Managing Director’s Report

 THE ABC…        ABOUT TRUSTCO

All successful entrepreneurs dared where angels fear to tread. These pioneers exist because of individuals who are prepared to place their wealth, credibility and trust of investors on the line, mostly to benefit the societies they operate in. They are selfless, driven by a sense of urgency, personal sacrifice and the ultimate reward, because they are one with the society they live in. However…

ABOUT AUDITORS

Auditors seem to exist to keep entrepreneurs on the straight and narrow, yet they too often focus on risk avoidance only, on wealth preservation instead of wealth creation. It is a treacherous road towards economic complacency, an irrational fear of growth exacerbated by fear of losing what you have already gained. This is the reason why major audit firms have spectacularly failed the credibility test in recent years. Without great risk, there can be no reward. Trustco’s ultimate goal has always been empowerment through wealth creation in order to narrow the income gap, and certainly not wealth retention for the few that accelerates inequality. The focus of the entrepreneur and the auditor should be on improving rather than proving, as it is more value accretive over time.

ABOUT BANKING AND FINANCE

Trustco believes that banking should be demystified, that financial independence should be a right of all Namibians, and that the financial market remains far too unserved by the current participants. We will therefore apply ourselves single-mindedly towards improving financial access and financial literacy for all Namibians. As such, Trustco Bank received capital and applied it by financing mortgage loans, while continuing to develop systems for participation in the national payment stream. With the first EFT processed just a few days ago, the group has also been granted both unit trust and asset management licenses during the past year, and we hope to leverage the opportunities they afford us in enabling all Namibians to share in the Trustco investment machine.

ABOUT DEVELOPMENT

Trustco has always remained ready, waiting for the moments of opportunity, to seize it when it comes, and to be part of the Namibian transition back to hope from the edge of despair. But, while waiting for these moments of opportunity, we don’t sit still – rather, we embrace and develop new opportunities during the wait, taking those risks to develop far greater future rewards. Because bad times are always followed by the good times. It’s the main reason why we have a dedicated incubator division – to sieve through the sands of the desert to unlock the diamonds of opportunity therein.

ABOUT EDUCATION

With the Namibian government striving towards providing a broader and better suited education for all, our long distance education institution, IOL, not only increased its graduates by 112%, but also launched a vocational training centre. Education, as we say, is the greatest equalizer, and will prove crucial in developing Namibia.

ABOUT ENTREPRENEURS

All new businesses, no matter the size or whether a success or failure, are started by a special breed of resolute men and women. They endure no matter what naysayers may mutter about their innovative ideas. Those with endurance perform better, because their eyes remain fixed upon their beliefs to always improve and impact on the lives of others, to create value for all those that surround them. They are truly special and I salute them. To those that use and bestow the title of entrepreneur and innovator on themselves and use it as camouflage to deceive and defraud because they feed on greed, I hold them in contempt. Like the enemy at the gate they cast suspicion and question the risk takers and wealth creators of this world. If you only create value for yourself and have no desire to share with the rest of humanity, you should not taint the reputations of those that rose higher by dragging either their efforts or achievements down to the level of failure. To call that entrepreneurship is abuse and hide the
failures of the weak and unsuccessful.

ABOUT THE FAMILY AND SUCCESSION

As it goes with Trustco, so it goes with the family. As an exception rather than the rule, the family opted to forfeit its management and surety fees to the amount of NAD 61.5 million earned during the reporting period, as the group did not reach board agreed targets. This was done as a gesture to show the family’s confidence in the business and the decisions taken to ensure future growth. The family will always provide its support, at its cost and when justified in the opinion of the family, to Trustco whenever it is needed. This year also allowed us the opportunity to further develop and strengthen Quinton Jr’s role as Deputy CEO, which he has grown into and performed admirably. My interest is hereby declared. I am confident that proper succession is in place to counter any unexpected challenge and eventuality that may happen. Quinton Jr has demonstrated the ability to identify the best talent, skills and experience and mould it into a cohesive team to vigorously pursue the Trustco ethos of wealth creation and empowerment. Quinton Jr just has one big disadvantage –he’s got a Quinton Sr occasionally looking.

ABOUT FUNDERS

All funders are not created equal, but are valued equally. Our funders are our partners in sustainable wealth creation and they remain eager to be part of Trustco’s plans going forward. With our wealth addition to their portfolios continuing apace, we’ve entered into talks to restructure covenants that are by now obsolete and are an obstacle to the continued wealth creation they and our shareholders have become accustomed to. We remain eager to engage the future with willing partners by our side, exploring every opportunity together that we can capitalize on.

ABOUT GOVERNMENT

Namibia remains fortunate to have a government that is responsive and prudent and is taking action to restore the damage done to our economy while maintaining our international reputation of good governance and a principled, unaligned stance towards the rest of the world. I am confident, out of my prior experience, that government will TRUSTCO GROUP 17 INTEGRATED ANNUAL REPORT 2018 stay the course of its transformation agenda that is mainly private sector friendly and allows entrepreneurs to flourish and will even strengthen the bonds between private and public sectors for the common good. The government, after all, exists to serve the people of Namibia, not the other way around.

