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					                                     268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 1




                                                                               Corporate Profile




Datatec is an international networking and IT services group with operations in Europe, North America, South
America, Africa and the Asia Pacific region. The Group generates more than 95% of its revenue in foreign currency
outside South Africa.


The Group provides active management support to the strategic direction and operations of its subsidiaries and has
three principal lines of business:

•   Westcon, a global distributor of advanced networking, security, data and voice communications and convergence
    products, based in New York, United States of America (“US”) and the largest distributor worldwide of equipment
    in this sector, with operations in many countries;


•   Logical, an international professional services and IT network integration group headquartered in London, United
    Kingdom (“UK”) and with operations in more than ten countries; and


•   Mason, a strategic telecommunications consultancy headquartered in Manchester in the UK and focusing on
    UK and European clients.


The Group also has similarly focused operations in South Africa (“SA”) under Other Holdings. These are Westcon
AME, Affinity Logic and RangeGate.




                                                                                         Value Drivers




               to provide a best in class                                                to deliver long-term,sustainable,
             portfolio of actively managed                                                above average returns through
            businesses in the international                                               investing, operating and value
                 IT networking sector                                                    realisation within the businesses



                                                         enhance and protect
                                                               Datatec
                                                          shareholder value


                to be an employer of                                                        to be ethical, honest and
            choice, attracting, developing                                                     socially responsible
               and retaining the best                                                        to all stakeholders and
                   and key talents                                                         acceptable corporate citizens




                                                                                                                             Dat at ec Annual R epor t 2002   1
                                                          268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 2




                           Six Year Review




                                                                               %
                                                                 2002      change        2001         2000       1999       1998    1997

                           In South African Rand (R million)

                           Revenue                             20 677            3     20 158       11 524       6 641      1 374   464

                             Continuing operations             20 360                  17 500        7 607       2 005       550     96
                             Acquisitions                         202                   1 537        2 572       4 179       680    302
                             Discontinued operations              115                   1 121        1 345         457       144     66

                           Operating profit before
                           finance costs, depreciation
                           and amortisation (“EBITDA”)            846          (20)      1 059         708         479        92     26
                           Operating profit                       646          (20)        807         553         406        74     19

                             Westcon                              586                     772          406         312        (9)      4
                             Logical                              (13)                     25          148          78        44       –
                             Mason                                  6                      34            4           –         –       –
                             Other Holdings                        99                      81           32         (11)       35      16
                             Discontinued operations              (32)                   (105)         (37)         27         4      (1)

                           Profit before exceptional items
                           and goodwill amortisation              547         (21)         690         515         399        67     16
                           (Loss)/profit before taxation         (147)       (111)       1 316         539         373        93     16
                           (Loss)/profit after taxation          (325)       (132)       1 015         388         219        68     10
                           Attributable (loss)/earnings          (336)       (135)         958         379         195        72     11
                           Headline earnings                      346         (16)         410         364         225        44     11

                           Non-current assets                   1 295           (1)      1 302         705         514        72     32
                           Current assets                       8 420           (1)      8 466       5 670       4 191       800    252
                           Ordinary shareholders’ funds         3 726           16       3 205       1 403         897       161     44
                           Outside shareholders’ interest         199          (23)        260         138          84         6      9
                           Non-current liabilities                 78           (3)         80         607       1 096       199     57
                           Current liabilities                  5 712           (8)      6 223       4 227       2 628       506    175

                           Net cash inflow/(outflow) from
                           operating activities                  1 687        715          207        (203)            38     92      32
                           Net cash (outflow)/inflow from
                           investing activities                  (520)      (2 837)         19      (2 022)     (3 569)     (625)   (180)
                           Net cash (outflow)/inflow from
                           financing activities                  (100)       (168)         148       1 353       3 693       710     221
                           Net cash/(borrowings)                  168         164         (262)       (485)        405       256      79
                           In South African cents
                           Headline earnings per share            265         (18)        325          300         267        87     39
                           Basic (loss)/earnings per share       (257)       (134)        761          340         231       141     39
                           Tangible net asset value
                           per share                             2 414          17       2 058       1 179         898       277     118




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                                 268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 3




                                                      %
                                        2002     change         2001        2000        1999      1998    1997

In US dollars (US$ million)

Revenue                                2 198         (20)      2 763       1 859       1 145      292     105

 Continuing operations                 2 165                   2 399       1 227         346       117     22
 Acquisitions                             21                     211         415         720       144     68
 Discontinued operations                  12                     153         217          79        31     15

Operating profit before
finance costs, depreciation
and amortisation (“EBITDA”)               88         (39)        144         114          83       20        6
Operating profit                          69         (38)        111          89          70       16        4

 Westcon                                  62                     106          65          54       (2)       1
 Logical                                  (1)                      3          24          13       10        –
 Mason                                     1                       5           1           –        –        –
 Other Holdings                           10                      11           5          (2)       7        3
 Discontinued operations                  (3)                    (14)         (6)          5        1        –

Profit before exceptional items
and goodwill amortisation                 58         (38)         95          83          69       14        4
(Loss)/profit before taxation            (14)       (108)        180          87          64       20        4
(Loss)/profit after taxation             (33)       (124)        139          63          38       14        2
Attributable (loss)/earnings             (35)       (127)        131          61          34       15        3
Headline earnings                         36         (36)         56          59          39        9        3

Non-current assets                       113         (30)        163         107          82       14       7
Current assets                           736         (30)      1 057         859         665      160      56
Ordinary shareholders’ funds             326         (19)        400         213         142       32      10
Outside shareholders’ interest            17         (46)         32          21          13        1       2
Non-current liabilities                    7         (32)         10          92         174       39      12
Current liabilities                      499         (36)        777         640         417      101      39

Net cash inflow/(outflow) from
operating activities                     175         522          28         (33)             7    20        7
Net cash (outflow)/inflow
from investing activities                (45)     (2 015)          2        (307)       (567)     (125)    (40)
Net cash (outflow)/inflow
from financing activities                 (9)       (147)         18         205         586       142     49
Net cash/(borrowings)                     15         145         (33)        (74)         64        51     18

In US cents
Headline earnings per share               28         (38)         44          48          46       19        9
Basic (loss)/earnings per share          (27)       (126)        104          55          40       30        9
Tangible net asset value
per share                                211         (18)        257         179         143       56      26




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                                                         268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 4




                           Six Year Review                            continued




                                                                             2002        2001        2000        1999       1998        1997

                           Summary of statistics
                           Stock exchange performance
                           Total number of shares traded ('000)           130 566     127 537      79 297      43 721     20 471      13 559
                           Total number of shares traded as a
                           percentage of total shares                      95.0%       99.1%       66.7%        55.3%     40.0%       33.6%
                           Total value of shares traded (R million)         2 199       6 212       7 405        3 780      772         222

                           Prices (cents)
                           Closing                                          1 650       1 650      11 600       9 560      7 500       2 100
                           High                                             2 500      11 700      14 500      12 800      7 700       2 400
                           Low                                                880       1 450       5 530       4 600      2 000         925
                           Market capitalisation                            2 267       2 124      13 798       9 551      4 364         782

                           Shares issued
                           Issued (million)                                   137         128         119         100         58             37
                           Weighted average (million)                         131         126         112          84         51             31

                           Ratios
                           Return on total assets                           6.6%        8.3%        8.7%        8.6%       8.4%        6.7%
                           Return on ordinary shareholders' funds          14.7%       21.5%       36.7%       44.5%      41.6%       36.4%
                           Debt/equity ratio                                2.1:1       2.5:1      43.3:1     122.2:1    122.4:1     127.3:1
                           Current ratio                                    1.5:1       1.4:1       1.3:1       1.6:1      1.6:1       1.4:1
                           Interest cover                                 375.6%      322.8%      384.0%      624.6%     429.4%      316.7%
                           SA Consumer Price Index                          8.6%        5.7%        5.3%        5.2%       6.9%        8.6%

                           Employees
                           Number of employees                              3 023       3 830       4 135       2 913      1 200         507
                           Revenue per employee (R’000)                     6 840       5 263       2 787       2 280      1 145         915
                           Revenue per employee ($’000)                       727         721         450         393        244         208

                           Exchange rates
                           Rand/$ income statement
                           translation rate                                   9.6         7.3         6.2         5.8        4.7         4.4
                           Rand/$ balance sheet
                           translation rate                                  11.4         8.0         6.6         6.3        5.0         4.5

                           Notes:
                           – Westcon is consolidated into the Group’s results based on Westcon’s results for its financial year ended
                              28 February for the 2002, 2001 and 2000 periods. Westcon’s results are thus translated at a different Rand/$
                              exchange rate, as set out on page 36 of the Finance Report.
                           – 1997 represents a thirteen month period.
                           – Detailed segmental information is set out in note 26 of the annual financial statements on pages 89 and 90.
                           – The SA Consumer Price Index sourced from Standard Bank of South Africa Limited.
                           – Return on total assets is calculated utilising operating profit and return on ordinary shareholders’ funds is
                              calculated utilising profit before exceptional items and goodwill amortisation.
                           – Debt includes all long-term liabilities including amounts due to vendors of a long-term nature.




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                        268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 5




 25                                                          1 200
                                                                                                     1 127

                                             20.6
                                                             1 000
 20                                   19.0
                                                                                                             873

                                                              800
 15                                                                                            706

                                                              600
                               10.2
 10                                                                                      431
                                                              400
                         5.8
  5
                                                              200

                  1.2                                                              76
            0.4                                                             22
  0                                                            0
            1997 1998 1999 2000 2001 2002                                  1997 1998 1999 2000 2001 2002


        6 Year CAGR = 120%                                              6 Year CAGR = 102%



revenue — ongoing operations                                           ebitda — ongoing operations
R Billion                                                              R Million




350                                                                7                                         6.8
                                      325
                               300
300                                                                6
                         267                 265                                                      5.3

250                                                                5


200                                                                4


150                                                                3                           2.8

                                                                                         2.3
100               87                                               2

                                                                                   1.1
                                                                            0.9
50          39                                                     1


 0                                                                 0
            1997 1998 1999 2000 2001 2002                                  1997 1998 1999 2000 2001 2002



        6 Year CAGR = 47%                                              6 Year CAGR = 50%



headline earnings per share                                            revenue per employee
Cents                                                                  R Million




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                                                                         268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 6




                                       Directorate




> Jens Montanana                       > Stephen Lawrence                      > David Pfaff                    > Robin Rindel                     > Alan Smith




                                       Executive Directors

                                       > Jens Montanana                                                 communications. From 1 June 2002, David succeeded
                                       Chief Executive Officer, Age 41 (British)                        Robin Rindel as Chief Financial Officer and will remain
                                       Date of Appointment 6 October 1994.                              responsible for global investor relations and corporate
                                       Jens is the founder and chief architect behind Datatec           communications. Prior to joining Datatec, David was a
                                       Limited, which he established in 1986. Between 1989              director of Anglo American Industrial Corporation.
                                       and 1993 Jens ran US Robotics' UK operations. In 1993
                                                                                                        > Robin Rindel
                                       he co-founded US start up Xedia Corporation in Boston,
                                       MA, an early pioneer of network switching and one of             Executive Director, Age 40 (South African)
                                       the market leaders in IP bandwidth management, which             Date of Appointment 1 September 1995
                                       was subsequently sold to Lucent Corporation. In 1994             Robin was the Datatec Finance Director and he heads
                                       Jens returned to SA and listed Datatec on the JSE                up a team responsible for the Group’s corporate finance
                                       Securities Exchange South Africa.                                and acquisition activities. From 31 May 2002, Robin
                                                                                                        relinquished his CFO role and will assume on 1 October
                                       > Stephen Lawrence
                                                                                                        2002 operational responsibility for Westcon’s Asia
                                       Chief Executive Officer: Logical, Age 45 (British)
                                                                                                        Pacific Operation.
                                       Date of Appointment 7 November 2000
                                       Prior to joining Logical, Stephen was vice-president of          > Alan Smith
                                       Arthur D Little, the Boston headquartered, technology            Chief Executive Officer of Westcon Group, Inc., Age 39
                                       based management consultancy – where he was                      (American) Date of Appointment 17 July 2001
                                       responsible for the company's UK activities, which was           Alan is the CEO and president of Westcon. He is the
                                       the company's largest operation outside the US. He was           former executive vice-president and chief operating
                                       also non-executive chairman of Mason, acquired by                officer. He joined Westcon in 1997 as director of
                                       Datatec in 1999.                                                 business development and planning. Prior to joining
                                       > David Pfaff                                                    Westcon,       Alan   was   manager   of   the   business
                                       Executive Director, Age 37 (South African)                       management group at Bay Networks (now Nortel
                                       Date of Appointment 1 July 2001                                  Networks), and its predecessor, Synoptics Corporation,
                                       David is responsible for Datatec’s South African                 from 1993 to 1997. From 1989 to 1993, he held the
                                       interests, global investor relations and corporate               position of manager of contracts at Oracle.




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                                     268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 7




> Leslie Boyd             > Colin Brayshaw          > Mendel Karpul            > John McCartney              > Cedric Savage                      > Chris Seabrooke




       Non-executive Directors

       > Leslie Boyd                                               commercial Internet            Ser vice   Providers      in
       Non-executive Chairman, Age 65 (South African)              SA, Internet Africa.
       Date of Appointment 6 December 2001
                                                                   > John McCartney
       In addition to his position as Chairman at Datatec,
                                                                   Non-executive Director and Deputy Chairman, Age 49
       Leslie is chairman of Imperial Holdings and
                                                                   (American) Date of Appointment 11 May 1998
       co-chair of the Millenium Labour Council. Leslie is
                                                                   John was formerly president and chief operating
       also a director of a number of other companies
       including: ABSA Bank, Anglo American Corporation of         officer for US Robotics, as well as president of 3Com
       South Africa, Anglo American Platinum Corporation,          Corporation's Client Access Unit. He joined
       Highveld Steel and Vanadium Corporation, and The            the executive management team of US Robotics
       Tongaat-Hulett Group, to name but a few. In the past,       in 1984. John is also a director of A.M. Castle
       Leslie has also held chairman positions at several of       Corporation, Quotesmith.com and Next Level
       these companies. In 1990, Leslie was the founding           Communications.
       president of the South African Chamber of Business.         > Cedric Savage
       > Colin Brayshaw                                            Non-executive Director, Age 63 (South African)
       Non-executive Director, Age 66 (South African)              Date of Appointment 6 December 2001
       Date of Appointment 6 December 2001                         Cedric has been appointed to the board of Datatec
       Colin is currently chairman of Coronation Holdings          Limited as a non-executive director. In addition, he is
       and a non-executive director on the boards of a number      non-executive chairman of The Tongaat-Hulett
       of listed companies, including: African Harvest,            Group, and a director of a number of companies,
       AngloGold, Anglo Platinum Corporation, AECI,                including AECI, ARM Gold and Delta Motor
       Johnnic Holdings, Highveld Steel and Vanadium               Corporation.
       Corporation. Previously he was chairman and
                                                                   > Chris Seabrooke
       managing partner of Deloitte & Touche and various of
                                                                   Non-executive Director, Age 49 (South African)
       its predecessor firms.
                                                                   Date of Appointment 6 October 1994
       > Mendel Karpul                                             Chris is executive chairman of Sabvest, which is a
       Non-executive Director, Age 49 (South African)              listed investment group with interests in SA and the
       Date of Appointment 30 August 1996                          UK. He is a director of seven JSE listed companies,
       Mendel has over fifteen years experience in the             including Primedia and Massmart, and is also
       solution-driven software development industr y and          chairman of trade finance and financial services
       was strategically involved in forming one of the first      groups in London and Luxembourg.




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                           Chairman’s Report




                                                                            Leslie Boyd Chairman




                           This is my first Chairman's Report since I became            Chairman. Jens deserves credit for taking that decision
                           non-executive Chairman of Datatec in December 2001.          and inviting someone with no previous contact with
                           The year under review has undoubtedly been the most          Datatec to become Chairman.
                           difficult in the relatively short history of the worldwide   At the same time, Colin Brayshaw and Cedric Savage
                           IT industry. Despite this, progress has been made by         were made independent non-executive directors. I chair
                           Datatec on a number of fronts and management has             the Remuneration and Nomination Committee, Colin
                           responded well to the challenges.                            the Audit and Compliance Committee and Cedric the
                                                                                        Business Risk Committee. The Board now has a majority
                           > Corporate Governance                                       of non-executive directors, with independent directors
                           The Group has made good progress in corporate                chairing all the board committees.
                           governance and is in the process of reviewing the King       The Business Risk Committee was set up during the
                           II Report in order to move to full compliance.               year and will introduce a set of standards and values to
                           The Executive Chairman, Jens Montanana, decided to           guide the way business is done throughout Datatec's
                           step down from that role and to assume the role of Chief     operations. The Business Risk Committee will oversee
                           Executive under an independent non-executive                 management and application of these processes.




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> Performance                                                   Jens Montanana, the management team has, with some
It is important to note that over 95% of Datatec's              resilience, weathered the storm. On behalf of all
revenue is earned outside SA in foreign currencies,             shareholders, I would like to thank everyone for their efforts.
making it a strong Rand hedge stock.                            I would also like to thank Mark Lamberti and Jon James,
In the 2002 financial year, turnover from ongoing               who resigned from the Board during the course of the
operations of R20.6 billion increased by 8% from                year, for their contribution to the affairs of the company.
R19.0 billion in 2001. Operating profit declined from           At   the   same     time    I   welcome     to   the   Board
R807 million to R646 million as a result of weaker              Colin Brayshaw, David Pfaff, Cedric Savage and
trading conditions. Headline earnings per share                 Alan Smith. I am sure they will contribute significantly
declined by 18% from 325 cents per share to 265 cents.          to the business.
Cash flow showed a significant improvement through
the year and, at year end, the company moved from a             > Prospects
net debt position of R262 million to a net cash position        The year ahead will remain challenging, but prospects
of R168 million.                                                should improve in calendar 2003.




The past year has been extremely dif ficult and challenging. Led by Jens Montanana,
the management team has, with some resilience, weathered the storm.



> Operating Environment                                         A tough market is the true test of any company and I am
There are early indications of a recovery in the world          pleased to report that the Datatec Group has achieved
economy. The recovery is likely to be slow and will             significant advances despite a particularly difficult
depend on factors such as the oil price. The US seems to        environment.
be recovering from the recession and the terrible effects
of the September 11 attacks. However, this recovery is likely
to be delayed due to the uncertainties around the recent
US corporate governance and accounting failures.
The sectors in which Datatec's subsidiaries operate
are less predictable than most, and we expect margins
                                                                Leslie Boyd
to remain under pressure during the ensuing
                                                                Chairman
financial year.

                                                                17 July 2002
> Appreciation
As I mentioned previously, the past year has been
extremely     difficult   and    challenging.      Led    by




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                            Chief Executive Officer’s Report




                                                                   Jens Montanana Chief Executive Officer




                            > Overview and Market Conditions                             Generally, our industr y experienced exceptional
                            The year saw Datatec successfully navigate a particularly    growth during 1999 and 2000, fuelled by the
                            challenging environment in which the IT and                  telecommunications      explosion.   A    new    business
                            telecommunications sectors experienced significant           paradigm of “build before demand” took hold, in
                            contraction, driven by a downturn in service provider        preference to the previous philosophy of “build to meet
                            and corporate spending and faced with slowing                demand”. The catalysts to this dynamic were driven by
                            spending and lengthening sales and product life cycles.      the Internet revolution, the e-business boom, the build-
                            The networking and telecommunications sectors have           up to Y2K, and fueled by deregulation.
                            become increasingly intertwined as a consequence of          These     technology    investment       and    planning
                            digitalisation in communications, Internet networking        excesses became all the more evident as Datatec’s
                            and voice/data convergence. Deregulation accelerated         suppliers, partners and competitors experienced
                            this convergence but in the process also created             a sharp contraction in their businesses. The result
                            significant capacity “hangover” as a result of over-         was an industr y downsizing by, sometimes, as much
                            investment during recent years.                              as 40%.




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The Internet and e-business boom prompted many to draw             Consolidation in the sector occurred during the
new parallels between “old” and “new” economies and                market downturn. Datatec has been an active
business, in which the Internet was often presented as the basis   consolidator during this period, taking advantage of
of an alternative economy. The realisation that everything is      opportunities where appropriate, illustrated most
part of one economy has sobered the market considerably.           recently by the Group’s acquisition of the activities of
Those least affected by the downturn were the                      Landis Business Partners, giving Westcon a major boost
organisations which did not over-invest in pioneering and          to its European presence.
often over-promising technologies, who can now adopt               We remain passionately committed to growth and
appropriate e-technologies and use communications                  the enhancement of shareholder value. Throughout
infrastructure at a fraction of the cost that early adopters       our sixteen-year histor y we have continued to deliver
and evangelical e-businesses had to bear.                          top-line growth and uninterrupted profitability, a
At an early stage, Datatec responded to the anticipated            performance we would like to continue in the
downturn. It began restructuring and reshaping its                 long term.




Our early approach to rationalisation has enhanced the Group’s competitiveness and
our businesses are positioned to exploit any market improvements.



operations and subsidiaries to assure itself a stronger            Datatec has come through this turbulent period with a
competitive position to adapt to changes in the                    balance sheet in better condition than at any time
business environment.                                              during its life as a public company. That is a tribute to
This pro-active response helped us through a difficult             the quality of our people, our assets and our ability to
period and despite experiencing a decline in business              readily adapt in order to remain competitive and
in all of our major operations, we were able to                    profitable, while holding our position at the cutting
out-perform many in our industry by falling less than              edge of our market.
many others. This applies especially to the key
statistics and the ratios of our financial performance,            > Operations and Strategy
particularly in the areas of debt reduction and                    Datatec operates as an integrated management services
significant improvements in working capital, resulting             group, providing active management of the Group’s
in a positive cash inflow.                                         subsidiaries via strategic direction, business planning,
One consequence of the year’s disappointing market                 investment, financial control and risk management.
conditions was to delay the possibility of a NASDAQ                The Datatec Group was built on solid and fundamental
stock exchange listing (IPO) of Westcon.                           businesses in significant markets with proven growth




                                                                                                                       Dat at ec Annual R epor t 2002   11
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                           Chief Executive Officer’s Report                                                          continued




                           characteristics, not on high-risk exponential growth            to our market sector at various levels that are all
                           opportunities. Our differentiation is the ability to            complementary.
                           identify, select and exploit the “out-perform” sectors and      Our individually distinguished and separately branded
                           cyclical trends that drive our industry.                        subsidiaries are aligned with their own routes to market
                           Today, these trends include the convergence of voice            and are all customer focused. This structural flexibility
                           and data, widespread adoption of the Internet, mobile           improves our nimbleness and customer reach without
                           computing,       broadband       and       high     capacity    creating overlap or conflict. It delivers quality in service
                           communications and considerably increased spending              through best practice.
                           on security as use of the Internet is “industrialised”.         Datatec    has    adopted     successful,    decentralised
                           Datatec’s operations comprise significant, focused              management of its subsidiary divisions while creating
                           businesses providing IT networking products and                 the right control and reporting mechanisms which instil
                           services to channels and enterprises all over the               greater responsibility and accountability throughout the




                           Throughout our 16-year history we have continued to deliver top-line growth and
                           uninterrupted profitability, a performance we would like to continue in the long term.




