ANNUAL REPORT 2010 - ShareData Online - South African … · 2011-06-27 · records is still the largest project of its kind in the world. ... BBA Business Administration, ... Earnings

Ideco Group Limited – providing certainty through identity

ProfileIdeco Group Limited is an established leader in the application of biometric technology and South Africa’s sole distributor of Morpho 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 Morpho fingerprint biometrics for access control and time management solutions.

There are now over 60 000 Morpho fingerprint readers deployed across southern Africa, securely controlling workplace access for over two million people in a diverse range of professionally-managed, security-conscious businesses.

cer ta in ty th rough ident i tyce2010

ANNUALREPORT

deco Annual report 2010 1

Financial highlights

ContentsIFC Ideco profile

1 Financial highlights

2 Board of directors

3 Corporate structure

4 Executive chairman’s report

7 Corporate governance

10 Annual financial statements

51 Notice of annual general meeting

IBC Corporate information

Attached Form of proxy

2010 2009 2008 2007R’000 R’000 R’000 R’000

Revenue 126 795 83 076 113 645 209 471 EBITDA 8 175 (11 487) 2 422 32 279 Operating profit/(loss) 1 406 (14 788) (563) 31 317 Total assets 130 739 121 954 85 793 55 692 Cash and cash equivalents (2 459) 8 247 (2 792) 26 177 Shareholders' equity 21 895 28 781 40 872 16 589

Number of shares in issue 202 222 222 202 222 222 202 222 222 25 000 000 Weighted average number of shares 202 222 222 202 222 222 127 550 685 25 000 000 Headline (loss)/earnings per share (cents) (3,39) (5,69) (0,43) 88,84 Basic (loss)/earnings per share (cents) (3,41) (5,98) 2,35 88,85 Net asset value per share (cents) 10,83 14,23 20,21 66,36

2 deco Annual report 2010

Board of directors

R Troester (54) (German)Non-executive directorBBA Business Administration, University of Applied Sciences

During his career Mr Troester has worked in different management positions at Siemens and IBM, Germany before starting his own information technology consultancy firm in 1997. He has concentrated on biometrics consultancy work since 2002.

HB Aucamp (60)Financial directorBCom (Potch), BCompt (Hons) (Unisa), CA (SA)

Mr Aucamp has 40 years’ experience in auditing, financial management and financial consultancy. He left the auditing profession in 1976 and has since built up experience in the mining, fertilizer, oil, engineering and ICT sectors. He has been involved with the founders of Ideco since the early 1990s.

V Mufamadi (42)Executive chairmanBA LLB (Wits)

After spending several years in the legal profession, Mr Mufamadi entered the business world in 1997 and has become an accomplished businessman and entrepreneur with experience in the ICT sector, consumer goods distribution and infrastructure engineering.

He was one of the founding members of Ideco and is currently a non-executive director of Discovery Holdings Limited.

MF Kekana (40)Non-executive directorBComm (Witwatersrand)

Mr Kekana had several positions in banking before starting Prodigy Capital, a private equity fund associated with Prodigy Asset Management. He was the chief executive officer of the Umsobomvu Youth Fund. He also started Baswa Investment Company, to participate in BEE transactions. He serves on the Board of the Black Management Forum Investment, the Council of the University of Limpopo and the Council for the Support for National Defence.

Ms AX Sisulu-Dunstan (34)Non-executive directorBachelor of Arts (Hons) (Wellesley College, Boston, USA)

Ms Sisulu-Dunstan is a business development director with responsibility for State Owned Enterprises at Rand Merchant Bank. She started her career as a private equity analyst at Brait Capital Partners and has 10 years’ investment banking experience.


Corporate structure

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 Biometric Security Solutions (Pty) Limited (“IBSS”) is the sole distributor of Morpho biometric products in South Africa. IBSS distributes and supports Morpho’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 (“AFISwitch”) 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 (“SAPS”).

Ideco Biometrix (Pty) Limited supplies biometric equipment to the public sector on contracts administered by the State Information Technology

IDECO Technologies (Pty) Limited – 100%I(

IDECO Biometric Security Solutions (Pty)

Limited – 100%

IDECO AFISwitch(Pty) Limited – 100%

IDECO Biometrix(Pty) Limited – 100%

IDECO Identity Solutions(Pty) Limited – 100%

Managed Integrity Evaluation(Pty) Limited – 100%

IDECO GROUP LIMITED


Executive chairman’s report

Vhonani MufamadiExecutive chairman

Our technology is tried-and-tested and is delivering a range of benefits that empower businesses to protect their bottom line in an increasingly tough financial climate.

The year under reviewI am pleased to report a much improved year for the Ideco Group. This is the first year that includes a full twelve months results for MIE, which had a positive effect on Group results. The highlights of the year were the following: Revenue from Group operations increased by 53% to R126,8 million;

Earnings before interest, tax, depreciation and amortisation increased to R8,2 million compared to a loss of R11,5 million for the previous financial year; and

Ideco AFISwitch reported a profit for the first time in its history.

The operating results of the three business segments are discussed below.

Biometric readers and solutionsThe economic downturn resulted in a decrease of 10% in revenue. The Morpho factory in France experienced a shortage of certain components required for the production of biometric readers. At 31 August 2010, the Company had unfulfilled orders of R3,6 million on its books, which would normally have been executed, were it not for the delay in delivery from France. Had these deliveries taken place, the decrease in sales would have been only 4%. Cost savings of just under R1 million made up for the reduced gross profit, with the result that the segment’s operating profit was only R261 000 lower than that of the previous year.

On 27 May 2010 Sagem Securité changed its name to Safran Morpho, and therefore the biometric readers previously referred to as Sagem readers are now known as Morpho readers.

Secure credentialing servicesThis 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: AFISwitch – offering criminal record checks and MIE – offering background screening services. This is the first reporting period when background screening services revenue is included in


the segmental results for the full year, as it was acquired as a wholly-owned subsidiary with effect from 1 July 2009.

MIE’s revenue was marginally higher for the year ended 31 August 2010 compared to the year ended 31 August 2009.

The revenue of AFISwitch included a non-recurring amount of R6,6 million in respect of work done for theSAPS AFIS upgrade. Revenue from criminal background checks increased by 39% for the year ended 31 August 2010 compared to the revenue for the year ended 31 August 2009.

Biometric projectsRevenue generated by this segment increased by 65% compared to the revenue for the year ended 31 August 2009. The main reason for this increase is the commencement of the three-year contract with the Bombela Operating Company for the supply of the Gautrain smartcards and the fact that revenue from the Namibian drivers’ licence contract was included for a full year in comparison to only nine months in the prior financial year.

Financial overviewEarnings before interest, tax, depreciation and amortisation (“EBITDA”) showed an improvement of R19,7 million over the previous year. This improvement can largely be ascribed to the increase in EBITDA of the credentialing services segment. The increase in EBITDA of this segment was due to the fact that the results of MIE were included for the full financial year compared to only two months in the year ended 31 August 2009. The performance of AFISwitch, which is also included in this segment was also much better than in the previous year and the Company reported a profit for the first time in its history. The operating results of the biometric products and biometric solutions and projects segments were in line with the previous year’s results. Cost savings of R1,4 million were primarily achieved by not replacing personnel who had resigned.

The total comprehensive loss attributable to ordinary shareholders of R6,9 million was R5,2 million lower than the previous year. Although EBITDA increased by R19,7 million, the increase was negated by higher depreciation and amortisation (R3,5 million), finance costs (R3,5 million) and a tax charge instead of a tax credit (R5,7 million). All these increases are due to the acquisition of MIE.

The business combination balances of intangible assets on the acquisition of MIE have been finalised and led to changes in computer software (R2,9 million), trade name, customer base and goodwill on acquisition as reflected in note 27 to the annual financial statements.

The loan to an associate consists of a loan to Biometrical Medical Solutions (Pty) Limited (“Biomed”). Ideco Group acquired 25% of the issued share capital of Biomed on 28 September 2009. In terms of Ideco’s accounting policies, losses made by an associate are recognised to the extent of the investment in the associate.

Trade and other receivables is R4,3 million higher than in the previous year, which is due to the increase in Group revenue. This is also the reason for the increase in trade and other payables.

The Group’s net cash position decreased by R10,7 million during the year ended 31 August 2010. Cash generated by operations amounted to R9,7 million, which was utilised by finance costs, tax paid, investment in property, plant and equipment, intangible assets and a loan to an associate. Loan repayments consumed a further R4,0 million. More details of the above cash flows are reflected in the consolidated statement of cash flows.

The major item included in long-term borrowings 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 on the “A” preference shares and a rate that will give the NEF an internal rate of return of 18% on its total investment on the “B” preference share. The capital amount outstanding at 31 August 2010 amounted to R35,6 million (R5 million was redeemed on 1 November 2009) and provision of R3,1 million has been made for the dividend on the “B” preference shares, which will only be payable on the final

Picture by MediaClubSouthAfrica.com


Executive chairman’s report continued

redemption date which is 1 September 2016. The other long-term borrowing consists of a bond registered over a property in Centurion, with an outstanding balance of R2,4 million.

