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Listed on the AltX board of the Johannesburg Securities
Exchange, Ideco Group Limited (IDE) is an established
leader in the application of biometric technology and
southern Africa’s sole distributor of Sagem fingerprint
biometrics.
The Group’s digitisation of The Department of Home
Affairs’ paper-based fingerprint records is still the largest
project of its kind in the world.
Through AFISwitch, Ideco operates South Africa’s only
commercially-available, automated link to the SAPS
criminal record database.
In addition to our extensive work with Government, we
are the world’s largest distributor of Sagem fingerprint
biometrics for access control and time management
solutions.
There are now over 50 000 Sagem fingerprint readers
deployed across southern Africa, securely controlling
workplace access for almost two million people in a
diverse range of professionally-managed, security-
conscious businesses.
Identity Management
The optimum identity management solutions are founded
on technologies that can accurately and consistently
confirm the identity of an individual.
Identity management solutions start by creating a unique
link between an individual and a definitive biometric
characteristic such as a fingerprint. This unique link
then enables continual identification for a wide range of
purposes.
For example, within government, biometrically-empowered
identification can be incorporated in official credentials
such as birth certificates, national ID documents, drivers’
licences, pension and health cards, passports and work-
permits. Amongst law enforcement agencies, fingerprint
biometrics have been used for decades and Ideco works
closely with such organisations in South Africa.
Commercial applications for biometrics are equally diverse.
Fingerprint biometrics are commonly used in large-scale
solutions for workplace access management where they
have an established reputation for far greater security,
accuracy, speed and integrity than traditional PINs, access
cards and passwords.
PROFILE
IDECO 2009 Annual Report 1
Contents Page
Financial highlights 1
Board of directors 2
Group structure 3
Executive chairman’s report 4
Corporate governance 8
Analysis of shareholders 11
Statement of responsibility by the board of directors 12
Statement of compliance by the company secretary 12
Independent auditor of Ideco Group Limited 13
Directors’ report 14
Income statements 16
Balance sheets 17
Statements of changes in equity 18
Cash flow statements 19
Notes to the financial statements 20
Notice of annual general meeting 51
Form of proxy Inserted
IDECO GROUP LIMITEDANNUAL REPORT 2009
FINANCIAL HIGHLIGHTS
2009 2008 2007
R’000 R’000 R’000
Revenue 83 076 113 645 209 471
Operating (loss)/profit (14 788) (563) 31 317
Total assets 121 954 85 793 55 692
Cash and cash equivalents 8 247 (2 792) 26 177
Shareholders’ equity 28 781 40 872 16 589
Number of shares in issue 202 222 222 202 222 222 25 000 000
Weighted average number of shares 202 222 222 127 550 685 25 000 000
Headline (loss)/earnings per share (cents) (5,69) (0,43) 88,84
Basic (loss)/earnings per share (cents) (5,98) 2,35 88,85
Net asset value per share (cents) 14,23 20,21 66,36
IDECO 2009 Annual Report2 IDECO 2009 Annual Report 3
GROUP STRUCTURE
Ideco Biometric Security Solutions (Pty) Limited (“IBSS”)
is the sole supplier of Sagem biometric products in
South Africa. IBSS distributes and supports Sagem’s
fingerprint scanners for access control and time-and-
attendance solutions through its partner network which
covers the entire country.
Ideco Technologies (Pty) Limited delivers large-scale
biometric and identity management projects which
typically range from 12 to 60 months in duration.
Ideco AFISwitch (Pty) Limited operates a system
developed by Ideco to provide automated criminal
background checks to the private sector and members
of the public in terms of an agreement with the South
African Police Service.
Ideco Biometrix (Pty) Limited supplies biometric
equipment to the public sector on contracts
administered by the State Information Technology
Agency and the Electronic Communication Security
Company. This equipment ranges from physical and
logical access control scanners to forensic fingerprint
acquisition stations.
Managed Integrity Evaluation (Pty) Limited (“MIE”) is the
leading provider of background and pre-employment
screening services in South Africa. MIE’s verifications
integrate seamlessly with clients’ HR decision-
making process, adhering to published service-level
agreements and adding value by managing risk. The
types of services that MIE provides include: criminal
record checks, credit record checks, motor vehicle
reports, employment verification, education verification,
reference checks, and professional certification
verifications. MIE is a registered Credit Bureau.
Ideco Identity Solutions (Pty) Limited is a newly formed
company specialising in identity management services
in the retail and financial services sectors.
IDECO GROUP LIMITED
IDECO Biometric Security Solutions
(Pty) Limited – 100%
IDECO Technologies (Pty) Limited – 100%
IDECO AFISwitch(Pty) Limited – 100%
IDECO Biometrix(Pty) Limited – 100%
Managed Integrity Evaluation
(Pty) Limited – 100%
IDECO Identity Solutions
(Pty) Limited – 100%
BOARD OF DIRECTORS
Vhonani Mufamadi (41)Executive chairmanBA LLB (Wits)
Vhonani completed his articles with Edward Nathan and
was admitted as an attorney to the High Court in 1991,
but left the legal profession in 1997 to follow several
investment opportunities in consumer goods distribution,
the ICT sector and infra-structure engineering.
He was one of the founding members of Ideco and served
on boards and governing structures of, inter alia, Business
Map, Tiso Group and the University of Witwatersrand.
Malose Kekana (39)Non-executive directorBComm (Witwatersrand)
Malose until recently served as chief executive officer
of the Umsobomvu Youth Fund (UYF). He had several
positions in banking before starting Prodigy Capital,
a private equity fund associated with Prodigy Asset
Management based in Cape Town. After that, he started
Baswa Investment Company to participate in Black
Economic Empowerment Transactions as a youth
investment group.
Malose serves on the Board of the Black Management
Forum Investment, Where he is the Deputy Chair and
chair of the Investment Committee since 1998. He serves
on the Council of the University of Limpopo. He was
appointed onto the Council for the Support of National
Defence which is charged with supporting the National
Reserve Force and the SA National Defence Force.
Ayanda Sisulu-Dunstan (33)Non-executive directorBachelor of Arts (Hons) (Wellesley College, Boston, USA)
Ayanda is a business development director with
responsibility for State Owned Enterprises at Rand
Merchant Bank.
She was previously a fixed income sales trader in
RMB Treasury. Ayanda began her career as a Private
Equity analyst at Brait Capital Partners and has 9 years
investment banking experience.
Rainer Troester (53) (German)Non-executive directorBBA Business Administration, Business Administration (University of Applied Sciences)
During his career he has worked in different management
positions as an employee of Siemens AG and IBM
Germany before founding his own IT technology
consultancy company in 1997.
Since 2002 he has concentrated on biometric business
in European markets. In 2006 his company merged with
idematrix from Switzerland, an established international
biometric identity management solution provider.
HB Aucamp (59)Financial directorBCom (Potch), BCompt (Hons) (Unisa), CA(SA)
After completing his articles, he joined Deloitte in
Bloemfontein as audit manager and qualified as a
chartered accountant in 1979.
After a career as financial manager in the fertilizer industry,
he set up a financial consultancy business and consulted
for various listed and unlisted companies in the fertilizer,
engineering and ICT sectors.
He has been involved with the founders of Ideco since the
early nineties and has advised them on financial matters
before and after formation of the Ideco Group.
IDECO 2009 Annual Report4 IDECO 2009 Annual Report 5
in these sectors was also scaled down. However this
business appears to have stabilised and tracking back to
earlier levels of growth.
Compared to the previous reporting period, where sales
of biometric readers to the public sector comprised 25%
of segmental revenue, sales to the public sector for the
period under review was less than 1% of segmental
revenue. This trend tracked government expenditure
pattern in the sector, and accordingly it is expected to
recover well along with the planned increased government
spending. Many key biometric and related projects
were cancelled by government and are gradually being
reintroduced for implementation. These include the
procurement of fingerprint readers by the police for a
multiplicity of applications; and the introduction of a smart
driver’s license card by the Department of Transport.
Secure credentialing services
This segment provides fingerprint-based criminal record
checks in terms of a long-term agreement with SAPS
as well as background screening services for employers
on existing and prospective employees. The activities of
this segment are conducted in two companies: Ideco
AFISwitch (Pty) Ltd (AFISwitch) - offering criminal record
checks and MIE – offering background screening services.
The AFISwitch results were previously included in the
biometric readers and solutions segment, but AFISwitch’s
activities are more closely related to those of MIE, hence
the re-classification in this new segment.
Revenue from criminal background checks increased by
177% for the year ended 31 August 2009 compared to
the annualised revenue for the eighteen months ended
31 August 2008. This is testimony to the widening rollout
of the AFISwitch infrastructure and service, which will
drive a significant part of the Group’s future growth. The
effective date of the acquisition of MIE as a wholly-owned
subsidiary was on 1 July 2009, and therefore only two
months of that company’s results are included in the
segmental results. MIE has a strong trend of growth and
profitability over the last 21 years of its existence.
Biometric projects
Revenue generated by this segment was 4,5 times higher
than the annualised revenue for the eighteen months
ended 31 August 2008. The main reason for this increase
is the commencement of the five-year contract for the
delivery of drivers licences in Namibia in December 2008.
Financial overview
The operating loss of R563 000 for the eighteen months
ended 31 August 2008 included a once-off profit on the
sale of property of R4,1 million, making the operating
loss from trading activities for that period R3,5 million.
The operating loss of R14,8 million for the year ended
31 August 2009 was therefore effectively R11,3 million
higher than the previous 18 month reporting period. The
major contributing factors to the increase in the operating
loss were the reduced sales of biometric readers in the
government sphere and increased operating costs
Vhonani Mufamadi
Executive chairman
Introduction
Since our listing in 2007 this is our first report covering a
twelve month period of operations. The preceding report
covered a period of eighteen months following the change
of our financial year in August 2007 from the end of
February to the end of August.
The year under review
The difficult trading conditions which, for us, started in late
2008 continued well into 2009. In this time we have seen
poor sales of biometric devices and solutions in both the
private and public sectors. However the decline appears
to have bottomed out as we have been doing business
at a stable level for several months now. We are now
focusing our effort on driving growth back to pre-decline
levels and beyond. The demand for biometric devices
is getting more and more robust; and we are expanding
our criminal background checking service, as well as
acquiring new business for our solutions and services. In
this context the highlight of the year ended August 2009
was the acquisition of the 70% share in Kroll Background
Screening (Pty) Limited, which was not already held by
Ideco and thereby making it a wholly-owned subsidiary of
the Group. The company was renamed Managed Integrity
Evaluation (Pty) Limited (MIE) – thereby returning to its
South African roots when it traded as MIE until 2003.
The Group was also re-organised into three business
segments:
Biometric readers and solutions;
Secure credentialing services and
Biometric projects.
The reorganisation has been implemented to enhance the
Group’s efficiencies in operations.
Biometric readers and solutions
This segment combines the activities of Ideco Biometric
Security Solutions (Pty) Limited (IBSS) and Ideco Biometrix
(Pty) Limited (Ideco Biometrix). IBSS distributes biometric
readers through a partner channel to the private sector,
while Ideco Biometrix supplies such readers directly to
government departments.
The economic downturn resulted in a slow-down of
revenue growth in sales to the private sector, where
the growth rate decreased to 11% compared to the
annualised revenue for the eighteen months ended
31 August 2008. These biometric readers are usually
integrated into security and /or payroll solutions on the
mines, factories, office blocks and residential complexes.
As the recession entrenched in 2008/2009 expenditure
EXECUTIVE CHAIRMAN’S REPORT
IDECO 2009 Annual Report6 IDECO 2009 Annual Report 7
Other projects and prospects
We have concluded a three year ticketing agreement
with the Bombela Operating Company in charge of
operating the Gautrain service, following the award of
the international tender to us. Ideco won this tender with
its offer of a card ticketing solution on par with similar
services in major cities such as Paris and London. This
award signals industry recognition of Ideco’s solution
offerings and expertise, and further boosts prospects
of growth in the company’s sector of activity – identity
management and related services. In this tender we
offered a solution in partnership with ASK of France,
who supply a wide variety of secure card, document and
border control solutions. Following on the early success
of this partnership, we are exploring extension of our
business cooperation in southern Africa.
The Group’s biometric solutions for specific sectors such
as retail, micro-lending and credit bureaux are gaining
momentum and management is confident that these
sectors will provide solid revenue streams in the near
future. The company is currently negotiating contracts with
specific customers for the use of its technology solutions
in these sectors. These contracts are expected to be
concluded and implementation to commence in the year
to end August 2010.
Ideco has also concluded a memorandum of
understanding with MorphoTrak Incorporated, the USA
subsidiary of Sagem Defence Securité, France to explore
the US market for the establishment of a joint venture
to distribute Sagem biometric scanners in that market.
This follows the successes of the Ideco distribution
model in the South African market which appears to have
good resonance with the access control and time and
attendance market in the USA as well. Ideco’s contribution
to this exploration has been to transfer two of its experts
into the employ of MorphoTrak for a 12 month period.
Initial reports on the viability of the venture are very
promising.
We wish to thank all our stakeholders for their support,
especially our employees who have worked hard and
remained loyal to the Group during this difficult year. We
are also grateful to our suppliers and distribution partners
whose loyalty is critical to our growth and success.
Vhonani MufamadiExecutive chairman
of R4 million for the further rollout of the criminal record
checking service. The bulk of the cost in the rollout
was rental of equipment which is being installed at 350
drivers licence testing stations. Furthermore, the Group
staff complement, excluding the new acquisition, MIE,
increased by approximately 20%, especially in the fields
of research and development and sales. The increase in
staff complement was necessary in gearing for the delivery
of the AFISwitch service and new product research and
development to stay abreast of industry development. An
increase of R3,1 million in finance charges and a reduction
of R1,5 million in investment income resulted in a loss
before tax of R16,8 million compared to a profit before tax
of R2,4 million for the eighteen months ended 31 August
2008.
Property, plant and equipment increased by R3,4 million,
mainly due to the acquisition of MIE, which includes an
unencumbered fixed property of R2,3 million. The big
increase in other non-current assets is mainly as a result
of goodwill on the acquisition of MIE. The increase in
computer software is also mainly due to the acquisition
of MIE, which owns the trademark NQR software used to
check qualifications in the background screening industry.
The right of use of R15,9 million referred to in note 10 in
the consolidated annual financial statements is in respect
of a charge by Sagem Security SA (Pty) Limited (Sagem),
which entitles AFISwitch to make use of the South
African Police Services (SAPS) Automated Fingerprint
Identification System (AFIS). The payment of this amount
is part of AFISwitch’s agreement with SAPS relating to
criminal background checking service. This amount will be
amortised over the remaining period of the agreement with
SAPS.
Inventories mainly consist of biometric readers held in
IBSS – the subsidiary focused on the access control and
time & attendance business. The inventory increased by
about 14%, which was in line with the increased revenue
of the subsidiary.