                           world.     The   Group’s      international       subsidiar y   Group. The Group’s reward system motivates and
                           companies, Westcon, Logical and Mason, provide                  encourages management individuals to retain their
                           value-added distribution, integration services and              entrepreneurial spirit.
                           strategic consulting respectively, to organisations             Importantly, Datatec is not afraid of change. We cannot
                           locally and globally.                                           be. We cannot afford to be complacent in ensuring we
                           We have established solid foundations for each of the           remain in control of the growth drivers that make us
                           major operating divisions by focusing our businesses into       passionate about our business.
                           “pure play” operations at various levels of our industry        Our early approach to rationalisation has enhanced the
                           supply chain. We are able to operate and respond more           Group’s competitiveness and our businesses are well
                           effectively to rapid changes in our industry vertical sector    positioned to exploit any market improvements.
                           – IT networking – and adapt accordingly.
                           Operating in these three principal areas of indirect            > Financial Results
                           distribution, direct integration services and consulting,       Difficult international market conditions and the
                           we provide our shareholders with an aggregate exposure          downturn in technology resulted in lower US Dollar




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revenues and earnings, an adverse impact that was             has been exacerbated by the downturn in corporate
mitigated somewhat by the weaker South African Rand           technology spending, will only start to improve once
and significant reductions in operating costs and better      the fundamental supply and demand characteristics
working capital management.                                   which drive our overall industry return to an
We experienced modest revenue growth from ongoing             expansionary trend.
operations of 8% in Rand terms but a decline, in US Dollar    Steps have been taken to stabilise profitability over the
terms, of 16%. Our operating profit in Rands fell 20%         next year through lower operating costs and reductions
and in US Dollars, approximately 38%. EBITDA profits          in personnel. However, although revenues appear to
from ongoing operations fell to R873 million from             have stabilised and confidence may be returning, the
R1.127 billion.                                               Group believes that there will be no recovery in this
The most notable feature of the year’s financial              sector until at least calendar 2003.
performance resulted from improvements to the
balance sheet. Cash generated from operations was a
significant R2.1 billion, largely as a result of
improvements to working capital of R1.3 billion, driven
largely through a reduction in inventories.
The Group’s net debt at the year end was eliminated,
moving to a net cash position of R168 million from a
                                                              Jens Montanana
negative R262 million in the 2001 financial year – a year-
                                                              Chief Executive Officer
on-year improvement of R430 million.
                                                              17 July 2002
> Prospects for the Group
The networking and telecommunications sector
remains subdued as a result of the over investment that
has occurred during recent years. The acquisition of the
Landis distribution activities, while providing a boost to
Westcon’s European revenues and geographical
footprint, will create a drag on profits in the year ahead
as increased investment and expenses in integrating
systems and infrastructure occur.
We anticipate that margin pressure on product sales will
continue to erode the operating profit performance of
the Group, especially in the Westcon division. We
further expect that this contraction in margin, which




                                                                                                                  Dat at ec Annual R epor t 2002   13
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                            Westcon Divisional Report




                            >
                            Goods move. People move.
                            Ideas move and cultures change.
                            The difference now is
                            the speed of these changes.




14 Dat at ec   Annual R epor t 2002
                              268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 15




Westcon Group, Inc. (“Westcon”) is the leading global        Westcon targets sales opportunities that are solutions
distributor of networking and telecommunications             based, thereby requiring a high degree of specialisation
equipment with multi-country operations spanning             and customisation. Its customers are value-added
North and South America, Europe, Asia Pacific with
                                                             resellers, systems integrators and service providers that
services in Africa and the Middle East.
                                                             resell networking products and solutions to large
Its primary vendors are Cisco Systems, Nortel Networks
                                                             organisations and governments around the world. These
and Avaya Communications. Westcon is a sales and
marketing channel for other leading vendors of               solutions include the design and configuration of data,
networking technology in the security, wireless and          voice converged and wireless networks, as well as
voice-over-IP (VOIP) markets. Westcon adds value to its      extensions of a network such as video conferencing,
distribution activities by providing technical expertise,    network storage and unified messaging.
sales support and services.




                                                                                                                 Dat at ec Annual R epor t 2002   15
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                            Westcon Divisional Report                                                continued




                                                        > Alan Smith                       > John O’Malley
                                                        Chief Executive Officer            Chief Financial Officer
                                                        Westcon                            Westcon




                            Our global services and training enable customers to         The Westcon division of the group leads with Nortel
                            expand their technology offerings and geographic             Networks solutions and also provides a wide range of
                            presence, enter new markets and offer a more                 complementary voice and data networking equipment
                            comprehensive set of networking services.                    and security products in the US, Canada, UK, Australia
                                                                                         and Brazil.
                            > Structure                                                  Westcon has developed significant technical competencies
                            Westcon operates its global distribution business            and a wide array of support services, allowing it to
                            throughout the Americas, Asia, Australia and Europe          complement, or act as an extension of, its vendors’ sales
                            and has separate operations under the Comstor, Voda          forces. In this way we provide Cisco, Nortel and Avaya with
                            One and Westcon brands. The group delivers value to          a focused sales force that markets products and services
                            its customers through its highly trained sales staff of      through our own three branded divisions.
                            400 people, supported by over 100 certified technical
                            personnel.
                            The Comstor division provides a wide range of Cisco                  19%                               7%
                                                                                                                              1%
                            products in the US, UK, Germany, Belgium, Australia,
                            Ireland and Singapore.                                       12%                                                                  63%
                            The US-based Voda One division provides Avaya
                                                                                                                            29%
                            products for the rapidly-growing market for
                            convergence solutions, as well as unified messaging, call          12%                    57%

                            centre applications, PABX and data networking
                            solutions. Voda One was created by combining the                    westcon revenue by vendor         westcon revenue by region
                            operations of two distributors of Avaya voice products,             cisco                             north america
                                                                                                avaya                             uk and europe
                            Inacom Communications and CCA Technologies, both                    nortel                            south america
                                                                                                other                             asia pacific
                            acquired in 2000.




16 Dat at ec   Annual R epor t 2002
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Our sales and technical personnel also assist customers        Europe and the US, as well as the bankruptcies and
with network design and configuration consulting, pre-         reorganisations common in a contracting market.
and post-sales support, training, security monitoring,
technical   consulting,    professional     services   staff   > Financial Performance
augmentation, as well as the staging and configuration         During the year, Westcon’s revenue declined 19% from
of products.                                                   $2.056 billion in fiscal 2001 to $1.670 billion due to
The role of the distribution channel has continued to          softening demand for voice and data networking
remain a critical part of major networking vendors’            products, particularly among telecommunications
business models. Companies such as Cisco, Nortel,              companies and service providers.
Avaya, Checkpoint, Nokia and Alcatel rely on the               Gross margins decreased from 11.2% in 2001 to 10.4%
channel for contributing sales coverage, geographical          in this financial year, primarily due to a reduction in
coverage, design and configuration skills, pre- and post-      global channel margins associated with sales of Cisco
sales product support, as well as professional services        products, as well as the highly competitive nature of a
and training.                                                  contracting market and the reduction or elimination of
During the year under review, networking vendors               margin-enhancing programmes previously offered by
increased their reliance on the channel for mission critical   many significant vendors.
functions as they looked to enhance their efficiencies in a    We responded with several cost-cutting and control
contracting market while also introducing new products         measures such as reductions in staffing and certain
that are technologically complex.                              employee benefit programmes, modifications to
Westcon serves nearly 9 500 customers who are primarily
                                                               compensation plans and freezes on the hiring of new
value-added resellers and system integrators, with less
                                                               staff and capital spending. These initiatives successfully
than 5% of the group’s revenues coming from service
                                                               contained selling and general administration expenses,
providers or telco’s.
                                                               bringing them into line with our current levels of
                                                               operation.
> Markets
                                                               For the year ended 28 February 2002, Westcon’s
The economic and trading environment in the Americas
                                                               EBITDA decreased by 36% from $115.2 million (2001)
has improved slightly with indications of rising demand,
                                                               to $73.3 million, after making provision during the year
particularly in the retail and consumer sectors. However,
                                                               in respect of the Lucent litigation, as detailed in note 23
the technology sector deteriorated during the year. The
                                                               of the annual financial statements.
exceptions were modest growth in security, storage,
wireless and voice in IP segments of the market where          Substantial operating cash flows generated during
customers are stabilising, securitising and enhancing          the   year    allowed    Westcon      to   reduce    debt
their existing network infrastructures rather than             substantially, specifically when combined with
expanding them.                                                steadily declining interest rates, which resulted in
In Europe, the IT market was adversely affected by             lower financing costs.
shrinking consumer spending and significant corporate          During the year, we maintained our focus on managing
debt, specifically in the service provider/telco markets.      key elements of working capital. These disciplines
This resulted in a more competitive market,                    reduced the outstanding aggregate accounts receivables
demonstrated by lower margins and volatile market share.       by 14% from $311 million (2001) to $267 million.
The global IT market contracted overall, punctuated by         Inventories declined by 51% from $363 million (2001)
increasing merger and acquisition activity in both             to $178 million at the year end.




                                                                                                                     Dat at ec Annual R epor t 2002   17
                                                             268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 18




                            Westcon Divisional Report                                              continued




                            This positive cash flow was utilised to improve the
                                                                                                        15 595
                            Westcon balance sheet. During the year, lines of credit             16 000 ($1 670)    14 871    900              830
                                                                                                14 000                       800     685
                            and acquisition debt were reduced by 43% from                                                    700    ($73)
                                                                                                12 000
                                                                                                10 000                       600
                            $246 million (2001) to $139 million, while cash on hand              8 000
                                                                                                                             500
                                                                                                                             400
                            increased by 30% from $76 million (2001) to                          6 000
                                                                                                                             300
                                                                                                 4 000                       200
                            $99 million.                                                         2 000                       100
                                                                                                     0                         0
                            During the year ended 28 February 2002, the Comstor                          2002      2001             2002      2001

                            division sold Cisco products worth $947 million and was
                            responsible for generating 57% of Westcon’s revenue.                 westcon revenue             westcon ebitda
                                                                                                 R million                   R million
                            The Americas accounted for 50% of the Comstor
                            division’s net sales, while Europe and the Asia-Pacific
                            region accounted for 40% and 10% respectively.                  > People
                            Most of the Westcon division’s net sales occurred in the        A primary asset of Westcon is its staff worldwide.
                            US (82%) while Europe accounted for 17% and the                 Westcon’s recruitment philosophy is to hire the most
                            Asia-Pacific region accounted for the remaining 1%.             experienced and capable management team in each of
                            Sales of Nortel products represented 46% of this                the markets in which it operates. We recruit the best
                                                                                            local talent from every part of the globe, including
                            division’s total sales in fiscal 2002.
                                                                                            certified engineers, product specialists and sales
                                                                                            representatives. These local employees are best suited to
                            > Ongoing Strategy
                                                                                            understanding their individual markets and uncovering
                            In its exceptionally competitive environment, Westcon           new sales opportunities.
                            maintained its differentiation among customers by               Westcon offers training and career development
                            continuing to evolve its value proposition. During the          programmes to its employees throughout the world.
                            year under review, we took the following actions:               Many are given Datatec and Westcon stock options and
                            •    began the process of changing our organisational           other incentives designed to increase productivity and
                                                                                            enhance business performance.
                                 structure to reflect our divisional approach
                                 globally;
                                                                                            > Landis
                            •    continued our growth strategy in Europe through            On May 15, 2002, Westcon completed a transaction to
                                 planned acquisitions and green-fielding (new locations     absorb the employees and the fixed assets of the former
                                 include Comstor Belgium and Comstor Ireland);              Landis Business Partner organisation operating in nine
                            •    diversified our overall product portfolio to include       European countries: Austria, Belgium, Denmark, France,
                                 more IP Telephony and Convergence products from            Germany, Norway, Spain, Sweden and The Netherlands.
                                                                                            Westcon’s executive management team, combined with
                                 vendors such as 3Com, Siemens and Polycom; and
                                                                                            the Business Partner management teams, have
                            •    enhanced our security and networking product
                                                                                            commenced an aggressive integration schedule to re-
                                 range through strategic vendor agreements with ISS,        start the operations of the former Business Partner
                                 WatchGuard, Aladdin, Netscreen and Secure                  organisations in these countries. The integration process
                                 Computing Corporation.                                     includes merging the “best practices” of both




18 Dat at ec   Annual R epor t 2002
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organisations, while bringing to the new Westcon              > The Coming Year
subsidiaries an enhanced value-added business model           In the year ahead, we intend extending Westcon’s
that has been the cornerstone of Westcon’s success. It is     leadership as a networking and telecommunications
expected the first phase of the integration will be           distributor by expanding into Europe through the
completed within three to four months and the full
                                                              acquisition of the Landis businesses and by enhancing
integration completed within six to eight months. As part
                                                              the group’s value offering through providing the most
of the integration process, the company will be actively
                                                              innovative products available, all supported by our
“right-sizing” the former Business Partner operations,
                                                              expertise, product training and networking insight.
inclusive of staff reductions, to appropriate levels based
on the Westcon operating model and current economic           The route will include:

trends for our industry in the respective geographies.        •   continuing sales of complete network solutions in
The current integration plans call for the new business           preference to simply shipping products;
operations to turn profitable late in the last quarter of     •   offering value-added solutions in the developing
our current fiscal year.                                          convergence and telecommunications market place,
Cisco, Nortel, Avaya, Extreme Networks, Siemens, as well          supported by sales support and training;
as other major networking and communications vendors,         •   increasing market penetration by streamlining
have agreed to continue their relationship with the new           global operations, expanding our geographic
Westcon and Comstor subsidiaries in Europe. While the             presence and enhancing our technology offerings;
integration process is progressing, it should be noted that   •   pursuing strategic acquisitions by creating greater
due to the rapid support of Westcon’s vendors and the             demand for Westcon’s style of value-added sales and
timely re-branding of the new business entities, within two       support services; and
weeks of the close of the transaction the new Westcon         •   realising the benefits of the significant cost
subsidiaries re-entered the market and are currently              and   operational       efficiencies   of   Compass,
working with customers, taking orders and shipping                Westcon’s recently-implemented processing and
product.                                                          information system.




                                                                                                                  Dat at ec Annual R epor t 2002   19
                                      268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 20




                           Logical Divisional Report




                           >
                           Unless you do something
                           beyond what you’ve mastered
                           you will never grow




20   Dat at ec Annual R epor t 2002
                                268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 21




Logical Group Limited (“Logical”) is an international          •   designing and deploying the networks and
professional services and IT network integration group             advanced IT infrastructures that underpin the
with specific skills in next generation technologies such          enterprise; and
as convergence and mobility.                                   •   monitoring and maintaining enterprise networks,
We take a consulting-led approach to help our clients              systems and applications to enable our clients to
leverage these technologies to gain competitive                    outsource routine operational management of
advantages for their businesses, using our core                    mission critical technologies.
competencies in four key areas:
•   shaping business strategies within the context of the      > Structure
    impact of new technology;                                  Logical’s business is structured geographically with a
•   developing and integrating custom applications             small head office function in London that provides
    and web-enabled solutions to drive process                 strategic direction, financial control and standards-
    efficiency;                                                setting. We aim to make our country operations part of an




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                           Logical Divisional Report                                         continued




                                                         > Stephen Lawrence             > Nigel Drakeford-Lewis
                                                         Chief Executive Officer        Chief Financial Officer
                                                         Logical                        Logical




                           integrated network of businesses, creating synergies that    slowdown in IT expenditure affected both revenue
                           enhance the overall value of Logical to our shareholders.    and gross margins.
                           As part of the restructuring of the business during the      Our business in Australasia held up well, largely driven
                           year under review, we narrowed the focus of the              by strong domestic demand. Economic growth
                           organisation around networking solutions and we exited       forecasts for this region remain strong for 2002/03. In
                           the loss-making operations in Switzerland (e-business)       Argentina, the economic crisis and the devaluation of
                           and France (systems) and acquired 100% ownership of          the Peso made growth particularly difficult and our
                           the French networking operation and Secure24, our            focus here has been on minimising risk in a highly
                           managed services’ security product.
                                                                                        volatile market. We do not expect to see a significant
                           Overall, the emphasis has shifted from business
                                                                                        improvement in the US and European markets until
                           transition to business integration and activity has been
                                                                                        calendar 2003.
                           focused on managing earn-outs, integrating the
                           remaining business units, developing consistent
                                                                                        > Financial Performance
                           marketing collateral to support our value proposition
                                                                                        The net effect of Logical’s cost cutting and
                           and exploiting proprietary technologies.
                                                                                        reorganisation during the year was an improvement in
                           Difficult market conditions in all our key markets
                                                                                        overall levels of profitability, reflected in a positive
                           meant that we focused heavily on operational cost
                                                                                        EBITDA of $1.9 million for the second half, compared
                           containment with the aim of ensuring ongoing monthly
                                                                                        with $1.1 million in the first half.
                           profitability in all regions. To this end we reduced our
                           headcount by 25% over the year, as well as substantially     Revenue fell markedly from the previous year’s levels,
                           improving working capital management to improve our          largely due to exiting operations in Switzerland and
                           cash position.                                               France, the Peso devaluation in Argentina and declining
                                                                                        market conditions in our key US and European markets.
                           > Markets                                                    Logical ended the year with an overall positive EBITDA
                           Trading conditions affected Logical’s financial              of $3.1 million ($5.3 million in continuing operations).
                           performance during the year. Our business suffered           The cash position improved by 381% to $16.0 million
                           most in the US and Europe, where the general                 from a net debt position of $5.7 million (2001).




22   Dat at ec Annual R epor t 2002
                               268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 23




             3 799
                                                              people and we acknowledged this by issuing Datatec
    4   000 ($395m)                160             151        share options to all our employees so that they can have
    3   500            3 381       140
    3   000                        120                        a stake in the future performance of the Group.
    2   500                        100
                                    80
                                                              We recognise that major organisational restructuring
    2   000                                 52
    1   500                         60    ($5m)               and downsizing can create instability and uncertainty
    1   000                         40
        500                         20                        among employees and we have taken steps to address
          0                          0
                                                              this with a series of regular communication meetings
             2002      2001               2002     2001
                                                              and newsletters to explain the business strategy and the
                                                              actions required of our staff.
     logical revenue              logical ebitda
     R million                    R million
                                                              In addition, we instituted a comprehensive employee
                                                              opinion survey to obtain feedback from all levels of
                                                              the organisation. The survey showed significant
                                                              improvements from a similar project twelve months ago.
> Strategy
                                                              The survey also highlighted a number of areas to
There are growth forecasts for network-related professional
                                                              address, specifically in the area of knowledge sharing
services, driven by the increased availability of low-cost
                                                              across business units. We will take steps to address this in
bandwidth (and subsequent new business applications),
                                                              the coming months.
the convergence of voice, video and data and increasing
demand for mobile access to the enterprise.
We expect growth in four key areas over the next three        > The Coming Year
years: storage solutions, wireless LANs, converged            Logical has achieved stability and focus and having
networks and security. Logical will invest in technical       completed its transition and integration, it is set to show
skills and vendor accreditations accordingly.                 profitable, ongoing growth. It will continue to develop
We are also continuing to develop relationships with          as   a   focused   value-player    around    leading-edge
providers of higher margin niche products that                technology solutions that help our clients identify and
complement our core product business. We will                 exploit the many business opportunities offered by
maintain our focus on Cisco for networking products           advancing technology.
and on HP for servers, but we will also take on new
                                                              We have deep technical skills and vendor recognition
vendors in related value-adding areas such as security,
                                                              in high growth areas such as converged technologies
storage, mobility and service assurance.
                                                              and we have defined a “battleground” that allows us to
We will also concentrate on exploiting our own
                                                              add value to our clients and differentiate ourselves
proprietary technologies across all our operations,
since these proprietary products have a high services         from our competition.
component and carry higher margins than third                 We have already achieved some significant international
party products.                                               successes in the convergence area, particularly in IP
                                                              Telephony, that highlight our expertise and positioning
> People                                                      as a leading solutions provider.
The integration process and the successful development        Our focus in the year ahead will be on building on
of Logical is dependent on the commitment of our              this foundation.




                                                                                                                    Dat at ec Annual R epor t 2002   23
                                      268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 24




                           Mason Divisional Report




                           >
                           … don’t predict the future,
                           create it




24   Dat at ec Annual R epor t 2002
                              268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 25




Mason Group Limited (“Mason”) is a pure-play                 The majority of Mason’s clients are large organisations
telecommunications and IT convergence consultancy. As        in telecommunications, enterprise and government and
such it provides fee-based expertise rather than hardware    include 30 of the FTSE 100 companies.
or software. Mason’s activities occur primarily in the UK
and Ireland, although approximately 6% of its revenue        > Markets
comes from Continental Europe. Mason’s UK-based              The collapse of technology stock prices and turmoil in
consultants have also served clients in more than            the telecommunications industry had a major effect on
thirty countries around the world.                           Mason. Many of our clients suffered financially and
Mason’s services, operating under an ISO9001                 consequently reduced their spending on external
accredited quality system, include solutions strategies,     consultancy.
business    planning,    engineering      and    design,     The roll-out of third generation (3G) mobile telephony
procurement on behalf of clients, programme and              was also delayed due to financial constraints and delays
project management and network optimisation.                 in handset development.




                                                                                                                Dat at ec Annual R epor t 2002   25
                                                          268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 26




                           Mason Divisional Report                                         continued




                           > Dave Mason                    > Alex Smith                  > Terry Flanigan                > Bill Moore
                           Chief Executive Officer         Founding Director             Founding Director               Finance Director
                           Mason                           Mason                         Mason                           Mason




                           The downturn in the enterprise market was less severe         Catalyst performed very well in a strong market and
                           and government work continued apace. Difficult market         increased its revenue by 46%.
                           conditions continued past the year end and although           Geographically, revenue came from the UK (88%),
                           there are large numbers of enquiries for new work, it was     Ireland (5%), the rest of Europe (6%) and other parts
                           difficult to close new contracts.                             of the world (1%).
                                                                                         Mason has achieved an average annual revenue growth
                           Catalyst, the contact centre consultancy acquired by
                                                                                         rate over the last five years of 27%. The level of repeat
                           Mason in March 2001, was successfully integrated into
                                                                                         business from existing clients represented 76% of total
                           our finance, IT/IS and human resources systems,
                                                                                         revenue.
                           achieving a high degree of cross-selling.
                                                                                         Revenue for the year under review was level at
                           The gloomy mood in the marketplace was lifted in part
                                                                                         £20.4 million. Having been prompted by market
                           by some accolades. Mason was ranked as the UK’s
                                                                                         conditions to reduce our staff complement from 260 to
                           leading “Telecoms and IT Convergence Consultancy” by
                                                                                         200 and abandon the planning of an IPO for Mason,
                           an Industry Research Group survey conducted for
                                                                                         both developments generated substantial exceptional
                           Management Consultancy magazine.
                                                                                         costs that negatively affected profits.
                           Mason was also ranked 36 in the UK Sunday Times “100
                           Best Companies to Work For”, based on staff surveys, as       Before exceptional costs, EBITDA was down 74% to
                           well as being listed as one of the UK’s most visionary        £1.0 million and earnings before tax was down 116% to
                           companies in the BT/Guardian “Vision 100” awards.             a loss of £0.5 million after exceptional costs.


                           > Financial Performance                                       > Strategy
                           As a consequence of the stalling market, our revenue          Mason has altered its strategies to reflect important
                           from fixed and mobile telecommunications operators            issues being faced in each of the group’s principal
                           dropped by 27%, a fall softened by the fact that less         markets. In the telecommunications sector, debt
                           than half of Mason’s revenue comes from the                   reduction,     customer     retention,     mergers   and
                           telecommunications operators. During the year,                acquisitions, network optimisation and infrastructure
                           government work grew by 15%.                                  sharing are key issues.




