a response.

Trustco advises its shareholders (“Shareholders”) of the following regarding the matter:

 •       The group reclassified the certain properties from inventory to investment property
         as required by IAS 40: Investment property when there is a change in the intention
         and actions of an entity. Under such circumstances when an entity transfers items
         from inventories to investment property that will be carried at fair value, IAS 40
         requires that the transfer be treated in a manner that “is consistent with the
         treatment of sales of inventories” and to “recognise any difference between the fair
         value of the property at that date and its previous carrying amount in profit or loss”.

 •       This reclassification was treated as required by IFRS. The nature and complexity of this
         matter demanded a robust and responsible approach to all of its aspects with extensive
         involvement of internal and external professionals. These included chartered accountants,
         independent certified property valuators, JSE-accredited IFRS advisors, external auditors as
         well as the board of directors. Consensus was not only on the technical matters, but also on
         the strategic rationale for the change which is a pre-requisite for a reclassification like this.

 •       The group’s property assets are carried at their fair market value as determined by an
         independent valuer. Any suggestion that Trustco’s property portfolio is overvalued is false.

 •       These properties comprise of more than 4 000 hectares of the highest quality land available
         in Namibia, with a fair market value of more than NAD 2.3 billion. It is estimated that these
         properties will generate cash flows in excess of NAD 40 billion in future (refer to the
         Company’s Integrated Annual Reports of 2017 (page 47) and 2018 (page 63)). The property
         business model creates value through the acquisition of virgin un-serviced land and then
         unlocks its true value through development into a product which meets the diverse needs of

Anything published to the contrary of these facts is published to cause harm to the Company and its
Shareholders. Responsible commentators will rectify their misleading statements without delay.

Windhoek, Namibia
25 June 2019

Amanda Bruyns
Company Secretary: Trustco Group Holdings Limited

JSE Sponsor
Vunani Corporate Finance

NSX Sponsor
Simonis Storm Securities Proprietary Limited

Date: 25/06/2019 04:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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