The major addition to non-current liabilities is the
cumulative redeemable preference shares issued to the
National Empowerment Fund Trust (NEF) to finance the
acquisition of MIE. The dividend rate of the preference
shares is 75% of the prime overdraft rate. The other
non-current liability consists of a bond registered over a
property in Centurion, with an outstanding balance of
R2,6 million.
Trade and other payables increased by R2,6 million, mainly
as a result of the acquisition of MIE.
The other current liabilities consist of an amount of
R24,4 million due to Sagem which was taken over in
respect of the SAPS AFIS referred to above. The balance
of R2,9 million formed part of the MIE transaction and was
repaid in October 2009.
Prospects
Biometric readers and solutions
It is expected that segmental revenue in the private
sector will remain constant until the economic recovery
is well underway. Ideco’s certified partners have however
submitted several proposals to their customers for new
biometric applications in respect of risk management and
cost control, which could make up for the lower revenue
due to the generally poor economic climate.
Ideco has also been appointed as a sub-contractor to
supply biometric components and systems by several
suppliers who are contracted by government for various
security projects. Therefore, management is confident that
stronger sales to the public sector will resume in the year
ending 31 August 2010.
Secure credentialing services
The criminal record checking service, conducted by
AFISwitch, will continue to show strong growth. This
company has commenced the implementation of the
service to the Department of Transport for Professional
Drivers Permits, which constitute approximately 50%
of the service capacity. The installation of background
checking equipment at the 350 testing stations
countrywide has begun and will continue throughout
2010. The agreement concluded in May 2009 for the
management of more than 300 000 identity profiles will
also be implemented during 2010, further providing
predictable annuity revenue flow to the Group.
The acquisition of the remaining 70% of MIE will enhance
the performance of this segment for the year ending 31
August 2010. This will be the first reporting period in which
MIE’s full year results will be included in Ideco’s Group
results. MIE has an excellent profit and revenue growth
history. MIE has gained several new customers and
has also obtained security clearance to do background
screening services for government departments.
Biometric projects
We expect to add a few more projects similar to the
Namibian drivers licence project, as more such project
tenders are adjudicated in 2010 and beyond. Most
governments in the southern African region have issued
tenders for the procurement of various biometric systems
ranging from identity to border control systems. As
biometrics gain wider usage in the world and this region,
Ideco is well positioned to capture a good share of this
business as a recognised leader in the market.
IDECO 2009 Annual Report8 IDECO 2009 Annual Report 9
Audit and risk committee
The audit and risk committee comprises two non-executive directors Mr Malose Kekana (Chairman) and Ms Ayanda Sisulu-Dunstan as well as a representative from the company’s designated adviser, who is an invitee in terms of the JSE Listings Requirements.
The primary responsibility of the committee is to evaluate matters concerning accounting policies, internal controls, auditing, financial reporting, risk management, compliance and reviewing the annual financial statements of the Group prior to board approval. This committee also assists the board with company policies, the structure, size and effectiveness of the board and its committees, and in reviewing the Group’s governance processes. Furthermore, it establishes the formal induction process and ensures that a training and development programme is in place for committee members.
The external auditors attend the meetings and have unlimited access to the chairperson of the committee. The audit committee is responsible for recommending the use of the external auditors for non-audit services. Auditors are appointed annually based on the recommendation of the audit and risk committee.
The audit and risk committee has considered the qualifications and experience of Mr HB Aucamp, the Group’s financial director, and is of the opinion that he is suitably qualified to carry out his duties.
Remuneration committee
A remuneration committee was constituted during the year, consisting of the non-executive directors and Mr Vhonani Mufamadi . The committee is primarily responsible for formulating the remuneration strategy and policies of the Group and the terms and conditions of employment of executive directors and senior executives, whilst the board grants final approval of their recommendations. The committee has not yet had its first meeting, but will meet quarterly in future.
Nomination committee
The Group currently does not have a nomination committee. Nominations to the board are handled by the remuneration committee for the time being.
Company secretary
The Group’s financial director, Mr HB Aucamp, undertakes the duties of company secretary. While it is acknowledged that it is not recommended practice for the company secretary to also be a director of the company, it was considered more of a priority to first enhance the expertise in the finance department. This issue will be addressed when the time is appropriate.
The company secretary provides guidance to the directors on their duties and ensures awareness of all relevant statutory requirements and legislation. All directors have access to the advice and services of the company secretary. Independent professional advice will be arranged for the directors by the company secretary, at the Company’s expense, where it has been requested by the directors.
Accountability and audit
Going concern
The consolidated and company annual financial statements contained in this annual report have been prepared on the going concern basis. The directors have reviewed the Group’s budget and cash flow forecast for the year to 31 August 2010. The directors report that on the basis of this review and after making enquiries, they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Group continues to adopt the going concern basis in preparing the annual financial statements.
Auditing and accounting
The board is of the opinion that their auditors observe the highest level of business and professional ethics and that their independence is not in any way impaired. The auditors have the right of access to all information or personnel within the Group on any matter necessary to fulfil their duties. The external auditors attend audit and risk committee meetings by invitation.
Internal audit
Due to the present size of the Group, an internal audit function has not been established. This will be implemented accordingly with the Group’s expansion.
Internal control
The Company’s internal controls are designed to provide reasonable assurance to the integrity and reliability of the financial statements and to adequately safeguard, verify and maintain accountability of its assets. These internal controls are achieved through financial controls, operational controls, compliance with laws and regulations and risk management.
The controls and systems are designed to provide reasonable, but not absolute, assurance against misstatement of financial information or loss.
Recommendations made by the Group’s external auditors are being reviewed by the audit and risk committee, and changes to internal controls are being made where necessary.
CORPORATE GOVERNANCE
Ideco Group Limited (“Ideco” or “the Company” or “the Group”) listed on the Alternate Exchange (“AltX”) of the JSE Limited (“JSE”) on 30 October 2007 and is a public company incorporated in South Africa under the provisions of the Companies Act of 1973, as amended (“the Companies Act”).
The Group is committed to the principles established in the Code of Corporate Practices and Conduct as set out in the King II Report on Corporate Governance in South Africa (“the King II Report”), as well as to the Listings Requirements of the JSE.
Ideco is committed to the principles of transparency, integrity and accountability as advocated in the King II Report. In supporting the King II Report, the directors of Ideco recognise the need to conduct the business of the company with integrity and in accordance with generally accepted corporate practices. Therefore, Ideco subscribes to the principles of timeous, honest and objective communications with its stakeholders and the highest standards of ethics in the conduct of its business.
Board composition
Ideco has a unitary board and Mr Vhonani Mufamadi is the executive chairman of Ideco. The board has delegated certain powers to the executive chairman with due regard to the fiduciary responsibility on the one hand, and operational and strategic efficiency on the other, while simultaneously retaining effective control over the company. With a clear distinction between the respective responsibilities at board level, together with the responsibilities as delegated to the executive chairman, a balance of authority is therefore maintained and no one director is able to exercise unfettered decision-making powers.
At the last practicable date, the board of Ideco comprised five directors, with Mr HB Aucamp being the financial director and Mr Vhonani Mufamadi the executive chairman, and the balance and majority being non-executive directors. It is the intention of the group to appoint a non-executive chairman in the near future in order to comply with the King II Report. All of the members of the board of directors demonstrate the necessary caliber and credibility, skills and experience as may be expected from a director of a listed company. Ms Ayanda Sisulu-Dunstan, Mr Malose Kekana and Mr Rainer Troester meet the requirements of the JSE for independent non-executive directors.
Particulars of the directors are set out on page 2. The non-executive directors and the executive directors do not have fixed-term service contracts. In terms of the Company’s articles of association, one-third of directors shall retire from office at the annual general meeting to be
held on 16 April 2010 (or if their number is not a multiple of three then the number nearest to, but not less than one third). Retiring directors shall be eligible for re-election.
The board has a comprehensive system of controls in place to ensure that risks are mitigated and the Group’s objectives are attained. Furthermore, the board, together with senior management define levels of materiality, reviews performance, institute control measure and evaluates and monitors business matters which have an impact on the wellbeing of the Group and its stakeholders.
The board functions within a formal framework with the following terms of reference:
A board charter which sets out the responsibilities of
the board as a whole as well as for individual directors.
A trading policy to regulate the dealings in securities
by directors, directors of major subsidiaries and the
company secretary of Ideco.
A nomination policy detailing procedures for
appointments to the board.
A board charter has been adopted by the board to govern the responsibilities of the directors. Board meetings are scheduled for each quarter but the board may convene any additional meetings that may be considered appropriate or necessary. The board regularly reviews the direction of the Group, strategic issues, major contracts, acquisitions, financing and corporate governance. In addition, the board is also responsible for the relationship management and informative reporting to stakeholders. The board determines key risk areas, defines levels of materiality and ensures performance in all areas of the Group. The board has complete power and control to lead the Group but delegates certain matters with the necessary authority to management.
There were three board meetings during the year, two of which could not be attended by Mr Troester due to overseas commitments. All other directors and the company secretary attended all scheduled board meetings. There was 100% attendance at the four meetings of the audit and risk committee. Representatives from the designated advisor attend all board and audit and
risk committee meetings by invitation.
Board committees
While the board remains accountable and responsible for the performance and affairs of the Company, specific functions and responsibilities have formally been delegated to committees which operate within agreed terms of reference approved by the board. The functions of these committees are described in more detail below.
IDECO 2009 Annual Report10 IDECO 2009 Annual Report 11
Analysis of shareholdings Number of holders
% of total shareholders
Number of shares
% of total issued share capital
1 - 10 000 98 39,04% 515 779 0,26%
10 001 - 100 000 105 41,83% 4 530 549 2,24%
100 001 - 1 000 000 41 16,33% 13 205 958 6,53%
1 000 001 - and more 7 2,79% 183 969 936 90,97%
Totals 251 100,00% 202 222 222 100,00%
Categories of shareholders
Insurance companies 1 0,40% 3 000 000 1,48%
Banks 2 0,80% 3 105 688 1,54%
Collective investment schemes and mutual funds
6 2,39% 4 433 756 2,19%
Trusts 19 7,58% 967 066 0,48%
Pension funds and medical schemes
4 1,59% 455 024 0,23%
Private companies and close corporations
18 7,17% 175 140 876 86,62%
Individuals 201 80,07% 15 119 812 7,47%
Totals 251 100,00% 202 222 222 100,00%
Shareholder spread
Public 242 96,41% 27 348 719 13,52%
Non-public 1 0,40% 1 818 182 0,90%
Directors 7 2,79% 86 005 389 42,53%
Major shareholder 1 0,40% 87 049 932 43,05%
Totals 251 100,00% 202 222 222 100,00%
Major shareholders (5% and more of the shares in issue)
Muvoni Investment Holdings (Pty) Limited
83 762 634 41,42%
Six Sis Limited 87 049 932 43,05%
ANALYSIS OF SHAREHOLDERSRisk management
Effective risk management is integral and extremely important in Ideco’s objective to continuously add value to the business in all areas of the Group’s operations. The board and management are responsible for designing, implementing and monitoring the processes of risk management incorporating it into the daily activities of the Group. The board determines the Group’s tolerance for risk and is responsible for ensuring that the Group has an effective, ongoing process in place that identifies risk factors across the Group, measuring its impact and implement what is necessary to proactively manage these risks.
Share dealings
Ideco has a closed-period policy that requires directors be precluded from dealing in the Group’s shares prior to the release of the Group’s interim and annual results. To ensure that dealings are not carried out at a time when other price sensitive information may be known, directors must at all times obtain permission from the chief executive before dealings in the shares of the Group. Approved dealings in the Group’s shares by directors are disclosed to the JSE and published on the Stock Exchange News Services (SENS). All approved dealings are reported in arrears to the regular meetings of the board. There has been no change in directors’ shareholding between 31 August 2009 and the date of this report.
People and values
Ideco’s goal is to attract and retain, at every level of the company, people who represent the highest standards of excellence and integrity. The Company is dedicated to diversity, fair treatment, mutual respect and trust. Its management practices leadership that teaches, inspires and promotes full participation and career development and encourages open and effective communication.
Broad Based Black Economic Empowerment (BBBEE)
Ideco is an equal opportunity employer and there is no distinction on the basis of ethnic origin or gender or any other manner.
Employment equity
Ideco is committed to maintaining a balanced workforce that reflects the demographic realities within South Africa, and in line with governmental guidelines prescribed in this regard.
IDECO 2009 Annual Report12 IDECO 2009 Annual Report 13
INDEPENDENT AUDITOR’S REPORT
To the members of Ideco Group Limited
We have audited the consolidated annual financial statements and annual financial statements of Ideco Group Limited,
which comprise the consolidated and separate balance sheets as at 31 August 2009, and the consolidated and separate
income statements, the consolidated and separate statements of changes in equity and consolidated and separate cash
flow statements for the year then ended, and a summary of significant accounting policies and other explanatory notes,
and the directors’ report, as set out on pages 14 to 50.
Directors’ responsibility for the financial statements
The company’s directors are responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South
Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error;
selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting principles used and the reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion
Opinion
In our opinion, these financial statements present fairly, in all material respects, the consolidated and separate financial
position of Ideco Group Limited as at 31 August 2009, and its consolidated and separate financial performance and
consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting
Standards, and in the manner required by the Companies Act of South Africa.
BDO South Africa Incorporated
Per: J R Roberts
Registered Auditor
26 February 2010
13 Wellington Road, Parktown, 2193
STATEMENT OF RESPONSIBILITY BY THE BOARD OF DIRECTORS
The directors are responsible for the preparation and fair presentation of the consolidated annual financial statements and
annual financial statements of Ideco Group Limited, comprising the balance sheets at 31 August 2009, and the income
statements, the statements of changes in equity and cash flow statements for the period then ended, and the notes
to the financial statements, which include a summary of significant accounting policies and other explanatory notes, in
accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South
Africa.
The directors acknowledge that they are ultimately responsible for the system of internal financial control established
by the group and place considerable importance on maintaining a strong control environment. To enable the directors
to meet these responsibilities, the board of directors sets standards for internal control aimed at reducing the risk of
error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly
defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level
of risk. These controls are monitored throughout the group and all employees are required to maintain the highest
ethical standards in ensuring the Group’s business is conducted in a manner that all reasonable circumstances is above
reproach. The focus of risk management in the Group is on identifying, assessing, managing and monitoring all known
forms of risk across the Group.
While operating risk control cannot be fully eliminated, the Group endeavours to minimise it by ensuring that appropriate
infrastructure, control systems and ethical behaviour are applied and managed within pre-determined procedures and
constraints.
The directors are of the opinion, based on the information and explanations given by management that the system of
internal control provides reasonable assurance that the financial records may be relied on for the preparation of the
financial statements. However, any system of internal financial control can provide only reasonable, and not absolute,
assurance against material misstatement or loss.