The deferred tax liability increased by R6,5 million as a result of the final valuation of business combination balances with the acquisition of MIE.

ProspectsBiometric readers and solutionsIt is expected that segmental revenue in the private sector will improve moderately. Ideco’s certified partners have however submitted several proposals to their customers for new biometric applications in respect of risk management and cost control.

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 2011.

Secure credentialing servicesThe 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 Driver’s Permits, which constitute approximately 50%

of capacity. The installation of background checking equipment at the 350 testing stations countrywide has begun and will continue throughout 2011. The agreement concluded in May 2009 for the management of more than 300 000 identity profiles will also be implemented during 2011, further providing predictable annuity revenue flow to the Group.

MIE’s revenue for the first quarter of the financial year ending 31 August 2011 showed an increase of more than 50% over revenue for the first quarter of the year ended 31 August 2010. Although off a low base, it is expected that revenue for the full financial year will show healthy growth.

Biometric projectsIn addition to the Namibian drivers’ licence project, Ideco is awaiting the adjudication of several public sector tenders which, if awarded, will enhance the results of this segment.

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 year. We are also grateful to our suppliers and distribution partners whose loyalty is critical to our growth and success.

Vhonani MufamadiExecutive chairman


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 III Report on Corporate Governance in South Africa (“the King III 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 III Report. In supporting the King III 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 compositionIdeco 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. Although it is not an AltX requirement to have a non-executive chairman, it is the intention of the Group to appoint a non-executive chairman in the near future in order to comply with the King III Report. All of the members of the board of directors demonstrate the necessary calibre 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 19 April 2011 (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, defines levels of materiality, reviews performance, institutes control measures and evaluates and monitors business matters which have an impact on the well-being 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; and

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 was 100% attendance by all appointed directors and the company secretary at scheduled board meetings (three meetings) and meetings of the audit and risk committee (four meetings) during the period under review. Representatives from the designated advisor attend all board and audit and risk committee meetings by invitation. Board committeesWhile 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.


Corporate governance continued

Audit and risk committeeThe audit 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 advisor, 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.

The audit and risk committee has carried out and has met periodically to consider and to act upon its statutory duties and functions and confirms that it has satisfied itself of the independence of the Group’s auditors.

The committee has again nominated, for approval at the annual general meeting, BDO South Africa Incorporated as the external auditor and Mr GE Levick as the designated auditor for the 2011 financial year.

The committee confirms that the auditor and designated auditor are accredited by the JSE Limited.

Remuneration committeeA 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.

Company secretaryThe 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 auditGoing concernThe 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 2011. 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 accountingThe 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 auditDue 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 controlThe 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 reviewed by the audit and risk committee, and changes to internal controls will be made where necessary.

Risk managementEffective 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 and 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 their impact and implementing what is necessary to proactively manage these risks.

Share dealingsIdeco 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 dealing 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 2010 and the date of this report.

People and valuesIdeco’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 equityIdeco 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.



Annual financial statements

Contents11 Approval of annual financial statements

11 Statement of compliance by the company secretary

12 Statement of responsibility by the board of directors

13 Independent auditor’s report

14 Directors’ report

16 Statements of comprehensive income

17 Statements of financial position

18 Statement of changes in equity

19 Statements of cash flows

20 Accounting policies

30 Notes to the annual financial statements

50 Analysis of shareholders

2010

ANNUALREPORT

cer ta in ty th rough ident i ty


Approval of annual financial statements

The consolidated annual financial statements and annual financial statements of Ideco Group Limited, for the year ending 31 August 2010 set out on pages 14 to 50 were approved by the board of directors on 25 February 2011 and are signed on its behalf by:

V Mufamadi AX Sisulu-DunstanExecutive 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 AucampCompany secretary


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 statements of financial position at 31 August 2010, and the statements of comprehensive income, the statements of changes in equity and statements of cash flows 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 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 2011 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.


Independent auditor’s report

To the members of Ideco Group LimitedWe have audited the consolidated annual financial statements and annual financial statements of Ideco Group Limited, which comprise the consolidated and separate statements of financial position as at 31 August 2010, and the consolidated and separate statements of comprehensive income, the consolidated and separate statements of changes in equity and consolidated and separate statements of cash flows 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 statementsThe 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 responsibilityOur 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.

OpinionIn 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 2010, 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, the AC 500 standards as issued by the Accounting Practices Board and in the manner required by the Companies Act of South Africa.

BDO South Africa IncorporatedPer GE Levick

Registered Auditor25 February 201113 Wellington Road, Parktown, 2193


Directors’ reportfor the year ended 31 August 2010

The directors have pleasure in submitting their report and consolidated annual financial statements and annual financial

statements of Ideco Group Limited for the year ended 31 August 2010.

Business activitiesIdeco 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 the provision of an automated illicit activity checking service to employers. The nature of

business is consistent with that of the previous year.

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 operationsThe net loss of the Group was R6,9 million (2009: loss R12,1 million), after a tax charge of R0,9 million (2009: tax credit

R4,7 million). Refer to note 1 for the segmental reporting on the Group’s operations.

Going concernThe 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 2011, 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 to the Group.

Authorised and issued share capitalThere were no changes to the share capital during the year ended 31 August 2010. Details of the share capital are set out

in note 15 of the financial statements.

Fixed assetsThere was no major change in the nature of fixed assets during the year and there was no change to the policy on

fixed assets.

Directors’ shareholdingsAs at 31 August 2010, the present directors held a total of 86 005 389 ordinary shares in the Company. Details of their

shareholdings are set out in note 26 to these financial statements.

Borrowing powersThe directors’ borrowing powers have not been exceeded since Ideco’s incorporation and may only be varied by 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.

DividendsNo dividends have been declared to members during the year (2009: Rnil).

Special resolutionsIdeco Group Limited passed the following special resolution in the twelve months to 31 August 2010:

General authority to repurchase issued shares.


Events subsequent to the end of the reporting periodIt was previously reported that the R25,4 million due to Morpho SA (Pty) Limited as detailed in note 19 was rescheduled during November 2009 in terms of which R12,7 million was repayable in March 2010 and the balance of R12,7 million was payable in four equal payments from 15 September 2010 to 15 December 2010. The loan is currently being restructured to reflect the original intention of the parties, namely that the loan will be repaid from revenue flowing from criminal record checks performed by Ideco AFISwitch (Pty) Limited. The date of the first repayment to be made must still be agreed upon, but it will not be before 1 September 2011. No interest will accrue on the outstanding amount from 1 November 2009 to date of payment.

During January 2011, the Group increased its shareholding of 25% in Biometric Medical Solutions (Pty) Limited (“BioMed”) to 100% at a nominal cost of R300. The joint venture project with the three other investors has been terminated and it is the intention of the Group to utilise the company in other opportunities in the medical field. The directors are of the opinion that no provision need to be made for impairment of the loan of R533 000 made by the Group to BioMed, since it will be off-set by cash in the company and the utilisation of tax losses. The directors are not aware of any significant events that have occurred between the end of the financial year and the date of this report that may materially affect the results of the Group for the period under review or their financial position as at 31 August 2010 other than noted above.

BankersThe Group bankers are Absa Bank Limited and The Standard Bank of South Africa Limited.

DirectorsThe directors in office at the date of this report are: V Mufamadi HB Aucamp AX Sisulu-Dunstan MF Kekana R Troester (German)

SecretaryHB Aucamp

Refer to corporate information on the inside back cover.

AuditorsBDO South Africa Incorporated will continue in office in accordance with section 270(2) of the Companies Act.

SubsidiariesDetails of the Company’s subsidiaries are set out in note 9 of these financial statements.

Company informationThe Company is incorporated in South Africa. Refer to corporate information on the inside back cover for full details.

Power to amend the annual financial statementsThe shareholders of the Company do not have the power to amend the annual financial statements after issue, except if an error is discovered therein within three months after the approval thereof. Such error will be corrected and the annual financial statements will then be conclusive.