26   Dat at ec Annual R epor t 2002
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In the enterprise sector the issues are cost-savings,                > People
exploitation of broadband infrastructure for business                As a result of the market downturn during the year, we
advantage, information security, IP telephony, wireless              reduced our staff complement, for the first time, from
LANs and mobile data.                                                260 to 200. Redundancies were mainly among support
Key issues in the government sector are implementation               staff, consultants and managers. Although the
of e-government and e-policing initiatives, regional                 redundancies were traumatic for all concerned, all those
promotion          of    broadband     infrastructure,         the   involved felt they were treated fairly and with sensitivity
introduction of secure digital mobile communications                 and no industrial tribunal claims arose.
for emergency services and information security.                     Mason retains its strong people-based culture
Our strategy is to enhance our differentiation and sell              centred on customer service, teamwork, personal
market-focused services that help clients in those                   development, professionalism and fun. Each member
environments resolve these issues. Mason’s key                       of our team is appraised annually and a career
differentiators are that:                                            development and training plan is in place for
• it comprises specialist consultancies that are able to             each individual.
    compete with larger, more generalised consultancies;             We also operate a profit-related bonus scheme based on
• it is independent of vendors and can act impartially               agreed objectives. Most of the people hold Datatec
    in the best interests of customers;                              share options.
• it provides a “concept to reality” service that takes
    clients from initial strategic thinking to a working             > The Coming Year
    solution;
                                                                     Prospects for Mason are looking positive. Its reputation
• the group has expertise across all of the converging
                                                                     is growing in Continental Europe and demand for its
    technologies; and
                                                                     services is being driven by deregulation, the
• it adopts a collaborative approach to working with
                                                                     convergence of IT and telecommunications, new
    its clients.
                                                                     technology, mergers and acquisitions, e-business,
In the longer term, we see many opportunities for
                                                                     m-commerce and changes in business practices.
Mason to expand geographically through establishment
                                                                     The competition in Mason’s market is fragmented and
of new offices and through acquisitions.
                                                                     we expect to see some consolidation among Mason’s
                                                                     competitors and, as the UK’s market leader, Mason
              282                                       40           expects to play a leading role in this consolidation.
     300    ($29m)                      40
     250                                35
                        222             30
     200
                                        25
     150                                20     13
                                        15   ($1m)
     100
                                        10
      50
                                         5
       0                                 0
            2002        2001                     2002   2001




    mason revenue                    mason ebitda
    R million                        R million




                                                                                                                           Dat at ec Annual R epor t 2002   27
                                                          268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 28




                           Other Holdings’ Divisional Report




                           Datatec’s operations in SA focus in three core areas:         > Affinity Logic
                           •     RangeGate, a mobile technology systems integrator;      Affinity Logic’s core business is the provision of
                                                                                         outsource services for the delivery of computing
                           •     Affinity Logic, an IT outsource services company;
                                                                                         infrastructure and application solutions to the retail and
                                 and                                                     consumer goods sector. It has been developing an
                           •     Westcon AME (Africa Middle East), a value added         integrated computing platform that will be outsourced
                                 networking distributor whose operations mirror          on a capacity on demand basis.
                                                                                         At the start of the year the company made a
                                 those of the Westcon Group.
                                                                                         significant investment to develop its core outsourcing
                           For all three, the year was one of consolidation and cost
                                                                                         services platform. As part of this refocusing, it was
                           cutting through staff reductions and rationalisation of
                                                                                         decided to exit all the non-core investments and
                           back-end office functions.                                    service offerings.
                                                                                         The increased expenditure associated with the
                           > RangeGate                                                   change in the company’s strategy contributed to
                                                                                         Affinity’s significant loss during the year of R29
                           RangeGate represents the Group’s mobile technology
                                                                                         million for the Group. Turnover from continuing
                           systems integration business located in SA and the UK.
                                                                                         operations was flat, however, the company generated
                           It sells mobile solutions into specific market sectors
                                                                                         positive cash flows from operations.
                           such as retail, industrial, manufacturing, transport          The balance sheet ended the year well capitalised and
                           and logistics.                                                expenditure on the development of the core platform is
                           RangeGate grew revenues to R83 million during the             now substantially complete. More than 70% of turnover
                           year, but experienced an operating loss of R24 million.       is annuity based.
                           During the year the business cut substantial costs and        During the year it was proposed that Wooltru’s stake be
                           readied itself for an increasing demand for mobile            bought out by management and Datatec, increasing
                                                                                         Datatec’s shareholding from 47.5% to 55.2%. This
                           technology       as   organisations   sought   enhanced
                                                                                         transaction was finalised in June 2002 subject to
                           efficiencies through “anytime, anywhere” access for
                                                                                         Competition Commission approval for the increase in
                           managers, customers and suppliers.
                                                                                         the Datatec shareholding.
                           The proposed merger of RangeGate with Versatile
                                                                                         After investing substantially in upgrading its service
                           Mobile Systems did not proceed, as not all                    offering and developing a comprehensive growth and
                           regulator y approvals had been received. RangeGate            marketing strategy, Affinity Logic looks forward to a year
                           will, however, continue to work together with                 of increased revenues and close to break-even
                           Versatile on opportunities where both companies               profitability.
                           can add value.
                           In the year ahead, revenues are expected to increase and      > Westcon AME
                           the operating performance should improve to a near            Westcon AME, created by merging the South African
                           break-even situation.                                         operations of Westcon, Scantec and Datanet, maintained




28   Dat at ec Annual R epor t 2002
                                268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 29




its focus on territorial expansion and successfully
concluded the acquisition of Dubai-based OnLine on                   900       886                  140
                                                                                                              123
                                                                     800                            120
30 June 2001.                                                        700                                              106
                                                                                       563          100
                                                                     600
The back offices of the SA businesses (Westcon, Datanet              500                              80
                                                                     400                              60
and Scantec) were consolidated, resulting in significant
                                                                     300
                                                                                                      40
cost reductions. The company has now realigned all the               200
                                                                     100                              20
businesses to match the strategy of leveraging Westcon’s               0                                  0
                                                                               2002   2001                    2002    2001
global competitive advantage.
Revenue for the year increased by 56% to R713 million
                                                                   other holdings revenue     other holdings ebitda
and operating profits rose by 325% to R17 million.
                                                                   R million                  R million
We expect the year ahead to show both increased
revenues and operating profit.




                                                                                                                        Dat at ec Annual R epor t 2002   29
                                                           268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 30




                            Finance Report




                            GROUP ACCOUNTING POLICIES

                            The annual financial statements have been prepared in accordance with the Group's published and materially
                            consistently applied accounting policies that comply with South African Statements of Generally Accepted
                            Accounting Practice, and with International Accounting Standards (other than goodwill which has previously been
                            written off against share premium).


                            Westcon is consolidated into the Group’s annual financial statements based on Westcon’s results for its financial year
                            ended 28 February. This is consistent with the previous years’ annual financial statements.


                            REVENUE

                            The Group's financial results for the year ended 31 March 2002 reflected revenue from ongoing operations of
                            R20.6 billion compared with revenue in the previous year of R19.0 billion, an increase of 8%. However, in US Dollars
                            revenue decreased from $2.6 billion in 2001 to $2.2 billion in 2002, a decrease of 16%. Revenue from ongoing
                            operations per division is as follows:

                                                                                        2002             2001             2002             2001
                            Revenue (million)                                           Rand             Rand                $                 $

                            Westcon                                                   15 595           14 871             1 670           2 043
                            Logical                                                    3 799             3 381             395              460
                            Mason                                                        282              222               29               30
                            Other Holdings                                               886              563               92               77

                            Total                                                     20 562           19 037             2 186           2 610

                            Westcon achieved revenue from ongoing operations of R15.6 billion ($1.67 billion) in 2002 compared to revenue of
                            R14.9 billion ($2.04 billion) in 2001, a decline of 18% in US Dollars reflecting the weak economic trading conditions
                            and the effects of the September 11, 2001 events. Gross margins decreased from 11.2% in 2001 to 10.4% for 2002, a
                            decline of 7.1%. This decline is due mainly to the reduction and elimination in the second half of the year of margin
                            enhancing programmes associated with the sales of Cisco products and the provision made during the year in respect
                            of the Lucent litigation.


                            Logical achieved revenue from ongoing operations of R3.8 billion ($395 million) in 2002 compared to revenue of
                            R3.4 billion ($460 million) in 2001, a decline of 14% in US Dollars. This decline is primarily a result of the weak
                            economic conditions together with customers in the US and Europe postponing IT projects in a climate of reduced
                            confidence in the economy. Gross margins decreased from 27.8% in 2001 to 24.4% in 2002 as product margins
                            declined under increasing competition and the declining use of professional services.


                            Mason achieved revenue of R282 million (£20 million) in 2002 compared to R222 million (£21 million) in 2001
                            despite the inclusion for the first time in 2002 of revenue of £5 million from Catalyst, which was acquired by Mason
                            in March 2001. The collapse of technology stock prices and the turmoil in the telecommunications industry had a
                            major effect on Mason, with many of Mason's telecommunication customers suffering financially and consequently
                            reducing their spending on external consultancy. This resulted in revenue reducing from £11.7 million in the first six
                            months to £8.7 million in the second six months, a reduction of 26%.




30 Dat at ec   Annual R epor t 2002
                               268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 31




Other Holdings’ revenue increased mainly through the inclusion for the first time of revenue of R202 million from
OnLine, acquired by Westcon AME on 30 June 2001.


OPERATING PROFIT BEFORE FINANCE COSTS, DEPRECIATION AND AMORTISATION (“EBITDA”)

EBITDA from ongoing operations amounted to R873 million compared with the prior year of R1.127 billion. This
decline is largely the result of the difficult economic trading conditions, disappointing results achieved by Logical and
an increase in provisions in Westcon. EBITDA from ongoing operations per division is as follows:


                                                            2002              2001              2002             2001
EBITDA (million)                                             Rand             Rand                  $                $

Westcon                                                       685              830                73              114
Logical                                                        52              151                  5               21
Mason                                                          13                40                 1                5
Other Holdings                                                123              106                 13               14

                                                              873             1 127               92              154

EBITDA margin on ongoing operations                           4.2%              5.9%              4.2%             5.9%


Included in EBITDA are foreign exchange gains of R136 million (2001: R49 million) attributable to the substantial
decline in the value of the Rand against the Group's trading currencies in the latter part of the year and an amount
of R39 million relating to the refund of customs duty paid, to be received by Westcon from the taxation authorities in
the UK.

As noted in the Group's 2001 annual report, Westcon held $24 million of inventory purchased from Lucent
Technologies, Inc. (“Lucent”) and in July 2001 commenced litigation to require Lucent to abide by the distribution
agreement between the parties and accept return of this inventory. Westcon management believes that Westcon has a
meritorious case against Lucent and is continuing with the litigation. Management has, however, decided to adopt a
prudent approach and, accordingly, Westcon during the year has provided an amount of $13 million (R123 million)
against its remaining Lucent inventory of $16 million.

Logical charged an amount of R86 million against the restructuring provisions created during the financial
year ended 31 March 2001. At the end of the year, R24 million of the restructuring provisions remained, which
provisions are considered adequate to meet restructuring costs mainly relating to future rentals on premises
vacated.

FINANCING COSTS

Financing costs decreased during the year due to the reduction in interest rates in the US and the operating cash flows
generated in Westcon and Logical that lowered the levels of working capital.

GOODWILL AMORTISATION

Goodwill is amortised in the Group's financial statements over a period of seven years and amounted to R133 million
in 2002 compared to R80 million in 2001. This increase is due to goodwill being recorded during the year of
R421 million in respect of payments made for amounts still outstanding to vendors that were subject to earnouts.




                                                                                                                    Dat at ec Annual R epor t 2002   31
                                                          268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 32




                           Finance Report                          continued




                           EXCEPTIONAL ITEMS
                           The following exceptional items were recorded during the year under review:

                           (R million)                                                                                       2002              2001

                           Impairments of property, plant and equipment                                                        (1)             (109)
                           Net (loss)/surplus on disposal of operations and investments                                        (1)            1 068
                           Write-down of carrying value of investments                                                        (58)             (161)
                           Loss on disposal and closure of discontinued operations                                            (64)              (92)
                           Proposed subsidiary listing costs                                                                  (40)                –

                                                                                                                             (164)              706
                           Goodwill impairment                                                                               (397)                –

                           Exceptional items per the Income Statement                                                        (561)              706
                           Tax effect                                                                                          11               (65)
                           Attributable to outside shareholders                                                                 2                (5)

                           Net effect of exceptional items                                                                   (548)              636

                           Exceptional items, excluding impairment of goodwill, of R164 million were incurred during the year, which related
                           predominantly to the net loss realised on disposal of certain operations, the write down in the carrying value of
                           investments and the write off of costs relating to Westcon's proposed listing previously included in the balance sheet.

                           The Group reviewed the value of goodwill carried on its balance sheet at the end of the year. Given the historical
                           trading losses of Logical and certain of its Other Holdings, the Group has written off the remaining amounts of
                           goodwill totalling R397 million relating to those loss-making operations. The remaining goodwill carried on the
                           Group's balance sheet of R419 million relates to Westcon, Mason and Westcon AME and management believe that
                           there has been no impairment to this goodwill.

                           TAXATION

                           The effective rate of ordinary taxation on profit before exceptional items and goodwill decreased from 34.2% in 2001
                           to 30.6% in 2002. This decrease is a result of a shift in Westcon's profit to non-US territories that are subject to lower
                           rates of tax, compared to the previous year, together with the increased impact on the rate of tax deductions for
                           acquired goodwill of $10 million in the US arising from this spread of profits, a reduction in US state taxes in Westcon,
                           prior year tax credits in Logical, and the recognition of certain deferred tax assets on a prudent basis where
                           management believes that their recovery is probable.

                           No provision has been made in Westcon for US Federal deferred income taxes on approximately $108 million of
                           accumulated and undistributed earnings of Westcon’s foreign subsidiaries at 28 February 2002 (Westcon’s year end)
                           as it is the present intention of the Group to continue reinvesting such earnings in the foreign subsidiaries indefinitely.
                           The Group has not calculated the amount of the potential US Federal deferred income taxes, which amount will be
                           less than the US statutory rate of taxation after taking into account credit for foreign taxes paid.

                           MINORITY INTERESTS

                           Minority interests relate to the 7.5% in Westcon, 25% in Logical Softnet (in Argentina), 25% in Mason and 20.9% in
                           RangeGate not owned by the Group. The decline in profit attributable to the outside shareholders of R57 million in
                           2001 to R11 million in 2002 is due to the general decline in the overall Group profitability, the increase in the Group’s
                           investment in Westcon from 85.3% to 92.5% during the year and the allocation to the outside shareholders of their
                           share of the losses in RangeGate and Logical Softnet.




32   Dat at ec Annual R epor t 2002
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HEADLINE EARNINGS PER SHARE
Headline earnings per share decreased by 18% from 325 cents in 2001 to 265 cents in 2002. Basic earnings per share
declined from 761 cents in 2001 to a loss per share of 257 cents in 2002 due primarily to the charge for impairment of
goodwill amounting to R397 million (2001: Nil) and the losses from other exceptional items of R164 million (2001: profit
of R706 million). Diluted earnings per share was slightly lower than basic earnings per share at a loss per share of 253
cents reflecting the notional additional shares in issue necessary to fund the difference between the number of shares
issued and the number of shares that would have been issued at fair value in respect of the share options granted but not
exercised. Diluted headline earnings per share of 260 cents in 2002 was 20% lower than the 325 cents in 2001.

The weighted average number of shares in issue for the year was 131 million which increased from last year's
126 million due to the additional shares in issue arising predominantly from the issue of shares for cash concluded in
the latter part of the year.

DIVIDEND POLICY
The Group continues to pursue attractive investment opportunities that are synergistic to existing operations.
Accordingly, the Group's policy of retaining attributable income for future growth without a dividend distribution to
shareholders remains in place.

BALANCE SHEET
Ordinary shareholders' funds increased from R3.2 billion in 2001 to R3.7 billion in 2002, an increase of R0.5 billion.
This increase is after the charge for impairment of goodwill of R397 million and partly reflects the fall of the Rand on
the historic cost asset base.

BORROWINGS
Long-term liabilities relate primarily to the Group's proportional share of debt raised in Affinity Logic to fund the
development of operations in that business, as well as capitalised finance leases in respect of property, plant and
equipment in other subsidiary companies.

During the year under review the Group reduced its net borrowings mainly through the cash generated from
operations. As at 31 March 2001, Westcon had a senior acquisition loan facility of $75 million of which $50 million was
repaid in April 2001. The balance of $25 million was repaid by an instalment of $10 million on 31 December 2001,
with the balance of $15 million repayable in six monthly instalments of $2.5 million through June 2002. In addition,
as at 31 March 2002, Westcon had a $225 million senior revolving credit facility, expiring on 31 December 2002.
Westcon is in the process of interviewing prospective finance companies, which include its current lender, with a view
to selecting a syndicate of financiers to replace this current senior revolving credit facility in January 2003.

The Group is dependent on its bank overdrafts, working capital line of credit and trade finance facilities to operate.
These facilities generally consist of either a fixed term or a fixed period but repayable on demand, are secured against
the assets of the company to which the facility is made available and contain certain covenants which include financial
covenants such as minimum liquidity, maximum leverage and pre-tax earnings coverage. If these covenants are
violated and a waiver is not obtained for such violation, this may, amongst other things, mean that the facility may be
repayable on demand.

Datatec has no restrictions on its borrowing powers in terms of its Memorandum and Articles of Association.

CAPITALISED DEVELOPMENT EXPENDITURE
Westcon
Westcon has developed internally an enterprise resource planning system known as Compass which is based on a
J D Edwards application running on an Oracle platform. Compass has been installed in Westcon UK, Westcon, Inc.,
Westcon Canada, Comstor US, Comstor Germany and Voda One, which operations amount to 77% of Westcon’s total
revenue. Westcon will, over the next eighteen months, implement this system over its remaining material operations.
The capitalised costs associated with the development of Compass to date amount to R87 million (2001: R24 million)
and further costs of approximately $2 million will be capitalised over the next eighteen months.

Development costs are amortised over a maximum of seven years with R13.2 million amortised in the year under review.




                                                                                                                    Dat at ec Annual R epor t 2002   33
                                                         268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 34




                            Finance Report                        continued




                            Logical

                            Capitalised development costs consist mainly of R26 million (2001: R19 million) for the EBOC (e-business operations
                            centre) and R11 million (2001: R6 million) for Secure24. The EBOC costs relate to the costs incurred in developing
                            the network management centres in the US and UK, which provide outsourced network infrastructure
                            management for customers. Secure24 costs relate to a service, developed in New Zealand, which provides
                            monitoring, management and reporting of security related events within a customer environment with a unique set
                            of software tools.

                            Development costs are amortised over a maximum of three years commencing when the development project is
                            brought to market. During the year under review an amount of R7.0 million was amortised.

                            Affinity Logic

                            Capitalised development costs comprise systems development in progress amounting to R2.5 million
                            (2001: R7.9 million), which consists of a wide variety of projects that are under development, including extended
                            enterprise application integration projects, web based development and planning systems. The majority of these
                            projects are SAP based.

                            When development of a project is completed the development costs are transferred from systems development in
                            progress to either software or computer equipment and depreciated over the useful life of the project. During the
                            2002 financial year amounts of R20.4 million and R0.6 million were transferred from systems development in progress
                            to software and computer equipment respectively (2001: R9.3 million and R14.1 million respectively).

                            All amounts above reflect Datatec’s proportional share of such amounts.

                            AMOUNTS OWING TO VENDORS

                            Amounts owing to vendors represent purchase considerations owing in respect of acquisitions. Amounts owing
                            are recognised once there is sufficient assurance that the suspensive conditions will be met and the amounts can
                            be measured reliably. Amounts owing where the suspensive conditions have not been met are disclosed as
                            contingent liabilities.

                            Amounts owing to vendors decreased during the year from R413 million included in the balance sheet and
                            R395 million reflected as the maximum contingent liability in 2001 to R90 million included in the balance sheet and
                            R65 million reflected as the maximum contingent liability in 2002.

                            During the year the following amounts were paid to vendors out of the Group's internal cash resources:

                            Million                                                                                       R                 $

                            Westcon                                                                                     105               11
                            Logical                                                                                     461               55
                            Other Holdings                                                                               66                8

                                                                                                                        632               74

                            The Westcon payments to vendors relate mainly to the acquisitions of Loginet in Germany, Technocraft in Singapore
                            and CCA Technologies in the US. The Logical payments to vendors relate mainly to the acquisitions of PSSG and BCS
                            in the US, and Satelcom in the UK. The Other Holdings payments relate mainly to the payment to Wooltru Limited
                            in respect of Affinity Logic.




34 Dat at ec   Annual R epor t 2002
                               268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 35




The amounts owing to vendors at 31 March 2002 are made up as follows:

Softnet SA
An amount of R36 million ($3 million) is still owing to the vendors of Softnet. During June 2002 it was agreed that
a maximum further amount of $1.7 million would be paid to the vendors, with an amount of $1.5 million to be
advanced to Softnet on loan account by Logical. The minority shareholder of 25% has agreed to advance
$0.5 million, his pro rata share of the loan.

Catalyst IT Partners
An amount of R98 million ($9 million) is still owing to the vendors of Catalyst IT Partners (a company previously
acquired by Mason). Of this amount R33 million ($3 million) is expected to be paid during the 2003 financial year in
respect of the 2002 financial year and is dependent on the level of profitability achieved for such year. The remaining
R65 million ($6 million) has been included in contingent liabilities and is payable in respect of the 2003 financial year
and is dependent on the level of profitability achieved for such year.

Online Distribution
An amount of R21 million ($2 million) was provided to be paid during the 2003 financial year to the vendors of
Online Distribution (a company acquired by Westcon AME) and was dependent on the level of profitability achieved
for the 2002 financial year. This amount was finalised during May 2002 and an amount of R15 million ($1.3 million)
was paid to the vendors.

CASH FLOW
Cash generated from operations of R2.1 billion was driven by improvements in working capital of R1.3 billion mainly
as a result of a reduction in inventories. This is particularly reflected in Westcon where inventories reduced by
$185 million, a decline of 51% from the previous year. At year end the Group's balance sheet had improved to a net
cash positive position of R168 million compared with net debt of R262 million in the prior year, an improvement of
R430 million. These cash flows allowed Westcon to reduce its net debt by $131 million including a repayment of
$65 million of its original $75 million acquisition facility.

OPERATING LEASE COMMITMENTS
Operating lease commitments increased from R788 million to R1.046 billion, due to the deterioration of the
R/$ exchange rate during the 2002 financial year. In US Dollars operating lease commitments have reduced from
$99 million in 2001 to $92 million in 2002.

Operating lease commitments are made up per division as follows:
                                                            2002              2001              2002              2001
Million                                                        R                 R                 $                 $
Westcon                                                       378              318                33                41
Logical                                                       569              380                50                47
Mason                                                          57               58                 5                 7
Other Holdings                                                 42               32                 4                 4
Total                                                       1 046              788                92                99
More detail on operating lease commitments can be found in note 22 of the annual financial statements.

The operating lease commitments in Westcon relate mainly to future property rentals of warehouses and office
properties. The balance relates to future rentals in respect of office equipment and computer equipment.

The vast majority of the operating lease commitments in Logical relate to property rentals. Included in these rentals
is an amount of $36 million which relates to the Logical Group and Logical UK premises in Slough, where a twenty
five year lease was entered into in April 2000. Approximately 30% of the building has been sublet for a period of five




                                                                                                                    Dat at ec Annual R epor t 2002   35
                                                          268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 36




                            Finance Report                         continued




                            years (with two break clauses after eighteen months and thirty six months) from January 2002, although this future
                            rental has not been applied to reducing the operating lease commitments. The balance of the operating lease
                            commitments relate to future rentals on vehicles and computer equipment.

                            The operating lease commitments for Mason and Other Holdings relate predominantly to future property rentals of
                            warehouses and office properties.

                            FOREIGN CURRENCY
                            The Group publishes its financial statements in South African Rands. The Group, however, earns over 58% of its
                            revenues in US Dollars although over 94% of its revenues are denominated in US Dollars as Westcon and Logical
                            report their consolidated results in US Dollars. As a result a similar proportion of the Group's balance sheet
                            including net debt and cash deposits are denominated in US Dollars.

                            However, the Group conducts business in many foreign currencies and, as a result, is subject to currency risks owing
                            to exchange rate movements which will affect its costs and translation of the profits of subsidiaries whose functional
                            currency is not the South African Rand. The most significant other currencies in which the Group trades are Sterling,
                            the Euro and the Australian Dollar.

                            During the year the Group was exposed to significant currency risk with the devaluation of the Argentinian Peso. Since
                            1991, the conversion rate of the Argentinian Peso has been 1:1 with the US Dollar. On 20 December 2001, the
                            Argentinian government announced that exchange transactions would be temporarily suspended. On 2 January 2002,
                            the government then announced that the 1:1 ratio would no longer be maintained and instead a dual system with a
                            free market foreign currency exchange was established for most transactions. In February 2002, the dual system was
                            replaced by the current single floating rate for all transactions.

                            The exchange rate at the year end was 2.85 Pesos to the US Dollar. Significant exchange movements have arisen where
                            balances have been translated from the previous 1:1 rate to the current market rate.

                            The majority of Logical Argentina's revenues are with local customers, invoiced in US Dollars and expected to be
                            collected in US Dollars at the floating rate prevailing at the time of collection. Revenues that were made before
                            31 December 2001 and not yet collected were therefore caught by the change in legislation which requires these
                            balances to be translated at the old 1:1 rate and not the market rate. This resulted in Logical Argentina incurring
                            significant exchange losses in respect of its receivables.

                            In addition, suppliers, which were mainly outside Argentina, still had to be paid in US Dollars, at the market rates.
                            However, Logical management successfully negotiated payment relief with the major supplier, who also agreed to an
                            extended repayment plan in respect of its debt. The net effect of the payment relief and exchange losses in respect of
                            receivables was not material to the Group accounts.