ABOUT INSURANCE

The insurance segment has been providing its unique service in promoting social justice for all Namibians for more than 17 years now. In the wake of the landmark transaction concluded with Riskowitz Value Fund, management in this segment has been devising and developing strategies to expose the business to more investors in the future which will inevitably see this segment opening up to the wider Namibian and international market. It will allow for investors to concentrate their funds to where their mandates dictate. The properties in this segment’s portfolio are undervalued due to IFRS in my opinion, and I intend to rectify this as soon as possible under established guidelines.

ABOUT INTELLIGENCE

Intelligence to my mind is the ability of individuals to pre-empt expected outcomes and predict the behaviour of people even before it happens. It is a characteristic I try to develop not only amongst my senior management, but it is also what I admire most of my trusted advisors on the board.

ABOUT LEADERSHIP

Trustco’s performance would not have been possible without the exemplary guidance and experience of our board of directors as well as the executive team that managed to stay the course and steer the group on its path to prosperity. Our new board members had an immediate positive impact, showing their mettle, and I expect their contribution to realise fully in the years ahead. The high value of Jabu has been confirmed by the high calibre of the board members that succeeded him.

ABOUT THE NAMIBIAN ECONOMY

Namibia finally saw an end to the drought that had plagued the country for so long and saw a resurgence in the agriculture industry, while the Bank of Namibia finally managed to wrestle inflation back under control and the man on the street could breathe slightly easier as food inflation decreased once again. Compared to the previous economic downturns of 1993 and 2009, Trustco has withstood bigger waves as the bigger boats on the high seas face stronger storms. Trustco, as always, remained vigilant and with fortitude born from experience, is armed to wait for or create moments of opportunity, ready to seize them when the time comes.

ABOUT SOCIAL MEDIA

The new combined media division flexed its muscles into one cohesive behemoth this year, and managed to retain its position as the leading source of Namibian news on social media (especially Informanté with more than 330 000 followers). In many ways they determined the tone of the national discourse on key issues, while turning the phenomenon of fake news to their advantage with well researched and factual reporting.

ABOUT SOCIAL MEDIA USERS

The media division was also successful with more effective and factually enlightening the ordinary individual reader about Trustco’s strategy and successes in the face of an onslaught of mostly fake and semi-literate analysts and commentators that abuse social media platforms. It exposed questionable agendas on social media platforms that remain known only to themselves and their like-minded and
equally financially-illiterate cabal.

ABOUT RESOURCES

In Namibia, Trustco has received a Preparedness to Grant Application for a Mining Licence Notice from the Ministry of Mines and Energy, while the Meya operation in Sierra Leone entered the ring with a bang! The unearthing of the Meya Prosperity Diamond, a 476 carats diamond, was a big diamond in the rough, while our normal exploration activities continued unabated, with results that have been extremely positive, returning high grades in sample results.

ABOUT RISKOWITZ VALUE FUND

In a first-for-Namibia transaction, Riskowitz Value Fund acquired 20% of Legal Shield Holdings, the owner of Trustco’s profitable insurance and property investments, for N$1.2 billion. The investment injected much needed liquidity into the Namibian economy, which Trustco then deployed into high return opportunities, including the funding of Trustco Bank, increasing the group’s diamond mining capacity and bolstering the balance sheet. We appreciate the continued support of Riskowitz Value Fund as a long term anchor shareholder. Their dedication to fundamental research and the long term prospects of Trustco serves all stakeholders with an interest in the success of the business well.

ABOUT SUPPORTING STAKEHOLDERS

Trustco’s ultimate mission has always been sustainable wealth creation over time for our stakeholders and this year our market capitalisation finally supports that. Starting the year with a market capitalisation of NAD 3.119 billion, we ended with it at NAD 7.237 billion. To all our other stakeholders, customers, friends and investors who joined us on our journey towards sustainable wealth creation, thank you. It would not have been possible without your support.

ABOUT TRUSTCONIANS

To my stalwart employees, who endlessly toil to deliver the performance demanded of them, I salute you. It warms the cockles of my heart that you continue to consider Trustco “The Best Company To Work For” and I will continue to support you, like you have supported Trustco throughout the years. Remember my eternal pledge to you; No employee will ever have to surrender his or her job as a result of poor management decisions or inaction.

ABOUT THE UNIVERSE, LIFE AND
EVERYTHING THAT MATTERS

We sometimes just live life, but l think just living should never be enough. We should never stop fighting against the darkness that threatens to let us lose our way. We need constant vigilance against the loss of hope and despair. I remain confident in the group and its stakeholders’ ability to weather these storms, to cast our hopes and dreams into reality and propel us into a future of wealth creation for all. We have shown our mettle and are battle hardened. The future is all around us and we have a record of pouncing on opportunity that will always be born in the transition of what was, towards what should be. Trustco will continue to be a responsible corporate citizen and a champion of improved service, added value, distribution of wealth, dignity and justice for all. We will surely stand to guarantee the reputation of Namibia and its immense growth and investment potential which Trustco will always be ready to support and unlock for the common good and the added wealth to its stakeholders, which is Namibia and the world.

DR QUINTON VAN ROOYEN
GROUP MANAGING DIRECTOR AND CEO