Statements of comprehensive income for the year ended 31 August 2010

GROUP COMPANY

2010 2009 2010 2009Notes R’000 R’000 R’000 R’000

Revenue 2 126 795 83 076 – – Cost of sales (57 433) (48 806) – –

Gross profit 69 362 34 270 – – Other operating income 519 166 5 513 6 805 Operating expenses (61 706) (45 923) (13 618) (14 158)

Earnings before interest, tax, depreciation and amortisation 8 175 (11 487) (8 105) (7 353)Depreciation (1 700) (1 105) (444) (595)Impairment of loan to subsidiary – – (1 094)Amortisation (5 069) (2 196) – –

Operating profit/(loss) 1 406 (14 788) (9 643) (7 948)Investment revenue 522 287 150 34 Finance costs 4 (7 883) (4 359) (968) (900)Share of profit of associate company – 2 023 – 2 023

Loss before tax (5 955) (16 837) (10 461) (6 791)Taxation (expense)/credit 6 (931) 4 746 2 533 2 172

Loss for the year (6 886) (12 091) (7 928) (4 619)Other comprehensive income – – – –

Total comprehensive loss for the year (6 886) (12 091) (7 928) (4 619)

Loss per share 7Basic and diluted basic loss per share (cents) (3,41) (5,98)


Statements of financial positionat 31 August 2010

GROUP COMPANY

2010 2009 2010 2009Notes R’000 R’000 R’000 R’000

AssetsNon-current assets 84 049 76 415 31 570 30 629

Property, plant and equipment 8 10 771 10 210 5 145 5 770 Investments in subsidiaries 9 – – 21 098 21 098 Investment in associate 5 533 – 533 – Intangible assets 10 62 924 58 724 – 1 500 Deferred tax 11 9 821 7 481 4 794 2 261

Current assets 46 690 45 539 17 566 19 146

Inventories 12 13 498 12 704 – – Loans to subsidiaries 9 – – 16 454 17 572 Trade and other receivables 13 28 211 23 894 787 1 265 Cash and cash equivalents 14 4 468 8 598 7 9 Taxation receivable 513 343 318 300

Total assets 130 739 121 954 49 136 49 775

Equity and liabilitiesEquityShare capital 15 1 1 1 1 Share premium 15 21 286 21 286 21 286 21 286 Retained earnings 608 7 494 (7 492) 436

Shareholders' equity 21 895 28 781 13 795 21 723

Non-current liabilities 47 763 43 357 2 132 2 396

Long-term borrowings 16 2 132 2 396 2 132 2 396 Deferred tax 11 6 888 361 – – Cumulative redeemable preference shares 17 38 743 40 600 – –

Current liabilities 61 081 49 816 33 209 25 656

Loans from subsidiaries 9 – – 24 782 20 990 Taxation payable 316 325 – – Trade and other payables 18 26 515 20 257 1 237 1 206 Current portion of long-term borrowings 16 266 238 266 238 Bank overdraft 14 6 928 351 6 924 351 Other current liabilities 19 25 363 27 291 – 2 871 Provisions 20 1 693 1 354 – –

Total equity and liabilities 130 739 121 954 49 136 49 775


Statement of changes in equityfor the year ended 31 August 2010

Ordinary Share Retainedshare capital premium earnings Total

R'000 R'000 R'000 R'000

GroupBalance at 1 September 2008 1 21 286 19 585 40 872 Total comprehensive loss for the year (12 091) (12 091)

Balance at 31 August 2009 1 21 286 7 494 28 781

Balance 1 September 2009 1 21 286 7 494 28 781 Total comprehensive loss for the year (6 886) (6 886)

Total changes – (6 886) (6 886)

Balance at 31 August 2010 1 21 286 608 21 895

CompanyBalance at 1 September 2008 1 21 286 5 055 26 342 Total comprehensive loss for the year (4 619) (4 619)

Balance at 31 August 2009 1 21 286 436 21 723

Balance 1 September 2009 1 21 286 436 21 723 Total comprehensive loss for the year (7 928) (7 928)

Total changes – (7 928) (7 928)

Balance at 31 August 2010 1 21 286 (7 492) 13 795


Statements of cash flowsfor the year ended 31 August 2010

GROUP COMPANY

2010 2009 2010 2009Notes R’000 R’000 R’000 R’000

Cash generated/(utilised) by operations 25.1 9 694 (11 652) (8 654) (8 082)Investment income 522 287 150 34 Finance costs (7 883) (4 359) (968) (900)Dividends paid – – – – Taxation paid 25.2 (4 186) (541) (18) (14)

Net cash from operating activities (1 853) (16 265) (9 490) (8 962)

Cash flows from investing activitiesProceeds from disposal of property, plant and equipment 342 1 300 – Transfer of intangible asset to a subsidiary 1 500 Acquisition of property, plant and equipment 8 (2 643) (1 552) (155) (105)Acquisition: cash in subsidiary 27 – 20 093 – – Investment in associated company (533) – (533) – Acquisition of intangible assets 10 (1 999) (1 725) – – Non-current assets held for sale – 4 335 – 282

Net cash from investing activities (4 833) 21 152 1 112 177

Cash flows from financing activitiesDecrease in long-term borrowings (2 093) (177) (236) (177)Movement in related party loans – – 4 910 8 551 Movement in other current liabilities (1 928) 6 329 (2 871) 2 871

Net cash from financing activities (4 021) 6 152 1 803 11 245

Net (decrease)/increase in cash and equivalents (10 707) 11 039 (6 575) 2 460 Cash and cash equivalents at the beginning of the year 14 8 247 (2 792) (342) (2 802)

Cash and cash equivalents at the end of the year 14 (2 460) 8 247 (6 917) (342)


Accounting policiesfor the year ended 31 August 2010

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 2010 comprise the Company and its subsidiaries (together referred to as the “Group”).

The principal 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, the AC 500 Standards issued by the Accounting Practices Board and its successor and the Companies Act of South Africa.

Basis of preparationThe 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) 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 8, “Operating segments”, and IAS 1, “Presentation of financial statements”, 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 judgementsThe 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 debtsThe 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 the provision and actual loss incurred is performed to assess the reasonableness of provisions.

Estimate of taxationThe Group is subject to income tax. Corporate and deferred taxation calculations have been determined on the basis of prior year assessed computations adjusted for changes in taxation legislation in the year. No significant new transactions have been entered into in the year which require 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 statement of financial position date could be impacted. Additionally future changes in taxation laws within which the Group operates could limit the ability of the Group to obtain taxation deductions in future periods.

Goodwill impairmentThe Company tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated for Goodwill on page 25. The recoverable amount of the cash generating unit has been determined based on value in use calculations. These calculations require the use of estimates in relation to the projections of future cash flows, the projected growth rate, the terminal value of the business and the discount rate derived from the weighted average cost of capital specific to the Company.


Accounting policies continued

for the year ended 31 August 2010

Critical accounting estimates and judgements (continued)Property, plant and equipment (“PPE”) and intangible assetsPPE and intangible assets are considered for impairment if there is any reason to believe after applying the internal and external impairment indicators that an impairment may be necessary. Factors taken into consideration include the economic viability of the asset itself and where it is a component of a larger cash-generating unit, the viability of the unit. Future cash flows expected to be generated by the assets are projected, taking into account market conditions and the expected useful lives of the assets. The present value of these cash flows, determined using an appropriate discount rate, is compared to the current asset value and, if lower, the assets are impaired to the present value.

Asset useful lives and residual valueThe Group depreciates its assets over their estimated useful lives taking into account residual values, where appropriate. The appropriateness of its assets’ estimated useful lives, residual values and their depreciation methods are re-assessed on an annual basis. The actual lives of these assets and their respective residual values may vary depending on a variety of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account.

Impairment of trade receivablesThe Group assesses its trade receivables for impairment at each balance sheet date. The impairment for trade receivables is assessed for impairment on an individual debtor basis, based on historical data and future factors. In determining whether an impairment loss should be recorded in the statement of comprehensive income, the Group makes judgements as to whether there is objective evidence indicating a measurable decrease in the estimated future cash flows from a financial asset. Where objective evidence of impairment exists, future cash flows expected to be collected are projected after taking into account market conditions and credit risk profile of the trade debtors. The present value of these cash flows, determined using an appropriate discount rate, is compared to the carrying amount of the trade receivable and, if lower, the trade receivables are impaired to the present value.

Basis of consolidationThe 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. SubsidiariesSubsidiaries 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 impairment losses.

All companies in the Group maintain consistent accounting policies and have the same year-end.

AssociatesThe 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 statement of comprehensive income 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, unaudited financial statements are used.

Where a Group entity transacts with an associate of the Group, unrealised profits and losses are eliminated to the extent of the Group’s interest in the respective associate.




Basis of consolidation (continued)Associates (continued)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 statement of comprehensive income 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 combinationsInitial recognition and measurementAll business combinations are accounted for by applying the acquisition method. The cost of the business combination is the fair values at the date of exchange of the assets given, liabilities incurred or assumed, and equity instruments issued by the Group, in exchange for control of the acquiree. Costs directly attributable to the business combination are expensed as incurred, except the costs to issue debt which are amortised as part of the effective interest and costs to issue equity which are included in equity. 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 non-controlling interest. Contingent consideration is included in the cost of the business combination at fair value determined at the date of acquisition. Subsequent changes to the assets, liabilities or equity which arise as a result of the contingent consideration are not effected against goodwill, unless they are valid measurement period adjustments. The interest to non-controlling shareholders may be measured either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. When a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value on the date the Group attains control and the resulting gain or loss is recognised in profit or loss. Where the previously held interest was classified as an available-for-sale financial asset, the cumulative fair value adjustments recognised previously to other comprehensive income and accumulated in equity are recognised in profit or loss as a reclassification adjustment. At the acquisition date, the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill in accordance with the Group’s accounting policy for goodwill. The acquisition date is the date on which the Group effectively obtains control of the acquiree. The excess of the fair value of the net identifiable assets and contingent liabilities of the entity acquired over the cost of acquisition results in a bargain purchase which is recognised immediately in profit or loss. Subsequent measurementIf the initial accounting for business combinations has been determined provisionally, then these provisional amounts are adjusted during the measurement period to reflect new information obtained about facts and circumstances that existed as of the date of acquisition that, if known, would have affected the amounts initially recognised. The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date, subject to a maximum of one year.