                            The following table reflects the average and year end exchange rates against the South African Rand of US Dollars
                            and Sterling:
                                                                                            Year ended                         Year ended
                                                                                          31 March 2002                      31 March 2001
                                                                                     Average           Closing          Average          Closing
                            US Dollar (Westcon – February)                           9.3405           11.4450            7.2759           7.7100
                            US Dollar (Group)                                        9.6251           11.4452            7.3492           8.0300
                            Sterling                                                13.8069           16.3276           10.8192          11.4588


                            POST-RETIREMENT BENEFITS

                            The Group's retirement benefit funds comprise a number of defined contribution funds throughout the world. The
                            Group has no liability to these funds other than the monthly payment of staff contributions. The Group has no liability
                            in terms of post retirement medical aid contributions for staff.




36 Dat at ec   Annual R epor t 2002
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Corporate Governance




The Group and its directors are fully committed to good corporate governance and to the principles of openness,
integrity and accountability in dealing with shareholders and all other stakeholders. All directors endorse the Code of
Corporate Practices and Conduct recommended in the King Report on Corporate Governance in South Africa 2002
(“King II report”).


BOARD OF DIRECTORS (“THE BOARD”)

The Board consists of eleven directors, six of whom are non-executive and five of whom are independent, as defined
by the King II report. This is the first time in the history of the Group that the number of non-executive directors
exceeds the number of executive directors. The Remuneration and Nomination Committee is seeking to appoint an
additional independent non-executive director. The non-executive directors, drawing on their skills and business
acumen, ensure impartial and objective viewpoints in decision making processes and standards of conduct.


The roles of the Chairman and the Chief Executive Officer do not vest in the same person. Leslie Boyd was appointed
as non-executive Chairman of the Group during the year. Jens Montanana continues in the separate role of Chief
Executive Officer.


The directors consider the mix of technical, entrepreneurial, financial and business skills of the directors to be
balanced, thus enhancing the effectiveness of the Board.


The Board retains full and effective control over the Group and monitors the executive management and decisions
in the subsidiary companies. While the Group's executive directors are on the boards of the Group’s subsidiaries,
effective day-to-day executive management of these subsidiaries resides at the divisional level. Logical and Westcon
have executive representation on the main Datatec Board through their Chief Executive Officers.


The Board is responsible for the adoption of strategic plans, monitoring of operational performance and
management, determination of policy and processes to ensure the integrity of the company’s risk management and
internal controls, communications policy, and director selection, orientation and evaluation. These responsibilities
will be set out in the board charter that will be formalised during the 2003 financial year. To adequately fulfil their
responsibilities, directors have unrestricted access to timely financial information, all company information, records,
documents and property. Directors are provided with guidelines regarding their duties and responsibilities as directors
and a formal orientation programme has been established to familiarise incoming directors with information about
the company’s business, competitive position and strategic plans and objectives.


The Board meets at least four times a year and additional meetings are held when non-scheduled matters arise. At all
Board meetings directors declare their interests in contracts where applicable. Full details of the directorate are set
out on pages 6 to 7 and page 101.




                                                                                                                  Dat at ec Annual R epor t 2002   37
                                                           268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 38




                            Corporate Governance                                       continued




                            DIRECTORS’ ATTENDANCE AT BOARD MEETINGS — 2002 FINANCIAL YEAR

                                                                    17 May         23 August       10 October     14 November   15 March
                                                                       2001             2001              2001           2001        2002

                            L Boyd                                    NAD               NAD               NAD            NAD               P
                            C B Brayshaw                              NAD               NAD               NAD            NAD               P
                            J S James                                     P                 P               A              P        NAD
                            M Karpul                                      P                 P                P             P               P
                            M J Lamberti                                  A                 P                P           NAD        NAD
                            S F Lawrence                                  P                 P               A              P               P
                            J F McCartney                                 P                 P                P             P               P
                            J P Montanana                                 P                 P                P             P               P
                            D B Pfaff                                 NAD                   P                P             P               P
                            R S Rindel                                    P                 P                P             P               P
                            C M L Savage                              NAD               NAD               NAD            NAD               P
                            C S Seabrooke                                 P                 P                P             P               P
                            A M Smith                                 NAD                   P               A              P               P

                            A = Absent           P = Present          NAD = Not a director at that time


                            The Board has the following committees to assist it with its duties:

                            •    Audit and Compliance Committee

                            •    Remuneration and Nomination Committee

                            •    Business Risk Committee


                            Audit and Compliance Committee

                            For the period from 1 April 2001 to 6 December 2001, the Audit Committee consisted of the following members:

                            C S Seabrooke (Chairman)
                            M J Lamberti*
                            J S James
                            R S Rindel

                            * M J Lamberti was a member of the Audit Committee until 22 October 2001, the date of his resignation from the
                                Board.

                            With the appointment of additional non-executive directors on 6 December 2001, the composition of the Audit
                            Committee was amended as follows to include only independent, non-executive directors:

                            C B Brayshaw (Chairman)
                            C M L Savage
                            C S Seabrooke




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The name of the Committee was changed to the Audit and Compliance Committee.


The Committee operates within defined terms of reference and authority granted to it by the Board and meets at least
three times a year, when the external auditors and Group Financial Director are invited to attend. The external
auditors have unrestricted access to the Audit and Compliance Committee.


The principal functions of the Committee are to review the interim and annual financial statements and accounting
policies, monitor the effectiveness of internal controls, assess the risks facing the business and to discuss the findings
and recommendations of the auditors.


In line with the increasing independence of Datatec's subsidiaries, separate Audit Committees have been established
for all the subsidiary companies. Full reports from these sub-committees are submitted to, and form part of, the
documentation made available to the Datatec Audit and Compliance Committee.


The Audit and Compliance Committee ensures that there is appropriate independence relating to non-audit services
provided by the external auditors.


Remuneration and Nomination Committee

From 6 December 2001, the Remuneration and Nomination Committee consists of the following members, all being
independent non-executive directors:

L Boyd (Chairman)
J F McCartney
C S Seabrooke


Details of the composition of the Committee prior to 6 December 2001 are set out in the Remuneration Report on
pages 45 to 53.


The Committee operates within defined terms of reference and authority granted to it by the Board and meets at least
twice a year. The Chief Executive Officer and Group Financial Director may be invited to attend these meetings, but
neither may take any part in decisions regarding their own remuneration.


The Committee is responsible for making recommendations to the Board on the company’s framework of executive
remuneration and to determine specific remuneration packages for each of the executive directors and certain senior
managers of the Group. The Committee is also responsible for the Group's remuneration policies and the allocation
of share options in terms of the Group’s share option scheme. The Committee makes recommendations to the Board
regarding the appointment of new executive and non-executive directors and makes recommendations on the
composition of the Board generally.




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                            Corporate Governance                                         continued




                            Business Risk Committee

                            The Business Risk Committee consists of the following members:

                            C M L Savage (Chairman)
                            S F Lawrence
                            J F McCartney
                            J P Montanana
                            D B Pfaff (Chief Risk Officer)
                            R S Rindel
                            A M Smith


                            The Committee was formed during December 2001 and operates within defined terms of reference and authority
                            granted to it by the Board. At least three meetings are held annually.


                            The Board appointed the Business Risk Committee to assist it in reviewing the risk management process and review
                            significant risks facing the Group. The Committee sets the Group’s risk strategy in liaison with the executive directors
                            and senior management, making use of generally recognised risk management and internal control models and
                            frameworks in order to maintain a sound system of risk management and internal control.


                            Management is accountable to the Board for designing, implementing, monitoring and integrating the process of risk
                            management into the day-to-day activities, but the Board retains overall accountability for risk management. The
                            Board views risk management in a positive light, as it may identify business opportunities.


                            The Committee has commissioned the services of Ernst & Young to design and facilitate a formal strategic risk
                            assessment for Datatec at the Group level. This will result in dynamic risk identification, commitment by management
                            to the risk management process, risk mitigation activities, documented risk communications, alignment of assurance
                            to the risk profile and a register of key risks. The Board will set the risk strategy policies with senior management and
                            decide the Group’s tolerance for risk.


                            The committee will identify and monitor, at least annually, key performance indicators and key risks, including
                            operational, physical, human resources, technology, continuity, credit, market and compliance risks.


                            The Business Risk Committee maintains a close relationship with the Audit and Compliance Committee. The chairman
                            of the Business Risk Committee is a member of the Audit and Compliance Committee.


                            COMPANY SECRETARY

                            All directors have access to the advice and services of the Company Secretary and are entitled and authorised to seek
                            independent and professional advice about affairs of the Group at the Group’s expense. The Company Secretary is
                            responsible for the duties set out in Section 268G of the Companies Act. The certificate required to be signed in terms
                            of subsection (d) of the Companies Act (Act 61 of 1973), as amended, appears on page 55.




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FINANCIAL AND INTERNAL CONTROL

The Group’s internal control and accounting systems are designed to provide reasonable, but not absolute, assurance
as to the integrity and reliability of the financial information and to safeguard, verify and maintain accountability of
its revenue and assets. These controls are implemented by skilled company personnel.


The Group has implemented a system of control self-assessment across all Group companies. Local management is
required to complete and submit control self-assessment programmes bi-annually. Local management is monitored
against internal control norms in other Group companies and action is taken where ratings are considered to be
inadequate.


The external auditors review the self-assessment programmes to ensure objectivity and consistency of rating across the
Group. Ratings are also reviewed by the Audit and Compliance Committee.


Nothing came to the attention of the Board or arose out of the internal control self-assessment process or year end
external audits to indicate that any material breakdown in the functioning of the Group’s internal controls,
procedures and systems had occurred during the course of the year.


The Board is considering implementing an internal audit function during the year ahead to provide ongoing
assurance on effectiveness of internal controls.


MANAGEMENT REPORTING

The Group has established management reporting disciplines which include the preparation of annual budgets by
operating entities. Monthly results and the financial status of operating entities are reported against approved
budgets. Profit projections and cash flow forecasts are reviewed regularly, while working capital and borrowing levels
are monitored on an ongoing basis.


EMPOWERMENT AND EMPLOYMENT EQUITY

Datatec places particularly high value on the abilities and contributions made by employees in the development and
achievements of its businesses.


The Group is open to new partnerships that will increase shareholder value as well as plough back skills and resources
into the South African community.


Around the globe, the Group is an equal opportunities employer. In terms of the South African Employment Equity
Act, the Group strives to afford all staff members opportunities to realise their full potential and advance their careers.
The Group is committed to a working environment that is free from any discrimination and seeks to develop skills and
talent inherent in its work force.


The Group's social responsibility activities are detailed on pages 43 to 44.




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                           Corporate Governance                                       continued




                           ORGANISATIONAL INTEGRITY

                           The Group operates on a basis of decentralised management across numerous countries. All employees are
                           required to maintain the highest level of ethical standards in ensuring that the Group’s business practices are
                           conducted in a manner that, in all circumstances, is above reproach. A formal code of ethics will be implemented
                           during the 2003 financial year.


                           Datatec is actively enhancing its performance-driven culture of full disclosure and transparency in which individual
                           employees assume responsibility for the actions of the business. The integrity of new appointees in the selection and
                           promotion process is continuously assessed.


                           ENVIRONMENT

                           Datatec operates in an office based environment and is committed to conduct its operations in an environmentally
                           responsible manner in all the countries in which it operates.


                           The Group encourages recycling of paper and other materials and is mindful to save electricity, water and other
                           resources.


                           In light of the King II report, a formal environmental policy will be implemented during the 2003 financial year.


                           SHARE DEALINGS

                           No Group director or employee may deal, directly or indirectly, in Datatec shares or warrants on the basis of previously
                           unpublished, price-sensitive information.


                           Restrictions are imposed upon directors and senior management in the trading of Datatec shares and warrants and
                           upon all employees regarding the exercising of Datatec share options during certain “closed periods”. These closed
                           periods include those between the interim and financial year end dates (30 September and 31 March) and the interim
                           and financial year end reporting dates, when the financial results are published in the press.


                           SHAREHOLDER RELATIONS

                           Datatec’s investor relations programme includes communications with shareholders through interim and annual
                           reports, meetings and presentations.


                           GOING CONCERN

                           The directors’ assessment on the Group as a going concern is set out on page 55.




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Corporate Social Investment




WESTCON

Westcon’s policy is to make charitable donations in support of various causes for others in need. During fiscal 2002,
Westcon contributed to the American Red Cross, as well as making contributions to support the advancement of
treatments for conditions such as breast cancer and autism.


Each year, Westcon contributes to the Community Fund, a US local non-profit corporation that provides funding
and support for the health, education and welfare needs of its residents. The Community Fund provides support
to over twenty agencies concerned with health care, substance abuse, community services, mature adults,
counselling and youth.


Westcon also makes regular contributions to local police and firefighters. In Westchester County, New York, Westcon
employees are currently participating in projects of Habitat for Humanity, an American volunteer organisation that
provides housing assistance for under-privileged families.


LOGICAL

As a member of the Information Systems Research Centre at Cranfield School of Management, Logical is
working with leading IT companies and academics to co-sponsor research on success factors in technology-led
business change.


In addition, Logical's CEO makes presentations to assist numerous MBA students, while the company plays an active
part in a number of professional institutions in the Thames Valley area, participating in meetings and speaking at
conferences.


MASON

Mason participated in numerous events such as the Manchester to Blackpool Bike Ride and various marathons,
managing to raise several thousand pounds for charities. Mason also awarded a scholarship to an MSc graduate at
Salford University.


OTHER HOLDINGS

All the South African operations have committed themselves to a transformation process designed to minimise
barriers to employment equity. Plans were submitted to the Department of Labour during 2001. Significant progress
has been made towards achieving the plans' goals. Since most of our business interests exist outside SA, employment
equity plans are established on an individual entity basis.


The Datatec Education and Technology Trust was established in March 2000 with an initial grant allocation from the
Group of R10 million. The principal ideal of the Trust is to grow SA’s mathematics, science and technology talent,
with a primary focus on providing sustainable infrastructure dedicated to developing these skills. The Group believes
that this development, at grassroots level, provides a platform from which SA can build its expertise in fields such as
medicine, science and technology.




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                            Corporate Social Investment                                                continued




                            The Trust invested in three community-based projects:

                            •    The Centre for Innovation, established at Hilton College in the Kwa Zulu-Natal Midlands, provides the
                                 surrounding community with computer skills training and is utilised by Protec, a national organisation involved in
                                 technology skills training within disadvantaged communities.

                            •    The Maths Centre, a national initiative to improve mathematics education in state schools. It serves as a resource
                                 base for the empowerment of teachers of mathematics and equips them with the necessary skills to improve their
                                 profession.

                            •    The Siyakhula Bridging School, situated in an economically depressed area between Ivory Park and Ebony Park,
                                 aims at teaching basic computer literacy skills to local area residents, many of whom are unemployed.




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Remuneration Report




REMUNERATION AND NOMINATION COMMITTEE (“REMUNERATION COMMITTEE”)
The Board has delegated responsibility for the remuneration policy to the Remuneration Committee. The role of the
Remuneration Committee is to establish the overall principles that determine the remuneration of the Group's
management and to determine the remuneration of the Group's executive directors. In compiling this report, the
Committee has taken into account the provisions and recommendations outlined in the King II Report.

The composition of the Remuneration Committee was amended during the year under review as follows:

For the period from 1 April 2001 to 6 December 2001, the Remuneration Committee comprised the following
members:
J F McCartney (Chairman)
M J Lamberti*
C S Seabrooke
J P Montanana
* M J Lamberti was chairman of the Remuneration Committee until 22 October 2001, the date of his resignation from
  the Board.

With the appointment of additional non-executive directors on 6 December 2001, the composition of the
Remuneration Committee was amended as follows:
L Boyd (Chairman)
J F McCartney
C S Seabrooke

The Chief Executive Officer and Group Financial Director may be invited to attend meetings of the Remuneration
Committee but neither may take any part in discussions regarding their own remuneration. External advisers are used
to provide information and advice as required.

REMUNERATION POLICIES
The Remuneration Committee operates a framework of policies, within which it has set the remuneration package for
each executive director.

The overall strategy of the Remuneration Committee is to ensure that executive directors and senior managers are
rewarded for their contribution to the Group's operating and financial performance at levels which take account of
the international IT industry, market and country benchmarks. In order to promote an identity of interest with
shareholders, share incentives are considered to be critical elements of executive incentive policy.

The basic objective of the policies is that the executive directors should receive remuneration which is appropriate to
their scale of responsibility and performance and which will attract, motivate and retain individuals of the necessary
calibre. The underlying philosophy of the Remuneration Committee is to provide base pay at median levels by
comparison with relevant comparator companies internationally and to provide the potential for upper quartile
earnings when corporate and individual performance justify it. In the application of its policy, the Remuneration
Committee has regard to the necessity of being competitive in the different parts of the world in which the Group
operates, particularly the US and the UK.

SUMMARY OF REMUNERATION
The remuneration of the executive directors is made up of three main elements designed to balance long- and short-
term objectives: a base salary, annual bonus plan with performance targets and a long-term incentive in the form of
an executive share option scheme. The last two elements are designed to encourage and reward superior performance




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                            Remuneration Report                                     continued




                            and to align the interests of the executive directors as closely as possible with the interests of the shareholders. In
                            addition to these main elements, the executive directors also receive retirement and other benefits as outlined below.

                            Base salary

                            The base salary of the executive directors is subject to annual review and is set with reference to external market data
                            relating to comparable international companies based in the US and the UK, and individual performance is also taken
                            into consideration.

                            Annual bonus plan

                            All executive directors are eligible to participate in an annual bonus plan based on the achievement of short-term
                            performance targets set for each executive director. These targets include measures of corporate performance and
                            divisional performance (where applicable) and the achievement of individual objectives. These targets are reviewed
                            annually by the Chief Executive with the Remuneration Committee. The bonus will not normally exceed 100% of
                            annual base salary.

                            Other benefits

                            Executive directors are entitled to pensions, the provision of car allowances or a fully-maintained car, medical
                            insurance, death and disability insurance and reimbursement of reasonable business expenses. The total value of
                            benefits received by each director is shown on page 50.

                            The Group contributes an amount of 10% of the executive directors' salary package for J P Montanana, R S Rindel
                            and D B Pfaff in respect of retirement funding contributions. Westcon contributed an amount of $2 000 for A M Smith
                            to the US Statutory 401K Retirement Savings Programme. Logical contributes an amount of 25% of S F Lawrence's
                            base salary in lieu of all benefits.

                            SHARE OPTION SCHEMES

                            The Group operates a number of share option schemes as follows:

                            •    The Datatec Share Option Scheme

                            •    The Westcon Group, Inc. Share Option Plan

                            •    The Logical Group Senior Management Share Option Scheme

                            •    The Mason Employee Benefit Trust

                            The Datatec Share Option Scheme (“the Datatec Scheme”)

                            The Datatec Scheme is available to all employees and directors of the Group. The Remuneration Committee, with the
                            approval of the Board, grants options to employees and directors of Group companies at a price equal to the 30 day
                            closing market price prior to the date of such grant less a 15% discount (always subject to a minimum price of 200 cents).

                            The number of options available in terms of the Datatec Scheme amounts to 18 000 000 (approximately 13.1% of the
                            issued share capital), with the maximum number of share options available to any one participant being limited to
                            1 000 000 (approximately 0.7% of the issued share capital). Options vest over a period of four years from the date on
                            which the option is granted, at the rate of 25% per annum at each anniversary of the date of grant. Options are eligible
                            to be exercised within five years of being granted, unless such option lapses through the death or termination of
                            employment of the option holder.

                            Various amendments to the Datatec Scheme are to be proposed at the Annual General Meeting, the details of which
                            appear in the Notice to Members on pages 96 to 100.




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As at 31 March 2002, 5 013 433 (2001: 4 437 487) share options had been exercised since the original grants and
11 626 398 (2001: 10 963 876) share options had been granted but not yet exercised as follows:

                                                                                       Number of          Option price
Number of holders                                                                        options            per share

1 494                                                                                   7 564 448            R10 – R20
  114                                                                                     616 543            R20 – R30
  370                                                                                   1 325 082            R30 – R40
  452                                                                                   1 799 350            R40 – R50
   54                                                                                     123 425            R50 – R60
   26                                                                                      46 400            R60 – R70
   27                                                                                      43 800            R70 – R80
   30                                                                                     102 350            R80 – R90
    1                                                                                       5 000           R90 – R100

2 568                                                                                  11 626 398

As set out in the 2001 annual report (after consultation with major shareholders) the Board agreed, in terms of the
authority granted to them in the Datatec Scheme, to allow employees to elect to either have their existing options
lapse and receive new options at a new grant price based on the formula in the Datatec Scheme rules for the same
number of options, or to remain with their existing options. This process was completed during January 2002, and
718 employees elected to allow their existing options to lapse and received 3 296 673 new options at a grant price of
R10.96 per option. 263 employees elected to retain their existing 1 206 089 options at various grant prices. The
cancellation and re-issue did not apply to Westcon employees, certain of the SA subsidiaries disposed of and to Datatec
directors other than S F Lawrence.

Westcon Group, Inc. Stock Option Plan (“the Plan”)

As noted in the 2000 and 2001 annual report, Westcon was in the process of implementing an executive share
incentive scheme.

The Plan provides for grants of incentive stock options and non-qualified stock options and is available to all
directors, officers, employees, consultants, contractors and advisors of Westcon and its subsidiaries. The Plan is
administered by Westcon’s Compensation Committee, which is appointed by the board of directors of Westcon and
consists of three members of the board of directors. The current Compensation Committee members are
J P Montanana, D B Pfaff and C S Seabrooke, all non-executives of Westcon. Pursuant to the Plan, the Compensation
Committee is empowered to determine: the option recipients, the option price (provided it is at least fair market value
on the grant date), the number of shares subject to the option and the option term.

The number of shares that may be issued under the Plan is 4 660 000 shares of common stock of Westcon
(approximately 10% of the issued share capital). Options are eligible to be exercised within ten years of the grant date
unless such option lapses through the death or termination of employment of the option holder.

454 350 non-qualified options (approximately 1% of the issued share capital) were granted on 1 July 2001 to
A M Smith pursuant to the following terms: option price – $6.40 (a valuation of Westcon of approximately $300 million);
option term – maximum of ten years; option vests – (i) on the date of issuance with respect to 33% of the shares subject
to the Option; and (ii) at the expiration of each three month period thereafter with respect to 9% of the shares subject
to the Option until the Option may be exercised in full; provided however, that in the event of a change in control of
Westcon, on the date immediately preceding such change in control 100% of the shares subject to the Option may be
exercised. For purposes of the Plan, “change in control” is defined as the sale of substantially all the assets of Westcon




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                            Remuneration Report                                      continued




                            or its parent to a bona fide unaffiliated third party or a change of 35% of the shareholders of Westcon or 40% of the
                            board of directors of Westcon. In the event that the Optionee’s employment or service is terminated earlier by death,
                            the Option will be exercisable immediately in accordance with the Plan.

                            The Compensation Committee has approved the granting of 2 211 400 share options to 310 employees
                            (approximately one third of Westcon’s current workforce) pursuant to the following terms: option price – $6.40
                            (a valuation of Westcon of approximately $300 million); option term – maximum of ten years; option vests over a three
                            year period as to 33% one year after the date of grant and at the expiration of each three month period thereafter with
                            respect to 9% of the shares subject to the option. Options are only exercisable in the event of an IPO and terminate
                            within three years of grant in the event that an IPO does not occur. These options have a grant date of October 1, 2001.
                            A M Smith was granted a further 250 000 options in respect of this grant and J F McCartney is to receive 200 000 options.

                            The Logical Group Senior Management Share Option Scheme (“the Logical Scheme”)

                            As noted in the 2000 and 2001 annual report, an executive share incentive scheme was in the process of being
                            implemented in Logical. This scheme amounted to 10% of the capital of the Logical group of companies of which
                            about 7.5% was to be issued. With the introduction of new management in Logical and the creation of a holding
                            company, Logical Group Limited (“LGL”), the Logical Scheme has been amended through the introduction of an
                            Employee Benefit Trust which is administered by independent Trustees in Jersey.

                            In terms of the Logical Scheme, LGL is to issue to the Trust 7 200 000 Logical shares (equal to 10% of the issued share
                            capital of Logical) at a valuation of Logical of $100 million. The Trust will grant options over these shares to the
                            various participants.

                            The Logical Scheme is available to the top forty or so of the senior managers (on a worldwide basis) within Logical.
                            The Datatec Remuneration Committee recommends to the Trustees the identities of the grantees and the prices at
                            which options are exercisable. Options amounting to 5% of the issued capital are to be granted at an exercise price
                            of $1.39 (equivalent to a valuation of Logical of $100 million). 1 080 000 options (approximately 1.5% of the issued
                            share capital) are to be issued to S F Lawrence at a price of $1.39 per ordinary share.