The directors have reviewed the Group’s cash flow forecast for the year to 31 August 2010 and, in light of this review and
the current financial position, they are satisfied that the group has or has access to adequate resources to continue in
operational existence for the foreseeable future.
The external auditors are responsible for independently reviewing and reporting on the consolidated annual financial
statements. The consolidated financial statements have been examined by the group’s external auditors and their report
is presented on page 13.
APPROVAL OF ANNUAL FINANCIAL STATEMENTS
The consolidated annual financial statements and annual financial statements of Ideco Group Limited, for the year ending
31 August 2009 set out on pages 14 to 50 were approved by the board of directors on 26 February 2010 and are signed
on its behalf by:
V Mufamadi AX Sisulu-Dunstan
Executive chairman Non-executive director
STATEMENT OF COMPLIANCE BY THE COMPANY SECRETARY
In terms of the Companies Act, No 61 of 1973 (as amended) (“the Act”), I certify that, to the best of my knowledge, the
company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of
the Act and that all such returns are true, correct and up to date.
HB Aucamp
Company secretary
IDECO 2009 Annual Report14 IDECO 2009 Annual Report 15
special resolution passed by the shareholders of Ideco in
general meeting. No exchange control or other restrictions
exist in respect of the borrowing powers of the Group.
Dividends
No dividends have been declared to members during the
year (2008: Rnil)
Special Resolutions
Ideco Group Limited passed the following special
resolution in the twelve months to 31 August 2009:
General authority to repurchase issued shares
Post balance sheet events
During September 2009 Ideco Group Limited acquired a
25% share in a new biometric venture offering biometric
solutions to the health industry.
The repayment of the amount of R24,4 million due to
Sagem Security SA (Pty) Limited as detailed in note 20
has been rescheduled during November 2009. Of this
amount, R12,7 million is now repayable in March 2010
and the balance of R11,7 million is payable in four equal
instalments from 15 September 2010 to 15 December
2010. No interest will accrue on the outstanding amount.
Other than the above, the directors are not aware of any
post balance sheet events that require comment.
Bankers
The Group bankers are Absa Bank Limited.
Directors
The directors in office at the date of this report are:
V Mufamadi
HB Aucamp
A X Sisulu-Dunstan
M F Kekana
R Troester (German)
Secretary
HB Aucamp
Refer to corporate information on page 56.
Auditors
BDO South Africa Incorporated will continue in office in
accordance with section 270(2) of the Companies Act.
Subsidiaries
Details of the Company’s subsidiaries are set out in note 9
of these financial statements.
The group has also formed a new wholly-owned
subsidiary, Ideco Identity Solutions (Pty) Limited that will
specialise in identity management services and solutions
specifically aimed at the financial services and retail
sectors of the economy.
Acquisition of subsidiary (formerly an associate)
With effect from 1 July 2009, the group acquired the
70% of the issued share capital of MIE, not already held
by Ideco, for nil consideration. This transaction has been
accounted for using the purchase method of accounting.
The acquisition was effected by way of a share re-
purchase by MIE, which re-purchase was financed by
issuing cumulative redeemable preference shares to the
value of R40,6 million to the National Empowerment Fund
Trust.
Refer to note 28 for further details of this acquisition.
The directors have pleasure in submitting their second
report and consolidated annual financial statements and
annual financial statements of Ideco Group Limited for the
year ended 31 August 2009.
Business activities
Ideco Group Limited is an investment holding company
with investments in wholly–owned subsidiaries providing
fingerprint–solutions and logical access control, large
scale Automated Fingerprint Identification Systems (AFIS)
solutions, fingerprint scanning activities, as well as secure
credentialing services to employers.
The operating results and state of affairs of the company
are fully set out in the consolidated group annual financial
statements and do not in our opinion require any further
comment.
General review of operations
Net loss of the Group was R12,1 million (2008 profit R3,0
million), after a tax credit of R4,7 million (2008: tax credit
R0,6 million).
Going concern
The consolidated annual financial statements have been
prepared on the basis of accounting policies applicable
to a going concern. This basis presumes that funds will
be available to finance future operations and that the
realisation of assets and settlement of liabilities, contingent
obligations and commitments will occur in the ordinary
course of business.
The directors have reviewed the cash flow projections
for the year ending 31 August 2010, which are based
on new contracts being implemented, current projects
and historical trend analysis. Based on these cash flow
projections, the directors are satisfied that the going
concern principle is the correct accounting policy to be
applied by the Group.
Authorised and issued share capital
There were no changes to the share capital during the
year ended 31 August 2009. Details of the share capital
are set out in note 16 of the financial statements.
Directors’ shareholdings
As at 31 August 2009, the present directors held a total
of 86 005 389 ordinary shares in the Company. Details of
their shareholdings are set out in note 27 to these financial
statements.
Borrowing powers
The directors’ borrowing powers have not been exceeded
since Ideco’s incorporation and may only be varied by
DIRECTORS’ REPORT for the year ended 31 August 2009
IDECO 2009 Annual Report16 IDECO 2009 Annual Report 17
INCOME STATEMENTSfor the year ended 31 August 2009
Group Company
Notes
Year ended 31 Aug 2009
R’000
18 months ended
31 Aug 2008 R’000
Year ended 31 Aug 2009
R’000
18 months ended
31 Aug 2008 R’000
Revenue 2 83 076 113 645 - -
Cost of sales 2 (48 806) (80 954) - -
Gross profit 34 270 32 691 - -
Other operating income 166 4 406 6 805 18 510
Operating expenses (49 224) (37 660) (14 753) (16 818)
Operating (loss)/profit 2 (14 788) (563) (7 948) 1 692
Investment income 3 287 1 747 34 1 051
Finance costs 4 (4 359) (1 213) (900) (1 065)
Share of profit of associated company
5 2 023 2 463 2 023 2 463
(Loss)/profit before tax (16 837) 2 434 (6 791) 4 141
Taxation credit 6 4 746 562 2 172 90
(Loss)/profit attributable to ordinary shareholders
(12 091) 2 996 (4 619) 4 231
Basic (loss)/earnings per share (cents)
7 (5,98) 2,35
BALANCE SHEETSat 31 August 2009
Group Company
Notes2009
R’0002008
R’0002009
R’0002008
R’000
ASSETS
Non-current assets 76 415 51 069 30 629 26 940
Property, plant and equipment 8 10 210 6 828 5 770 6 276
Investments in subsidiaries 9 - - 21 098 *
Investment in associate 5 - 19 075 - 19 075
Intangible assets 10 58 724 23 337 1 500 1 500
Deferred tax 11 7 481 1 829 2 261 89
Current assets 45 539 30 389 19 146 44 176
Inventories 12 12 704 11 136 - -
Loans to subsidiaries 9 - - 17 572 43 260
Trade and other receivables 13 23 894 18 955 1 265 628
Cash and cash equivalents 14 8 598 12 9 2
Taxation receivable 343 286 300 286
Non-current assets held for sale 15 - 4 335 - 282
Total assets 121 954 85 793 49 775 71 398
EQUITY AND LIABILITIES
Equity
Share capital 16 1 1 1 1
Share premium 16 21 286 21 286 21 286 21 286
Retained income 7 494 19 585 436 5 055
Shareholders’ equity 28 781 40 872 21 723 26 342
Non-current liabilities 43 357 2 639 2 396 2 639
Long-term borrowings 17 2 396 2 639 2 396 2 639
Deferred tax 11 361 - - -
Cumulative redeemable preference shares
18 40 600 - - -
Current liabilities 49 816 42 282 25 656 42 417
Loans from subsidiaries 9 - - 20 990 38 127
Taxation payable 325 392 - -
Trade and other payables 19 20 257 17 687 1 206 1 314
Current portion of long-term borrowings
17 238 172 238 172
Bank overdraft 14 351 2 804 351 2 804
Other current liabilities 20 27 291 21 227 2 871 -
Provisions 21 1 354 - - -
Total equity and liabilities 121 954 85 793 49 775 71 398
* less than R1 000
IDECO 2009 Annual Report18 IDECO 2009 Annual Report 19
STATEMENTS OF CHANGES IN EQUITY for the year ended 31 August 2009
Ordinary share capital
R’000
Share premium
R’000
Retained earnings
R’000Total
R’000
Group
Balance at 1 March 2007 * * 16 589 16 589
Issue of shares 1 21 286 - 21 287
Profit for the period 2 996 2 996
Balance at 31 August 2008 1 21 286 19 585 40 872
Balance at 1 September 2008 1 21 286 19 585 40 872
Loss for the year (12 091) (12 091)
Total changes - - (12 091) (12 091)
Balance at 31 August 2009 1 21 286 7 494 28 781
Company
Balance at 1 March 2007 * * 824 824
Issue of shares 1 21 286 - 21 287
Profit for the period 4 231 4 231
Balance at 31 August 2008 1 21 286 5 055 26 342
Balance at 1 September 2008 1 21 286 5 055 26 342
Loss for the year (4 619) (4 619)
Total changes - - (4 619) (4 619)
Balance at 31 August 2009 1 21 286 436 21 723
* less than R1 000
CASH FLOW STATEMENTSfor the year ended 31 August 2009
Group Company
Notes2009
R’0002008
R’0002009
R’0002008
R’000
Cash utilised by operations 26.1 (11 652) (5 687) (8 082) (811)
Investment income 287 1 747 34 1 051
Finance costs (4 359) (1 213) (900) (1 065)
Dividends paid - (5 000) - (5 000)
Taxation paid 26.2 (541) (16 887) (14) (1 767)
Net cash from operating activities
(16 265) (27 040) (8 962) (7 592)
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment
2 1 8 498 - 8 498
Acquisition of property, plant and equipment
2 (1 552) (9 903) (105) (9 666)
Acquisition: cash in subsidiary 28 20 093 - - -
Investment in associated company - (16 612) - (16 612)
Investment in intellectual property - (1 500) - (1 500)
Acquisition of computer software (1 725) (4 731) - -
Acquisition of right of use - (18 387) - -
Non-current assets held for sale 4 335 (3 635) 282 (282)
Net cash from investing activities 21 152 (46 270) 177 (19 562)
Cash flows from financing activities
Issue of share capital - 21 287 - 21 287
(Decrease)/increase in long-term borrowings
(177) 2 811 (177) 2 811
Movement in related party loans - (719) 8 551 (11 540)
Movement in other current liabilities 6 329 20 962 2 871 -
Net cash from financing activities
6 152 44 341 11 245 12 558
Net increase/(decrease) in cash and cash equivalents
11 039 (28 969) 2 460 (14 596)
Cash and cash equivalents at the beginning of the year
14 (2 792) 26 177 (2 802) 11 794
Cash and cash equivalents at the end of the year
14 8 247 (2 792) (342) (2 802)
IDECO 2009 Annual Report20 IDECO 2009 Annual Report 21
Ideco Group Limited (the “Company”) is a company
domiciled in South Africa. The consolidated financial
statements of the Company as at and for the year
ended 31 August 2009 comprise the Company and its
subsidiaries (together referred to as the “Group”).
The principle accounting policies adopted in the
preparation of the financial statements are set out below.
Statement of compliance
The consolidated financial statements have been prepared
in accordance with International Financial Reporting
Standards (“IFRS”) and its interpretations adopted by the
International Accounting Standards Board (“IASB”), the
JSE Listings Requirements and the Companies Act of
South Africa.
Basis of preparation
The consolidated annual financial statements are prepared
on the historical cost basis, adjusted by the fair value of
certain assets and liabilities.
The accounting policies set out below have been applied
consistently to all periods presented in these consolidated
financial statements and have been applied consistently
by Group entities.
The financial statements are presented in Rands which
is the Company’s functional and Group’s presentation
currency, and all values are rounded to the nearest
thousand (R’000’s) except when otherwise indicated.
The Company applies the accounting policies adopted
by the Group. These accounting policies have been
applied consistently to all periods presented in these
financial statements, except in relation to the adoption
of the new IFRS 7, “Financial Instruments: Disclosures”,
the amendments to IAS 1, “Presentation of Financial
Statements” and the new IFRIC 10, “Interim Financial
Reporting and Impairment”, during the year. Adoption
of these revised standards and interpretations did not
have any effect on the financial performance or position
of the Company. They did however give rise to additional
disclosures, including in some cases, revisions to
accounting policies.
Critical accounting estimates and judgements
The preparation of financial statements in conformity
with IFRS requires management to make judgements,
estimates and assumptions that affect the application of
policies and reported amounts of assets and liabilities,
income and expenses.The resulting accounting estimates
and judgements can, by definition, only approximate the
actual result.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised if the revision affects only that period, or in the
period of the revision and future periods, if the revision
affects both current and future periods.
The assumptions and estimates that have the potential
to cause a material adjustment to the carrying amount
of assets and liabilities within the next financial year are
discussed below.
Estimate of level of provision required for obsolete stock and doubtful debts
The Group estimates the level of provision required for
obsolete stock and doubtful debts on an ongoing basis
based on historical experience as well as other specific
relevant factors. A comparison between provision
and actual loss incurred is performed to assess the
reasonableness of provisions.
Estimate of taxation
The Group is subject to income tax. Corporate and
deferred taxation calculations have been determined on
the basis of prior year assessed computation adjusted for
changes in taxation legislation in the year. No significant
new transactions have been entered into in the year which
requires specific additional estimates or judgements to
be made. The Group recognises the net future benefit
related to deferred income tax assets to the extent that
it is probable that the deductible temporary differences
will reverse in the foreseeable future. Assessing the
recoverability of the deferred income tax assets requires
the Group to make estimates related to expectations of
future taxable income. Estimates of future taxable income
are based on forecast cash flows from operations and
the application of existing tax laws. To the extent that
future cash flows and taxable income differ significantly
from estimates, the ability of the Group to realise the net
deferred taxation assets recorded at the balance sheet
date could be impacted. Additionally future changes in
taxation laws in which the Group operates could limit the
ability of the Group to obtain taxation deductions in future
periods.
ACCOUNTING POLICIES for the year ended 31 August 2009
Basis of consolidation
The consolidated financial statements reflect the
financial results of the Group. All financial statements
are consolidated with similar items on a line by line basis
except for investments in associates, which are included in
the Group’s results as set out below.
Subsidiaries
Subsidiaries are those entities over whose financial and
operating policies the Group has the power to exercise
control, so as to obtain benefits from their activities. In
assessing control, potential voting rights that are currently
exercisable are taken into account.
Where an investment in a subsidiary is acquired or
disposed of during the financial year its results are
included from, or to, the date control commences or
ceases.
The Company’s investment in subsidiaries is accounted for
at cost, less accumulated impairment losses.
All companies in the Group maintain consistent accounting
policies and have the same year–end.