Foreign currency transactionsForeign 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 statement of comprehensive income.

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 reportingSegment information is determined on the same basis as the information used by the chief operating decision maker for the purposes of allocating resources to segments and assessing segments’ performance. The chief operating decision maker has been identified as the executive chairman that makes strategic decisions. Segments have been determined on a business unit basis by reference to the nature of the products and services engaged by the Group. All intersegment transactions are eliminated and conducted at an arm’s length basis.

Revenue recognitionRevenue 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.

Revenue from the rendering of services is recognised during the period in which the service is performed.

Investment incomeDividendsDividends 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 investment income.

Finance costsFinance 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.

TaxationThe income tax expense comprises current and deferred tax. The income tax expense is recognised in profit or loss except 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 statement of financial position date, and any adjustment of taxation payable for previous years.

Deferred taxation is provided using the statement of financial position 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 in 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 statement of financial position 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.




Taxation (continued)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 Dividend distributions to the Company’s shareholders are recognised as a liability in the Company’s financial statements in the period in which the dividends are approved by the Company’s shareholders. Lease assetsFinance leasesLeases in which the Group assumes 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 leasesOther 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 saleNon-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 equipmentProperty, 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: 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.




Property, plant and equipment (continued)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 assetsIntangible 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 – internally developed 5 years Computer software – developed for specific contract Over contract period Intellectual property rights 5 years Right of use 15 years NQR trademark 15 years Trade name 10 years Customer base 10 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 trademark, trade name and customer base relates to the acquisition of MIE, which was recognised in terms of IFRS 3.

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.

GoodwillGoodwill 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 assetsFinancial assets measured at amortised cost comprising trade receivables and loans to subsidiariesA 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.

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.

The following objective evidence is considered in determining when an impairment loss has been incurred: Significant financial difficulty of the debtor; A breach of contract, such as a default or delinquency in interest or principal repayments; and It becoming probable that the debtor will enter bankruptcy or other financial re-organisation.




Impairment of assets (continued)Financial assets measured at amortised cost comprising trade receivables and loans to subsidiaries (continued)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.

The carrying amount of trade receivables is reduced directly when the facts about the trade debtor indicate that liquidation has occurred or has been applied for thereby indicating uncollectability, and the debt has not been previously impaired. In all other cases impairment is recognised through an allowance account. A provision for impairment is made when the Group will not be able to collect all of the amounts due under the original terms of the invoice. Amounts charged to the allowance account are written off against trade receivables balance when the Group becomes aware that a debt previously impaired is no longer recoverable and would remain uncollectible.

Non-financial assetsThe carrying amount of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each statement of financial position 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 statement of comprehensive income. 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.

InventoriesInventories 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.

ProvisionsProvisions 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 benefitsThe 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 statement of financial position date. The accruals have been calculated at undiscounted amounts based on current salary rates.




Financial instrumentsFinancial 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 assetsFinancial 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 receivablesTrade 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 equivalentsCash 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 statement of cash flow. Cash and cash equivalents are measured at amortised cost.

Financial liabilitiesFinancial 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. Financial liabilities comprise borrowings, loans from subsidiaries, other current liabilities, bank overdrafts and trade payables. All liabilities are measured at amortised cost.

Preference share capitalPreference share capital 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. Dividends thereon are recognised as interest expense in profit or loss as accrued.

BorrowingsBorrowings, 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 statement of comprehensive income as finance expenses based on the effective interest rate method.

OffsetFinancial assets and financial liabilities are offset and the net amount reported in the statement of financial position 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 instrumentsFinancial assetsA 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




Financial instruments (continued)Derecognition of financial instruments (continued) 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 liabilitiesA financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on 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 measurementGains 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.

Share capitalOrdinary 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 attributable issue costs.

Contingencies and commitmentsA 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 transactionsAll 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’ and senior management emoluments as well as transactions with other related parties are set out in notes 24 and 26 of this annual report. There were no other material contracts with related parties.

Earnings per shareThe 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.




Headline earnings per shareHeadline 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 3/2009 “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.

Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Standards and amendments to standards effective and adopted during the yearDuring the year, Ideco adopted the following standards and amendments to existing standards: IAS 1 – Presentation of financial statements IAS 27 – Consolidated and separate financial statements IFRS 3 – Business combinations IFRS 7 – Statement of cash flows IFRS 8 – Operating segments

All amendments have been complied with in line with the transitional provisions of that standard and there has been no impact on the financial position or results of the Group.

Standards issued not yet effective IFRS 9 – Financial instruments

The Group does not intend to adopt the standard early. Management is of the opinion that the adoption of this standard will not have a material impact on the consolidated financial statements of the Group.

Amendments to existing standards issued not yet effective IFRS 3 – Business combinations IFRS 5 – Non-current assets held for sale and discontinued operations IFRS 7 – Financial instruments: Disclosures IFRS 9 – Financial instruments IAS 1 – Presentation of financial statements IAS 7 – Statement of cash flows IAS 17 – Leases IAS 24 – Related party disclosure IAS 27 – Consolidated and separate financial statements IAS 28 – Investments in associates IAS 31 – Interests in joint ventures IAS 34 – Interim financial reporting IAS 36 – Impairment of assets IAS 39 – Financial instruments: Recognition and measurement

The Group does not intend to adopt the amendments to existing standards early. Management is of the opinion that the adoption of these standards will not have a material impact on the consolidated financial statements of the Group.


Notes to the annual financial statementsfor the year ended 31 August 2010

1. Segmental reportingThe Group is organised into three main business segments namely biometric readers and solutions, secure credentialing and biometric projects. Segmental reporting within geographical areas is not presented as the Group has operated primarily in Gauteng, South Africa. Segment assets consist primarily of: property, plant and equipment; payment in advance; inventories; receivables; and cash.

Segment liabilities consist primarily of: borrowings; and payables.

Transactions between segments are accounted for at market related prices.

The products and services provided by each segment are as follows: Biometric readers and solutions – the supply of biometric readers and solutions for access control and time and attendance solutions

Secure credentialing services – provision of pre-employment background checks and criminal record checks; and Biometric projects – consulting services for large biometric and identity management projects.

Biometric Securereaders and credentialing Biometric

solutions services projects Corporate TotalR’000 R’000 R’000 R’000 R’000

2010Revenue from external customers – South Africa 51 470 63 068 7 432 – 121 970 Revenue from external customers – foreign countries 1 074 – 3 751 – 4 825

Total revenue 52 544 63 068 11 183 – 126 795 Depreciation and amortisation (75) (5 315) (935) (444) (6 769)Operating profit/(loss) 1 846 14 290 (2 181) (12 549) 1 406 Investment income 30 218 123 151 522 Finance costs (2) (6 913) – (968) (7 883)Profit/(loss) before tax 873 4 596 (2 057) (9 367) (5 955)Taxation (expense)/credit (601) (3 389) 527 2 532 (931)Total assets 27 341 63 857 6 859 32 682 130 739 Total liabilities (19 823) (76 345) (2 117) (10 559) (108 844)

2009Revenue from external customers– South Africa 58 166 17 716 3 862 – 79 744 Revenue from external customers– foreign countries 405 – 2 927 – 3 332

Total 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)Investment income 6 228 18 35 287 Finance costs – (3 459) – (900) (4 359)Loss before tax (4 387) (4 651) (1 008) (6 791) (16 837)Taxation credit 1 008 1 294 272 2 172 4 746 Total assets 21 441 59 689 8 621 32 203 121 954 Total liabilities (12 543) (71 346) (2 226) (7 058) (93 173)


Notes to the annual financial statements continued


Biometric Securereaders and credentialing Biometric

solutions services projectsR’000 R’000 R’000

1. Segmental reporting (continued)The total sales to customers to whom sales exceeded 10% of total segmental revenue were as follows:

2010Number of customers 4 1 3 Total segmental revenue received from these customers 29 411 8 458 10 353

2009Number of customers 3 1 3 Total segmental revenue received from these customers 33 150 5 649 6 043

GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

2. Operating profit/(loss)is arrived at after taking into account:Revenue 126 795 83 076 – –

sale of biometric readers and related repairs 52 544 58 571 – – services 63 068 17 716 – – projects 11 183 6 789 – –

Cost of sales 57 433 48 806 – –

inventory purchases expensed 57 190 45 413 – – inventory adjustments 243 119 – – direct labour – 3 274 – –

Amortisation of intangible assets 5 069 2 196 – – Auditor’s remuneration 773 541 370 297

audit fee 727 502 364 284 other services 46 39 6 13

Depreciation of plant and equipment 1 700 1 105 (444) 595

immovable property 14 1 – – furniture and fittings 208 195 (92) 108 motor vehicles 95 91 (79) 87 office equipment 106 54 (12) 22 IT equipment 1 277 764 (261) 378