                            Options vest over a period of two years from the date of grant, with 33.33% vesting on the date of grant and a further
                            33.33% vesting on each of the two subsequent anniversaries of such date of grant. Any further grants of options will
                            be done at market value at the time, subject to a minimum valuation of $100 million, such market value to be
                            determined by the auditors.

                            Options are exercisable in the event of a trade sale of the Logical business, the flotation of Logical, the sale by Datatec
                            of the majority of its shares in Logical (only a similar proportion as sold by Datatec), the occurrence of certain
                            statutory events in relation to Logical and a long-stop date being reached (30 June 2005). In the event that the long-
                            stop date is reached, the options are to be exercised and subsequently converted into Datatec shares according to a
                            pre-determined formula (subject to the approval of, inter alia, the JSE Securities Exchange South Africa and
                            shareholders in general meeting, to the extent required). This pre-determined formula is based on an independent
                            valuation of Logical, which valuation is limited to the P:E multiple of Datatec at the time. In the event that the P:E
                            multiple is zero or less than zero, an independent valuation of Datatec will be performed.

                            Options lapse through the termination of the employment of the relevant option holder. Vested options may be
                            exercised by a personal representative in the case of the death of the option holder.

                            The Mason Employee Benefit Trust (“the Mason EBT”)

                            The Mason EBT is available to all employees of the Group and was established on 13 March 1998, prior to the
                            acquisition of Mason by the Group.

                            Options are granted at the discretion of the board of Mason as a means of retaining key members of staff and
                            rewarding good performance.




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The options are held in an Employee Benefit Trust which is administered by the Royal Bank of Canada, an
offshore trust.

The number of options available in terms of the Mason scheme amounts to 1 103 000 (approximately 10% of the
issued share capital).

Options are eligible to be exercised within ten years of being granted, or on either the 100% sale of Mason or as a
result of a public listing of the company, unless such option lapses through the death or termination of employment
of the option holder.

At present, 835 515 share options have been granted but not yet exercised as follows:
Number of holders                                                  Number of options         Option price per share
25                                                                              59 436                   £0 – £0.50
38                                                                             372 100                £0.51 – £1.00
86                                                                             403 979                £2.00 – £2.50
149                                                                            835 515

The collapse of technology stock prices, specifically in the telecommunications sector and Mason’s peer companies,
has resulted in the value of Mason falling dramatically. Based on an independent valuation performed, the Mason
board and the Datatec Remuneration Committee approved the repricing of the 403 979 options, originally granted at
a price of £2.30, to a new grant price of £1.32. In addition, Datatec is in discussions with the Trustees of the EBT
regarding a realisation mechanism for the EBT. Details of these discussions are set out in the commitments note (note
22 of the annual financial statements on page 85).

NON-EXECUTIVE DIRECTORS
L Boyd was appointed non-executive chairman on 6 December 2001 and receives a fee of $75 000 per annum.

J F McCartney is the non-executive deputy chairman and will be appointed the non-executive chairman of Westcon
during the 2003 financial year, and receives a fee of $62 000 per annum.

With effect from 6 December 2001, each other non-executive director is paid a fee of $40 000 per annum. Non-
executive directors, who are members of a committee of the Board, are paid an additional sum of $5 000 per annum
in respect of each committee of which they are members.

The remuneration of the non-executive directors is determined by the board of directors as a whole, and is subject to
the approval of shareholders at the Annual General Meeting.

EXTERNAL APPOINTMENTS
Subject to the approval of the Board, executive directors are permitted to hold a directorship in one non-group listed
company and to retain the fees payable from this appointment.

DIRECTORS’ SERVICE CONTRACTS
In order to properly reflect their spread of responsibilities, J P Montanana, R S Rindel and D B Pfaff have contracts
with Datatec International Holdings Limited and Datatec Management Services (Pty) Limited. Other than is set out
hereunder, the employment contracts of all executive directors are terminable at three months notice by either party.
A M Smith has a contract with Westcon Group, Inc. with a fixed term expiring on 31 December 2004 exclusive of a six
month notice provision. S F Lawrence has a contract with Logical Group Services Limited that is terminable at six
months notice by either party.
All the non-executive directors have letters of appointment with Datatec and/or Datatec International Holdings for
a period of three years from their date of appointment.




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                            Remuneration Report                                           continued




                            DIRECTORS’ EMOLUMENTS

                            The following tables set out an analysis of the pre-tax remuneration, including bonuses for individual directors who
                            held office during the years ended 31 March 2001 and 2002 in the Group. The Remuneration and Nomination
                            Committee has approved the directors’ emoluments.

                                                                         Basic salary         Bonus            Fees      Benefits           Total        Total#
                            2002                                                    $             $               $             $              $          Rand

                            Executive directors
                            J P Montanana                                    623 081        311 296               –       127 311     1 061 688 10 218 853
                            R S Rindel                                       284 522        142 260               –        44 887       471 669 4 539 861
                            J S James*                                       113 410         51 948               –        17 138       182 496 1 756 542
                            S F Lawrence                                     358 617         80 689               –        89 654       528 960 5 091 293
                            D B Pfaff~                                       111 149         29 732               –        12 790       153 671 1 479 099
                            A M Smith~                                       308 712        125 000               –         4 951       438 663 4 097 332†

                            Total executive directors                      1 799 491        740 925               –      296 731      2 837 147 27 182 980

                            Non-executive directors
                            L Boyd ~                                                –              –        24 000               –       24 000        231 002
                            C B Brayshaw ~                                          –              –        13 500               –       13 500        129 939
                            C M L Savage ~                                          –              –        15 000               –       15 000        144 377
                            M J Lamberti*                                           –              –        13 091               –       13 091        126 002
                            M Karpul                                                –              –        49 870               –       49 870        480 004
                            C S Seabrooke                                           –              –        49 870               –       49 870        480 004
                            J F McCartney                                           –              –        72 000               –       72 000        693 007

                            Total non-executive directors                           –              –       237 331               –      237 331      2 284 335

                            Total directors’ emoluments                    1 799 491        740 925        237 331       296 731      3 074 478 29 467 315

                            # converted at a weighted average rand/dollar exchange rate of R9.6251 for the year ended 31 March 2002
                            * resigned during the 2002 financial year
                            ~ appointed during the 2002 financial year
                            † converted at a weighted average rand/dollar exchange rate of R9.3405, being the Westcon conversion rate
                            Westcon entered into a restraint of trade agreement with A M Smith on 1 July 2001. In terms of this agreement the restraint is for a
                            period of eighteen months after the last day of A M Smith’s employment with Westcon and an amount of $2 million is to be paid to
                            him over a period of time, as follows: the first payment of $500 000 was made during July 2001, and the second payment of
                            $214 286 was made to him during September 2001. Thereafter payments of $214 286 will be made to him in March and September
                            each year, with the last payment due on 1 September 2004. The amount of $714 286 paid to him during the 2002 financial year is
                            not included in the table of emoluments above.
                            Where a director was a director for part of the financial year, only the portion of his salary or fees for the time that he has been a
                            director has been included in the table above. A M Smith was appointed on 17 July 2001 and D B Pfaff was appointed on 1 July
                            2001. L Boyd, C B Brayshaw and C M L Savage were appointed on 6 December 2001. J S James resigned on 6 December 2001 and
                            M J Lamberti resigned on 22 October 2001.
                            All directors’ emoluments have been paid by subsidiaries of Datatec Limited.
                            J P Montanana received a relocation allowance of $70 000 during the year to assist in his relocation from the US to the UK. This
                            allowance is not included in the table of emoluments above.
                            Fees paid to M J Lamberti, C S Seabrooke and M Karpul were paid to Ratelimb (Pty) Limited, Sabvest Financial Services (Pty)
                            Limited and Korbitec (Pty) Limited (50% of the fees) respectively.




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                                              Basic salary          Bonus            Fees      Benefits            Total        Total#
2001                                                      $              $              $              $               $          Rand

Executive directors
J P Montanana                                     624 798        616 877˜               –        64 527      1 306 202      9 599 540
R S Rindel                                        265 740        548 360˜               –        28 948        843 048      6 195 728
J S James *                                       244 472          33 418               –        14 930        292 820      2 151 993
M Karpul                                           32 657      1 234 638˜               –              –     1 267 295      9 313 604
S F Lawrence                                      153 350        168 685                –        38 338        360 373      2 648 453
D B Pfaff =                                               –              –              –              –               –                 –
A M Smith=                                                –              –              –              –               –                 –

Total executive directors                       1 321 017      2 601 978                –       146 743      4 069 738     29 909 318

Non-executive directors
L Boyd =                                                  –              –              –              –               –                 –
C B Brayshaw =                                            –              –              –              –               –                 –
C M L Savage =                                            –              –              –              –               –                 –
M J Lamberti *                                            –              –              –              –               –                 –
C S Seabrooke                                             –              –        21 771               –        21 771        160 000
J F McCartney                                             –              –      100 000                –       100 000        734 920

Total non-executive
directors                                                 –              –       121 771               –       121 771        894 920

Total directors ‘
emoluments                                      1 321 017      2 601 978         121 771        146 743      4 191 509 30 804 238

# converted at a weighted average rand/dollar exchange rate of R7.3492 for the year ended 31 March 2001

˜Special incentive bonuses relating to the sale of UUNET SA are included in these amounts as follows:
J P Montanana           $544 277
R S Rindel              $517 063
M Karpul                $1 224 623

* resigned during the 2002 financial year
= appointed during the 2002 financial year
The 2001 emoluments only reflect the emoluments of directors that were directors of the company during the 2002 financial year.
For this reason the total remuneration above does not agree to the directors’ emoluments for 2001 on page 72.

Where a director was a director for part of the financial year, only the portion of his salary or fees for the time that he has been a
director has been included in the table above. S F Lawrence was appointed on 7 November 2000.

All directors’ emoluments have been paid by subsidiaries of Datatec Limited.

Fees paid to C S Seabrooke were paid to Sabvest Financial Services (Pty) Limited.




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                           Remuneration Report                                         continued




                           DIRECTORS’ SHARE INTERESTS

                           The interests of directors who held office at 31 March 2002 in ordinary shares of the company were as follows:

                                                                                               Direct                  Indirect
                           2002                                                              Beneficial       Beneficial   Non-beneficial                Total

                           Executive directors
                           J P Montanana                                                     5 249 955         345 000                   –      5 594 955
                           R S Rindel                                                            44 500                –           62 057         106 557
                           J S James*                                                                   –              –                 –                  –
                           S F Lawrence                                                          45 000                –                 –         45 000
                           D B Pfaff                                                                    –              –                 –                  –
                           A M Smith                                                                    –              –                 –                  –

                           Non-executive directors
                           L Boyd                                                                       –              –                 –                  –
                           C B Brayshaw                                                                 –              –                 –                  –
                           C M L Savage                                                                 –              –                 –                  –
                           M J Lamberti*                                                                –              –                 –                  –
                           M Karpul                                                            355 200                 –                 –        355 200
                           C S Seabrooke                                                                –      300 000†                  –        300 000
                           J F McCartney                                                       233 000                 –                 –        233 000

                                                                                             5 927 655         645 000             62 057       6 634 712

                           2001
                           Executive directors
                           J P Montanana                                                     1 149 955       4 370 000                   –      5 519 955
                           R S Rindel                                                            44 500                –           62 057         106 557
                           J S James*                                                             5 200                –                 –           5 200
                           M Karpul                                                            355 200                 –                 –        355 200
                           S F Lawrence                                                          45 000                –                 –         45 000
                           D B Pfaff                                                                    –              –                 –                  –
                           A M Smith                                                                    –              –                 –                  –

                           Non-executive directors
                           L Boyd                                                                       –              –                 –                  –
                           C B Brayshaw                                                                 –              –                 –                  –
                           C M L Savage                                                                 –              –                 –                  –
                           M J Lamberti*                                                                –              –                 –                  –
                           C S Seabrooke                                                                –      300 000                   –        300 000
                           J F McCartney                                                       233 000                 –                 –        233 000

                                                                                             1 832 855       4 670 000             62 057       6 564 912

                           * resigned during the 2002 financial year
                           †The only movement in the interests of directors since the year end was the disposal of these shares on 23 and 24 May 2002.




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DIRECTORS’ DATATEC SHARE OPTIONS
                                                                Options
                                                                held at        Granted                      Exercised        Options
                                                     Issue    beginning          during                           and        held at
Directors at year end                                 date       of year       the year           Price          paid       year end
J P Montanana                                 1997-04-15        100 000              –           15.56               –      100 000
                                              2000-11-12        200 000              –           35.46               –      200 000
                                              2001-12-10              –      ~ 700 000           10.96               –      700 000
                                                                300 000        700 000                               –    1 000 000
R S Rindel                                    1997-04-15          17 500             –           15.56               –       17 500
                                              1997-10-29          35 000             –           14.25               –       35 000
                                              2000-11-12          70 000             –           35.46               –       70 000
                                              2001-12-10               –     ~ 410 000           10.96               –      410 000
                                                                122 500        410 000                               –      532 500
S F Lawrence ^                                2001-12-10        228 000                –         10.96               –      228 000
                                                                228 000                –                             –      228 000
D B Pfaff                                     2001-12-10                –      200 000           10.96               –      200 000
                                                                        –      200 000                               –      200 000
A M Smith                                     1998-12-01          30 000               –         31.40               –       30 000
                                              1999-07-08          30 000               –         42.85               –       30 000
                                                                  60 000               –                             –       60 000
M Karpul                                      1997-04-15          37 500               –         15.56               –       37 500
                                              1999-09-28          50 000               –         28.75               –       50 000
                                              2000-11-12          40 000               –         35.46               –       40 000
                                                                127 500                –                             –      127 500
C S Seabrooke                                 1997-10-29          40 000             –           14.25               –       40 000
                                              2002-03-14               –       √80 000           18.06               –       80 000
                                                                  40 000        80 000                               –      120 000
J F McCartney                                 2002-03-14                –     √125 000           18.06               –      125 000
                                                                        –      125 000                               –      125 000
Total                                                           878 000      1 515 000                               –    2 393 000
^ These options were cancelled and re-issued during the 2002 financial year as set out on page 47.
~ These options were granted to such directors during the year as a result of the conversion of their interests in the Westcon, Logical
  and Mason share schemes into Datatec options as set out in the press announcement dated 18 October 2001.
√ The granting of these options is subject to ratification by shareholders at the Annual General Meeting.




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                            Index to the Annual Financial Statements




                                                                          Board Approval 55

                                                                   Certificate by Secretary 55

                                                      Report of the Independent Auditors 56

                                                                         Directors’ Report 57

                                                               Group Accounting Policies 62

                                                                       Income Statements 66

                                                                           Balance Sheets 67

                                                          Statements of Changes in Equity 68

                                                                    Cash Flow Statements 69

                                                        Notes to the Cash Flow Statements 70

                                                  Notes to the Annual Financial Statements 72

                                      Annexure 1 – Subsidiary Companies and Joint Venture 91

                                                      Annexure 2 – Associated Companies 93

                                                                Annexure 3 – Investments 94




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                                                                               Board Approval




The annual financial statements for the year ended 31 March 2002 are prepared in accordance with Generally
Accepted Accounting Practice as applied in the Republic of South Africa and incorporate appropriate and responsible
disclosure together with appropriate accounting policies.

The directors are responsible for the maintenance of adequate accounting records, the preparation and integrity of
the annual financial statements and all related information. The directors are also responsible for the systems of
internal control which are designed to provide reasonable, but not absolute, assurance as to the reliability of the
financial statements and to adequately safeguard, verify and maintain accountability of assets and to prevent and
detect material misstatement and loss.

The directors believe that the Group has adequate resources to continue in operation for the foreseeable future and
accordingly the financial statements have been prepared on a going concern basis.

The annual financial statements which appear on pages 57 to 94 were approved by the board of directors on 17 July
2002 and are signed on its behalf by:




J P Montanana                              R S Rindel                               D B Pfaff
Chief Executive Officer                    Executive Director                       Executive Director
                                           (Group Finance Director                  (Group Finance Director
                                           from 1 April 2001 to 31 May 2002)        from 1 June 2002)



                                                        Certificate by Secretary
> for the year ended 31 March 2002


In terms of section 268G(d) of the Companies Act (Act 61 of 1973), as amended (“Act”), I certify that for the year
ended 31 March 2002, Datatec Limited has lodged with the Registrar of Companies all such returns as are required
of a public company in terms of the Act.


Further, that such returns are true, correct and up to date.




I P Dittrich
Secretary




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                            Report of the Independent Auditors




                            To the members of Datatec Limited


                            We have audited the annual financial statements and Group annual financial statements of Datatec Limited, set out
                            on pages 57 to 94, for the year ended 31 March 2002. These financial statements are the responsibility of the
                            company’s directors. Our responsibility is to express an opinion on these financial statements based on our audit.


                            SCOPE

                            We conducted our audit in accordance with statements of South African Auditing Standards. Those standards require
                            that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material
                            misstatement. An audit includes:

                            •    examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements;

                            •    assessing the accounting principles used and significant estimates made by management; and

                            •    evaluating the overall financial statement presentation.

                            We believe that our audit provides a reasonable basis for our opinion.


                            AUDIT OPINION

                            In our opinion, the financial statements fairly present, in all material respects, the financial position of the company
                            and the Group at 31 March 2002 and the results of their operations and cash flows for the year then ended in
                            accordance with Statements of Generally Accepted Accounting Practice as applied in the Republic of South Africa,
                            and in the manner required by the Companies Act of South Africa.




                            Deloitte & Touche
                            Chartered Accountants (SA)
                            Registered Accountants and Auditors


                            Sandton
                            17 July 2002




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                                                                           Directors’ report




PROFILE AND GROUP STRUCTURE

Datatec and its subsidiaries (“the Group”) is an international IT networking and services group with operations in
many of the world's leading economies. The Group's main lines of business comprise the global distribution of
advanced networking and communication products (“Westcon”), professional services and IT network integration
(“Logical”) and strategic telecommunications consulting (“Mason”). The Group also has a number of other interests
in SA, which are included with the Group Head Office under Other Holdings. These interests include Westcon AME
(operating in Africa and the Middle East), a 47.5% interest in Affinity Logic and a 79.1% interest in RangeGate
(operating in SA and the UK).


GROUP FINANCIAL RESULTS

Commentary on the Group financial results is given in the Finance Report on pages 30 to 36. Full details of the
financial position and financial results of the Group are set out in the annual financial statements on pages 57 to 94.


SHARE CAPITAL

Authorised share capital

The authorised share capital of the company is made up of R2 000 000, divided into 200 000 000 ordinary shares of
one cent each.


Issued share capital

As at 31 March 2002, the issued share capital is made up of R1 373 819,23 divided into 137 381 923 ordinary shares
of one cent each.


Share capital issued during the year ended 31 March 2002

During the year, 8 680 251 shares were issued, primarily to finance acquisitions, to fund the Group's working capital and
capital expenditure requirements and to settle shares issued in terms of The Datatec Group Share Option Scheme.


During the year the following shares were issued for cash:
– 3 000 000 shares at R18.60 per share; and
– 5 000 000 shares at R20.00 per share.


The authorised and issued share capital of the company, and full details of the movement in share capital, have been
reflected in the statements of changes in equity on page 68 in the annual financial statements.


DIRECTORS

Details of the current board of directors appear on pages 6 and 7 and page 101. M J Lamberti and J S James resigned
from the Board on 22 October 2001 and 6 December 2001 respectively. D B Pfaff and A M Smith were appointed to
the Board on 1 July 2001 and 17 July 2001 respectively. L Boyd, C B Brayshaw and C M L Savage were appointed to
the Board on 6 December 2001. There were no other changes in the composition of the Board.




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                            Directors’ report                              continued




                            All directors, including non-executive directors, are required, in terms of the company’s Articles of Association, to
                            retire and offer themselves for re-election at least every three years. All directors are subject to re-election by
                            shareholders at the first opportunity after their appointment in addition to re-election at least every three years.


                            Messrs Boyd, Brayshaw, Seabrooke and Savage retire at the forthcoming Annual General Meeting and, being eligible,
                            offer themselves for re-election.


                            More details on the directors and their interests are provided in the Remuneration Report set out on pages 45 to 53.


                            INVESTMENTS, ASSOCIATES, SUBSIDIARIES AND JOINT VENTURES

                            Financial information relating to the Group's investments and interests in subsidiaries, associates, investments and
                            joint ventures is contained in notes 10, 12 and 13 as well as Annexures 1 to 3 to the annual financial statements.


                            ACQUISITIONS

                            The following significant acquisitions were concluded during the year under review:


                            Pursuant to an agreement dated 8 June 2001 (“the Agreement”) RangeGate Mobile Solutions Limited (“RangeGate”)
                            acquired the Task Management System computer software programme (“the Programme”) and certain assets from
                            Symbol Technologies Limited and Symbol Technologies Inc. (collectively “Symbol”) for an initial consideration of
                            £57 034 together with further payments of 33% of all licence fees received by RangeGate for licences sold and
                            collected by it in respect of the Programme. These payments in respect of the licence fees continue for a period of
                            four years or until a total aggregate amount of $2 million has been paid. In addition, Datatec has provided a guarantee
                            limited to $1 million to Symbol in respect of RangeGate’s other obligations under the Agreement.


                            Westcon AME acquired, with effect from 30 June 2001, the entire issued share capital of, and shareholders’ claims
                            against, On Line Distribution Limited, a Dubai-based networking distribution company, for an initial consideration of
                            $2.43 million, plus a further amount of up to $1.92 million to be paid in the event of the achievement of certain profit
                            milestones over the twelve-month period ending 30 April 2002. This amount was finalised during May 2002 and an
                            amount of R15 million ($1.3 million) was paid to the vendors.


                            Datatec acquired, on 17 July 2001, an additional 5% of Westcon Group, Inc. from the original founders of Westcon
                            and certain other shareholders, for an amount of $22 million. In addition, during the period Datatec exercised its
                            rights under the original sale agreements entered into between Datatec and certain members of Westcon's senior
                            management and repurchased the 2.25% of equity capital of Westcon sold to such members during the 2000 financial
                            year. The consideration for such repurchase was (in each case) cancellation of the loan amount (together with any
                            accrued interest) owed by the relevant member to Datatec which was created at the time of the original purchase of
                            such equity capital by such member. As a result of these acquisitions Datatec increased its investment in Westcon from
                            85.3% to 92.5%.


                            Datatec, together with Primedia Limited, entered into a scheme of arrangement during November 2001 in
                            terms of which the minority shareholders’ shareholdings in Metropolis* were acquired by Datatec and
                            Primedia at a price of 40 cents per Metropolis* share. Metropolis* has since been delisted and Datatec’s
                            interest amounts to 28.6% of Metropolis*.




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DISPOSALS

Datatec, with effect from 1 April 2001, disposed of 20.9% of RangeGate to certain members of RangeGate’s
management for an amount of R1.58 million.


With effect from 11 June 2001, the Group disposed of, for an amount of R1.6 million, the business of Datasoft Logical
(Pty) Limited that, since the disposal of the South African Logical business, was no longer core to the South African
based Datatec subsidiaries. The disposal agreement was drawn up under SA law and contains warranties that are
considered normal for disposals of this nature.


With effect from 28 June 2001, the Group disposed of its interest in Network I Limited, based in the UK. The sale,
made to a consortium of incumbent management and external investors, was for an amount of £0.75 million,
including a dividend payment of £0.1 million. In the event that Network I is sold to a third party at a later date, a
further £0.25 million will accrue to the Group. The disposal agreement was drawn up under UK law and contains a
warranty in respect of ownership of the shares.


As set out in the 2001 annual report, the Group has disposed of its investment holding in Korbitec Holdings (Pty)
Limited for an amount of R4 million to existing Korbitec shareholders. The disposal agreement was drawn up under
SA law and contains a warranty in respect of ownership of the shares. Certain of these shareholders (Messrs
Montanana, Karpul and Seabrooke, directors of Datatec), constitute related parties and duly declared their interest.
The approval of the JSE Securities Exchange South Africa was obtained prior to the disposal.


