CHAIRMAN OF THE AUDIT AND RISK COMMITTEE REPORT

THE CULTURE OF GOOD GOVERNANCE AND ETHICAL BEHAVIOR IS MOULDED INTO THE
ETHOS OF THE COMPANY

Trustco’s operations are as diverse as its risks are myriad. The operations are
varied from insurance to banking to resources, each with its own associated
audit requirements, risk management and regulatory requirements. The ARC
has set itself up in such a way as to encompass each and every associated
risk in the group and comply with every audit requirement for each operating
segment, ensuring that for every risk identified, it could act to mitigate and
limit the group’s exposure should it occur. The ARC operates in the following segments:
• The insurance segment, which has two separate ARC’s, one for Trustco Life
(which included its investments) and the other for Trustco Insurance
• The banking and finance segment, which operated under Trustco Bank
• The Trustco Group Holdings Limited (Trustco) ARC and
• The Trustco ARC had oversight over the resources segment during this
reporting period.
Each segmental ARC escalated significant items to the Trustco ARC for
notification, review, approval, oversight or rulings.Winton Geyser

“NEARLY ALL MEN CAN STAND ADVERSITY, BUT IF YOU WANT TO TEST
A MAN’S CHARACTER, GIVE HIM POWER.” ABRAHAM LINCOLN, 16TH
PRESIDENT OF THE USA

With the ARC having ultimate responsibility for overseeing and ensuring
the proper governance of the auditing, risk and compliance function, it
implemented a number of changes. The most important was the identification
of the need to implement an Auditors Rotation Policy to ensure the ongoing
independence of the group’s auditors. On the ARC’s recommendation, the
Auditors Rotation Policy was approved on the 9th of March 2018 by the
board, and subsequently Moore Stephens replaced BDO South Africa as the
external auditor of Trustco. BDO Namibia remained the external auditor of the
Namibian operations (excluding the banking and finance segment) and also
rotated the engagement partner at BDO Namibia. Subsequent to the reporting
period BDO Namibia also rotated Deloitte for the banking and finance
segment as external auditor to ensure ongoing independence. The internal
audit function was cosourced between the internal audit department and
EY as the independent internal auditor for the group (excluding the banking
and finance segment, where PwC acted as the internal auditor). Subsequent
to the reporting period EY was appointed as internal auditor for the banking
and finance segment, while PwC was appointed as the internal auditor for the
Sierra Leone operations.

“WITH EACH NEW DAY IN AFRICA, A GAZELLE WAKES UP KNOWING HE
MUST OUTRUN THE FASTEST LION OR PERISH. AT THE SAME TIME, A LION
STIRS AND STRETCHES, KNOWING HE MUST OUTRUN THE FASTEST GAZELLE
OR STARVE. IT’S NO DIFFERENT FOR THE HUMAN RACE. WHETHER YOU
CONSIDER YOURSELF A GAZELLE OR A LION, YOU HAVE TO RUN FASTER
THAN OTHERS TO SURVIVE.” MOHAMMED BIN RASHID AL MAKTOUM, RULER
OF THE EMIRATE OF DUBAI

The other main function of ARC also includes the management of risk of the
group. For Trustco, this turns out to be quite complex, with the ARC needing
to consider risks ranging from insurance to banking to resources. The ARC
satisfied itself on the risk profile, risk tolerance and the risk management that
is required for each operating segment.
Stakeholders can rest assured that through thorough deliberation, the ARC
obtained a clear understanding of its strengths and weaknesses, its risk profile
and of the group’s internal control management systems. It continuously
monitored the risk tolerance of the group during the reporting period and
implemented safety measures to ensure that the risk tolerance of the group is
not exceeded. Any identified weaknesses were dealt with immediately.

“THE TRUTH IS RARELY PURE AND NEVER SIMPLE.” OSCAR WILDE,
IRISH POET

Subsequent to the reporting period, a longstanding member of ARC resigned.
I have previously said that it is imperative for every ARC member to have in
depth financial knowledge as well as the ability to apply business experience
into practical application, and can only applaud the level of expertise serving
on this committee. I believe that the newly appointed ARC members will
contribute greatly and continue to provide the expert-level balance between
risk and reward our stakeholders expect of us.
The ARC has on an ongoing basis assessed the effectiveness of the control
framework and, obtained information from management as well as from the
internal and external auditors as part of this process. ARC continuously tested
management as well as the internal and external auditors on any assessment
they made.

A culture of good governance and ethical behaviour is moulded into the ethos
of the company and, as ARC, we constantly challenge management to prove
that beyond a reasonable doubt. We can attest that both are present and
intertwined into the being of the company, to the highest possible level.
If being a good corporate citizen is the minimum requirement, Trustco and this
ARC work tirelessly to not only meet, but consistently exceed that goal to remain
an industry leader. As chairman of the ARC I can enthusiastically congratulate the
company for actively pursuing good governance, cultivating a culture of excellence
and at all times being transparent.

Winton Geyser

CHAIRMAN OF THE AUDIT
AND RISK COMMITTEE AND
INDEPENDENT NON-EXECUTIVE DIRECTOR