Directors’ emoluments 2 821 2 820 2 821 2 820

managerial services 2 611 2 690 2 611 2 690 as directors 210 130 210 130

Employee costs 29 094 15 929 2 328 3 256 Impairment of intangible assets – 782 – – Operating lease charges 8 752 6 313 2 354 2 116

premises 3 405 2 550 1 989 1 834 equipment 5 347 3 763 365 282

Other third party payments 2 234 1 415 260 43

administrative 175 49 152 43 managerial 399 401 – – technical 1 660 965 108 –

Loss on disposal of property, plant and equipment (32) (16) (36) (16)




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

3. Investment incomeBank call and deposit accounts 522 287 150 34

4. Finance costsLong-term borrowings 236 354 236 354 Bank overdraft 732 546 732 546 Preference dividends 5 954 – – – South African Revenue Service 18 – – – Morpho SA (Pty) Limited 943 3 459 – –

7 883 4 359 968 900

5. Investment in associate 5.1 Details of associate company

Effective group holding Carrying amount Directors’ valuation2010 2009 2010 2009 2010 2009

% % R’000 R’000 R’000 R’000

UnlistedBiometric Medical Solutions (Pty) Limited– incorporated in

South Africa 25 – 533 – 533 –

25 – 533 – 533 –

GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

5.2 Carrying amount of associateCarrying amount at the beginning of the year – 19 075 – 19 075 Acquisition of shares * *Loan to associate during the period 533 – 533 – Equity accounted earnings of associate – 2 023 – 2 023 Disposal during the year – (21 098) – (21 098)

Carrying amount at the end of the year 533 – 533 –

* less than R1 000Biometric Medical

Solutions (Pty) Limited2010 2009

R’000 R’000

5.3 Summarised financial statements of associateCurrent assets 365 – Current liabilities (57) – Non-current liabilities (2 098) – Loss after tax (427) –

The year-end of the associate was 31 March 2010. The unaudited summarised financial statements for the period ended 31 August 2010 are presented in the table above.




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

6. Taxation debit/(credit)Current tax expense 4 005 452 – –

current 3 683 452 – – prior year under provision 41 STC 281 – – –

Deferred tax (3 074) (5 198) (2 533) (2 172)

origination and reversal of temporary differences (3 074) (5 239) (2 533) (2 172) prior year under provision – 41 – –

931 (4 746) (2 533) (2 172)

Taxation consequences of undistributed reservesSecondary tax on companies on remaining reserves 55 681 – 40

Reconciliation of tax rateAccounting loss (5 955) (16 837) (10 461) (6 791)Tax thereon at 28% (1 239) (4 714) (2 929) (1 901)Non-deductible expenses 2 475 647 396 295 Exempt income – (566) – (566)Arising from business combination (734) – – –STC 281 – – –Other 107 (154) – – Prior year under provision 41 41 – –

931 (4 746) (2 533) (2 172)

GroupThe Group’s estimated tax losses available for set off against future taxable income total R37 586 675 (2009: R28 206 433).

CompanyNo provision has been made for 2010 tax as the Company has no taxable income. The estimated tax losses available for set off against future taxable income total R16 483 203 (2009: R8 318 790).

GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

7. Earnings per shareCalculation of headline earningsTotal loss attributable to ordinary shareholders of the Group (6 886) (12 091)Adjustments after tax: Impairment of intangible assets – 563 Loss on sale of non-current assets 23 12

Headline loss (6 863) (11 516)

Number of shares in issue Issued and weighted 202 222 222 202 222 222

Headline and diluted headline loss per share (cents) (3,39) (5,69)

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.




Accumulated CarryingCost depreciation value

R’000 R’000 R’000

8. Property, plant and equipmentGroup2010Immovable property 7 412 (62) 7 350 Furniture and fixtures 1 605 (1 124) 481 Motor vehicles 116 (112) 4 Office equipment 681 (446) 235 IT equipment 7 809 (5 108) 2 701

17 623 (6 852) 10 771

2009Immovable 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

2008Immovable 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,Opening balance

Business combination Additions Disposals

Transfer to intangible

assets DepreciationClosing balance

plant and equipment R’000 R’000 R’000 R’000 R’000 R’000 R’000

2010Immovable property 7 002 – 362 – – (14) 7 350 Furniture and fixtures 644 – 81 (36) – (208) 481 Motor vehicles 435 – – (336) – (95) 4 Office equipment 217 – 126 (2) – (106) 235 IT equipment 1 912 – 2 074 – (8) (1 277) 2 701

10 210 – 2 643 (374) (8) (1 700) 10 771

2009Immovable 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




Accumulated CarryingCost depreciation value

R’000 R’000 R’000

8. Property, plant and equipment (continued)Company2010 Immovable property 4 678 – 4 678 Furniture and fixtures 646 (407) 239 Motor vehicles 7 (3) 4 Office equipment 120 (82) 38 IT equipment 1 572 (1 386) 186

7 023 (1 878) 5 145

2009Immovable 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

2008Immovable 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

Opening Closingbalance Additions Disposals Depreciation balance

Reconciliation of property, plant and equipment R’000 R’000 R’000 R’000 R’000

2010Immovable property 4 678 – – – 4 678 Furniture and fixtures 292 39 – (92) 239 Motor vehicles 419 – (336) (79) 4 Office equipment 21 29 – (12) 38 IT equipment 360 87 – (261) 186

5 770 155 (336) (444) 5 145

2009Immovable 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

Immovable property consists of the following: Ideco Group Limited: 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.

Managed Integrity Evaluation (Pty) Limited: Part 149 Lyttelton farm 381 in the Tshwane Metropolitan Municipality.




Percentage holdingInterest of company

Shares at costLoans due by/(to)

subsidiaries

2010 2009 2010 2009 2010 2009% % R’000 R’000 R’000 R’000

9. Investments in subsidiariesAll companies are registered (Pty) Limited and incorporated in South Africa

Name and principal activity

Ideco Biometric Security Solutions (Supply of biometric equipment and solutions to the private sector for access control) 100 100 * * 7 444 9 223

Ideco Biometrix (Supply of biometric equipment and solutions to the government sector) 100 100 * * (6 301) (6 427)

Ideco Technologies (Biometric projects) 100 100 * * (610) (563)

Ideco AFISwitch (Supply of biometric services related to criminal background checks) 100 100 * * 8 630 7 776

Ideco Identity Solutions (Supply of client verification services in the financial services sector) 100 100 * * 1 474 573

Less: Impairment (1 094) –

Managed Integrity Evaluation (“MIE”) (Supply of reference checking and background screening services) 100 100 21 098 21 098 (17 871) (14 000)

21 098 21 098 (8 328) (3 418)

* less than R1 000

The directors value the investment in MIE at R50,8 million (2009: 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 17.

COMPANY

2010 2009R’000 R’000

Interest in subsidiaries is disclosed as follows:Investments in subsidiaries 21 098 21 098 Loans to subsidiaries 16 454 17 572 Loans from subsidiaries (24 782) (20 990)

12 770 17 680

Loans to and from subsidiaries are non-interest bearing and have no fixed date of repayment.

Accumulated CarryingCost amortisation amount

R’000 R’000 R’000

10. Intangible assetsGroup2010Computer software 11 165 (3 210) 7 955 Intellectual property rights 1 500 – 1 500 Right of use 18 387 (3 859) 14 528NQR trademark 7 700 (513) 7 187Trade name 1 637 (164) 1 473Customer base 13 728 (1 373) 12 355Goodwill on acquisition 17 926 – 17 926




72 043 (9 119) 62 924

10. Intangible assets (continued)Accumulated Carrying

Cost amortisation amount R’000 R’000 R’000

2009Computer software 5 714 (980) 4 734 Intellectual property rights 1 500 – 1 500 Right of use 18 387 (2 497) 15 890 NQR trademark 7 700 – 7 700 Provisional goodwill on acquisition 28 900 – 28 900

62 201 (3 477) 58 724

2008Computer 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

Allocation ofOpening provisional Impair- Transfer Amorti- Closingbalance goodwill Additions ments from PPE sation balance

Reconciliation of intangible assets R’000 R’000 R’000 R’000 R’000 R’000 R’000

2010Computer software 4 734 2 872 1 999 – 7 (1 657) 7 955 Intellectual property rights 1 500 – – – – – 1 500 Right of use 15 890 – – – – (1 362) 14 528 NQR trademark 7 700 – – – – (513) 7 187Trade name – 1 637 – – – (164) 1 473Customer base – 13 728 – – – (1 373) 12 355Goodwill on acquisition 28 900 (10 974) – – – – 17 926

58 724 7 263 1 999 – 7 (5 069) 62 924

2009Computer software 4 585 40 1 725 (782) – (834) 4 734 Intellectual property rights 1 500 – – – – 1 500 Right of use 17 252 – – – (1 362) 15 890 NQR trademark – 7 700 – – – – 7 700 Provisional goodwill on acquisition – 28 900 – – – – 28 900

23 337 36 640 1 725 (782) – (2 196) 58 724

The impairment of R782 000 was necessary because the project for which development costs have been capitalised, was terminated.