On 28 September 2001, Logical Group Limited disposed of its Swiss subsidiary Logical Solutions AG, for an amount
of CHF 1 plus 10% of the proceeds realised in the event of a future sale of the company. Logical Solutions AG was loss
making and focused on packaged applications, such as Broadvision, and desktop services. The company was disposed
of as its focus was not consistent with the Group's strategic direction. The disposal agreement was drawn up under
Swiss law and contains a warranty in respect of ownership of the shares.


On 20 December 2001, Logical Group Limited disposed of its loss making French subsidiary Logical France SA and
its 100% subsidiary Logical Systems SA for an amount of EUR1 000. Logical Systems SA was focused on desktop
product supply and support. Logical France SA was disposed of as the business was not consistent with Logical’s
strategic direction. The disposal agreements were drawn up under French law and contain limited warranties that
expire on 19 December 2002 and warranty claims cannot exceed EUR152 450 in the aggregate.


SPECIAL RESOLUTIONS OF THE GROUP

During the year, RangeGate (Pty) Limited increased its authorised share capital from R1 000 to R10 000 and
Logical Group Limited increased its authorised share capital from £32 million to £80 million.


CORPORATE GOVERANCE COMPLIANCE STATEMENTS

A statement on the Group's corporate governance policies and procedures is set out on pages 37 to 42.




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                            Directors’ report                                continued




                            EXTERNAL AUDITORS

                            Deloitte & Touche have expressed their willingness to continue in office as external auditors of the Group and a
                            resolution to re-appoint them will be proposed at the forthcoming Annual General Meeting in accordance with
                            section 270 of the Companies Act.


                            STRATE (Share Transactions Totally Electronic)

                            As set out in the 2001 annual report, the company's shares were dematerialised on 25 September 2001 by the JSE
                            Securities Exchange South Africa. Electronic trading of the company's shares commenced on 15 October 2001, details
                            of which were sent to shareholders in August 2001.


                            SHARE OPTION AND MANAGEMENT INCENTIVE SCHEMES

                            Details of the Group's share option and other management incentive schemes are set out in the Remuneration Report
                            on pages 45 to 53.


                            EVENTS OCCURRING SUBSEQUENT TO THE YEAR-END

                            Landis

                            Pursuant to a sale and purchase agreement dated 25 April 2002, as varied by a supplemental agreement dated 14 May
                            2002 (“the Agreement”), Westcon Group European Operations Limited (“Westcon Europe”), a subsidiary of Westcon
                            Group, Inc., purchased the European computer networks equipment distribution business of Landis Group NV (“the
                            Business”) for a total consideration of EUR6 617 883. Completion of this transaction took place on 15 May 2002. The
                            Business is carried on in The Netherlands, Belgium, Germany, France, Norway, Sweden, Denmark, Spain and Austria.


                            Westcon Europe obtained an abbreviated set of warranties in relation to this transaction from Landis Group NV but
                            a substantial amount of the purchase price is to remain in escrow as security for the proper discharge by Landis Group
                            NV of its obligations under the Agreement.


                            Westcon has assumed no liabilities in respect of the Business other than in respect of the employees of the Business.
                            Westcon has estimated an amount in respect of the costs of any restructuring of the workforce of the Business which
                            may need to be carried out and has set aside such amount in terms of the Agreement.


                            Westcon has received restrictive covenants in the usual form from Landis Group NV and its affiliates to the effect that,
                            inter alia, such persons will not carry on any business in competition with the Business during a period of three years
                            after the date of the Agreement.


                            Affinity Logic Holdings (Pty) Limited (“Affinity Logic”)

                            Subject to the approval of the Competition Commission, Datatec is to increase, without cost, its investment in Affinity
                            Logic from its current holding of 47.5% to 55.2%, through the disposal by Wooltru Limited (“Wooltru”) of its 33.2%
                            interest in Affinity Logic as a result of the unbundling of Wooltru. The management of Affinity Logic have acquired
                            the balance of Wooltru's interest (25.5%) for an amount of R6.69 million. Datatec has advanced such amount to the
                            management of Affinity Logic to enable them to acquire these shares, which amount bears interest and is repayable
                            at the end of a period of three years.




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ANNUAL GENERAL MEETING (“AGM”)

The AGM will be held at 14h00 on 30 September 2002 in the auditorium at Building 8, Harrowdene Office Park,
Western Service Road, Woodmead, Sandton, Republic of South Africa. In addition to the ordinary business of the
meeting, as special business, shareholder consent will be sought to:


(a) authorise directors to repurchase the company shares from time to time according to certain guidelines;

(b) ratify the grant of options on 14 March 2002 to Messrs J F McCartney and C S Seabrooke, non-executive directors
     of the company; and

(c) amend the Articles of Association of the company to allow for the electronic communication of proxies and notices.




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                           Group Accounting Policies




                           BASIS OF ACCOUNTING
                           The company’s annual financial statements and Group annual financial statements set out on pages 57 to 94 have
                           been prepared on the historical cost basis and incorporate the following principal accounting policies, prepared in
                           accordance with Statements of Generally Accepted Accounting Practice as applied in the Republic of South Africa,
                           which have been consistently applied in all material respects, with the exceptions of those noted in the accounting
                           policies that follow. The principal accounting policies adopted are set out below.

                           CONSOLIDATION
                           The consolidated financial statements incorporate the financial statements of the company and enterprises controlled
                           by the company up to 31 March each year, with the exception of Westcon Group, Inc. which is consolidated for the
                           twelve month period to 28 February each year. Control is achieved where the company has the power to govern the
                           financial and operating policies of an investee enterprise so as to obtain benefits from its activities.

                           The Group annual financial statements incorporate the annual financial statements of the company and its
                           subsidiaries, associates and joint venture. The operating results of these entities have been included from the
                           effective dates of acquisition to the effective dates of disposal. All significant inter-company transactions and
                           balances have been eliminated.

                           ASSOCIATES
                           Associates are those enterprises in which the Group holds a long-term equity interest, and over which it has the ability
                           to exercise significant influence and which are neither subsidiaries nor joint ventures.

                           Associates are accounted for on the equity method in the Group financial statements as from the date on which they
                           become investees.

                           Provision is made when, in the opinion of the directors, there has been an impairment in the carrying value of an
                           interest in an associate.

                           Unrealised profits and losses are eliminated to the extent of the Group’s interest in the relevant associate.

                           JOINT VENTURES
                           Joint ventures are those companies where there is a contractual agreement in terms of which the Group and one or
                           more venturers undertake an economic activity subject to joint control.

                           Such joint ventures are accounted for using the proportionate consolidation method. The proportionate share of
                           assets, liabilities, income and expenses of the joint venture are brought into account in the Group annual financial
                           statements on a line-by-line basis. Inter-company transactions are eliminated.

                           INVESTMENTS
                           Investments are stated at cost to the Group, unless an impairment in the value of the investment has occurred. In these
                           circumstances, the investment is stated at its written down value. Income from investments is brought to account only
                           to the extent of dividends received or declared.

                           PROPERTY, PLANT AND EQUIPMENT
                           Property, plant and equipment have been stated at historical cost, less accumulated depreciation. In accordance with
                           revised accounting standards, owner occupied properties are stated at historical cost and are depreciated. This is not
                           consistent with prior financial periods. The prior year amounts have not been restated as the effect of this revised
                           accounting policy is immaterial.




62   Dat at ec Annual R epor t 2002
                               268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 63




Depreciation is calculated based on historical cost using the straight-line method over the estimated useful lives of
the assets.

The basis of depreciation to be provided on property, plant and equipment is as follows:

                            Number of years over which to be written off

Computer equipment and software                                      2–6
Leasehold improvements                                 period of the lease
Office furniture and equipment                                       2–6
Motor vehicles                                                       2–4
Owner occupied properties                                               20

INTANGIBLES

Goodwill, comprising the excess of the cost of shares in subsidiaries, associates and joint ventures over their net asset
value at the date of acquisition, is written off over its useful life, not exceeding seven years.

Other intangible assets, comprising trademarks, tradenames, patents and other intellectual property purchased by the
Group, are treated in the same manner as goodwill.

IMPAIRMENT

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it
is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount
of the cash-generating unit to which the asset belongs.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, its
carrying amount is reduced to its recoverable amount. Impairment losses are recognised as an expense immediately
and are treated as exceptional items.

Where an impairment loss subsequently reverses, the carr ying amount of the asset or cash generating unit is
increased to the revised estimate of its recoverable amount. This is done so that the increased carrying amount
does not exceed the carrying amount that would have been determined had no impairment loss been
recognised in prior years. A reversal of an impairment loss is recognised as income immediately and treated as
an exceptional item.

AMOUNTS OWING TO VENDORS

Amounts owing to vendors represent purchase considerations owing in respect of acquisitions. Amounts owing are
recognised once there is sufficient assurance that the suspensive conditions will be met and the amounts can be
measured reliably. Amounts potentially owing where the suspensive conditions have not been met are disclosed as
contingent liabilities.

LEASED ASSETS

Assets leased in terms of agreements, which are considered to be finance leases, are capitalised. Capitalised leased
assets are depreciated at the same rate and on the same basis as equivalent owned assets. Lease finance charges are
amortised over the duration of the leases, using the effective interest rate method.




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                            Group Accounting Policies                                               continued




                            INVENTORIES

                            Inventories, comprising merchandise for resale and raw materials, are stated at the lower of cost and net
                            realisable value and are primarily valued on the average cost basis.


                            Provision is made for obsolete and slow-moving inventory.


                            Contract work in progress is recognised on the percentage of completion method by reference to the milestones set
                            out in each contract.


                            DEFERRED TAXATION

                            Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from
                            differences between the carrying amount of assets and liabilities in the financial statements and the corresponding
                            tax basis used in the computation of taxable profit. In principle, deferred tax liabilities are recognised for all taxable
                            temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will
                            be available against which deductible temporary differences can be utilised. Such assets and liabilities are not
                            recognised if the temporary difference arises from goodwill (or negative goodwill).


                            Deferred tax liabilities are recognised for temporary taxable differences arising on investments in subsidiaries and
                            associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary
                            difference and it is probable that the temporary difference will not reverse in the foreseeable future.


                            Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the
                            liability is settled. Deferred tax is charged or credited in the income statement, except when it relates to items credited
                            or charged directly to equity, in which case the deferred tax is also dealt with in equity.


                            FOREIGN CURRENCY TRANSACTIONS

                            Transactions in currencies other than the South African Rand are initially recorded at the rates of exchange ruling
                            on the dates of the transactions. Monetary assets and liabilities denominated in such currencies are retranslated at the
                            rates ruling on the balance sheet date. Profits and losses arising on exchange are dealt with in the income statement.


                            Where appropriate, in order to hedge its exposure to foreign exchange risks, the Group enters into forward contracts.


                            On consolidation, the assets and liabilities of the Group's overseas operations are translated at exchange rates ruling
                            on the balance sheet date. Income and expense items are translated at the average exchange rates for the period.
                            Exchange differences arising, if any, are classified as equity and transferred to the Group's translation reserve. Such
                            translation differences are recognised as income or expenses in the period in which the operations are disposed of.


                            PROVISIONS

                            Provisions are recognised when the Group has a present legal or constructive obligation, as a result of past events, for
                            which it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable
                            estimate can be made for the amount of the obligation. Where the effect of the discounting to present value is
                            material, provisions are adjusted to reflect the time value of money.




64 Dat at ec   Annual R epor t 2002
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REVENUE

The invoiced value of sales and services rendered, excluding value added and sales taxes, in respect of trading
operations is recognised at the date on which goods are delivered to customers or services are provided.


Revenue and profits from long-term and fixed-price contracts are recognised on the percentage of completion
method, after providing for contingencies and once the outcome of the contract can be assessed with reasonable
assurance. The percentage of completion is measured by reference to milestones set out in each contract. As soon as
losses on individual contracts become evident, they are provided for in full.


Revenue from cost plus contracts is recognised by reference to the recoverable costs incurred during the period plus
the fee earned, measured by the proportion that costs incurred to date bear to the estimated total costs of the contract.


Inter-company and inter-divisional sales are eliminated on consolidation.


PENSION SCHEME ARRANGEMENTS

Certain subsidiaries of the Group make contributions to various defined contribution retirement plans, on behalf of
employees, in accordance with the local practice in the country of operation. These contributions are charged against
income as incurred.


The Group has no liability to these defined contribution retirement plans other than the payment of its share of
the contribution in terms of the agreement with the funds and employees concerned, which differs from country
to country.


EXCEPTIONAL ITEMS

Exceptional items are those items of income and expenditure from ordinary activities that are of such size and nature
of incidence that their separate disclosure is relevant to explain the performance of the Group.


DISCONTINUING OPERATIONS

Discontinuing operations are significant, distinguishable components of an enterprise that have been sold,
abandoned or are the subject of formal plans for disposal or discontinuance.


Once an operation has been identified as discontinuing, comparative information is restated.


CAPITALISED DEVELOPMENT EXPENDITURE

Development expenditure is capitalised where costs are incurred for a clearly defined project that are separately
identifiable, and where the outcome of the project has been assessed with reasonable certainty with adequate
resources to complete the project.


Capitalised development costs are amortised over a maximum period of between three to seven years.




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                            Income Statements




                            > for the year ended 31 March

                                                                                                      Group                        Company
                                                                                             2002             2001            2002          2001
                                                                             Notes        R million       R million        R million    R million
                            Revenue                                                        20 677             20 158              –            –
                            Continuing operations                                          20 360             17 500              –            –
                            Acquisitions                                                      202              1 537              –            –
                                                                                        ]]]]]]]           ]]]]]]]        ]]]]]]]       ]]]]]]]
                            Ongoing operations                                             20 562             19 037              –
                            Discontinued operations                                           115              1 121              –            –
                            Cost of sales                                                  (17 759)           (16 853)            –            –
                            Gross margin                                                     2 918              3 305             –            –
                            Operating (costs)/income                                        (2 072)            (2 246)          141           40
                            Operating profit before finance costs,
                            depreciation and amortisation (“EBITDA”)                           846              1 059           141           40
                            Ongoing operations                                                 873              1 127           141           40
                            Discontinued operations                                            (27)               (68)            –            –
                            Depreciation                                         1            (200)             (170)             –            –
                            Restructuring costs of continuing
                            operations                                                           –               (82)             –            –
                            Operating profit                                     1             646               807            141           40
                            Income from investments                              2              76               146             34           79
                            Financing costs                                      3            (172)             (250)            (3)           –
                            Share of associate company losses                                   (3)              (13)             –            –
                            Profit before exceptional items and
                            goodwill amortisation                                              547               690            172          119
                            Goodwill amortisation                               11            (133)              (80)            (1)           –
                            Exceptional items                                    4            (561)              706           (524)         374
                            Goodwill impairment                                               (397)                –             (9)           –
                            Other exceptional items                                           (164)              706           (515)         374

                            (Loss)/profit before taxation                                     (147)             1 316          (353)         493
                            Taxation                                             5            (178)              (301)          (53)         (24)
                            (Loss)/profit after taxation                                      (325)             1 015          (406)         469
                            Profit attributable to outside
                            shareholders                                                       (11)              (57)             –            –
                            Attributable (loss)/earnings                         6            (336)              958           (406)         469
                            Headline earnings                                    6             346               410
                            Number of shares issued (millions)
                            – Issued                                                           137               128
                            – Weighted average                                                 131               126
                            – Diluted weighted average                                         133               126
                            Earnings per share (cents)                           6
                            – Headline                                                         265               325
                            – Basic                                                           (257)              761
                            – Diluted                                                         (253)              761
                            – Diluted headline                                                 260               325




66 Dat at ec   Annual R epor t 2002
                               268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 67




                                                                                 Balance Sheets




> as at 31 March

                                                                       Group                         Company

                                                              2002             2001             2002          2001
                                              Notes        R million       R million         R million    R million

ASSETS

Non-current assets                                            1 295            1 302            1 490          1 196

Property, plant and equipment                      8            513             448                 –              3
Capitalised development expenditure                9            131              75                 –              –
Subsidiary companies and joint venture            10              –               –             1 485          1 177
Intangible assets                                 11            419             571                 –             10
Associated companies                              12              1               9                 –              –
Investments                                       13             29              34                 5              6
Deferred tax asset                                14            202             165                 –              –

Current assets                                                8 420            8 466              779          1 348

Inventories                                       15          2 397            3 044                –             –
Accounts receivable                               16          3 781            3 268                –             –
Other receivables                                               366              308                2            95
Subsidiary companies                              10              –                –              700           401
Cash resources                                                1 876            1 846               77           852

Total assets                                                  9 715            9 768            2 269          2 544

EQUITY AND LIABILITIES

Ordinary shareholders’ funds                                  3 726            3 205            2 145          2 071

Share capital and premium                                     1 193            1 029            1 193          1 029
Non-distributable reserves                                    1 228              535              629            471
Distributable reserves                                        1 305            1 641              323            571

Outside shareholders’ interest                                  199             260                 –             –

Total shareholders’ funds                                     3 925            3 465            2 145          2 071

Non-current liabilities                                          78              80                23             –

Long-term liabilities                             17             58              74                 –             –
Deferred tax liability                            14             20               6                23             –

Current liabilities                                           5 712            6 223              101           473

Accounts payable and provisions                   18          3 771            3 584               40            53
Amounts owing to vendors                          19             90              413               12           401
Taxation                                                        143              118               49            19
Bank overdrafts and trade finance advances        20          1 708            2 108                –             –


Total equity and liabilities                                  9 715            9 768            2 269          2 544




                                                                                                                  Dat at ec Annual R epor t 2002   67
                                                             268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 68




                            Statements of Changes in Equity




                            > for the year ended 31 March

                                                                             Group                                                Company

                                                                                Non-                                                 Non-
                                                                              distri-    Distribu-                                  distri-   Distribu-
                                                         Share      Share    butable        table             Share      Share     butable       table
                                                        capital   premium    reserves    reserves    Total   capital   premium    reserves    reserves    Total

                            Balance at 1 April 2000          1       546         173          717    1 437        1       546           95         102     744
                            New share issues                 –       484             –          –     484         –       484            –           –     484
                            Share issue expenses             –         (2)           –          –      (2)        –         (2)          –           –      (2)
                            Exchange difference
                            arising on translation of
                            offshore operations              –          –         95            –      95         –         –         109            –     109
                            Recoupment of goodwill
                            and trademarks                   –         –         267            –     267         –         –         267            –     267
                            Attributable earnings for
                            the year                         –         –             –        958     958         –         –            –         469     469
                            Change of accounting
                            period for Westcon               –         –             –        (34)    (34)        –         –            –           –       –

                            Balance at 31 March 2001         1      1 028        535        1 641    3 205        1      1 028        471          571    2 071

                            New share issues                 –       165             –          –     165         –       165            –           –     165
                            Share issue expenses             –         (1)           –          –      (1)        –         (1)          –           –      (1)
                            Exchange difference
                            arising on translation of
                            offshore operations              –          –        622            –     622         –         –           87           –      87
                            Recoupment of goodwill
                            and trademarks                   –         –          71            –      71         –         –           71         158     229
                            Attributable loss for
                            the year                         –         –             –       (336)   (336)        –         –            –        (406)   (406)

                            Balance at 31 March 2002         1      1 192      1 228        1 305    3 726        1      1 192        629          323    2 145

                            Authorised share capital
                            200 000 000 (2001: 200 000 000) ordinary shares of R0.01 each

                            Issued share capital
                            137 381 923 (2001: 128 701 672) ordinary shares of R0.01 each

                            18 000 000 (2001: 18 000 000) of the unissued shares equivalent to 13.1% (2001: 13.9%) of the issued share capital,
                            have been set aside for the purpose of granting options to any officer or employee of the company, including any
                            director, in terms of the Group employee share option scheme. At the balance sheet date 5 013 433 of the
                            18 000 000 shares set aside for the share option scheme had been exercised.

                            The remaining unissued ordinary shares of 62 618 077 (2001: 71 298 328) are under the control of the directors
                            until the next general meeting, subject to the provisions of section 221 and 222 of the Companies Act and the
                            requirements of the JSE Securities Exchange South Africa.




68 Dat at ec   Annual R epor t 2002
                                268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 69




                                                                Cash Flow Statements




> for the year ended 31 March

                                                                        Group                         Company

                                                               2002             2001             2002          2001
                                                 Notes      R million       R million         R million    R million

Cash flow from operating activities

Cash generated from operations                         A       2 051             623               105            52
Income from investments                                           76             146                34            79
Financing costs                                                 (172)           (250)               (3)            –
Taxation paid                                          B        (268)           (230)              (27)          (14)

                                                               1 687             289               109           117
Net cash flow relating to exceptional items                        –             (82)               (2)           (1)

Net cash inflow from operating
activities                                                     1 687             207               107           116

Cash flow from investing activities

Acquisition of subsidiary companies and
joint ventures                                         C        (371)           (725)             (662)         (960)
Investment in associated companies                                10             (10)              (18)            –
Loans to subsidiaries                                              –               –               (35)           14
Proceeds on disposal of businesses and
investments                                            D           6            1 118               22          1 314
Additions to property, plant and equipment             E        (149)           (375)                –            (3)
Additions to capitalised development expenditure                 (76)            (53)                –             –
Proceeds on disposal of property, plant
and equipment                                                     60              64                 –             –

Net cash (outflow)/inflow from investing activities             (520)             19              (693)          365

Cash flow from financing activities

Net proceeds from issue of shares                      F         164             482               164           482
Decrease in amounts owing to vendors                            (323)           (190)             (353)         (126)
Increase/(decrease) in long-term liabilities                      59            (146)                –             –
Increase in short-term loans                                       –               2                 –             –

Net cash (outflow)/inflow from financing activities             (100)            148              (189)          356

Net increase/(decrease) in cash and cash equivalents           1 067             374              (775)          837
Cash and cash equivalents at the beginning of year              (262)           (298)              852            15
Translation difference on opening cash position        G        (637)           (151)                –             –
Change in Westcon cash for one month                               –            (187)                –             –

Cash and cash equivalents at end of year               H         168            (262)               77           852




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                                                              268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 70




                            Notes to the Cash Flow Statements




                            > for the year ended 31 March

                                                                                                       Group                        Company

                                                                                              2002             2001            2002          2001
                                                                                           R million       R million        R million    R million
                            A. Cash generated from operations
                                 (Loss)/profit before taxation                                 (147)           1 316            (353)         493
                                 Adjustments for:
                                  Unrealised foreign exchange gains                             (95)              –              (95)            –
                                  Share of associated companies losses                            3              13                –             –
                                  Depreciation                                                  200             170                –             –
                                  Net loss on disposal of property, plant and
                                  equipment                                                       1              11                3             –
                                  Income from investments                                       (76)           (146)             (34)          (79)
                                  Financing costs                                               172             250                3             –
                                  Goodwill amortisation                                         133              80                1             –
                                  Restructuring costs                                             –              82                –             –
                                  Exceptional items                                             561            (706)             524          (374)
                                 Operating profit before working capital changes                752            1 070              49           40
                                 Working capital changes:
                                  Decrease/(increase) in inventories                          1 611            (683)               –             –
                                  Decrease/(increase) in accounts receivable                    754            (214)              62           (16)
                                  (Decrease)/increase in accounts payable                    (1 066)            450               (6)           28
                                                                                              2 051             623              105           52
                            B. Taxation paid
                                 Amounts unpaid at beginning of year                            118              86               19             9
                                 Amounts charged to the income statement
                                 excluding deferred tax                                         224             395               53            24
                                 Other movements                                                 69            (133)               4             –
                                 Amounts unpaid at end of year                                 (143)           (118)             (49)          (19)
                                                                                                268             230               27           14
                            C. Acquisition of subsidiary companies and
                               joint ventures
                                 Cost of investment acquired in subsidiary
                                 companies and joint venture                                                                     662          960
                                 The fair value of assets acquired and the liabilities
                                 assumed on the acquisition of subsidiary companies
                                 and on the purchase of joint ventures, net of cash
                                 acquired, is as follows:                                       371             725                –             –
                                      Property, plant and equipment                               1              11
                                      Goodwill arising on acquisitions                          421             698
                                      Accounts receivable                                        37             397
                                      Inventories                                                30             181
                                      Taxes acquired                                              8               –
                                      Accounts payable                                          (53)           (562)
                                      Long-term liabilities                                     (73)              –
                                                                                                371             725




70 Dat at ec   Annual R epor t 2002
                              268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 71




           Notes to the Cash Flow Statements                                                            continued




> for the year ended 31 March

                                                                      Group                         Company

                                                             2002             2001             2002          2001
                                                          R million       R million         R million    R million

D. Proceeds on disposal of businesses and investments
   Property, plant and equipment                                13               71                –             –
   Capitalised development expenditure                           5                4                –             –
   Investments                                                   4                7                4           579
   Accounts receivable                                          21              141                –             –
   Inventories                                                   8                1                –             –
   Accounts payable                                            (20)            (102)               –             –
   Long-term liabilities                                       (81)            (395)               –             –
   Outside shareholders                                          –               (9)               –             –
   Deferred tax                                                  3               (1)               –             –
   Surplus on disposal                                          10            1 354               18           735
   Intangibles                                                  43               47                –             –

                                                                 6            1 118               22          1 314

E. Additions to property, plant and equipment
   Office furniture, equipment and motor vehicles              (52)             (91)               –             –
   Computer equipment and software                             (85)            (246)               –            (3)
   Leasehold improvements                                      (12)             (38)               –             –

                                                              (149)            (375)               –            (3)

F. Net proceeds from issue of shares
   Ordinary shares issued, including share premium             165              484              165           484
   Share issue expenses                                         (1)              (2)              (1)           (2)

                                                               164              482              164           482

G. The translation difference on the opening cash
   position is calculated on opening cash balances
   of companies based outside SA, and not on the
   net cash and cash equivalents included on the
   balance sheet at the beginning of the year, which
   is inclusive of cash held by the company,
   Datatec Limited.