Associates
The financial results of associates are included in the
Group’s results according to the equity method from
acquisition date until the disposal date.
Under this method, subsequent to the acquisition date,
the Group’s share of profits or losses of associates is
charged to the income statement as equity accounted
earnings and its share of movements in equity reserves
is recognised in the statement of changes in equity. All
cumulative post-acquisition movements in the equity of
associates are adjusted against the cost of the investment.
When the Group’s share of losses in associates equals
or exceeds its interest in those associates, the Group
does not recognise further losses, unless the Group
has incurred a legal or constructive obligation or made
payments on behalf of those associates to make good any
losses.
The share of retained earnings and reserves of associates
is generally determined from the latest audited financial
statements of the associate, but, in some instances, un-
audited financial statements are used.
Where a Group entity transacts with an associate of the
Group, un-realised profits and losses are eliminated to the
extent of the Group’s interest in the respective associate.
Any excess of the cost of acquisition over the Group’s
share of the net fair value of the identifiable assets,
liabilities and contingent liabilities of the associate
recognised at the date of acquisition is recognised as
goodwill. The goodwill is included within the carrying
amount of the investment and is assessed for impairment
as part of the investment. Any excess of the Group’s share
of the net fair value of the identifiable assets, liabilities
and contingent liabilities over the cost of acquisition,
after reassessment, is recognised immediately in profit
or loss. Any impairment of goodwill relating to associates
is charged to the income statement as part of equity
accounted earnings of those associates and the carrying
value of the group’s share of the underlying assets of
associates is written down to its estimated recoverable
amount in accordance with the accounting policy on
impairment.
The company’s investment in an associate is carried at
cost less any accumulated impairment.
Distributions received from the associate reduce the
carrying amount of the investment.
All intra–group transactions and balances, and any
unrealised income and expenses arising from the
intra–group transactions, are eliminated in preparing the
consolidated financial statements.
In respect of associates, unrealised gains and losses
are eliminated to the extent of the Group’s interest in
these entities. Unrealised gains and losses arising from
transactions with associates are eliminated against the
investment in the associate.
Business combinations
The purchase method of accounting is used to account
for the acquisition of businesses by the Group. A
business may comprise an entity, group of entities or an
unincorporated operation including its operating assets
and associated liabilities.
The cost of an acquisition is measured as the fair value of
the assets given, equity instruments issued and liabilities
incurred or assumed at the date of exchange, plus costs
directly attributable to the acquisition.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date,
irrespective of the extent of any minority interest.
ACCOUNTING POLICIES continued for the year ended 31 August 2009
IDECO 2009 Annual Report22 IDECO 2009 Annual Report 23
ACCOUNTING POLICIES continued for the year ended 31 August 2009
The fair values of the identifiable assets and liabilities are
determined by reference to the market values of those or
similar items or by discounting expected future cash flows
using market participation assumptions.
The excess of the cost of acquisition over the fair value of
the group’s share of the identifiable net assets acquired is
recorded as goodwill. If the cost of acquisition is less than
the fair value of the net assets of the business acquired,
the difference is recognised directly in the income
statement.
Foreign currency transactions
Foreign currency transactions are translated to the
respective functional currencies of Group entities at the
rates of exchange ruling at the dates of the transactions.
Balances on monetary assets and liabilities outstanding
on foreign transactions at the end of the financial year are
translated to the functional currency at the rates ruling at
that date. Gains or losses on translation are recognised in
the income statement.
Non–monetary assets and liabilities that are measured in
terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction.
Non–monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated to
Rands at the foreign exchange rates ruling at the dates the
fair value was determined.
Segmental reporting
A segment is a distinguishable component of the Group
that is engaged in providing products or services (primary
segment) within different geographical areas (secondary
segment) which are subject to risks and returns which
are different from those of other segments. The basis
of segment reporting is representative of the internal
structure used for management reporting.
Segment results, assets and liabilities include items
directly attributable to a segment as well as those that can
be allocated on a reasonable basis.
Revenue recognition
Revenue is recognised net of indirect taxes, rebates and
trade discounts and consist primarily of the sale of goods.
Revenue is recognised only when it is probable that the
economic benefits associated with a transaction will flow
to the Group and the amount of revenue can be measured
reliably. No revenue is recognised if there are significant
uncertainties regarding the recovery of the consideration
due, associated costs or the possible return of goods, and
continuing managerial involvement with the goods.
Revenue arising from the sale of goods is recognised
when the significant risks and rewards of ownership of the
goods have passed to the buyer. Revenue from the sale
of goods is measured at the fair value of the consideration
received or receivable, net of returns, trade discounts
and volume rebates and after eliminating sales within the
Group.
Investment income
Dividends
Dividends are recognised when the right to receive
payment is established, with the exception of dividends
on preference share investments which are recognised on
a time proportion basis, using the effective interest rate
method, in the period to which they relate.
Interest
Interest income is recognised in profit or loss as it accrues
using the effective interest rate method.
Exchange gains
Gains and losses on foreign currency transactions are
reported in profit or loss on a net basis and are included
under finance income.
Finance costs
Finance costs comprise interest payable on borrowings
calculated on the principal outstanding using the effective
interest rate method and is recognised in profit or loss
when it is incurred.
Taxation
The income tax expense comprises current and deferred
tax. The income tax expense is recognised in profit or loss
to the extent that it relates to items recognised directly in
equity, in which case it is recognised in equity.
Current taxation comprises taxation payable calculated
on the basis of the expected taxable income for the year,
using the taxation rates enacted or substantively enacted
at the balance sheet date, and any adjustment of taxation
payable for previous years.
Deferred taxation is provided using the balance sheet
liability method based on temporary differences.
Temporary differences are differences between the
carrying amounts of assets and liabilities for financial
reporting purposes and their tax base. Deferred taxation is
recognised profit or loss except to the extent that it relates
to a transaction that is recorded directly in equity or a
business combination that is an acquisition. The amount
of deferred taxation provided is based on the expected
manner of realisation or settlement of the carrying amount
of assets and liabilities using taxation rates enacted
or substantively enacted at the balance sheet date. A
deferred taxation asset is recognised to the extent that
it is probable that future taxable profits will be available
against which the associated unused taxation losses and
deductible temporary differences can be utilised. Deferred
taxation assets are reduced to the extent that it is no
longer probable that the related taxation benefit will be
realised.
Deferred taxation is not recognised for the following
temporary differences:
The initial recognition of goodwill;
The initial recognition of assets and liabilities in a
transaction that is not a business combination and that
affects neither accounting nor taxable profit; and
Differences relating to investments in subsidiaries to the
extent that the timing of the reversal is controlled by the
Group and it is probable that they will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are offset, if a legally
enforceable right exists to set off current tax assets against
current income tax liabilities and the deferred income taxes
relate to the same taxable entity and the same taxation
authority.
Secondary taxation on companies (STC) is recognised in
the year dividends are declared, net of dividends received.
A deferred tax asset is recognised on unutilised STC
credits when it is probable that such unutilised STC credits
will be utilised in the future.
Dividends payable
Dividends payable and any STC pertaining thereto are
recognised in the period in which such dividends are
declared.
Lease assets
Finance leases
Leases in which the Group assume substantially all the
risks and rewards of ownership are classified as finance
leases.
Property, plant and equipment subject to finance lease
agreements are capitalised at the lower of their fair value
and the present value of the minimum lease payments
and the corresponding liability to the lessor is raised.
Lease payments are allocated using the effective interest
rate method to determine the lease finance cost, which
is charged against operating profit, and the capital
repayment, which reduces the liability to the lessor. These
assets are treated on the same basis as the property, plant
and equipment owned by the Group and is subject to
impairment losses.
Operating leases
Other leases, which do not transfer substantially all the
risks and rewards of ownership, are treated as operating
leases with lease payments charged against operating
income. Payment made under operating leases is charged
against income on a straight–line basis over the period of
the lease, irrespective of the payment terms.
Non-current assets held for sale
Non-current assets and disposal groups are classified
as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than
continuing use. This condition is regarded as met only
when the sale is highly probable and the asset (or disposal
group) is available for immediate sale in its present
condition. Management must be committed to the sale,
which should be expected to qualify for recognition
as a completed sale within one year from the date of
classification.
Property, plant and equipment
Property, plant and equipment are recorded at cost, less
accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to
the acquisition of the asset. Purchased software that is
integral to the functionality of the related equipment is
capitalised as part of that equipment.
Land is not depreciated. Buildings, plant and equipment
are depreciated on the straight–line method over their
expected useful lives to an estimated residual value.
Leased assets are depreciated over the shorter of the
lease term and their useful lives. The current estimated
useful lives are generally:
ACCOUNTING POLICIES continued for the year ended 31 August 2009
IDECO 2009 Annual Report24 IDECO 2009 Annual Report 25
Buildings 50 years
Furniture and fixtures 6 years
Motor vehicles 5 years
Office equipment 5 years
Computer equipment 3 years
Where the carrying amount of an asset is greater than its
estimated recoverable amount (i.e. the higher of value in
use and net fair value less costs to sell) it is written down
immediately to its recoverable amount.
The cost of replacing part of an item of property, plant
and equipment is recognised in the carrying amount of
the item if it is probable that the future economic benefits
embodied within the property, plant and equipment will
flow to the Group and its cost can be measured reliably.
The costs of the day–to–day servicing of property, plant
and equipment are recognised in profit or loss as incurred.
Where parts of an item of property, plant and equipment
have different useful lives, they are accounted for as
separate items (major components) of property, plant and
equipment. Residual values, methods of depreciation
and useful lives of property, plant and equipment are
reassessed, and adjusted if appropriate, at each financial
year–end. Depreciation of an item of property, plant and
equipment begins when it is available for use and ceases
at the earlier of the date it is classified as held for sale or
the date that it is derecognised.
An item of property, plant and equipment is derecognised
upon disposal or when no future economic benefits are
expected from its use or disposal. Gains and losses
on derecognition of property, plant and equipment are
determined by reference to their carrying amount and the
net disposal proceeds and are taken to profit or loss in the
year the asset is derecognised.
Intangible assets
Intangible assets are stated at cost less accumulated
amortisation and impairment losses. Intangible assets are
amortised on a straight–line basis over their estimated
useful lives.
Amortisation is recognised in profit or loss on a straight–
line basis over the estimated useful lives of intangible
assets from the date that they are available for use. The
current estimated useful lives of intangible assets are as
follows:
Computer software 2 years
Intellectual property rights 5 years
Right of use 15 years
Trademark 15 years
The right of use is in respect of a 15 year agreement
with the South African Police Service for access to their
fingerprint database to perform automated criminal
background checks to the private sector and members of
the public.
The estimated useful life and amortisation method are
reviewed at the end of each reporting period, with the
effect of any changes in estimate being accounted for on a
prospective basis.
Goodwill
Goodwill is initially measured at cost, being the excess of
the business combination over the company’s interest of
the net fair value of the identifiable assets, liabilities and
contingent liabilities. Subsequently goodwill is carried at
cost less any accumulated impairment.
For the purpose of impairment testing, cash generating
units to which goodwill has been allocated are tested
for impairment annually, or more frequently when there
is an indication that the unit may be impaired. If the
recoverable amount of the cash generating unit is less
than the carrying amount of the unit, the impairment loss
is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to other assets of
the unit pro-rata on the basis of the carrying amount of
each asset in the unit. An impairment loss recognised is
not reversed in a subsequent period.
The excess of the company’s interest in the net fair value
of the identifiable assets, liabilities and contingent liabilities
over the cost of the business combination is immediately
recognised in profit or loss. Internally generated goodwill is
not recognised as an asset.
Impairment of assets
Financial assets
A financial asset is assessed at each reporting date to
determine whether there is any objective evidence that it is
impaired. A financial asset is considered to be impaired if
objective evidence indicates that one or more events have
had a negative effect on the estimated future cash flows of
that asset.
ACCOUNTING POLICIES continued for the year ended 31 August 2009
An impairment loss in respect of a financial asset
measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of
the estimated future cash flows discounted at the original
effective interest rate.
Individually significant financial assets are tested for
impairment on an individual basis. The remaining financial
assets are assessed collectively in groups that share
similar credit risk characteristics.
All impairment losses are recognised in profit or loss. An
impairment loss is reversed if the reversal can be related
objectively to an event occurring after the impairment
loss was recognised. For financial assets measured at
amortised cost, the reversal is recognised in profit or loss.
In relation to trade receivables, a provision for impairment
is made when there is objective evidence (such as the
probability of insolvency or significant financial difficulties
of the debtor) that the Group will not be able to collect
all of the amounts due under the original terms of the
invoice. The carrying amount of the receivable is reduced
through use of an allowance account. Impaired debts are
derecognised when they are assessed as uncollectable.
Non–financial assets
The carrying amount of the Group’s non–financial assets,
other than inventories and deferred tax assets, are
reviewed at each balance sheet date to determine whether
there is an indication of impairment and at any time
when there is an indication of impairment. If there is any
indication that an asset may be impaired, its recoverable
amount is estimated.
The recoverable amount of an asset or cash–generating
unit is the higher of its fair value less cost to sell and its
value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value
using a pre–tax discount rate that reflects current market
assessments of the time value of money and risks specific
to the asset.
A cash–generating unit is the smallest identifiable
asset group that generates cash flows that are largely
independent from other assets or groups. Impairment
losses are recognised in the income statement.
Impairment losses recognised in respect of cash–
generating units are allocated first to reduce the carrying
amount of goodwill allocated to the cash–generating units,
and then to reduce the carrying amount of other assets in
the unit on a pro–rata basis.
An impairment loss is recognised whenever the carrying
amount of an asset or its cash generating unit exceeds its
recoverable amount. Impairment losses are recognised in
profit or loss.
A previously recognised impairment loss, other than
for goodwill, is reversed if there is an indication that the
impairment loss has reversed and if the recoverable
amount increases as a result of a change in the estimates
used to determine the recoverable amount, but not to an
amount higher than the carrying amount that would have
been determined (net of depreciation or amortisation) had
no impairment loss been recognised in previous years.
Impairment losses in respect of goodwill are not reversed.
Inventories
Inventories are stated at the lower of cost or net realisable
value. Cost is determined using weighted average cost.
These costs are regularly reviewed and updated to reflect
the input costs of raw materials, direct labour, other direct
costs and related normal production overheads. Slow–
moving goods and obsolete inventories are written down
to their estimated net realisable value.
Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of
completion and selling expenses.
Provisions
Provisions are recognised when the Group has a present
legal or constructive obligation as a result of past events,
for which it is probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation and a reliable estimate of the obligation can be
made. If the effect is material, provisions are determined
by discounting the expected future cash flows at a pre–tax
rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific
to the liability.
Short–term employee benefits
The cost of all short–term employee benefits is recognised
as an expense during the period in which the employee
renders the related service.
