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IDION Technology Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/013846/06)
ISIN: (ZAE000022513)
Share Code: (IDI)
("IDION" or "the Group")
FURTHER REPORT BY IDION REGARDING DEEMED PROFIT FORECASTS
Further to the statement issued by IDION Technology Holdings Limited on 3
May 2002, shareholders are informed of the auditors' report regarding deemed
profit forecasts referred to in the Securities Regulation Panel ("SRP")
ruling on 2 May 2002.
In order to remove any doubt as to the import of the deemed profit
forecasts, IDION requested its auditors, Deloitte & Touche, to report on the
following statement in addition to the deemed profit forecasts:
The Group expects to report positive headline earnings for the year ending
31 December 2002.
The abovementioned profit forecast and deemed profit forecasts were made by
IDION, inter alia, after careful consideration of detailed forecasts. The
profit forecast and deemed profit forecasts are based on the following major
assumptions for the year ending 31 December 2002:
* The Group's historic revenue seasonality is expected to continue;
* There will be no further significant deterioration in the global economy;
* New licence sales for the Group will return to the levels achieved in the
2000 financial year and in line with the historic seasonality of the
business;
* No revenue has been budgeted from the ORION cross platform technology in
the 2002 financial year;
* No significant revenue from the newly released Symbiator 4.0 product has
been budgeted for the current financial year;
* The average exchange rate between the Rand and the US Dollar will be
US$1:ZAR11;
* The income tax rates in the various jurisdictions where the Group operates
will remain at current rates; and
* No further systemic shock to world markets.
Auditors' report
IDION instructed its auditors to report on the above-mentioned profit
forecast in addition to the two statements as ruled by the SRP.
The report of the auditors of IDION dated 6 May 2002, a copy of which is
available for inspection at IDION's registered office, is as follows:
"We have examined the profit forecasts of IDION and its subsidiaries for the
financial year ending 31 December 2002 which are referred to in the
communication to shareholders dated 6 May 2002. The forecasts were approved
by the Board and the Board is solely responsible therefore.
Our examination was made in accordance with the guidelines laid down by The
South African Institute of Chartered Accountants. In carrying out our
examination, we have examined the accounting policies adopted by IDION and
have reviewed the calculations used in the profit forecasts and confirm that
the underlying information used in the forecasts has been presented on a
basis consistent with the accounting policies adopted by IDION. We consider
that our procedures were appropriate in the circumstances to enable us to
express our opinion presented below.
In our opinion:
* the assumptions, barring unforeseen circumstances, provide a reasonable
basis for the preparation of the forecasts;
* the forecasts have been properly compiled on the basis of the assumptions;
and
* the forecasts are presented on a basis consistent with the accounting
policies adopted by IDION.
Since the profit forecasts are based on assumptions concerning future
events, actual results may vary from the forecasts which have been presented
and the variations may be material. Accordingly, we express no opinion on
whether or not the forecasts will be achieved."
Conclusion
The IDION Board of directors continues to urge shareholders to reject the
revised conditional hostile offer from DataMirror as it remains of the
opinion, supported by the independent committee of non-executive directors
and the independent advisers, PricewaterhouseCoopers Corporate Finance, that
the revised offer consideration of 120 cents per IDION share is
significantly below the true inherent value of IDION.
Johannesburg, 6 May 2002
The terms used in this announcement are those defined in the IDION circular
to shareholders dated 9 April 2002.
Joint corporate adviser and Legal adviser
sponsor Bowman Gilfillan Inc.
PricewaterhouseCoopers Corporate
Finance (Pty) Ltd Independent adviser
PricewaterhouseCoopers
Corporate Finance (Pty) Ltd
Joint corporate adviser
Corpcapital Corporate Finance
Auditors
Deloitte & Touche
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