H. Cash and cash equivalents at end of year
   Cash resources                                            1 876             1 846              77           852
   Bank overdrafts and trade finance advances               (1 708)           (2 108)              –             –

                                                               168             (262)              77           852




                                                                                                                 Dat at ec Annual R epor t 2002   71
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                           Notes to the Annual Financial Statements




                           > for the year ended 31 March

                                                                                                    Group                         Company

                                                                                               2002             2001           2002             2001
                                                                                            R million       R million       R million       R million

                           1. Operating profit
                                 Operating profit is arrived at after taking into
                                 account the following items:
                                  Auditors’ remuneration
                                   Audit fees – current year                                       15             12               –               –
                                              – prior year                                          3              2               –               –
                                   Other services and expenses                                      4              2               –               –
                                                                                                  22              16               –               –
                                 Depreciation                                                                                      –
                                  Office furniture, equipment and motor vehicles                  33              31               –               –
                                  Computer equipment and software                                133             126               –               –
                                  Leasehold improvements                                          12              11               –               –
                                  Owner occupied property                                          2               –               –               –
                                                                                                 180             168               –               –
                                      Capitalised development expenditure                         20               2               –               –
                                                                                                 200             170               –               –
                                 Foreign exchange gains                                          136              49             149              51
                                 Fees for services
                                  Administrative                                                   18              8               –               –
                                  Managerial                                                        7              4               1               –
                                  Technical                                                         9             20               –               –
                                                                                                  34              32               1               –
                                 Operating lease rentals
                                  Premises                                                       112              92               –               –
                                  Computer equipment                                              19              17               –               –
                                  Office furniture, equipment and motor vehicles                  32              19               –               –
                                                                                                 163             128               –               –
                                 Net loss on disposal of property, plant
                                 and equipment
                                  Computer equipment                                                –              2               3               –
                                  Office furniture, equipment and motor vehicles                    1              9               –               –
                                                                                                    1             11               3               –
                                 Retirement benefit contributions                                 39              36
                                 Staff costs                                                   1 721           1 620               –               –
                                 Directors’ emoluments
                                  Executive directors
                                   Salaries                                                        17             15
                                   Incentive bonuses                                                7              4
                                   Special incentive bonuses arising from the sale
                                   of UUNET                                                         –             17
                                   Benefits                                                         3              1
                                                                                                  27              37
                                      Non-executive directors’ fees                                2               1
                                                                                                  29              38
                                 Full details are provided on directors’ emoluments
                                 in the Remuneration Report on pages 45 to 53.




72   Dat at ec Annual R epor t 2002
                             268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 73




   Notes to the Annual Financial Statements                                                            continued




> for the year ended 31 March

                                                                     Group                         Company

                                                            2002             2001             2002          2001
                                                         R million       R million         R million    R million

2. Income from investments
   Dividends received                                           2               4                 –             2
     Listed                                                     –               2                 –             2
     Unlisted                                                   2               2                 –             –
   Interest received
     From subsidiary companies                                  –               –                21           25
     Other investments                                         74             142                13           52

                                                               76             146                34           79

3. Financing costs

   Interest paid
     Finance charges on finance leases                          1               3                 –             –
     Bank overdraft and trade finance interest                171             247                 3             –

                                                              172             250                 3             –

4. Exceptional items

   Impairments of property, plant and equipment                (1)           (109)               (3)            –
   Net (loss)/surplus on disposal of operations
   and investments                                             (1)           1 068                4           579
   Write-down of carrying value of investments                (58)            (161)            (485)         (105)
   Loss on disposal and closure of discontinued
   operations                                                 (64)            (92)              (26)         (105)
   Proposed subsidiary listing costs                          (40)              –                (5)            5
   Goodwill impairment                                       (397)              –                (9)            –

   Exceptional items                                         (561)            706              (524)         374
   Taxation                                                    11             (65)                –            –

                                                             (550)            641              (524)         374
   Attributable to outside shareholders                         2              (5)                –            –

   Net effect of exceptional items                           (548)            636              (524)         374

   The taxation credit and outside shareholders’
   portion of the exceptional items relates primarily
   to the proposed subsidiary listing costs. In 2001,
   a tax charge of R104 million was incurred on the
   surplus on disposal of operations, a credit of
   R32 million on the loss on disposal and closure
   of discontinued operations and a further credit
   of R7 million on the impairment of property,
   plant and equipment.




                                                                                                                Dat at ec Annual R epor t 2002   73
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                            Notes to the Annual Financial Statements                                                                  continued




                            > for the year ended 31 March

                                                                                                     Group                        Company

                                                                                            2002             2001            2002            2001
                                                                                         R million       R million        R million      R million

                            5. Taxation

                                 5.1 Taxation charge
                                      South African normal taxation:
                                       Current taxation – current year                        101                30             53              24
                                       Current taxation – prior year                            –                 1              –               –
                                       Deferred taxation – current year                         1                (3)             –               –
                                       Deferred taxation – prior year                          (1)               (2)             –               –

                                                                                              101                26             53              24

                                      Foreign taxation:
                                       Current taxation – current year                        143               355              –               –
                                       Current taxation – prior year                          (20)                9              –               –
                                       Deferred taxation – current year                       (25)              (87)             –               –
                                       Deferred taxation – prior year                         (21)               (2)             –               –

                                                                                               77               275              –               –

                                      Total taxation charge                                   178               301             53              24


                                 5.2 Reconciliation of taxation rate to profit
                                      before taxation
                                      South African normal tax rate                        30.0%             30.0%          30.0%           30.0%
                                      Tax losses utilised                                       –             (1.0%)             –               –
                                      Permanent differences                               (60.7%)             4.1%         (45.0%)               –
                                      Goodwill impairment                                 (84.3%)                 –              –               –
                                      Foreign taxation rate differential                    2.4%              4.4%               –               –
                                      Non-taxable capital gain                                  –            (21.3%)             –          (25.1%)
                                      Tax losses not recognised                            (8.5%)             6.7%               –               –

                                      Effective taxation rate                            (121.1%)            22.9%         (15.0%)           4.9%

                                      Certain subsidiaries had tax losses at the end
                                      of the financial year, that are available to
                                      reduce the future taxable income of the
                                      Group, estimated to amount to:                          364               300

                                      Estimated future tax relief at an estimated
                                      tax rate of 34.6% (2001: 31.7%)                         126                95




74 Dat at ec   Annual R epor t 2002
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   Notes to the Annual Financial Statements                                                               continued




> for the year ended 31 March

                                                                         Group                        Company

                                                                2002              2001           2002            2001
                                                             R million       R million        R million     R million

6. Earnings per share

   Basic earnings per share was a loss of 257 cents
   (2001: earnings of 761 cents) and is calculated
   on the weighted average number of shares in
   issue during the year of 130 673 730
   (2001: 125 963 705), based on earnings
   attributable to ordinary shareholders.
   Reconciliation of basic earnings to headline earnings:
   Attributable (loss)/earnings per the income
   statement                                                     (336)             958
   Headline earnings adjustments:                                 682             (548)
    Goodwill amortisation                                         133               80
    Net loss on disposal of property, plant and
    equipment                                                       1               11
    Net loss/(surplus) on disposal of operations and
    investments                                                     1            (1 068)
    Impairments of property, plant and equipment                    1               109
    Write-down of carrying value of investments                    58               161
    Loss on disposal and closure of discontinued
    operations                                                     64               92
    Proposed subsidiary listing costs                              40                –
    Goodwill impairment                                           397                –
                                                            ]]]]]]]          ]]]]]]]
                                                                  695             (615)
    Tax effect                                                    (11)              62
    Outside shareholders’ interest                                 (2)               5

   Headline earnings                                              346              410

   Headline earnings per share of 265 cents (2001: 325 cents) is calculated on the weighted average number of
   shares in issue during the year of 130 673 730 (2001: 125 963 705), based on the headline earnings attributable
   to ordinary shareholders.
   Diluted loss per share of 253 cents (2001: earnings of 761 cents) is calculated on the diluted weighted average
   number of shares in issue during the year of 133 046 599 (2001: 126 032 880), after taking into account the
   difference between the number of shares issued and the number of shares that would have been issued at fair value
   in respect of the 11 626 398 (2001: 10 963 876) options granted, but not exercised. These are calculated on the basis
   that the shares required for the options are issued by the company and not bought through the open market.
   Diluted headline earnings per share of 260 cents (2001: 325 cents) is based on headline earnings attributable to
   ordinary shareholders and the diluted weighted average number of shares in issue.




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                            Notes to the Annual Financial Statements                                                              continued




                            > for the year ended 31 March

                                                                                                   Group                         Company

                                                                                              2002             2001           2002             2001
                                                                                           R million       R million       R million       R million

                            7. Interest in profits and losses of subsidiaries
                               and joint venture

                                 Interest in the aggregate amount of profits and
                                 losses of subsidiaries and joint venture
                                 after taxation
                                    Profits                                                     380             999
                                    Losses – continuing operations                             (296)           (380)
                                         – discontinued operations                              (14)           (130)

                            8. Property, plant and equipment

                                                              2002             2002            2002            2001        2001                2001
                                                           R million       R million       R million       R million   R million           R million
                                                                        Accumulated        Net book                 Accumulated            Net book
                                                                Cost    depreciation          value            Cost depreciation               value

                                 Group
                                 Office furniture,
                                 equipment and
                                 motor vehicles                 181                84            97             163              78              85
                                 Computer
                                 equipment
                                 and software                   634             305             329             517             223             294
                                 Leasehold
                                 improvements                   109                43            66              80              26              54
                                 Owner occupied
                                 properties                      23                 2            21              15               –              15

                                                                947             434             513             775             327             448

                                 Company
                                 Computer
                                 equipment
                                 and software                      –                –              –              3               –               3

                                 Included in property, plant and equipment are assets held under finance lease agreements with a book value of
                                 R16 million (2001: R9 million) which are encumbered as security for liabilities under finance lease agreements
                                 as stated in note 17. A register giving particulars of land and buildings is maintained at the company's registered
                                 office and may be inspected by members of the public or their duly authorised agents. Property, plant and
                                 equipment have been impaired by an amount of R1 million. Refer to note 4.




76 Dat at ec   Annual R epor t 2002
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   Notes to the Annual Financial Statements                                                                continued




> for the year ended 31 March
8. Property, plant and equipment (continued)

                                               Office
                                           furniture,
                                          equipment        Computer          Leasehold         Owner
   Movement of property, plant and        and motor       equipment           improve-      occupied
   equipment                                 vehicles   and software            ments      properties             Total

   Group
   Net book value at beginning of year            85            294                54              15              448
   Subsidiaries acquired                           1              –                 –               –                1
   Other additions                                52             85                12               –              149
   Translation differences (net)                  22            106                20               8              156

                                                 160            485                86              23              754
   Subsidiaries disposed of                      (13)             –                 –               –              (13)
   Disposals and impairments                     (17)           (23)               (8)              –              (48)
   Depreciation                                  (33)          (133)              (12)             (2)            (180)

   Net book value at end of year                  97            329                66              21              513

   Company
   Net book value at beginning of year             –                 3                 –               –                3
   Additions                                       –                 –                 –               –                –

                                                   –              3                    –               –             3
   Disposals and impairments                       –             (3)                   –               –            (3)

   Net book value at end of year                   –                 –                 –               –                –

                                                                     Group                         Company

                                                            2002             2001             2002              2001
                                                         R million       R million         R million        R million

9. Capitalised development expenditure

   Balance at beginning of year                                75                 24              –                –
   Amounts capitalised                                        102                 80              –                –
   Disposals                                                   (5)                (4)             –                –
   Transfers                                                  (21)               (23)             –                –
   Amounts amortised                                          (20)                (2)             –                –

   Balance at end of year                                     131                 75              –                –




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                            Notes to the Annual Financial Statements                                                                      continued




                            > for the year ended 31 March

                                                                                                         Group                        Company

                                                                                                2002             2001            2002            2001
                                                                                             R million       R million        R million      R million

                            10. Subsidiary companies and joint venture

                                      Unlisted shares at cost                                                                    1 765            741
                                      Impairment of unlisted shares                                                               (449)            (6)

                                      Unlisted shares at written down value                                                      1 316            735
                                      Amounts owing by subsidiaries and joint venture                                              869            843

                                      Total investment per Annexure 1                                                            2 185          1 578

                                      Disclosed as follows:
                                      Shares at cost and long-term portion of loans                                              1 485          1 177
                                      Current portion of loans                                                                     700            401

                                                                                                                                 2 185          1 578

                                      Certain of the unlisted shares in the underlying
                                      subsidiaries have been pledged as stated in note 20.

                                      The Group's proportional interest in the joint
                                      venture has been incorporated in the Group's
                                      assets and liabilities and results as follows:

                                      Property, plant and equipment, investment and cash          148             144
                                      Long-term borrowings                                         33              49
                                      Working capital                                             (26)             21
                                      Revenue                                                      91             166
                                      (Loss)/profit before tax                                    (29)             29

                                      Further details of the company's subsidiaries and
                                      joint venture are disclosed in Annexure 1.

                            11. Intangible assets

                                      Goodwill at cost                                            949             651               10             10

                                        At beginning of year                                      571               –               10              –
                                        Arising on acquisition of subsidiaries                    421             698                –              –
                                        Disposal of a subsidiary                                  (43)            (47)               –              –
                                        Arising on restructuring of joint venture                   –               –                –             10

                                      Impairment                                                 (397)              –               (9)             –
                                      Goodwill amortised                                         (133)            (80)              (1)             –

                                      Balance at end of year                                      419             571                –             10




78 Dat at ec   Annual R epor t 2002
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   Notes to the Annual Financial Statements                                                                  continued




> for the year ended 31 March

                                                                       Group                         Company

                                                              2002             2001             2002              2001
                                                           R million       R million         R million        R million
12. Associated companies
     Shares at cost                                               5              82                 –               78
     Attributable share of post-acquisition losses,
     net of dividends received                                   (4)             (1)                –                –
       Beginning of year                                         (1)             12                 –                –
       Current year                                              (3)            (13)                –                –
     Write-down of investment to fair value                       –             (73)                –              (78)
     Loans                                                        –               1                 –                –
                                                                  1               9                 –                –
     The aggregate share of associated companies'
     net assets and revenue is as follows:
       Property, plant and equipment, investments
       and cash                                                   3              152
       Total borrowings                                           –              349
       Working capital                                           (1)             308
       Revenue                                                   14            2 680
     Further details of the Group’s associated
     companies are disclosed in Annexure 2
     For 2001 the results of Siltek Limited are
     included.
13. Investments
     Investments at beginning of year                            34              98                 6               41
     Additions                                                   11              12                 5                –
     Disposals                                                   (4)              –                (4)               –
     Write-down of investments to fair value                    (12)            (76)               (2)             (35)
     Investments at end of year                                  29              34                 5                6
     Further details of the Group's investments are
     disclosed in Annexure 3.
14. Deferred tax asset/(liability)
     Movement of deferred tax assets
     Balance at beginning of year                                 165              65                    –                –
     Arising on acquisition and disposal of subsidiaries            5              36                    –                –
     Other movements                                               32              64                    –                –
                                                                  202             165                    –                –
     Analysis of deferred tax assets
     Capital allowances                                            10               6                    –                –
     Provisions                                                   135              90                    –                –
     Effect of tax losses                                          35              44                    –                –
     Other temporary differences                                   22              25                    –                –
                                                                  202             165                    –                –




                                                                                                                     Dat at ec Annual R epor t 2002   79
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                            Notes to the Annual Financial Statements                                                                   continued




                            > for the year ended 31 March

                                                                                                      Group                         Company

                                                                                                 2002             2001           2002             2001
                                                                                              R million       R million       R million       R million

                            14. Deferred tax asset/(liability) (continued)

                                      Movement of deferred tax liabilities
                                      Balance at beginning of year                                 (6)            (11)             –                –
                                      Other movements                                             (14)              5            (23)               –

                                                                                                  (20)             (6)           (23)               –


                                      Analysis of deferred tax liabilities
                                      Capital allowances                                              –             (1)                –                –
                                      Provisions                                                      –             (1)                –                –
                                      Other temporary differences                                  (20)             (4)            (23)                 –

                                                                                                   (20)             (6)            (23)                 –

                            15. Inventories

                                      At cost:
                                      Merchandise for resale                                     2 790           3 236                 –                –
                                      Contract work in progress                                       3                 7              –                –

                                                                                                 2 793           3 243                 –                –
                                      Inventory provisions                                        (273)           (199)
                                      Lucent inventory provision                                  (123)                 –              –                –

                                                                                                 2 397           3 044                 –                –

                                      The Group has established return policies with
                                      its major vendors to reduce the risk of
                                      technological obsolescence of inventories.
                                      R2 149 million inventories are encumbered as
                                      set out in note 20.


                            16. Accounts receivable

                                      Trade receivables                                          3 952           3 407                 –                –
                                      Receivables provisions                                       (171)          (139)                –                –

                                                                                                 3 781           3 268                 –                –

                                      R3 728 million (2001: R2 920 million) of trade
                                      receivables are encumbered as per note 20 at
                                      the end of the financial year.




80 Dat at ec   Annual R epor t 2002
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      Notes to the Annual Financial Statements                                                            continued




> for the year ended 31 March

                                                                     Group                          Company

                                                                 2002            2001            2002             2001
                                                              R million      R million        R million       R million

17.   Long-term liabilities

      Liabilities under capitalised finance leases                  38              33               –                –
      Unsecured loans                                               58              56               –                –

                                                                    96              89               –                –
      Less: Current portion included in accounts
            payable and provisions (note 18)                       (38)            (15)              –                –

      Long-term portion                                             58              74               –                –

      Repayable within 2–5 years                                    51              73               –                –
      Repayable after 5 years                                        7               1               –                –

                                                                    58              74               –                –

      Liabilities under capitalised finance lease
      agreements are repayable in monthly
      instalments of R3 million (2001: R0.8 million),
      at rates linked to the prime interest rates.
      The liabilities relate to assets included under
      property, plant and equipment in note 8,
      with a net book value of R16 million (2001:
      R9 million). The final repayment date is
      April 2005. The long-term liabilities are
      reflected at their book values, which
      approximate fair values. Unsecured loans
      comprise borrowings raised to fund capital
      expenditure in certain subsidiary and joint
      venture companies. These loans bear interest
      at rates linked to prime borrowing rates, are
      repayable in 2005 and are unsecured.




                                                                                                                    Dat at ec Annual R epor t 2002   81
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                           Notes to the Annual Financial Statements                                                                   continued




                           > for the year ended 31 March

                                                                                                      Group                          Company

                                                                                                 2002             2001            2002             2001
                                                                                              R million       R million        R million       R million

                           18. Accounts payable and provisions

                                      Trade accounts payable                                      3 116          2 842                –               –
                                      Other payables                                                509            553               12              15
                                      Provisions                                                    108            174               28              38
                                      Current portion of long-term liabilities                       38             15                –               –

                                                                                                  3 771          3 584               40              53

                                                                                              Onerous                          Onerous
                                                                                               contract                         contract
                                      Analysis of provisions                                 provisions          Other        provisions          Other

                                      Balance at 1 April 2000                                       12               7                –              25
                                      Amounts added                                                149              75               27               –
                                      Amounts utilised                                             (56)            (13)               –             (14)

                                      Balance at 1 April 2001                                      105              69               27              11
                                      Amounts added                                                 14               4                5               –
                                      Amounts utilised                                             (99)            (40)              (7)             (8)
                                      Foreign exchange effects                                      33              22                –               –

                                      Balance at 31 March 2002                                      53              55               25               3

                                                                                                      Group                          Company

                                                                                                 2002             2001            2002             2001
                                                                                              R million       R million        R million       R million

                           19. Amounts owing to vendors

                                      Purchase considerations owing                                 90             413               12             401

                                      Amounts owing to vendors in the balance sheet
                                      represent purchase considerations due in respect
                                      of acquisitions and may, at the election
                                      of the Group, be funded out of the issue of new
                                      shares or by cash, pending the achievement of
                                      the relevant profit warranty milestones by the
                                      vendors of the businesses. Amounts owing are
                                      recognised once there is sufficient assurance that
                                      the suspensive conditions will be met and the
                                      amounts can be measured reliably. At the end of
                                      the financial year the Group had an estimated
                                      contingent liability of R65 million (2001:
                                      R395 million) relating to possible future earnout
                                      obligations.




82   Dat at ec Annual R epor t 2002
                             268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 83




   Notes to the Annual Financial Statements                                                            continued




> for the year ended 31 March

                                                                   Group                          Company

                                                               2002            2001           2002              2001
                                                            R million      R million       R million        R million

20. Bank overdrafts and trade finance advances

    Total borrowings at year end:
    Bank overdraft and trade finance advances                  1 708           2 108               –                –
    Other borrowings (note 17)                                    96              89               –                –

                                                               1 804           2 197               –                –

    South Africa – Other Holdings
    The Group has general short-term banking facilities amounting to R30 million (2001: R30 million) with the Standard
    Bank of South Africa Limited. In terms of the cash management system operated in SA, various cross guarantees have
    been put in place to restrict the overall exposure to the amount of the banking facility.

    Westcon AME (through OnLine Distribution) has a facility of $2.5 million with HSBC Bank in the Middle East,
    backed by a guarantee of $2 million by Datatec Limited. The facility bears interest at 6.5% and inventory and
    accounts receivable balances have been pledged as collateral.

    South Africa – Affinity Logic
    Affinity Logic Holdings (Pty) Limited has a long-term loan of R220 million (2001: R220 million) with Rand
    Merchant Bank (“RMB”). The loan bears interest at 20.35% and is repayable in 2004. Promissory notes
    amounting to R94 million (2001: R142 million) have been furnished to the loan creditor in respect of all interest
    payments due in terms of the loan agreement. An investment in an investment trust of R143 million (2001:
    R114 million) has been set off against this loan, with the net loan outstanding amount being R77 million
    (2001: R106 million). 47.5% of the net loan has been proportionally consolidated in the Group balance sheet.
    Datatec previously provided a letter of comfort to RMB in respect of the loan obligations of Affinity Logic to
    RMB, which letter of comfort was cancelled by RMB after the year end.

    Westcon
    Westcon has entered into a $225 million senior revolving credit facility, expiring on 31 December 2002 (2001:
    $285 million facility, expiring 30 September 2003). In addition, during the 2002 financial year, Westcon had a
    senior acquisition loan facility of $75 million, of which $50 million was repaid during April 2001. In December
    2001, $10 million of the acquisition facility was repaid with the balance to be repaid in six monthly instalments
    of $2.5 million each through June 2002.