An accrual is made for the estimated liability for annual
leave and performance bonuses as a result of services
rendered by employees up to the balance sheet date. The
accruals have been calculated at undiscounted amounts
based on current salary rates.
ACCOUNTING POLICIES continued for the year ended 31 August 2009
IDECO 2009 Annual Report26 IDECO 2009 Annual Report 27
Financial instruments
Financial instruments are initially recognised at fair value and, except for financial instruments stated at fair value through profit and loss, include directly attributable transaction costs. The Group assesses whether embedded derivatives are required to be separated from host contracts when the Group first becomes party to the contract. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.
Subsequent to initial recognition these instruments are measured as detailed below.
Financial assets
Financial assets are recognised when the Company and/or Group has rights or other access to economic benefits. Such assets consist of cash and cash equivalents, a contractual right to receive cash or another financial asset or a contractual right to exchange financial instruments with another entity on potentially favourable terms.
Loans and receivables
Trade receivables, loans and other receivables are non–derivative financial assets with fixed or determinable payments that are not quoted in an active market and are classified as loans and receivables. After initial measurement, these are carried at amortised cost, using the effective interest rate method, less impairment losses. Amortised cost is calculated taking into account any discount or premium on acquisition and includes fees that are an integral part of the effective interest rate and transaction costs.
Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances, deposits held on call with banks and in money market instruments. Bank overdrafts that are repayable on demand and form an integral part of the Group and/or Company’s cash management are included as a component of cash and cash equivalents for the purpose of the cash flow statement. Cash and cash equivalents are measured at fair value.
Financial liabilities
Financial liabilities are recognised when there is an obligation to transfer benefits and that obligation is a contractual liability to deliver cash or another financial asset or to exchange financial instruments with another entity on potentially unfavourable terms. Financial liabilities other than derivative instruments are measured at amortised cost, using the effective interest method.
Offset
Financial assets and financial liabilities are offset and the net amount reported in the balance sheet when the Group has a legally enforceable right to set off the recognised amounts, and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Derecognition of financial instruments
Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:
the rights to receive cash flows from the asset have
expired;
the Group retains the right to receive cash flows from
the asset, but has assumed an obligation to pay them
in full without material delay to a third party under a
‘pass through’ arrangement; or
the Group has transferred its rights to receive cash
flows from the asset and either (a) has transferred
substantially all the risks and rewards of the asset, or
(b) has neither transferred nor retained substantially all
the risks and rewards of the asset, but has transferred
control of the asset.
When the Group has transferred its rights to receive cash flow from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
When continuing involvement takes the form of a written and/or purchased option (including a cash settled option or similar provision) on the transferred asset, the extent of the Group’s continuing involvement is the amount of the transferred asset that the Group may repurchase, except that in the case of a written put option (including a cash settled option or similar provision) on an asset measured at fair value, the extent of the Group’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
ACCOUNTING POLICIES continued for the year ended 31 August 2009
When an existing financial liability is replaced by another from the same lender of substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference is the respective carrying amounts is recognised in profit or loss.
Gains and losses on subsequent measurement
Gains and losses arising from a change in the fair value of financial instruments that are not part of a hedging relationship are recognised in profit or loss in the year in which the change arises as well as through the amortisation process, if appropriate.
Gains and losses from measuring the hedging instruments relating to a fair value hedge at fair value are recognised
immediately in profit or loss.
Share capital
Ordinary shares are classified as equity. Issued share capital is stated in the statement of changes in equity at the amount of the proceeds received less directly
attributalbe issue costs.
Preference share capital
Preference share captial is classified as a liability if it is redeemable on a specific date or at the option of the shareholders, or if dividend payments are not discretionary. Dividencds thereon are recognised as interest expense in profit or loss as accrued.
Borrowings
Borrowings, which constitute a financial liability, include short-term and long-term debt. Borrowings are initially recognised at fair value, net of transaction costs incurred and are subsequently stated at amortised cost. Borrowings are classified as short-term unless the borrowing entity has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Borrowings are derecognised when the obligation in the contract is discharged, cancelled or has expired.
Premiums or discounts arising from the difference between the fair value of borrowings raised and the amount repayable at maturity date are charged to the income statement as finance expenses based on the effective interest rate method.
Contingencies and commitments
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the group, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or the amount of the obligation cannot be measured with sufficient reliability. Contingencies principally consist of contract specific third party obligations underwritten by banking institutions. Items are classified as commitments where the group commits itself to future transactions, particularly in the acquisition of property, plant and equipment.
Related party transactions
All subsidiaries and associated companies of the Group are related parties. A list of the major subsidiaries are included on page 36 of this annual report. All transactions entered into with subsidiaries and associated companies were under terms no more favourable than those with third parties and have been eliminated in the consolidated Group accounts. Directors’ emoluments as well as transactions with other related parties are set out in notes 25 and 27 of this annual report. There were no other material contracts with related parties.
Earnings per share
The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit and loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees that have
not yet met the applicable recognition criteria.
Headline earnings per share
Headline earnings per share is based on the same calculation as earnings per share except that attributable profit specifically excludes items as set out in Circular 8/2007 “Interpretation of Statement of Investment Practice No 1: Headline Earnings” issued by the South African Institute of Chartered Accountants. Fully diluted headline earnings per share are presented when the inclusion of potential ordinary shares has a dilutive effect on headline
earnings per share
ACCOUNTING POLICIES continued for the year ended 31 August 2009
IDECO 2009 Annual Report28 IDECO 2009 Annual Report 29
IFRS and IFRIC interpretations not yet effective
The Group has not applied the following IFRSs and IFRIC Interpretations that are not yet effective:
Amendments to IFRS 2, “Share–based Payment” –
Vesting Conditions and Cancellations
These amendments are to be applied for annual periods beginning on or after 1 January 2009. These amendments provide further guidance and clarity regarding the treatment of vesting conditions associated of share–based payments as well as the effect of cancellations thereof.
IFRS 3, “Business Combinations”.
This standard has been revised and is to be applied for annual periods beginning on or after 1 July 2009. The standard is aimed at ensuring that an acquirer of a business recognises the assets acquired and liabilities assumed at their acquisition–date fair values and discloses information that enables users to evaluate the nature and financial effects of the acquisition. The standard states that assets and liabilities that arose from business combinations whose acquisition dates preceded the application of this IFRS shall not be adjusted upon application of this IFRS.
IFRS 7, “Financial Instruments: Disclosures:
Presentation of finance costs”.
These amendments to the standard are effective for annual periods beginning on or after 1 January 2009. This amendment deals with presentation of finance costs. A further amendment has been made that deals with enhanced disclosures about fair value measurements and liquidity risk as well as dealing with improving disclosures about financial instruments.
IFRS 8, “Operating Segments”:
This standard is new and is to be applied for annual periods beginning on or after 1 January 2009. The standard requires an entity to adopt the ‘management approach’ to reporting on the financial performance of its operating segments. It sets out requirements for disclosure of information about the entity’s operating segments and also about the entity’s products and services, the geographical areas in which it operates, and its major customers. The disclosure should enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.
Amendment to IAS 1, “Presentation of Financial
Statements”.
This standard has been revised and is to be applied for annual periods beginning on or after 1 January 2009. IAS 1 sets overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content.
Amendments to IAS 23, “Borrowing Costs”:
These amendments are to be applied for annual periods beginning on or after 1 January 2009. The standard requires that borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset. Other borrowing costs are recognised as an expense.
Amendments to IAS 27, “Consolidated and Separate
Financial Statements”
These amendments are to be applied for annual periods beginning on or after 1 July 2009. The amendments aim to reduce alternatives in accounting for subsidiaries in consolidated financial statements and in accounting for investments in the separate financial statements of a parent, venture or investor.
Amendments to IAS 32, “Financial Instruments:
Presentation” and IAS 1, “Presentation of Financial
Statements” – Puttable Financial Instruments and
Obligations Arising on Liquidation
These amendments are to be applied for annual periods beginning on or after 1 January 2009. These amendments require further detail with regards to Puttable Financial Instruments and Obligations Arising on Liquidation.
IAS 39, “Financial Instruments: Recognition and
Measurement”:
These amendments are effective for annual periods beginning on or after 1 January 2009. This amendment deals with reclassification of derivatives into or out of the classification of at fair value through profit or loss, designating and documenting hedges at the segment level and applicable effective interest rate on cessation of fair value hedge accounting. Several further amendments have been processed that are effective at different dates. Amendments effective for annual periods beginning on or after 1 January 2010 deal with treating loan prepayment penalties as closely related embedded derivatives, scope exemption for business combination contracts, cash flow hedge accounting and hedging using internal contracts. An amendment effective for annual periods beginning on or after 1 July 2009 deals with the clarification of two
ACCOUNTING POLICIES continued for the year ended 31 August 2009
hedge accounting issues surrounding inflation in a financial hedged item and a one sided risk in a hedged item. An amendment effective for annual periods ending on or after 30 June 2009 deals with embedded derivatives when reclassifying financial instruments
IFRIC 9 (amended), “Reassessment of embedded
derivatives”.
These amendments are to be applied for annual periods beginning on or after 30 June 2009.The amendment results in a mandatory assessment of any embedded derivatives following reclassification of a financial asset out of the fair value through profit or loss category. The assessment will not have taken place at initial recognition, as the entire asset was accounted for at fair value. The amendment is necessary to ensure that, following a reclassification from the fair value category, entities apply the requirements for separation of an embedded derivative that is not closely related to the host contract. The assessment should be made on the basis of the circumstances that existed when the entity first became a party to the contract. In addition, if the fair value of the embedded derivative that would have to be separated cannot be reliably measured, the hybrid financial asset in its entirety should remain in the fair value through profit or loss category.
IFRIC 15, “Agreements for the construction of real
estate”.
This interpretation is to be applied for annual periods beginning on or after 1 January 2009. The IFRIC was issued to address diversity in accounting for real estate sales. Some entities recognise revenue when risks and rewards in the real estate are transferred in accordance with IAS 18: Revenue and others recognise revenue as the real estate is developed in accordance with IAS 11: Construction Contracts. The interpretation clarifies which standard should be applied to particular transactions. The guidance is not limited to real estate sales but can be applied by analogy in other circumstances to determine whether a transaction is accounted for as a sale of a good (IAS 18) or a construction contract (IAS 11).
IFRIC 16 (amended), “Hedges of a net investment in a
foreign operation”.
This interpretation is to be applied for annual periods beginning on or after 1 October 2008. This interpretation addresses three issues: the nature of the hedged risk and amount of the hedged item for which a hedging relationship may be designated; where in a Group the hedging instrument can be held; and what amounts should be reclassified from equity to profit and loss as
reclassification adjustments on disposal of the foreign operation.
IFRIC 17, “Distribution of non-cash assets to owners”.
This interpretation is to be applied for annual periods beginning on or after 1 July 2009. This interpretation clarifies that: (1) A dividend payable should be recognised when the dividend is appropriately authorised and is no longer at the discretion of the entity; (2) An entity should measure the dividend payable at the fair value of the net assets to be distributed; and (3) An entity should recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit and loss. The interpretation also requires an entity to provide additional disclosure if the net assets being held for distribution to owners meet the definition of a discontinued operation. The interpretation does not apply to common control transactions.
IFRIC 18, “Transfers of assets from customers”.
This interpretation is to be applied for annual periods beginning on or after 1 July 2009. This interpretation applies to agreements in which an entity receives from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas or water). In some cases, the entity receives cash from a customer which must be used only to acquire or construct the item of property, plant and equipment in order to connect the customer to a network or provide the customer with ongoing access to a supply of goods or services (or to do both). The interpretation clarifies: (1) the circumstances in which the definition of an asset is met; (2) the recognition of the asset and the measurement of its cost on initial recognition; (3) the identification of the separately identifiable services (one or more services in exchange for the transferred asset); (4) the recognition of revenue; and (5) the accounting for transfers of cash from customers.
The Group expects the pronouncements listed above to have no impact on the Group’s results, other than additional disclosures required in the Group annual financial statements in the period of initial recognition and/or for comparative periods as may be required. The Group intends to apply these statements and interpretations in the periods prescribed and required.
ACCOUNTING POLICIES continued for the year ended 31 August 2009
IDECO 2009 Annual Report30 IDECO 2009 Annual Report 31
NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 August 2009
1. Segmental reporting
The Group is organised into three main business segments namely biometric readers and solutions, secure credentialing
services and biometric projects. Segmental reporting within geographical areas is not presented as the Group has
operated primarily in Gauteng, South Africa. For the period ended 31 August 2008, the Group was organised in two
main business segments, namely biometric readers and solutions and biometric projects. Revenue, operating results and
assets and liabilities of Ideco AFISwitch (Pty) Limited was included in the segment “Biometric readers and solutions”. The
services offered by this company can be more closely associated with the activities of the wholly-owned subsidiary, MIE,
and therefore these companies’ revenue, operating results and assets and liabilities are henceforth reported in a new
segment, “Secure credentialing services”.
Segment assets consist primarily of:
property, plant and equipment;
payment in advance;
inventories;
receivables; and
cash.
Segment liabilities consist primarily of:
borrowings; and
payables.
1. Segmental reportingBiometric
readers and solutions
R’000
Secure credentialing
services R’000
Biometric projects
R’000Corporate
R’000Total
R’000
2009
Revenue 58 571 17 716 6 789 - 83 076
Depreciation and amortisation 54 1 793 859 595 3 301
Operating profit/(loss) 2 107 (1 421) (1 526) (13 948) (14 788)
Assets 21 441 59 689 8 621 32 203 121 954
Liabilities (12 543) (71 346) (2 226) (7 058) (93 173)
2008
Revenue 106 702 4 719 2 224 - 113 645
Depreciation and amortisation 6 1 352 800 827 2 985
Operating profit/(loss) 15 585 (2 773) (2 067) (11 308) (563)
Assets 17 894 26 316 8 688 32 895 85 793
Liabilities (8 326) (28 885) (1 069) (6 641) (44 921)
Group Company
2009R’000
2008 R’000
2009 R’000
2008 R’000
2. Operating (loss)/profitis arrived at after taking into account:
Revenue 83 076 113 645 - -
sale of biometric readers and related repairs 58 571 106 702 - -
services 17 716 4 719 - -
projects 6 789 2 224 - -
Cost of sales 48 806 80 954 - -
inventory purchases expensed 45 413 80 406 - -
inventory adjustments 119 (191) - -
direct labour 3 274 739 - -
Amortisation of intangible assets 2 196 1 281 - -
Auditor’s remuneration 541 372 297 150
audit fee 502 335 284 139
other services 39 37 13 11
Depreciation of plant and equipment 1 105 1 704 595 827
immovable property 1 - - -
furniture and fittings 195 211 108 118
motor vehicles 91 130 87 130
office equipment 54 45 22 45
IT equipment 764 1 318 378 534
Directors emoluments 2 820 3 822 2 820 3 822
managerial services 2 690 3 822 2 690 3 822
as directors 130 - 130 -
Employee costs 15 929 15 193 3 256 5 109
Impairment of intangible assets 782 - - -
Operating lease charges 6 313 2 005 2 116 922
premises 2 550 1 673 1 834 852
equipment 3 763 332 282 70
Other third party payments 1 415 725 43 351
administrative 49 106 43 106
managerial 401 365 - -
technical 965 254 - 245
(Loss)/profit on disposal of property, plant and equipment (16) 4 116 (16) 4 116
3. Investment incomeBank call and deposit accounts 287 1 747 34 1 051
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
IDECO 2009 Annual Report32 IDECO 2009 Annual Report 33
5. Investment in associate 5.1 Details of associate company
Effective group holding Carrying amount Directors’ valuation
2009 2008 2009 2008 2009 2008
Unlisted
Kroll Background Screening (Pty) Limited *
- 30% - 19 075 - 20 000
- 30% - 19 075 - 20 000
* Name subsequently changed to Managed Integrity Evaluation (Pty) Limited.