Accumulated CarryingCost amortisation value

R’000 R’000 R’000

Company2010Intellectual property rights – – –

2009Intellectual property rights 1 500 – 1 500

2008




Intellectual property rights 1 500 – 1 500

10. Intangible assets (continued)Opening Transfer to Closingbalance subsidiary balance

Reconciliation of carrying amount R’000 R’000 R’000

2010Intellectual property rights 1 500 (1 500) –



Business combination: The identification of MIE intangible assets and the valuation thereof was performed by Moore Stephens Corporate Finance. Their final purchase price allocation was submitted to Ideco Group Limited on 7 May 2010.

Amortisation was provided for in accordance with the Group’s accounting policies.

GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

11. Deferred tax Balance at beginning of year 7 120 1 829 2 261 89 Current charge 3 074 5 198 2 533 2 172

capital allowances (455) – – – income in advance (60) 61 – – intangible assets 759 (515) – – prepayments 121 32 – – provisions (46) 140 39 140 sec11A expenses (80) 80 – – tax losses available for set-off against future taxable income 2 835 5 400 2 494 2 032

Business combination (7 261) 93 – –

capital allowance – 454 – – intangible assets (7 261) – – – revaluations – (361) – –

Balance at end of year 2 933 7 120 4 794 2 261

Comprising: capital allowance – 455 – – income in advance – 60 – – intangible assets (7 890) (1 027) – – prepayments 121 – – – provisions 178 224 179 140 revaluations – (361) – – sec11A expenses – 80 – – tax losses available for set-off against future taxable income 10 524 7 689 4 615 2 121

2 933 7 120 4 794 2 261

Deferred tax asset 9 821 7 481 4 794 2 261 Deferred tax liability (6 888) (361) – –

2 933 7 120 4 794 2 261




A deferred tax asset has been raised for the Group and the Company, since the subsidiaries where tax losses have been raised are now profitable and will remain so in the foreseeable future. This will enable them to pay management fees to the Company in terms of Group policy, which will enable the Company to utilise its tax loss as well.

GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

12. InventoriesMerchandise 14 773 13 780 – – Less: Provision for impairment (1 275) (1 076) – –

13 498 12 704 – –

Provision for impairment at beginning of year (1 076) (961) – – Written off during the year 5 67 – – Provided for during the year (204) (182) – –

(1 275) (1 076) – –

13. Trade and other receivablesTrade receivables 22 468 19 470 – – Deposits 71 71 4 4 VAT 405 347 106 191 Other receivables 1 435 1 602 346 1 070 Prepayments 3 832 2 404 331 –

28 211 23 894 787 1 265

Prepayments – Includes royalties prepaid to ZNG Technologies AG R3,2 million (2009: R2,4 million).

Trade and other receivables are ceded to Absa Bank Limited as security for a R10 million overdraft facility.

GROUP

2010 2009R’000 R’000

Trade receivables comprise:Gross receivables External 28 090 24 131 Internal 125 167

Provision for impairment of trade receivables (4) (404)

28 211 23 894

The amount of the write-down of trade receivables recognised as an expense is R510 000 (2009: R147 000).Movements in the provision for impairment of trade receivables were as follows:Balance at beginning of year 404 400 Business combination – 4 Reduction for the year (400) –

Balance at end of year 4 404

The maximum exposure to credit risk for gross trade receivables at the reporting date by geographical region was:

South Africa 23 741 20 362 Foreign 4 470 3 532

28 211 23 894

Trade receivables comprise a widespread customer base. This is made up primarily of large corporate companies and government departments. The Group does not have any significant exposure to any one customer.




13. Trade and other receivables (continued)Foreign receivables are Rand denominated.

Management views the trade receivables days per geographic region as within expectations compared with the Group’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 ageing of gross trade receivables. There is no provision for impairment of trade receivables. The provision of R404 000 for 2009 related to specific items under the past due 61+ days ageing category only, which is no longer required.

2010 2009R’000 R’000

Not past due 14 237 12 831 Past due 0 – 30 days 7 363 5 800 Past due 31 – 60 days 1 402 1 675 Past due 61+ days 5 209 3 588

28 211 23 894

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 2010, 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.

GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

14. Cash and cash equivalentsCash on hand 10 11 5 5 Bank balances 4 458 8 587 2 4

4 468 8 598 7 9 Bank overdraft (6 928) (351) (6 924) (351)

(2 460) 8 247 (6 917) (342)

15. Ordinary share capital and premiumAuthorised1 000 000 000 ordinary shares of 0,0004 cents each 4 4 4 4

4 4 4 4

Issued202 222 222 fully paid 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




GROUP COMPANY

2010 2009 2010 2009Number Number Number Number

15. Ordinary share capital and premium (continued)Reconciliation of issued share capitalIn 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

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

Number of shares in issue 202 222 222 202 222 222 202 222 222 202 222 222

2010 2009 2010 2009R’000 R’000 R’000 R’000

16. Long-term borrowingsSecured at amortised cost: ABSA Bank Limited 2 398 2 634 2 398 2 634 Less: Current portion included in current liabilities (266) (238) (266) (238)

2 132 2 396 2 132 2 396

The loan is secured by a bond over Erf 316 Doringkloof, is repayable in 82 monthly instalments of R38 928 each, and bears interest at the prime overdraft rate less 1% (9,0% at 31 August 2010).

GROUP COMPANY

2010 2009 2010 2009Number Number Number Number

17. Cumulative redeemable preference sharesPremium on “A” preference shares issued to the NEF 40 599 40 599 – –

40 600 40 600 – – One redeemable participating “B” preference share of R1,00 issued to the NEF * * – –

40 600 40 600 – – “A” preference share redeemed (5 000) – Provision for preference dividends 3 143 –

38 743 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 annually at the end of August.

R5 million of the “A” preference shares were 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, provided it is redeemed from internally generated cash resources.

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 or 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 during 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.




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

18. Trade and other payablesTrade and other payables 23 127 17 287 139 238 VAT 581 270 – – Accrued expenses 1 316 1 192 637 555 Other payables 1 491 1 508 461 413

26 515 20 257 1 237 1 206

Trade payables are non-interest bearing and are normally settled on 30 days terms save for one liability of R17,7 million (2009: R12,6 million) which is payable on 90 day (2009: 60 day) terms. Accruals are non-interest bearing and have an average term of 30 days.

GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

19. Other current liabilitiesKroll Associates (Pty) Limited (“Kroll”) – 2 871 – 2 871 Morpho SA (Pty) Limited (“Morpho”) 25 363 24 420 – –

25 363 27 291 – 2 871

The amount due to Kroll was interest-free and was repaid by MIE on 1 October 2009 on behalf of Ideco Group Limited.

In terms of the original agreement, the amount due to Morpho carried interest at 1,5% per month on the capital amount and was repayable in ten equal monthly payments. The loan was rescheduled during November 2009 in terms of which R12,7 million was repayable in March 2010 and the balance of R11,7 million was payable in four equal payments from 15 September 2010 to 15 December 2010.

The loan is currently being restructured to reflect the original intention of the parties, namely that the loan will be repaid from revenue flowing from criminal record checks performed by Ideco AFISwitch (Pty) Limited. The date of the first payment to be made must still be agreed upon, but it will not be before 1 September 2011. No interest will accrue on the outstanding amount from 1 November 2009 to date of final payment.

GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

20. ProvisionsIncentive provisionAt the beginning of the year 1 354 – – – Provided for during the year 1 693 1 354 – – Utilised during the year (1 354) – –

At the end of the year 1 693 1 354 – –

The provision is for staff and executive performance bonuses and is payable before 28 February 2011.




21. 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. There have been no changes to the risk identified nor the objectives, policies and processes for managing risk since the comparative period. 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 2010 and 2009, 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.

Currency riskThe Group is exposed to foreign currency risk through the importation of merchandise. This risk is mitigated by the terms of the sales agreement with the customer, which stipulates that the contract selling price in Rand can be adjusted with the relevant foreign currency rate. The risk is further mitigated by entering into forward exchange contracts if deemed necessary by management. The Group does not use foreign exchange contracts for speculative purposes and does not apply hedge accounting. The adjustments to fair value have been recognised in the income statement. A decrease or increase of up to 5% in the exchange rate between the Rand and the Euro would not have a material impact on the Group. Purchases in foreign currencies do not constitute a major portion of the Group’s purchases. The Group does not incur currency risk as a result of borrowings and cash held in foreign currencies.

The Group’s only exposure to foreign currency as at 31 August 2010 was an uncovered and unhedged liability in the amount of 167 669 Euro in respect of trade payables.

Categories of financial instrumentsThe principal financial instruments used by the Group, from which financial risk arises, are as follows:

GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

Loans and receivablesTrade receivables 23 974 21 143 681 1 074 Cash and cash equivalents 4 468 8 598 7 9 Loans due by subsidiaries – – 16 454 17 572

The Group has not taken any collateral security for any loan or trade receivables.

Financial liabilities at costLong-term borrowings 2 398 2 634 2 398 2 634 Loans due to subsidiaries – – 24 782 20 990 Preference shares 38 743 40 600 Trade and other payables 26 515 20 257 1 237 1 206 Other current liabilities 25 363 27 291 – 2 871 Bank overdraft 6 928 351 6 924 351

Credit riskCredit 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 2010 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.