Group Company
5.2 Carrying amount of associate2009
R’0002008
R’0002009
R’0002008
R’000
Carrying amount at the beginning of the year 19 075 - 19 075 -
Acquisition during the period - 16 612 - 16 612
Equity accounted earnings of associate 2 023 2 463 2 023 2 463
Disposal during the year (21 098) - (21 098) -
- 19 075 - 19 075
* Associate becomes a subsidiary
5.3 Summarised financial statements of associate2009
R’0002008
R’000
Total assets - 24 515
Total liabilities - 7 467
Plant and equipment - 1 953
Net current assets - 14 571
Issued capital - *
Reserves - 17 048
Deferred tax - 524
Revenue - 28 581
Profit before taxation - 10 681
Income tax expense - 3 099
* less than R1 000
The year-end of the associate was 31 December, therefore the summarised financial statements above for the period ended 31 August 2008 were not audited.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
Group Company
2009R’000
2008 R’000
2009 R’000
2008 R’000
4. Finance costsLong-term borrowings 354 925 354 925
Bank overdraft 546 140 546 140
South African Revenue Service - 148 - -
Sagem Security S A (Pty) Limited 3 459 - - -
4 359 1 213 900 1 065
Group Company
2009 R’000
2008R’000
2009R’000
2008R’000
6. Taxation creditCurrent tax expense 452 382 - (1)
current 452 412 - -
prior year over provision - (30) - (1)
Deferred tax (5 198) (944) (2 172) (89)
origination and reversal and reversal of temporary differences
(5 239) (940) (2 172) (89)
prior year overprovision 41 (4) - -
Taxation credit in the income statement (4 746) (562) (2 172) (90)
Reconciliation of tax rate
Accounting (loss)/profit (16 837) 2 434 (6 791) 4 141
Tax thereon at 28% (4 714) 681 (1 901) 1 159
Non-deductible expenses 647 18 295 18
Exempt income (566) (1 266) (566) (1 266)
Change in tax rate - 31 - -
Other (154) - - -
Prior year under/(over) provision 41 (26) - (1)
(4 746) (562) (2 172) (90)
Group No provision has been made for 2009 tax as the group has no taxable income. The estimated tax loss available for set off against future taxable income is R28 206 433 (2008: R8 028 489). Company No provision has been made for 2009 tax as the company has no taxable income. The estimated tax loss available for set off against future taxable income is R8 318 790 (2008: R317 322).
7. Earnings per shareReconciliation of headline earnings
(Loss)/profit attributable to ordinary shareholders of the Group
(12 091) 2 996
Adjustments after tax:
Impairment of intangible assets 563 -
Profit/(loss) on sale of non-current assets 12 (3 540)
Headline loss (11 516) (544)
Number of shares in issue
Issued 202 222 222 202 222 222
Weighted 202 222 222 127 550 685
Basic (loss)/earnings per share (cents) (5,98) 2,35
Headline loss per share (cents) (5,69) (0,43)
7.1 Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the year.
7.2 Headline earnings per share is calculated by dividing the headline earnings by the adjusted weighted average number of ordinary shares in issue taking into account the conversion of all dilutive potential ordinary shares. The Group currently has no dilutive ordinary shares.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
IDECO 2009 Annual Report34 IDECO 2009 Annual Report 35
8. Property, plant and equipment
Group2009
Cost R’000
Accumulated depreciation
R’000Carrying value
R’000
Immovable property 7 003 (1) 7 002
Furniture and fixtures 1 195 (551) 644
Motor vehicles 742 (307) 435
Office equipment 319 (102) 217
IT equipment 5 061 (3 149) 1 912
14 320 (4 110) 10 210
2008
Immovable property 4 678 - 4 678
Furniture and fixtures 1 006 (356) 650
Motor vehicles 722 (216) 506
Office equipment 105 (49) 56
IT equipment 3 375 (2 437) 938
9 886 (3 058) 6 828
Reconciliation of property, plant and equipment
Opening balance
R’000
Business combination
R’000Additions
R’000Disposals
R’000
Transfer to non-current
assets held for sale
R’000Depreciation
R’000
Closing balance
R’000
Group2009
Immovable property
4 678 2 325 - - - (1) 7 002
Furniture and fixtures
650 102 87 - - (195) 644
Motor vehicles 506 20 - - - (91) 435
Office equipment 56 117 98 - - (54) 217
IT equipment 938 387 1 367 (16) - (764) 1 912
6 828 2 951 1 552 (16) - (1 105) 10 210
2008
Immovable property
- - 8 790 (4 112) - - 4 678
Furniture and fixtures
561 - 325 (25) - (211) 650
Motor vehicles 636 - - - - (130) 506
Office equipment 82 - 31 (12) - (45) 56
IT equipment 2 226 - 757 (27) (700) (1 318) 938
Leasehold improvements
207 - - (207) - - -
3 712 - 9 903 (4 383) (700) (1 704) 6 828
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
8. Property, plant and equipment
Company 2009
Cost R’000
Accumulated depreciation
R’000Carrying value
R’000
Immovable property 4 678 - 4 678
Furniture and fixtures 607 (315) 292
Motor vehicles 722 (303) 419
Office equipment 91 (70) 21
IT equipment 1 485 (1 125) 360
7 583 (1 813) 5 770
2008
Immovable property 4 678 - 4 678
Furniture and fixtures 578 (207) 371
Motor vehicles 722 (216) 506
Office equipment 87 (48) 39
IT equipment 1 481 (799) 682
7 546 (1 270) 6 276
Reconciliation of property, plant and equipment
Opening balance
R’000Additions
R’000Disposals
R’000Depreciation
R’000
Closing balance
R’000
Company2009
Immovable property 4 678 - - - 4 678
Furniture and fixtures 371 29 - (108) 292
Motor vehicles 506 - - (87) 419
Office equipment 39 4 - (22) 21
IT equipment 682 72 (16) (378) 360
6 276 105 (16) (595) 5 770
2008
Immovable property - 8 790 (4 112) - 4 678
Furniture and fixtures 330 184 (25) (118) 371
Motor vehicles 636 - - (130) 506
Office equipment 82 13 (11) (45) 39
IT equipment 564 679 (27) (534) 682
Leasehold improvements 207 - (207) - -
1 819 9 666 (4 382) (827) 6 276
Immovable property consists of the following:
Erf 316, Doringkloof Centurion, situated at 99 Jean Avenue. A bond to the value of R3 million has been registered in favour of Absa Bank Limited over the property. The net book value of the property is R4,7 million.
Acquisition of MIE (Pty) Limited: Part 149 Lyttelton farm 381 in the Tshwane Metropolitan Municipality.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
IDECO 2009 Annual Report36 IDECO 2009 Annual Report 37
Percentage holdingInterest of company
Shares at costLoans due by/(to)
subsidiaries
2009R’000
2008R’000
2009R’000
2008R’000
2009R’000
2008R’000
9. Investments in subsidiariesAll companies are registered (Pty) Limited
Name and principal activity
Ideco Biometric Security Solutions (Supply of biometric equipment and solutions to the private sector for access control)
100 100 * * 9 223 39 199
Ideco Biometrix (Supply of biometric equipment and solutions to the government sector)
100 100 * * (6 427) (3 200)
Ideco Technologies (Biometric projects)
100 100 * * (563) (34 927)
Ideco AFISwitch (Supply of biometric services related to criminal background checks)
100 100 * * 7 776 4 061
Ideco Identity Solutions (Supply of client verification services in the financial services sector)
100 - * - 573 -
Managed Integrity Evaluation (“MIE”) (Supply of reference checking and backgroundscreening services)
100 30 21 098 - (14 000) -
21 098 * (3 418) 5 133
* less than R1 000
The directors value the investment in MIE at R39 million, based on the price:earnings multiple valuation method.
The shares in MIE have been ceded to the National Empowerment Fund Trust (“NEF”) as security for the redeemable cumulative preference shares issued to the NEF as detailed in note 18.
Company
2009 R’000
2008 R’000
Interest in subsidiaries is disclosed as follows:
Investments in subsidiaries 21 098 *
Loans to subsidiaries 17 572 43 260
Loans from subsidiaries (20 990) (38 127)
17 680 5 133
* less than R1 000
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
CostR’000
Accumulated amortisation
R’000
Carrying amount
R’000
Company2009
Intellectual property rights 1 500 - 1 500
2008
Intellectual property rights 1 500 - 1 500
Reconciliation of carrying amountGoodwill
R’000 Trademark
R’000
Computer software
R’000
Intellectual property
rights R’000
Right of use
R’000 Total
R’000
2009
Carrying amount at beginning of year - - 4 585 1 500 17 252 23 337
Acquisitions – internal development - - 1 593 - - 1 593
Acquisitions – external - - 132 - - 132
Impairments - - (782) - - (782)
Business combination 28 900 7 700 40 - - 36 640
Amortisation for the year - - (834) - (1 362) (2 196)
28 900 7 700 4 734 1 500 15 890 58 724
2008
Carrying amount at beginning of year - - - -
Acquisitions 4 731 1 500 18 387 24 618
Amortisation for the year (146) - (1 135) (1 281)
4 585 1 500 17 252 23 337
Computer software is amortised over the project contract period and where there is no contract over a two year period. Right of use is amortised over the unexpired 140 months of the contract period. An amount of R782 000 was expensed as it was not technically feasible to continue with the project.
MIE has registered the trademark “NQR”, which is a national qualifications register and which is maintained in terms of exclusive long-term agreements with various universities. Information contained in the “NQR” is sold as part of MIE’s background screening services to prospective employers. The estimated useful life of the NQR trademark is 15 years.
10. Intangible assets
Group2009
CostR’000
Accumulated amortisation
R’000
Carrying amount
R’000
Computer software 5 714 (980) 4 734
Intellectual property rights 1 500 - 1 500
Right of use 18 387 (2 497) 15 890
Trademark 7 700 - 7 700
Provisional goodwill on acquisition * 28 900 - 28 900
62 201 (3 477) 58 724
2008
Computer software 4 731 (146) 4 585
Intellectual property rights 1 500 - 1 500
Right of use 18 387 (1 135) 17 252
24 618 (1 281) 23 337
* Refer to note 28
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
IDECO 2009 Annual Report38 IDECO 2009 Annual Report 39
Group Company
2009R’000
2008R’000
2009R’000
2008R’000
11. Deferred tax Balance at beginning of year 1 829 885 89 89
Current charge 5 198 944 2 172 -
intangible assets (515) (512) - -
income in advance 61 - - -
prepayments 32 (32) - -
provisions 140 (555) 140 -
sec11A expenses 80 - - -
creation of losses 5 400 2 043 2 032 -
Business combination 93 - - -
capital allowance 454 - - -
revaluations (361) - - -
7 120 1 829 2 261 89
Comprising:
tax losses available for set-off against future taxable income
7 689 2 289 2 121 89
sec11A expenses 80 - - -
provisions 224 84 140 -
prepayments - (32) - -
income in advance 60 - - -
revaluations (361) - - -
capital allowance 455 - - -
intangible assets (1 027) (512) - -
7 120 1 829 2 261 89
Deferred tax asset 7 481 1 829 2 261 89
Deferred tax liability (361) - - -
7 120 1 829 2 261 89
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
Group Company
2009R’000
2008R’000
2009R’000
2008R’000
12. InventoriesMerchandise 13 780 12 097 - -
Less provision for impairment (1 076) (961) - -
12 704 11 136 - -
Provision for impairment at beginning of year (961) (1 145) - -
Written off during the year 67 263 - -
Provided for during the year (182) (79) - -
(1 076) (961) - -
13. Trade and other receivablesTrade receivables 19 470 14 986 - 3
Deposits 71 71 4 4
VAT 347 762 191 -
Other receivables 1 602 1 614 1 070 621
Prepayments – Royalties payable to ZNG Technologies AG
2 404 1 522 - -
23 894 18 955 1 265 628
Trade and other receivables are ceded to Absa Bank Limited as security for a R10 million overdraft facility.
Group
2009R’000
2008R’000
Trade receivables comprise:
Gross receivables
External 24 298 19 355
Provision for impairment of trade receivables (404) (400)
23 894 18 955
The amount of the write-down of trade receivables recognised as an expense isR nil (2008: R nil). Movements in the provision for impairments of trade receivables were as follows:
Balance at beginning of year 400 400
Business combination 4 -
Charge for the year - -
404 400
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
Reconciliation of carrying amount
Intellectual property rights
R’000 Total
R’000
2009
Carrying amount at beginning of year 1 500 1 500
Acquisitions - -
Amortisation for the year - -
1 500 1 500
2008
Carrying amount at beginning of year - -
Acquisitions 1 500 1 500
Amortisation for the year - -
1 500 1 500
IDECO 2009 Annual Report40 IDECO 2009 Annual Report 41
Trade receivables comprise a widespread customer base. This made up primarily of large corporate companies and government departments. The Group does not have any significant exposure to any one customer.
The maximum exposure to credit risk for trade receivables at the reporting date by geographical region was:
Group
2009R’000
2008R’000
South Africa 20 362 16 504
Foreign 3 532 2 451
23 894 18 955
Foreign receivables are Rand denominated
Management views the trade receivables days per geographic region as within expectations compared with the company’s standard payment terms for that region. Trade receivables’ terms differ in certain regions due to local economic and market conditions and the risks of trading in that geographical region.
The following table illustrates the aging of gross trade receivables. The provision for impairment of trade receivables of R404 000 (2008 – R400 000) relates to specific items under the past due 61+ days ageing category only.
Group
2009R’000
2008R’000
Not past due 12 831 9 930
Past due 0 - 30 days 5 800 5 921
Past due 31 - 60 days 1 675 729
Past due 61+ days 3 588 2 375
23 894 18 955
The increase in accounts receivable days is due to the acquisition of MIE.
Credit risk is minimised through an initial client acceptance procedure whereby potential customers are individually assessed before an appropriate credit limit is allocated to the new client. Ongoing credit evaluation of the financial position of customers is performed.
Listings of overdue customer balances are reviewed monthly and evaluated against their credit terms and limits. Any customers exceeding their credit terms or limits must settle their overdue balances before any further credit is extended. Appropriate action is taken to recover outstanding amounts, where necessary.
At 31 August 2009, management did not consider there to be any material concentration of credit risk that has not been adequately provided for. Management consider the risk of non–recoverability as low.
No provision has been made for the amounts past due, since trade receivables past due have subsequently been received and the prepayments to ZNG Technologies AG will be expunged by royalties payable to them.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
Group Company
2009R’000
2008R’000
2009R’000
2008R’000
14. Cash and cash equivalentsCash on hand 11 2 5 2
Bank balances 8 587 10 4 -
8 598 12 9 2
Bank overdraft (351) (2 804) (351) (2 804)
8 247 (2 792) (342) (2 802)
15. Non-current assets heldfor saleIT equipment - 4 335 - 282
This equipment was purchased shortly before the previous year-end and has subsequently been sold at cost to a leasing company and the Group is utilising the assets under an operating lease. Refer to note 2 for details.
16. Ordinary share capital and premiumAuthorised
1 000 000 000 ordinary shares of 0,0004 cents each
4 4 4 4
4 4 4 4
Issued
202 222 222 ordinary shares of 0,0004 cents each
1 1 1 1
Share premium 22 244 22 244 22 244 22 244
Less: Listing expenses written off (958) (958) (958) (958)
21 286 21 286 21 286 21 286
Number Number Number Number
Reconciliation of issued share capital
In issue on 1 March 2007 at 100 cents per share
100 100 100 100
Issued on 14 August 2007 at 100 cents per share
628 628 628 628
728 728 728 728
Number of shares in issue
Conversion of par value shares from 100 cents per share to 0,0004 cents per share on 17 September 2007
182 000 000 182 000 000 182 000 000 182 000 000
Issue of 20 222 222 shares at 110 cents per share through private placement on 30 October 2007.
20 222 222 20 222 222 20 222 222 20 222 222
202 222 222 202 222 222 202 222 222 202 222 222
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
IDECO 2009 Annual Report42 IDECO 2009 Annual Report 43
Group Company
2009R’000
2008R’000
2009R’000
2008R’000
17. Long-term borrowingsSecured at amortised cost: Absa Bank Limited
2 634 2 811 2 634 2 811
Less: Current portion included in current liabilities
(238) (172) (238) (172)
2 396 2 639 2 396 2 639
The loan is secured by a bond over Erf 316 Doringkloof, is repayable in 94 monthly instalments of R40 243 each, and bears interest at the prime overdraft rate (9,5% at 31 August 2009).
18. Cumulative redeemable preference shares1 000 cumulative redeemable “A” preference of R1,00 each
1 - - -
Premium on “A” preference shares issued to the NEF
40 599 - - -
40 600 - - -
One redeemable participating “B” preference of R1,00 issued to the NEF
* - - -
40 600 - - -
* less than R1 000
The “A” preference share dividend rate is a variable rate equal to 75% of the prime overdraft rate and is payable bi-annually at the end of February and August.
R5 million of the “A” preference dividend was redeemed on 1 November 2009, and the balance is redeemable in four equal instalments, commencing one day after the third anniversary date after issuing of the preference shares, which date is 1 September 2012. The “A” preference shares may be redeemed earlier at the option of MIE, but not before 1 September 2012.
The “B” preference share must be redeemed together with the final redemption of the “A” preference dividend and a participating dividend must be paid which is equal to the higher of a minimum of 18% internal rate of return on the “A” preference shares subscription price and the “B” preference shares subscription price (including all dividends on all preference shares) from the issue date of the preference shares to the final redemption date or a maximum of 25% of the increase in the market value of MIE the period from the issue date to the final redemption date.
The “A” and “B” preference shares must be fully redeemed on 1 September 2016.
Ideco Group Limited has entered into a suretyship agreement with the NEF as additional security for the redemption of the “A” and “B” preference shares, in terms of which it binds itself with MIE for the due, proper and timeous payments of all dividends and redemptions in terms of the preference share subscription agreement.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
Group Company
2009R’000
2008R’000
2009R’000
2008R’000
19. Trade and other payablesTrade and other payables 17 287 15 764 238 140
VAT 270 942 - 942
Accrued expenses 1 192 506 555 -
Other payables 1 508 475 413 232
20 257 17 687 1 206 1 314
Trade payables are non-interest bearing and are normally settled on 30 days terms save for one liability of R12,6 million (2008:R12,2 million) which is payable on 60 day terms. Accrued expenses are non-interest bearing and have an average term of 30 days.
20. Other current liabilitiesSagem Defence Securité France - 266 - -
Kroll Associates (Pty) Limited (“Kroll”) 2 871 - 2 871 -
Sagem Security S A (Pty) Limited (“Sagem”) 24 420 20 961 - -
27 291 21 227 2 871 -
The amount due to Kroll is interest-free and is repayable on 1 October 2009.
The amount due to Sagem carries interest at 1,5% per month on the capital amount and is repayable in ten equal monthly payments.
The loan has been rescheduled during November 2009 in terms of which R12,7 million is repayable in March 2010 and the balance of R11,7 million is payable in four equal payments from 15 September 2010 to 15 December 2010. No interest will accrue on the outstanding amount from 1 November 2009 to date of final payment.
21. ProvisionsOnerous contract
At beginning of year - 1 903 - -
Utilised during the year - (1 903) - -
Incentive provision
At beginning of year - - - -
Provided for during the year 1 354 - - -
1 354 - - -
The provision is for staff and executive performance bonuses and is payable before 28 February 2010.
22. Financial InstrumentsThe Group has various financial assets, such as trade and other receivables and cash and short–term deposits, which arise directly from its operations. The Group’s principal financial liabilities, other than derivatives, comprise trade and other payables and borrowings. The main purpose of these financial liabilities is to raise finance for the Group’s operations.
The Group occasionally enters into derivative transactions, primarily forward currency contracts. The purpose is to manage the currency risk arising from the Group’s operations. It is, and has been throughout 2009 and 2008, the Group’s policy that no trading in derivatives shall be undertaken.
The main risks arising from the Group’s financial instruments are cash flow interest rate risk, liquidity risk, foreign currency risk and credit risk. The board of directors reviews and agrees policies for managing such risks, which are summarised below. The provision is for staff and executive performance bonuses and is payable before 28 February 2010.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
IDECO 2009 Annual Report44 IDECO 2009 Annual Report 45
Group Company
2009R’000
2008R’000
2009R’000
2008R’000
Categories of financial instruments
The principal financial instruments used by
the group, from which financial risk arises,
are as follows:
Loans and receivables
Trade receivables 21 490 17 433 1 265 628
Cash and cash equivalents 8 598 12 9 2
Loans due by subsidiaries - - 17 572 43 260
Financial liabilities at cost
Long-term borrowings 2 396 2 639 2 396 2 639
Loans due to subsidiaries - - 20 990 38 127
Preference shares 40 600 - - -
Trade and other payables 20 257 17 687 1 206 1 314
Other current liabilities 27 291 21 227 2 871 -
Bank overdraft 351 2 804 351 2 804
Credit risk
Credit risk primarily relates to exposure on cash and cash equivalents and trade receivables. The Group only deposits cash surpluses with well established financial institutions of high credit standing. Trade receivables comprise a widespread customer base. Ongoing credit evaluation of the financial position of customers is performed, and where appropriate, credit guarantee insurance is purchased. The granting of credit is made on application and is approved by management. At 31 August 2009 management did not consider there to be any material concentration of credit risk which has not been adequately provided for. Management consider the risk of irrecoverability as low.
Further disclosure of exposure to credit risk relating to trade and other receivables is included in note 13.
Interest rate risk
The Group’s exposure to changes in the market interest rates relates primarily to the bank overdraft and long-term borrowings.
As part of the process of managing the Group’s interest rate risk, interest rate characteristics of new borrowings are positioned according to expected movements in interest rates.
Currency risk
The Group does not incur currency risk as a result of purchases, borrowings and cash held in foreign currencies.
The Group had no exposure to foreign currency as at 31 August 2009.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
Interest rate sensitivity
The Group is sensitive to the movements in the ZAR interest rates which are the primary interest rates to which the Group is exposed. The Group has used a sensitivity analysis technique that measures the estimated change to the income statement of an instantaneous increase or decrease, as detailed in the table below, in market interest rates on financial liabilities from the applicable rate as at 31 August 2009. The calculations were determined with reference to the outstanding financial liability and financial asset balances for the year. This represents no change from the prior period in the method and assumptions used. This analysis is for illustrative purposes only and represents management’s best estimate of reasonably possible changes in interest rates.
2009 After tax effect on profit
and loss
2008 After tax effect on profit
and loss
2% increase R’000
1% decrease R’000
2% increase R’000
1% decrease R’000
South African lending rate
Group (Rand)
Variable rate long-term loans (646) 323 (40) 20
Cash and cash equivalents - local (6) 3 (40) 20
Company (Rand)
Variable rate long-term loans (38) 19 (89) 45
Cash and cash equivalents - local (6) 3 (40) 20
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
IDECO 2009 Annual Report46 IDECO 2009 Annual Report 47
Liquidity risk
The Group monitors its exposure to a shortage of funds by regular cash flow projections. The Group considers the maturity of both its financial liabilities and financial assets (e.g. trade and other receivables and cash and cash equivalents) and projected cash flows from operations.
In terms of the Articles of Association the Company’s borrowing powers are unlimited.
The table below summarises the maturity profile of the Group’s financial liabilities at year–end, based on contractual undiscounted payments.
Carrying amount
R’000
Contractual cash flows
R’000
Less than 1 year R’000
More than 1 yearR’000
2009
Non-derivative financial liabilities
Long-term borrowings 2 634 2 634 238 2 396
Preference shares 40 600 - - -
Trade and other payables 20 257 20 257 20 257 -
Other current liabilities 27 291 27 291 27 291 -
50 182 50 182 47 786 2 396
2008
Non-derivative financial liabilities
Long-term borrowings 2 811 2 811 172 2 639
Trade and other payables 17 687 17 687 17 687 -
Other current liabilities 21 227 21 227 21 227 -
41 725 41 725 39 086 2 639
The Group had a net cash balance of R8,2 million at 31 August 2009 and has not utilised any of its bank overdraft facility (2008 – utilised R2,8 million, and had unutilised credit facilities of R10 million (2008 – R7,2 million) in respect of which all conditions precedent have been met.
The Group’s cash flow forecast for the year ending 31 August 2010 indicates that the Group will have adequate resources to continue in operational existence for the foreseeable future.
Fair value
The fair values of all financial instruments are substantially the same as the carrying amounts reflected in the balance sheet.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made to the objectives, policies or processes during the years ended 31 August 2009 and 2008.
Capital includes equity attributable to equity holders of the parent. Refer to note 16 for a quantitative summary of authorised and issued share capital.
As at 31 August 2009, the Group’s gearing ratio was 24% (2008: 44%) expressed as equity as a percentage of total equity and liabilities. The main reason for the decrease is the acquisition of MIE, which was funded by way of redeemable preference shares.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
Group Company
2009R’000
2008R’000
2009R’000
2008R’000
23. Contingent liabilities and capital commitmentsThere were no capital expenditure authorised or contracted at 31 August 2009 (2008: R Nil)
A bank guarantee of R520,000 (2008: R520,000) issued by Absa Bank Limited on behalf of the Company to Growthpoint Properties (Pty) Limited was the only contingent liability as at 31 August 2009.
24. Operating leasesNon-cancellable operating lease rentals are payable as follows:
Less than one year 8 036 2 573 2 117 1 834
Between one and five years 9 249 5 162 1 723 3 574
17 285 7 735 3 840 5 408
25. Related partiesIdentity of related parties
Shareholders of Ideco Group Limited
Muvoni Investment Holdings (Pty) Limited
ZNG Technologies AG
Subsidiaries - Refer to note 9
Key management - Refer to note 27
Related party transactions
Management and consulting fees paid to/(received from) related parties
Ideco Biometrix (Pty) Limited - - - (4 000)
Ideco Biometric Security Solutions (Pty) Limited
- - (6 000) (9 000)
Muvoni Investment Holdings (Pty) Limited 636 900 636 900
ZNG Technologies AG 1 800 2 700 1 800 2 700
Lease agreements - Rent received from related parties
Ideco AFISwitch (Pty) Limited - - (436) (654)
Royalties paid to related parties
ZNG Technologies AG (“ZNG”) 450 - - -
Refer note 13 for balance due by ZNG
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
IDECO 2009 Annual Report48 IDECO 2009 Annual Report 49
Group Company
2009R’000
2008R’000
2009R’000
2008R’000
26. Notes to the cash flow statement
26.1 Cash utilised by operations
(Loss)/profit before taxation (16 837) 2 434 (6 791) 4 141
Adjustments for:
Depreciation and impairments 1 887 1 704 595 827
Amortisation of intangible assets 2 196 1 281 - -
Profit/(loss) on sale of assets 16 (4 116) 16 (4 116)
Share of profit of associate (2 023) (2 463) (2 023) (2 463)
Investment income (287) (1 747) (34) (1 051)
Finance costs 4 359 1 213 900 1 065
Movement in provisions 140 (1 903) - -
Loss before working capital changes and other non-cash flow items
(10 549) (3 597) (7 337) (1 597)
Working capital changes
(Increase)/decrease in inventories (1 568) (6 216) - -
Decrease/(increase) in trade and other receivables
2 265 2 243 (637) (109)
(Increase)/decrease in prepayments (1 137) (1 200) - 322
(Decrease)/increase in trade and other payables
(663) 3 083 (108) 573
(11 652) (5 687) (8 082) (811)
26.2 Tax paid
Amount outstanding at beginning of year (106) (16 611) 286 (1 482)
Income statement charge (452) (382) - 1
Amount outstanding at end of year 17 106 (300) (286)
(541) (16 887) (14) (1 767)
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
Salary R’000
BonusR’000
Allowances R’000
Provident fund
contributionsR’000
Fees R’000
TotalR’000
27. Directors’ emoluments
2009
Executive directors
V Mufamadi 1 200 - 158 60 - 1 418
HB Aucamp 368 - 47 41 816 1 272
1 568 - 205 101 816 2 690
Non-executive directors
MF Kekana - - - - 70 70
AX Sisulu-Dunstan - - - - 30 30
R Troester - - - - 30 30
- - - - 130 130
1 568 - 205 101 946 2 820
2008
Executive directors
V Mufamadi (18 months) 1 800 - 237 - 900 2 937
HB Aucamp (11 months) 718 37 130 - - 885
2 518 37 367 - 900 3 822
Direct Non-beneficial Indirect Total
Directors’ shareholding at31 August 2009
V Mufamadi 236 384 - 83 762 634 83 999 018
HB Aucamp 1 000 000 602 010 - 1 602 010
MF Kekana 224 361 - - 224 361
AX Sisulu-Dunstan 80 000 - - 80 000
R Troester - - 100 000 100 000
1 540 745 602 010 83 862 634 86 005 389
Directors’ shareholding at31 August 2008
V Mufamadi 236 384 - 83 762 634 83 999 018
HB Aucamp 1 000 000 602 010 - 1 602 010
MF Kekana 224 361 - - 224 361
AX Sisulu-Dunstan 80 000 - - 80 000
1 540 745 602 010 83 762 634 85 905 389
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
IDECO 2009 Annual Report50 IDECO 2009 Annual Report 51
NOTICE OF ANNUAL GENERAL MEETING
IDECO GROUP LIMITED(Incorporated in the Republic of South Africa)(Registration number: 2001/023463/06)(“Ideco” or “the Company” or “the Group”)Share code: IDE ISIN code: ZAE000107579
Notice is hereby given that the annual general meeting of shareholders of the Company will be held at Ideco’s business
address, Merton House, Eton Office Park East, 17 Harrison Avenue, Epsom Downs, Bryanston, on 16 April 2010, at
10:00 for the following purposes:
Ordinary business
To receive, consider and adopt the annual financial statements for the year ended 31 August 2009 of the Company 1.
and the Group, together with the directors’ and independent auditors’ reports contained therein.