21. Financial instruments (continued)Interest rate riskThe 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 Company’s interest rate risk, interest rate characteristics of new borrowings are positioned according to expected movements in interest rates.

Interest rate sensitivityThe 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 statement of comprehensive income 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 2010. 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.

2010 2009

After tax effect on profit and loss

After tax effect on profit and loss

2% increase

1% decrease

2% increase

1% decrease

R’000 R’000 R’000 R’000

South African lending rateGroup (Rand)Variable rate long-term loans (568) 284 (646) 323 Cash and cash equivalents – local (100) 50 (6) 3

Company (Rand)Variable rate long-term loans (34) 17 (38) 19 Cash and cash equivalents – local (100) 50 (6) 3

Liquidity riskThe 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 Contractual Less than More than amount cash flows 1 year 1 year

R’000 R’000 R’000 R’000

2010Non-derivative financial liabilitiesLong-term borrowings 2 398 2 398 266 2 132 Preference shares 38 743 – – 38 743Trade and other payables 26 515 26 515 26 515 – Other current liabilities 25 363 25 363 25 363 – Bank overdraft 6 928 6 928 6 928 –

99 947 61 204 59 072 40 875

2009Non-derivative financial liabilitiesLong-term borrowings 2 634 2 634 238 2 396 Preference shares 40 600 – 5 000 35 600Trade and other payables 20 257 20 257 20 257 – Other current liabilities 27 291 27 291 27 291 – Bank overdraft 351 351 351 -

91 133 50 533 53 137 37 996




21. Financial instruments (continued)The Group had a net bank overdraft of R2,4 million at 31 August 2010 and had unutilised credit facilities of R7,6 million (2009: net cash balance of R8,2 million and had unutilised credit facilities of R10 million) in respect of which all conditions precedent have been met.

The Group’s cash flow forecast for the year ending 31 August 2011 indicates that the Group will have adequate resources to continue in operational existence for the foreseeable future.

Fair valueThe fair values of all financial instruments are substantially the same as the carrying amounts reflected in the statement of financial position.

Capital managementThe 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 Company 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 2010 and 2009.

Capital includes equity attributable to equity holders of the parent. Refer to note 15 for a quantitative summary of authorised and issued share capital.

As at 31 August 2010, the Group’s gearing ratio was 17% (2009: 24%) expressed as equity as a percentage of total equity and liabilities. The main reason for the decrease was the increase of total assets and the total comprehensive loss attributable to ordinary shareholders for the year.

22. Contingent liabilities and capital commitmentsThere was no capital expenditure authorised or contracted at 31 August 2010 (2009: R nil).

A bank guarantee of R520 000 (2009: 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 2010.

GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

23. Operating leasesNon-cancellable operating lease rentals are payable as follows:Up to one year 8 547 8 036 2 434 2 117 Two to five years 4 595 9 249 1 779 1 723

13 142 17 285 4 213 3 840




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

24. Related partiesRelated party relationshipsShareholders of Ideco Group LimitedMuvoni Investment Holdings (Pty) LimitedZNG Technologies AG

Subsidiaries – Refer note 9Key management – Refer note 26

Related party transactionsManagement and consulting fees paid to/(received from) related partiesIdeco Biometric Security Solutions (Pty) Limited – – (4 000) (6 000)Muvoni Investment Holdings (Pty) Limited 600 636 600 636 ZNG Technologies AG 1 908 1 800 1 908 1 800

Lease agreements – Rent received from related partiesIdeco AFISwitch (Pty) Limited – – (436) (436)

Royalties paid to related partiesZNG Technologies AG (“ZNG”) 702 450 – – – Refer note 13 for balance due by ZNG

25. Notes to the cash flow statement25.1 Cash (utilised)/generated by operations

(Loss)/profit before taxation (5 955) (16 837) (10 461) (6 791)Adjustments for:Depreciation 1 700 1 887 444 595 Amortisation of intangible assets 5 069 2 196 – – Loss on sale of assets 32 16 36 16 Share of profit of associate – (2 023) – (2 023)Investment income (522) (287) (150) (34)Finance costs 7 883 4 359 968 900 Movement in provisions 339 140 – –

(Profit)/loss before working capital changes and other non-cash flow items 8 546 (10 549) (9 163) (7 337)

Working capital changes(Increase)/decrease in inventories (794) (1 568) – – (Increase)/decrease in trade and other receivables (3 345) 2 265 809 (637)(Increase)/decrease in prepayments (971) (1 137) (331) – Increase/(decrease) in trade and other payables 6 258 (663) 31 (108)

9 694 (11 652) (8 654) (8 082)

25.2 Tax paidAmount outstanding at the beginning of the year 17 (72) 300 286 Income statement charge (4 006) (452) – – Amount outstanding at the end of the year (197) (17) (318) (300)

(4 186) (541) (18) (14)




Salary Bonus Allowances Contributions Fees Total R’000 R’000 R’000 R’000 R’000 R’000

26. Directors’ emoluments2010Executive directors V Mufamadi 1 200 – 145 60 – 1 405 HB Aucamp – – – – 1 206 1 206

1 200 – 145 60 1 206 2 611

Non-executive directors – feesMF Kekana – – – – 90 90 AX Sisulu-Dunstan – – – – 80 80 R Troester – – – – 40 40

– – – – 210 210

1 200 – 145 60 1 416 2 821

2009Executive 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 – feesMF Kekana – – – – 70 70 AX Sisulu-Dunstan – – – – 30 30 R Troester – – – – 30 30

– – – – 130 130

1 568 – 205 101 946 2 820

DirectNon-

beneficial Indirect Total

Directors’ shareholding at 31 August 2010V Mufamadi 236 384 – 83 762 634 83 999 018 HB Aucamp 1 000 000 602 010 – 1 602 010 MF Kekana 224 361 – – 224 361AX 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 at 31 August 2009V Mufamadi 236 384 – 83 762 634 83 999 018 HB Aucamp 1 000 000 602 010 – 1 602 010 MF Kekana 224 361 – – 224 361AX Sisulu-Dunstan 80 000 – – 80 000R Troester – 100 000 100 000

1 540 745 602 010 83 862 634 86 005 389

There is no share incentive scheme in operation. There has been no change in the directors’ shareholding as detailed above and the date of approval of the annual financial statements.




27. Business combinationIFRS 3 Purchase price allocation in respect of the acquisition of a controlling interest in MIE as at 1 July 2009

Final fair value adjustment

MIE’s provisional

fair value after

combinationR’000

Allocation of provisional

goodwillR’000

Final fair valueR’000

2010Property plant and equipment 2 991 – 2 991 NQR trademark 7 700 7 700 Trade name 1 637 1 637 Customer base 13 727 13 727 Computer software 2 872 2 872 Deferred tax 281 (7 262) (6 981)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)

(7 442) 10 974 3 532

Final goodwill arising on acquisition 17 926

Investment in MIE 21 458

Investment 21 098 Deferred tax 360

The acquisition of MIE was provisionally accounted for in the previous financial year.

The identification of MIE intangible assets and the valuation thereof was performed by Moore Stephens Corporate Finance. Their final purchase price allocation was submitted to Ideco Group Limited on 7 May 2010.

Provisional fair value adjustment

MIE's carrying amount before

combinationR’000

Fair value adjustment

R’000

Fair valueR’000

2009Property, plant and equipment 1 703 1 288 2 991 NQR trademark 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 21 098 Deferred tax 360

Cash consideration paid – Cash and cash equivalents acquired 20 093

Net cash outflow arising on acquisition (20 093)




27. Business combination (continued)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:

R’000

Revenue 6 928 Cost of sales (2 071)

Gross profit 4 857

Other income 2Operating 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.


Analysis of shareholders

Analysis of shareholdingsNumber of

holders% of total

shareholdersNumber

of shares

% of total issued

share capital

1 – 10 000 95 37,25 446 555 0,22

10 001 – 100 000 113 44,31 4 827 771 2,39

100 001 – 1 000 000 40 15,69 12 983 036 6,42

1 000 001 – and more 7 2,75 183 964 860 90,97

255 100,00 202 222 222 100,00

Categories of shareholders

Insurance companies 2 0,78 6 308 500 3,11

Banks 6 2,35 3 796 453 1,88

Collective investment schemes and mutual funds 2 0,78 436 278 0,22

Trusts 14 5,50 856 632 0,42

Pension funds and medical schemes 4 1,57 455 024 0,23

Private companies and close corporations 22 8,63 175 296 934 86,70

Individuals 205 80,39 15 072 401 7,44

255 100,00 202 222 222 100,00

Shareholder spread

Public 248 97,26 27 328 795 13,51

Non-public

Designated advisor 1 0,39 1 818 182 0,90

Directors 5 1,96 86 005 389 42,53

Major shareholder 1 0,39 87 069 856 43,06

255 100,00 202 222 222 100,00

Major shareholders

(5% and more of the shares in issue)

Muvoni Investment Holdings (Pty) Limited 83 762 634 41,42

Six Sis Limited 87 069 856 43,06


Notice of annual general meeting

Ideco Group Limited(Incorporated in the Republic of South Africa)(Registration number: 2001/023463/06)(“Ideco” or “the Company”)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 19 April 2011, at 10:00 for the following purposes and if deemed fit, to pass the following ordinary and special resolutions with or without amendment:

Ordinary business1. To receive, consider and adopt the annual financial statements for the year ended 31 August 2010 of the Company and

the Group, together with the directors’ and independent auditors’ reports contained therein. 2. To re-elect, by separate resolution, each of the following directors who retire by rotation in accordance with the

Company’s articles of association: MF Kekana AX Sisulu-Dunstan 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.