To re-elect, by separate resolution, each of the following directors who retire by rotation in accordance with the 2.
Company’s articles of association:
V Mufamadi
R Troester
The retiring directors are eligible and offer themselves for re-election. Brief curriculum vitae of these directors appear on
page 2 of the annual report.
To confirm the re-appointment of BDO South Africa Incorporated as independent auditors to the Company for the 3.
ensuing financial year.
To transact any other business capable of being transacted at an annual general meeting.4.
Special business
In addition, shareholders will be requested to consider and, if deemed fit, to pass the following special and ordinary
resolutions with or without amendment:
Ordinary Resolution Number One
Control of authorised but unissued share capital
“Resolved that the unissued ordinary shares in the authorised share capital of the Company be hereby placed under the
control of the directors of the Company as a general authority to them to allot and issue the same at their discretion in
terms of and subject to the provisions of the Companies Act, Act 61 of 1973, as amended (“the Act”), the Company’s
articles of association and the Listings Requirements of the JSE Limited (“JSE”).”
Ordinary Resolution Number Two
Issue of ordinary shares for cash
“Resolved that, subject to:
the passing of Ordinary Resolution Number One above; and
not less than 75% of those shareholders of the Company present in person or by proxy and entitled to vote at this
annual general meeting, voting in favour of this resolution;
the directors of the Company are hereby authorised and empowered, by way of a general authority, to allot and issue
for cash, without restriction, all or any of the authorised but unissued ordinary shares in the capital of the Company
placed under their control as they in their discretion may deem fit, subject to the Act, the Company’s articles of
association and the provisions of the JSE Listings Requirements, namely:
R’000
Revenue 6 928
Cost of sales (2 071)
Gross profit 4 857
Other income 2
Operating expenses (2 850)
Depreciation (54)
Amortisation (22)
Operating profit 1 933
Investment revenue 228
Profit before tax 2 161
Taxation (451)
Profit contribution 1 710
If the acquisition had been completed on 1 September 2008, total group revenue for the period would have been R34,4 million higher and the loss for the period would have been R6,7 million lower.
No Competition Commission (“Commission”) approval was required for the acquisition referred to above, since MIE’s revenue is below the threshold set by the Competitions Act, but a competitor of MIE has lodged a complaint with the Commission, which ruled that the transaction must be reported to the Commission as a small merger. The required report was submitted to the Commission on 24 November 2009, and the transaction was approved by the Commission unconditionally on 18 February 2010.
28. Business combination
MIE’s carrying amount before
combination R’000
Fair value adjustment
R’000Fair value
R’000
Property, plant and equipment 1 703 1 288 2 991
Other non-current assets - 7 700 7 700
Deferred tax 281 281
Trade and other receivables 5 976 5 976
Taxation receivable 298 298
Cash and cash equivalents 20 093 20 093
Trade and other payables (2 967) (2 967)
Long-term liabilities (40 600) (40 600)
Provisions (1 214) (1 214)
(16 430) 8 988 (7 442)
Provisional goodwill arising on acquisition 28 900
Investment in MIE 21 458
Investment in MIE 21 098
Deferred tax 360
Cash consideration paid -
Cash and cash equivalents acquired 20 093
Net cash outflow arising on acquisition (20 093)
The acquisition of MIE has been provisionally accounted for, as permitted by IFRS 3. The purchase price allocation will be completed within the next 12 months and any resulting fair value adjustments to assets and the recognition of intangible assets will be accounted for accordingly.
The goodwill arising on the acquisition of MIE is attributable to the anticipated profitability of MIE and the anticipated future marketing synergies from the combination.
The results contributed by MIE for the two months between the date of acquisition and the balance sheet date were as follows:
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
for the year ended 31 August 2009
IDECO 2009 Annual Report52 IDECO 2009 Annual Report 53
NOTICE OF ANNUAL GENERAL MEETING continued
that this authority shall not extend beyond fifteen months from the date of this meeting or the date of the next -
annual general meeting, whichever is the earlier date;
that the issue shall be to public shareholders as defined in paragraphs 4.25 to 4.27 of the JSE Listings -
Requirements and not to related parties;
that a paid press release, giving full details, including the impact on net asset value, net tangible asset value and -
earnings and headline earnings per share be published at the time of any issue representing, on a cumulative
basis within one year, 5% or more of the number of ordinary shares issued prior to the issue;
that issues in the aggregate in any financial year, not exceed 15% of the number of ordinary shares of the -
Company’s issued share capital, including instruments which are convertible into ordinary shares. The number of
ordinary shares which may be issued shall be based on the number of ordinary shares in issue at the date of such
application less any ordinary shares issued during the current financial year, provided that any ordinary shares to
be issued pursuant to a rights issue (announced and irrevocably and underwritten) or acquisition (concluded up to
the date of application) may be included as though they were in issue at the date of application;
the equity securities which are the subject of the issue for cash must be of a class already in issue, or where this -
is not the case, must be limited to such securities or rights that are convertible into a class already in issue;
that in determining the price at which an issue for shares will be made in terms of this authority, the maximum -
discount permitted be 10% of the weighted average traded price of the shares in question over the thirty business
days prior to the date that the price of the issue is agreed in writing between the issuer and the party subscribing
for the securities.”
Ordinary Resolution Number Three
Non-executive directors’ remuneration
“Resolved that the remuneration of the non-executive directors for the financial year ending 31 August 2010 be as
follows: Board As member R40 000
Audit and Risk Committee As chairman R50 000 As member R40 000
Ordinary Resolution Number Four
Authority to action all ordinary and special resolutions
“Resolved that any one director of the Company or the company secretary be and is hereby authorised to do all such
things as are necessary and to sign all such documents issued by the Company so as to give effect to special resolution
number one and ordinary resolution numbers one, two, and three.”
Special Resolution Number One
General authority to repurchase issued shares
“Resolved that the Company hereby approves, as a general approval contemplated in sections 85(2) and 85(3) of the
Act, the acquisitions by the Company, and/or any subsidiary of the Company, from time to time of the issued ordinary
shares of the Company, upon such terms and conditions and in such amounts as the directors of the Company may
from time to time determine, but subject to the Company’s articles of association, the provisions of the Act and the JSE
Listings Requirements, when applicable, and provided that –
the repurchase of securities will be effected through the order book operated by the JSE trading system and done
without any prior understanding or arrangement between the Company and the counter party;
NOTICE OF ANNUAL GENERAL MEETING continued
this general authority shall only be valid until the Company’s next annual general meeting, provided that it shall not
extend beyond fifteen months from the date of passing this special resolution;
in determining the price at which the Company’s ordinary shares are acquired by the Company and/or subsidiary
of the Company, in terms of this general authority, the maximum premium at which such ordinary shares may be
acquired will be 10% of the weighted average of the market price at which such ordinary shares are traded on the
JSE, as determined over the five days immediately preceding the date of the repurchase of such ordinary shares;
the acquisitions of ordinary shares in the aggregate in any one financial year do not exceed 20% of the Company’s
issued ordinary share capital from the beginning of the financial year;
the Company and its subsidiaries will be able to pay their debts as they become due in the ordinary course of
business for a period of twelve months after the transaction;
the consolidated assets of the Company and its subsidiaries, being fairly valued in accordance with the accounting
policies used in the Company’s latest audited group annual financial statements, will be in excess of the consolidated
liabilities of the Company and its subsidiaries for a period of twelve months after the date of the transaction;
the issued share capital and reserves of the Company and its subsidiaries will be adequate for the purposes of the
business of the Company and its subsidiaries for a period of twelve months after the date of the transaction;
the working capital available to the Company and its subsidiaries will be adequate for ordinary business purposes for
a period of twelve months after the date of the transaction;
upon entering the market to proceed with the repurchase, the Company’s sponsor has confirmed the adequacy of the
Company’s working capital for the purposes of undertaking a repurchase of shares in writing to the JSE;
after such repurchase the Company will comply with the JSE Listings Requirements concerning shareholder spread
requirements;
the Company or its subsidiary are not repurchasing securities during a prohibited period as defined in the JSE Listings
Requirements unless they have in place a repurchase programme where the dates and quantities of the securities
to be traded during the relevant period are fixed (not subject to any variation) and full details of the programme have
been disclosed in an announcement over SENS prior to the commencement of the prohibited period;
when the Company has cumulatively repurchased 3% of the initial number of the relevant class of securities, and for
each 3% in aggregate of the initial number of that class acquired thereafter, an announcement will be made; and
the Company only appoints one agent to effect any repurchase(s) on its behalf.”
Reason for and effect of the Special Resolution
The reason for and the effect of the special resolution is to grant the Company’s directors a general authority, up to
and including the date of the following annual general meeting of the Company, to approve the Company’s purchase of
shares in itself, or to permit a subsidiary of the Company to purchase shares in the Company.
Certain information relating to the Company as required by the JSE Listings Requirements is set out in the attached
Annexure which forms part of this notice of annual general meeting.
Voting and proxies
Shareholders who hold their shares in certificated form or who are own name registered shareholders holding their shares
in dematerialised form who are unable to attend the annual general meeting but who wish to be represented thereat, are
required to complete and return the attached Form of Proxy so as to be received by the Company’s registrars by not later
than 10:00 on 14 April 2010.
IDECO 2009 Annual Report54 IDECO 2009 Annual Report 55
NOTICE OF ANNUAL GENERAL MEETING continued
Shareholders who have dematerialised their shares through a Central Securities Depository Participant (“CSDP”) or
broker, other than by own name registration, who wish to attend the annual general meeting should instruct their CSPD
or broker to issue them with the necessary authority to attend the meeting, in terms of the custody agreement entered
into between such shareholders and their CSDP or broker. Shareholders who have dematerialised their shares through
a CSDP or broker, other than by own name registration, who wish to vote by way of proxy, should provide their CSDP
or broker with voting instructions, in terms of the custody agreement entered into between such shareholders and their
CSPD or broker. These instructions must be provided to their CSPD or broker by the cut-off time or date advised by their
CSDP or broker for instructions of this nature.
Shareholders who have any doubt as to the action they should take, should consult their stockbroker, accountant,
attorney, banker or other professional adviser immediately.
By order of the board
H B AucampCompany secretaryJohannesburg26 February 2010
Registered office Registrars13 Wellington Road Computershare Investor Services (Pty) LimitedParktown 70 Marshall StreetJohannesburg 2193 Johannesburg, 2001 P O Box 61051 Marshalltown, 2107
General information on the company to support the resolution proposed in the notice of annual general meeting
The following information is required by the JSE Listings Requirements with regard to the resolution granting a general
authority to the Company to repurchase its securities.
The JSE Listings Requirements require the following disclosures, some of which are elsewhere in the annual report of
which this notice forms part as set out below:
Directors – page 2;
Major shareholders of the Company – page 11;
Directors’ interests in securities – page 49;
Share capital of the Company – page 41.
Litigation statement
There are no legal or arbitration proceedings, either pending or threatened against the Company or its subsidiaries, of
which the Company is aware, which may have, or have had in the last twelve months, a material effect on the financial
position of the Company or its subsidiaries.
Material change
Other than the facts and developments reported on in the annual report, there have been no material changes in the
affairs or financial position of the Company and Group since the date of signature of the audit report and the date of this
notice.
The board of directors has no immediate intention to use this authority to repurchase Company shares. However, the
board of directors is of the opinion that this authority should be in place should it become apparent to undertake a share
repurchase in the future.
NOTICE OF ANNUAL GENERAL MEETING continued
Directors’ responsibility statement
The directors whose names are given on page 2 of the annual report, collectively and individually accept full responsibility
for the accuracy of the information given in this notice of annual general meeting and certify that to the best of their
knowledge and belief there are no facts that have been omitted which would make any statement false or misleading,
and that all reasonable enquiries to ascertain such facts have been made and that the notice contains all information
required by Law and the JSE Listings Requirements.
IDECO 2009 Annual Report56
CORPORATE INFORMATION
REGISTERED OFFICEIdeco Group Limited(Registration number 2001/023463/06)13 Wellington RoadParktown 2193
DESIGNATED ADVISORQuestco Sponsors (Pty) Limited(Registration number 2004/018276/07)The Campus57 Sloane Street1st Floor, Wrigley FieldBryanstonPO Box 98956Sloane Park 2152
CORPORATE LAW ADVISORSCliffe Dekker Hofmeyr Incorporated(Registration number 2008/018923/21)1 Protea PlaceSandown 2196Private Bag X7Benmore 2010
COMMERCIAL BANKERAbsa Bank of South Africa Limited(Registration number 1986/004794/06)3rd Floor, Absa Towers East170 Main StreetJohannesburg 2001
TRANSFER SECRETARIESComputershare Investor Services (Pty) Limited(Registration number 2004/003647/07)Ground Floor, 70 Marshall StreetJohannesburg 2001(PO Box 61051, Marshalltown 2107)
INDEPENDANT AUDITORBDO South Africa Incorporated(Registration number 1995/002310/21)13 Wellington RoadParktown 2193(Private Bag X60500, Houghton 2041)
COMPANY SECRETARY AND REGISTERED ADDRESSHB Aucamp, CA(SA)13 Wellington RoadParktown 2193(Private Bag X60500, Houghton 2041)
Designed by Mortimer-Harvey
NOTES
Recommended