3. To confirm the re-appointment of BDO Spencer Steward (Johannesburg) Incorporated as independent auditors to the Company for the ensuing financial year.

Special businessIn addition, shareholders will be requested to consider and, if deemed fit, to pass the following special and ordinary resolutions with or without amendment:

4. 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”).”

5. 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; and 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:

• 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 50% 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 irrevocable 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;


Notice of annual general meeting continued

5. Ordinary resolution number two (continued) Issue of ordinary shares for cash (continued) • that 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; and

• 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.”

6. 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

7. Ordinary resolution number four Approval to make payments to shareholders “Resolved that, as a general approval contemplated in section 90 of the Companies Act 1973, as amended, or, as

necessary, section 46 the Companies Act 2008, Act 71 of 2008, and in terms of the Company’s articles of association, the Company grant a renewable mandate to the directors of the Company to make payments to shareholders on a pro rata basis by way of the reduction of the Company’s share capital 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 Limited Listings Requirements, when applicable, and provided:

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;

an announcement must be published giving the terms of the payment, the source of the payment, the date the payment will be made and the financial effects of the payment; and

any general payment may not exceed, in any one financial year, 20% of the Company’s issued share capital including reserves but excluding minority interests and revaluation of assets and intangible assets that are not supported by a valuation by an independent expert acceptable to the JSE prepared within the last six months.”

8. Ordinary resolution number five 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.”

9. 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;

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;


9. Special resolution number one (continued) General authority to repurchase issued shares (continued) 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 designated advisor has confirmed the adequacy of the Company’s working capital for the purposes of undertaking a repurchase of shares in writing to the JSE;

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 resolutionThe 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 proxiesShareholders 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 17 April 2011.

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 CSDP 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 CSDP 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

HB AucampCompany secretaryJohannesburg28 February 2011

Registered office Registrars13 Wellington Road Computershare Investor Services (Pty) LimitedParktown 70 Marshall StreetJohannesburg 2193 Johannesburg 2001 PO Box 61051 Marshalltown 2107


Notice of annual general meeting continued

General information on the Company to support the resolution proposed in the notice of annual general meetingThe following information is required by the JSE Limited 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 50; Directors’ interests in securities – page 47; Share capital of the Company – page 40.

Litigation statementThere 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.

Directors’ responsibility statementThe 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.

deco Annual report 2010

Form of proxy

Ideco Group Limited(“Ideco” or “the Company”)Incorporated in the Republic of South AfricaRegistration number 2001/023463/06Share code: IDE ISIN code: ZAE000107579

For the use only by ordinary shareholders who: hold ordinary shares in certificated form (“certificated ordinary shareholders”); or have dematerialised their ordinary shares (“dematerialised ordinary shareholders”) and are registered with “own-name” registration, at the annual general meeting of ordinary shareholders of the Company to be held on 19 April 2011 at 10:00 at the Company’s offices, Merton House, Eton Office Park East, 17 Harrison Avenue, Epsom Downs, Bryanston.

Dematerialised ordinary shareholders holding ordinary shares other than with own name registration who wish to attend the annual general meeting must inform their Central Securities Depository Participant (“CSDP”) or broker of their intention to attend the annual general meeting and request their CSDP or broker to issue them with the relevant Letter of Representation to attend the annual general meeting in person or by proxy and vote. If they do not wish to attend the annual general meeting in person or by proxy, they must provide their CSDP or broker with their voting instructions in terms of the relevant custody agreement entered into between them and the CSDP or broker. These ordinary shareholders must not use this form of proxy.

I/We(name/s in block letters)

of

being the holder of ordinary shares in the capital of the Company do hereby appoint (see note):

1. or failing him/her,

2. or failing him/her,

3. the Chairperson of the meeting,

as my/our proxy to act for me/us at the annual general meeting convened for purposes of considering and, if deemed fit, passing, with or without modification, the resolutions (“resolutions”) to be proposed thereat and at each adjournment thereof and to vote for and/or against the resolutions, and/or to abstain from voting for and/or against the resolutions, in respect of the ordinary shares registered in my/our name in accordance with the following instructions:

Number of ordinary shares

For Against Abstain

1. To receive, consider and adopt the annual financial statements of the Company and Group for the year ended 31 August 2010

2.1 To approve the re-election as director of MF Kekana who retires in accordance with the Company’s articles of association

2.2 To approve the re-election as director of AX Sisulu-Dunstan who retires in accordance with the Company’s articles of association

3. To confirm the re-appointment of BDO Spencer Steward (Johannesburg) Incorporated as auditors of the Company for the ensuing year

4. Ordinary resolution number one – control of authorised but unissued ordinary share capital

5. Ordinary resolution number two – approval to issue ordinary shares for cash

6. Ordinary resolution number three – to approve the non-executive directors’ remuneration for the financial year ended 31 August 2010

7. Ordinary resolution number four – approval to make payments to shareholders

8. Ordinary resolution number four – authority to action all ordinary and special resolutions

9. Special resolution number one – general approval to repurchase issued shares

Signed at on 2011

Signature

Assisted by (where applicable)

Each ordinary shareholder is entitled to appoint one or more proxies (who need not be a shareholder of the Company) to attend, speak and vote in place of that shareholder at the annual general meeting.

cer ta in ty th rough ident i ty


Notes to form of proxy

1. The form of proxy must only be used by certificated ordinary shareholders or dematerialised ordinary shareholders who hold dematerialised ordinary shares with own name registration.

2. Dematerialised ordinary shareholders are reminded that the onus is on such shareholder to communicate with their CSDP.

3. A shareholder entitled to attend and vote at the annual general meeting may insert the name of a proxy or the names of two alternative proxies of the shareholder’s choice in the space provided, with or without deleting “the Chairperson of the meeting”. The person whose name stands first on the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of such proxy(ies) whose names follow.

4. A shareholder is entitled to one vote on a show of hands and, on a poll, one vote in respect of each ordinary share held. A shareholder’s instructions to the proxy must be indicated by inserting the relevant number of votes exercisable by the shareholder in the appropriate box(es). Failure to comply with this will be deemed to authorise the proxy to vote or to abstain from voting at the annual general meeting as he/she deems fit in respect of all the shareholder’s votes.

5. A vote given in terms of an instrument of proxy shall be valid in relation to the annual general meeting notwithstanding the death, insanity or other legal disability of the person granting it, or the revocation of the proxy, or the transfer of the ordinary shares in respect of which the proxy is given, unless notice as to any of the aforementioned matters shall have been received by the registrars not less than forty-eight hours before the commencement of the annual general meeting.

6. If a shareholder does not indicate on this form that his/her proxy is to vote in favour of or against any resolution or to abstain from voting, or gives contradictory instructions, or should any further resolution(s) or any amendment(s) which may properly be put before the annual general meeting be proposed, such proxy shall be entitled to vote as he/she thinks fit.

7. The Chairperson of the annual general meeting may reject or accept any form of proxy which is completed and/or received other than in compliance with these notes.

8. The completion and lodging of this form of proxy will not preclude the relevant shareholder from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such shareholder wish to do so.

9. Documentary evidence establishing the authority of a person signing the form of proxy in a representative capacity must be attached to this form of proxy, unless previously recorded by the Company or unless this requirement is waived by the Chairperson of the annual general meeting.

10. A minor or any other person under legal incapacity must be assisted by his/her parent or guardian, as applicable, unless the relevant documents establishing his/her capacity are produced or have been registered with the Company.

11. Where there are joint holders of ordinary shares: Any one holder may sign the form of proxy; The vote(s) of the senior ordinary shareholders (for that purpose seniority will be determined by the order in which

the names of ordinary shareholders appear in the Company’s register of ordinary shareholders) who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint shareholder(s).

12. Forms of proxy should be lodged with or mailed to Computershare Investor Services (Proprietary) Limited:

Hand deliveries to: Postal deliveries to: Computershare Investor Services (Pty) Limited Computershare Investor Services (Pty) Limited Ground Floor, 70 Marshall Street PO Box 61051 Johannesburg 2001 Marshalltown 2107

to be received by no later than 10:00 on 17 April 2011 (or 48 hours before any adjournment of the annual general meeting which date, if necessary, will be notified on SENS).

13. Any alteration or correction made to this form of proxy, other than the deletion of alternatives, must be initialled by the signatory(ies).


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 Pivot1 Montecasino BoulevardEntrance D2nd FloorFourways 2055PO 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)

Independent 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)

ANNUAL REPORT 2010 - ShareData Online - South African … · 2011-06-27 · records is still the largest project of its kind in the world. ... BBA Business Administration, ... Earnings

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