    Advances under the revolving facility are available up to 85% of the company’s eligible accounts receivable and
    up to 50% of the company’s eligible inventory, with sub-limits on borrowings for certain of the company’s
    subsidiaries. The revolving credit component of these facilities bears interest at a base rate per annum equal to
    the US prime rate, as defined in the agreement, minus 0.5% or the London Interbank Offered Rate (“LIBOR”)
    plus 2.5%, at the company’s option. Amounts outstanding under the acquisition facility bear interest at prime
    plus 5.0% after December 31, 2001. Borrowings under these facilities were collaterised by (1) a pledge of
    common stock and (2) liens on inventory and accounts receivable of Westcon and its subsidiaries which utilise
    the facility. The loan facilities contain covenants including, but not limited to, financial covenants limiting
    balance sheet leverage, establishing minimum liquidity and pre-tax earnings coverage, restricting asset sales and
    purchases, restricting the payment of dividends during continuing events of default, limiting additional debt and
    granting liens. In addition, certain of the companies within Westcon had $203 million of inventory purchase
    financing. The amounts are collaterised by inventory and accounts receivable and are generally guaranteed by
    Westcon. These arrangements generally contain financial covenants limiting leverage and establishing minimum
    liquidity and pre-tax earnings coverage for subsidiaries that are parties to such arrangements. General short-term
    banking facilities amounting to $14 million are also available to the Australian and UK businesses.




                                                                                                                  Dat at ec Annual R epor t 2002   83
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                            Notes to the Annual Financial Statements                                                               continued




                            > for the year ended 31 March
                            20. Bank overdrafts and trade finance advances (continued)

                                      Westcon’s UK subsidiary has a revolving credit line of $10 million, which expires 30 September 2003. Advances
                                      under the revolving credit arrangement are generally available up to 85% of the subsidiary’s eligible accounts
                                      receivable and bears interest at the UK base rate plus 1.5%.

                                      Logical
                                      Logical operates a cash management system with Natwest/Royal Bank of Scotland in the UK. In terms of the cash
                                      management arrangement various cross guarantees have been put in place between the UK companies. Datatec
                                      previously issued a letter of comfort to Natwest which has now been cancelled. Logical UK had an IBM Global
                                      Finance facility of £2.5 million (2001: £15 million) at the year end where Logical UK had pledged its accounts
                                      receivable book as security for the facility. The facility was terminated after the year end. The facility was
                                      repayable on demand and bore interest at the UK base rate plus 2.5%. Logical US has short-term banking
                                      facilities amounting to $22 million (2001: $12.5 million) with Comerica Bank, with its accounts receivable book
                                      as security for the facility. The facility bears interest at the US prime rate less 0.5%. In addition short-term
                                      banking facilities of approximately $4 million (2001: $20.5 million) are also available from various financial
                                      institutions to other Logical companies across the world. These facilities are generally secured over specified
                                      assets of the local company.

                                      Mason
                                      Mason has access to general short-term banking facilities amounting to £2 million (2001: £2 million), bearing
                                      interest at the UK base rate plus 1%, as well as outstanding term loans of £1.1 million (2001: £1.7 million).
                                      These facilities are secured over the company’s debtors’ book.

                                                                                                    Group                         Company

                                                                                                2002            2001           2002             2001
                                                                                             R million      R million       R million       R million

                            21. Foreign liabilities

                                      Uncovered foreign liabilities at the balance
                                      sheet date:
                                      Trade accounts payable
                                      US Dollars                                                    9               9              –               –
                                      Pounds sterling                                               2               –              –               –

                                      The Group's operations manage their exposure
                                      to exchange rate fluctuations, where appropriate,
                                      through entering into forward exchange contracts
                                      and hedges with major commercial banks.

                            22. Commitments

                                      Capital commitments
                                      Capital expenditure authorised and contracted for            10             30               –               –
                                      Capital expenditure authorised but not yet
                                      contracted for                                               54            113               –               –

                                      Total capital commitments                                    64            143               –               –

                                      This expenditure will be incurred in the ensuing
                                      year and will be financed from existing cash
                                      resources and available facilities.




84 Dat at ec   Annual R epor t 2002
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   Notes to the Annual Financial Statements                                                                continued




> for the year ended 31 March

                                                                      Group                          Company

                                                                 2002             2001            2002             2001
                                                              R million       R million        R million       R million

22. Commitments (continued)

    Operating lease commitments
    Due within one year:
    Property                                                       150               98                –               –
    Office furniture, equipment and motor vehicles                  28               20                –               –
    Computer equipment                                              18               16                –               –

    Total operating lease commitments due within
    one year                                                       196              134                –               –

    Due within two to five years:
    Property                                                       387              319                –               –
    Office furniture, equipment and motor vehicles                  31               20                –               –
    Computer equipment                                              15               17                –               –

    Total operating lease commitments due within
    two to five years                                              433              356                –               –

    Due after five years:
    Property                                                        417             298                –               –
    Office furniture, equipment and motor vehicles                    –               –                –               –
    Computer equipment                                                –               –                –               –

    Total operating lease commitments due after
    five years                                                      417             298                –               –

    Total operating lease commitments                             1 046             788                –               –

    Other commitments

    At the time of the acquisition of Mason, Datatec entered into a series of put and call arrangements (exercisable
    in two equal tranches) with the founder management shareholders of Mason, that commenced in May 2002 and
    terminates in May 2004. The founder management shareholders own 15% of Mason. Neither Datatec nor the
    founder management shareholders exercised their rights to put or call in 2002. However the founder
    management shareholders have agreed to exercise their rights to put to Datatec the 15% shareholding owned by
    them in two equal tranches in May 2003 and May 2004. The consideration payable for such put will amount to a
    multiple of 8.28 times the audited pre-tax profits of Mason achieved in the previous financial year (ie financial
    year ended 31 March 2003 and 2004). In the event that Datatec had exercised a call, the multiple increases to
    10.35 times. The Employee Benefit Trust ("EBT") owns 10% of Mason. At the time of the acquisition, it was
    intended that Datatec would consider offering similar arrangements to the EBT that it had agreed with the
    founder management shareholders. Datatec is currently in discussions with the Trustees of the EBT in respect of
    these arrangements which may result in the EBT agreeing to allow its option holders to elect to either put their
    shares to Datatec in May 2003 (as to 33% of the shares subject to the put), May 2004 (as to a further 33% of the
    shares subject to the put) and May 2005 (as to the balance of 33% of the shares subject to the put) or to put their
    shares in the same percentages, but in May 2004, May 2005 and May 2006. The consideration payable for such put
    will amount to a multiple of 8.28 times the audited pre-tax profits of Mason achieved in the previous financial year.
    These arrangements are also subject to the approval of the Exchange Control Department of the South African
    Reserve Bank and the JSE Securities Exchange South Africa.




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                            Notes to the Annual Financial Statements                                                                  continued




                            > for the year ended 31 March
                            22. Commitments (continued)

                                      In the event of a change of control of Westcon, should Datatec directly own less than 51% of the issued and
                                      outstanding capital shares of Westcon, Datatec has committed to pay an amount of $4.5 million to Mirado Corp,
                                      whose shareholders include Philip Raffiani, Tom Dolan and Roman Michalowski.               A M Smith (CEO of
                                      Westcon) has the right to require Westcon to purchase his 1.02% shareholding in Westcon at any time after
                                      1 July 2004 for a period of thirty six months at fair market value. This right expires upon the commencement
                                      of trading of Westcon on the NASDAQ, New York or London stock exchanges.


                            23. Contingent liabilities, guarantees and litigation

                                      There are contingent liabilities relating to purchase considerations owing to vendors of businesses. These are
                                      conditional upon future earnout targets being met. Refer note 19 for details.

                                      As noted in the Group’s 2001 annual report, Westcon held $24 million of inventory purchased from Lucent
                                      and in July 2001 commenced litigation to require Lucent to abide by the distribution agreement between the
                                      parties and accept return of this inventory. Westcon management believe that Westcon has a meritorious case
                                      against Lucent and is continuing with the litigation. Management has, however, decided to adopt a prudent
                                      approach, and accordingly, Westcon has, during the year, provided an amount of $13 million (R123 million)
                                      against its remaining Lucent inventory of $16 million.

                                      In terms of the arrangement between RangeGate and Symbol, Datatec has provided a guarantee to Symbol in
                                      respect of licence fees sold and collected by RangeGate, limited to an amount of $2 million. In addition,
                                      Datatec has also issued a guarantee to Symbol for $1 million, expiring in June 2003.

                                      As set out in the 2001 annual report, the Group disposed of UUNET SA (Pty) Limited to WorldCom, Inc. The
                                      disposal agreement was drawn up under SA law and contains warranties and conditions required by the purchaser
                                      for its protection that were considered normal for disposals of this nature. The warranties expire after eighteen
                                      months from February 2001 with tax warranties expiring after thirty six months from the date of assessment by
                                      the South African Revenue Service of UUNET’s income tax returns for the period ended 31 December 2000.
                                      Such assessment has as yet not been made. In addition, in the normal course of business, Datatec had provided
                                      guarantees to certain suppliers and customers of UUNET SA. UUNET International Limited (a subsidiary of
                                      WorldCom, Inc.) indemnified Datatec in respect of these guarantees and agreed to procure Datatec is released
                                      from these guarantees. At the date of this report, Datatec had been released from the majority of its guarantees
                                      and has called on UUNET SA to procure its release from the remaining guarantees.

                                      Datatec has issued, in the ordinary course of business, guarantees and letters of comfort to third parties in
                                      SA in respect of trading facilities and lease commitments. RangeGate (Pty) Limited (SA) has provided a letter
                                      of support to RangeGate Mobile Solutions Limited (UK) confirming its intention to provide financial support
                                      for a period of at least twelve months from the date of signing their statutory financial statements.


                                      Westcon has issued, in the ordinary course of business, guarantees and letters of comfort to suppliers and
                                      financial institutions on behalf of its subsidiaries. The inventory purchase financing of $203 million referred to
                                      in note 20 is generally guaranteed by Westcon.




86 Dat at ec   Annual R epor t 2002
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   Notes to the Annual Financial Statements                                                                 continued




> for the year ended 31 March
23. Contingent liabilities, guarantees and litigation (continued)

     Logical has issued, in the ordinary course of business, guarantees to third parties in respect of trading facilities
     and lease commitments. Logical Group Limited has provided letters of support to Logical Networks Limited
     (incorporated in Australia), Logical Group Services Limited, Logical e-Business Solutions Limited and Logical
     Strategy Limited (all incorporated in the UK) confirming its intention to continue to provide financial support
     to these subsidiaries for a period of at least twelve months from the date of signing their statutory financial
     statements. In addition, Logical Group Limited also issued a letter of comfort confirming its intention to
     continue to provide financial support to Logical Networks France.


     The Group has certain other contingent liabilities resulting from litigation and claims including breach of
     warranties where operations have been disposed of, generally involving commercial and employment matters,
     which are incidental to the ordinary conduct of its business. Management believes, after taking legal advice
     where appropriate on the probable resolution of these contingencies, that none of these contingencies will
     materially affect the consolidated financial position or the results of operations of the Group.


24. Related party transactions

     Related party transactions exist within the Group. Sales and purchases between Group companies are
     concluded at arm's length in the ordinary course of business. Details of material transactions with related
     parties are disclosed elsewhere in the financial statements, specifically in the Directors’ Report.

     For the year ended 31 March 2002, the intergroup sales of goods and provision of services amounted to R179 million.

                                                                                              Logical      Other Holdings
                                                                                                2002                2002
                                                                                            R million           R million

25. Disposal and discontinuance of subsidiaries

     A description of subsidiaries disposed of can be found in the
     Directors’ Report on page 59.
     Revenue                                                                                     112                    3
     Cost of sales                                                                               (98)                   –

     Gross margin                                                                                 14                    3
     Operating costs                                                                             (40)                  (9)

     Operating loss before finance costs                                                         (26)                  (6)
     Financing costs                                                                               –                    –

     Loss before exceptional items and goodwill                                                  (26)                  (6)
     Exceptional items                                                                           (36)                  (8)

     Loss before taxation                                                                        (62)                (14)
     Taxation                                                                                      –                    –

     Loss after taxation                                                                         (62)                (14)




                                                                                                                      Dat at ec Annual R epor t 2002   87
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                            Notes to the Annual Financial Statements                                                                    continued




                            > for the year ended 31 March

                                                                                                                              Logical    Other Holdings
                                                                                                                               2002               2002
                                                                                                                          R million           R million

                            25. Disposal and discontinuance of subsidiaries (continued)

                                      Net operating cash outflow                                                                  68                 6
                                      Investing activities outflow                                                                 5                 6
                                      Financing activities outflow                                                                80                 5

                                      The net assets at date of disposal were as follows:
                                      Property, plant and equipment                                                               13                 –
                                      Goodwill                                                                                    43                 –
                                      Capitalised development expenditure                                                          5                 –
                                      Inventories                                                                                  8                 –
                                      Accounts receivable                                                                         21                 –
                                      Accounts payable                                                                           (20)                –
                                      Holding company and fellow subsidiary companies                                             (3)              (43)
                                      Bank overdraft                                                                              (2)                –
                                      Deferred taxation                                                                            3                 –
                                      Long-term liabilities                                                                        –               (81)

                                                                                                                                  68               124

                                      Net selling price                                                                            –                 2
                                      Loss                                                                                       (36)              (20)

                            26. Segmental report

                                      For management purposes the Group is currently organised into four operating divisions – Westcon, Logical,
                                      Mason and Other Holdings. These divisions are the basis on which the Group reports its primary segmental
                                      information.

                                      Principal activities are as follows:

                                      Westcon – Global distribution of advanced networking and communication products

                                      Logical – Provision of professional services and IT network integration

                                      Mason – Strategic telecommunications consultancy

                                      Other Holdings – Other distribution and service orientated interests in SA




88 Dat at ec   Annual R epor t 2002
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   Notes to the Annual Financial Statements                                                                               continued




> for the year ended 31 March
26. Segmental report (continued)
                                  Westcon                 Logical                Mason             Other Holdings          Eliminations                  Total
                                 2002      2001         2002      2001         2002      2001        2002      2001         2002      2001          2002      2001
                              R million R million    R million R million    R million R million   R million R million    R million R million     R million R million
    Abridged Income
    Statement
    Revenue                    15 595     14 963       3 911        4 040       282        222        889        933           –            –     20 677         20 158
    – North America             9 887       9 115      2 060        1 826         –          –          –          –          (8)         (68)     11 939        10 873
    – South America               223         170        235          232         –          –          –          –                        –         458           402
    – UK and Europe             4 572       4 784        956        1 321       282        222         37          3         (23)           –       5 824         6 330
    – Asia Pacific              1 080         962        672          661         –          –          –          –        (133)           –       1 619         1 623
    – Africa                        –           –          –            –         –          –        852        938         (15)          (8)        837           930
    – Intersegmental             (167)        (68)       (12)           –         –          –          –         (8)        179           76           –             –
    Operating profit/
    (loss)                        586        781         (39)        (20)         6         34         93         10           –           2          646              807
    Financing costs              (118)      (201)        (26)        (43)        (2)        (2)       (26)       (33)          –          29         (172)            (250)
    Income from
    investments                    29         34          11          14          1          –         35        129           –          (31)          76            146
    Share of associate
    company losses                  –          –           –           –          –          –         (3)       (13)          –            –           (3)            (13)
    Profit/(loss) before
    exceptional items and
    goodwill amortisation         497        614         (54)        (49)         5         32         99         93           –            –         547             690
    Goodwill amortisation         (61)       (42)        (64)        (35)        (4)        (7)        (4)         4           –            –        (133)            (80)
    Goodwill impairment             –          –        (382)          –          –          –        (15)         –           –            –        (397)              –
    Other exceptional items       (29)       200         (36)       (179)        (5)         –        (94)       685           –            –        (164)            706
    Profit/(loss) before
    taxation                      407        772        (536)       (263)        (4)        25        (14)       782           –            –        (147)        1 316
    Taxation                     (122)      (304)         48          37         (4)       (10)      (100)       (24)          –            –        (178)         (301)
    Profit/(loss) after
    taxation                      285        468        (488)       (226)        (8)        15       (114)       758           –            –        (325)        1 015
    EBITDA                        685        838          30         117         13         40        118           64         –            –         846         1 059
    – North America               220        421          50          69          –          –          –            –        15            –         285             490
    – South America                25         29           8          34          –          –          –            –         –            –          33              63
    – UK and Europe               346        334         (60)        (11)        13         40         22            1         –            2         321             366
    – Asia Pacific                 79         69          32           5          –          –          –            –         –            –         111              74
    – Africa                        –          –           –           –          –          –         95           54         1           12          96              66
    – Intersegmental               15        (15)          –          20          –          –          1            9       (16)         (14)          –               –

    Gross assets                7 823       7 151      2 169        1 915       285        220        938      3 292      (1 500)    (2 810)        9 715         9 768
    – North America             4 683       4 805      1 224        1 004         –          –          –          –         (34)       (96)        5 873         5 713
    – South America               168         122        112          190         –          –          –          –           –          –           280           312
    – UK and Europe             2 526       1 740        517          453       285        220         72         36        (477)       (59)        2 923         2 390
    – Asia Pacific                446         484        316          268         –          –          –          –         (20)         –           742           752
    – Africa                        –           –          –            –         –          –        866      3 256        (969)    (2 655)         (103)          601
    Property, plant,
    equipment and
    capitalised
    development costs             354        238         196         197         11         15         83           73         –            –         644             523
    – North America               271        220          70          39          –          –          –            –         –            –          341            259
    – South America                28          4           6          17          –          –          –            –         –            –           34             21
    – UK and Europe                45         13          73         100         11         15          1            –         –            –          130            128
    – Asia Pacific                 10          1          47          41          –          –          –            –         –            –           57             42
    – Africa                        –          –           –           –          –          –         82           73         –            –           82             73




                                                                                                                                     Dat at ec Annual R epor t 2002   89
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                              Notes to the Annual Financial Statements                                                                                     continued




                              > for the year ended 31 March
26. Segmental report (continued)
                                            Westcon                Logical                  Mason             Other Holdings          Eliminations               Total

                                           2002      2001        2002      2001           2002      2001        2002      2001         2002      2001         2002      2001
                                        R million R million   R million R million      R million R million   R million R million    R million R million    R million R million

      Investments and
      associated companies                    6         99          –            3          15          9      1 941      1 374      (1 932)    (1 442)         30          43
      – North America                         –         95          –            –           –          –          –          –           –        (92)          –           3
      – South America                         –          –          –           17           –          –          –          –           –          –           –          17
      – UK and Europe                         6          4          –          (19)         15          9          –          1           –         (1)         21          (6)
      – Asia Pacific                          –          –          –            5           –          –          –          –           –          –           –           5
      – Africa                                –          –          –            –           –          –      1 941      1 373      (1 932)    (1 349)          9          24
      Net cash resources                   (453)    (1 315)       183          (46)         53         43        385      1 056           –            –       168        (262)
      – North America                    (1 047)    (1 606)       115          (17)          –          –          –          –           –            –      (932)      (1 623)
      – South America                        19          2         (6)         (32)          –          –          –          –           –            –        13          (30)
      – UK and Europe                       545        306         85           12          53         43          9          1           –            –       692          362
      – Asia Pacific                         30        (17)       (11)          (9)          –          –          –          –           –            –        19          (26)
      – Africa                                –          –          –            –           –          –        376      1 055           –            –       376        1 055
      Inventories                         2 046       2 797       241          172           1          8        109           67         –            –     2 397       3 044
      – North America                     1 214       1 960       100           49           –          –          –            –         –            –     1 314       2 009
      – South America                        40          32        22           32           –          –          –            –         –            –        62          64
      – UK and Europe                       651         599        66           64           1          8          –            –         –            –       718         671
      – Asia Pacific                        141         206        53           27           –          –          –            –         –            –       194         233
      – Africa                                –           –         –            –           –          –        109           67         –            –       109          67
      Trade accounts
      receivable                          2 863       2 308       704          817          65         70        149           73         –            –     3 781       3 268
      – North America                     1 542       1 376       413          408           –          –          –            –         –            –     1 955       1 784
      – South America                        35          36        68          101           –          –          –            –         –            –       103         137
      – UK and Europe                     1 070         690       110          230          65         70         16            –         –            –     1 261         990
      – Asia Pacific                        216         206       113           78           –          –          –            –         –            –       329         284
      – Africa                                –           –         –            –           –          –        133           73         –            –       133          73
      Liabilities                        (2 672)    (2 636)      (953)       (1 031)      (131)      (148)      (620)      (757)        294          377    (4 082)      (4 195)
      – North America                    (1 100)    (1 229)      (381)        (282)          –          –          –          –          25            9    (1 456)      (1 502)
      – South America                       (10)       (68)       (75)         (64)          –          –          –          –           –            –       (85)        (132)
      – UK and Europe                    (1 387)    (1 059)      (278)        (484)       (131)      (148)       (35)       (13)        131          236    (1 700)      (1 468)
      – Asia Pacific                       (175)      (280)      (219)        (201)          –          –          –          –          20            –      (374)        (481)
      – Africa                                –          –          –            –           –          –       (585)      (744)        118          132      (467)        (612)
      Trade accounts payable             (2 368)    (2 292)      (596)        (459)         (8)       (11)      (144)       (80)          –            –    (3 116)      (2 842)
      – North America                    (1 030)    (1 212)      (341)        (204)          –          –          –          –           –            –    (1 371)      (1 416)
      – South America                       (12)       (24)       (64)         (31)          –          –          –          –           –            –       (76)         (55)
      – UK and Europe                    (1 146)      (866)      (106)        (161)         (8)       (11)        (4)         –           –            –    (1 264)      (1 038)
      – Asia Pacific                       (180)      (190)       (85)         (63)          –          –          –          –           –            –      (265)        (253)
      – Africa                                –          –          –            –           –          –       (140)       (80)          –            –      (140)         (80)
      The average number
      of employees for the
      year for each of the
      Group’s principal
      divisions was as follows:             916       1 059     1 217        2 050         253        233        637        488           –            –     3 023       3 830




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                                                                                                Annexure 1
                                                Subsidiary Companies and Joint Venture




                                                                  Effective holding     Unlisted shares          Indebtedness
                                                        Issued
                                        Nature of     ordinary     2002          2001   2002          2001      2002            2001
                                        business        capital      %             %    R’000        R'000      R’000          R'000

Active Subsidiaries
INCORPORATED IN
SOUTHERN AFRICA
Datatec Management Services (Pty) Ltd          O          100     100.0         100.0       –               –    224               47
RangeGate (Pty) Ltd                            O       10 000      79.1         100.0       –               –      1                –
Westcon AME (Pty) Ltd                          O            1     100.0         100.0       –               –     35              (66)

INCORPORATED IN UK
AND EUROPE
Comstor Belgium                               W            620     92.5             –      –                –      –                –
Comstor Group Ltd                             W     2 010 000      92.5          85.3      –                –    175              119
Comstor Ltd                                   W              2     92.5             –      –                –      –                –
Comstor Networks GmbH                         W         24 329     92.5          85.3      –                –     17                2
Westcon GmbH                                  W              1     92.5          85.3      4                4      –                –
Westcon UK Ltd                                W              2     92.5          85.3      –                –    133               92
Logical (UK) Ltd                              L     1 583 885     100.0         100.0      –                –      5                –
Logical e-Business Solutions                  L          1 810    100.0         100.0      –                –      –                2
Logical GmbH                                  L       255 646     100.0         100.0      –                –      –               10
Logical Group Ltd                             L     72 000 000    100.0         100.0    621              289    205                –
Logical Group Services Ltd
(formerly Datatec Group
Services Ltd)                                 L              2    100.0         100.0       –               –      –               86
Logical Networks GmbH                         L         25 000    100.0         100.0       –               –      –                –
Logical Networks SA                           L         77 600    100.0          60.0       –               –      –                –
Logical Strategy Ltd                          L              2    100.0         100.0       –               –      –                –
Regreb BV                                     L         40 000    100.0         100.0       –               –      –                –
Satelcom UK Ltd                               L         59 380    100.0         100.0       –               –      –                –
Catalyst IT Partners Ltd                      M       441 810      75.0          75.0       –               –      –                –
Mason Group Ltd                               M     11 247 100     75.0          75.0       9               9      6               34
Mason Communications Ltd                      M       119 403      75.0          75.0       –               –      –                –
Mason Communication Ireland Ltd               M              2     75.0          75.0       –               –      –                –
Datatec UK Holdings Ltd                       O         50 000    100.0         100.0       –               –     (4)               5
Rangegate Mobile Solutions Ltd                O            100     79.1         100.0       –               –      7                –

INCORPORATED IN US
AND CANADA
Business Operation Services Corp.             W             50     92.5          85.3      –                –      –                –
Comstor Inc.                                  W             10     92.5          85.3      6                6      –                –
Eastpro Services Inc.                         W             10     92.5          85.3      –                –      –                –
Voda One Corp                                 W              1     92.5          85.3      –                –      –                –
Westcon Canada Systems (WCS) Inc.             W       173 228      92.5          85.3      –                –      –                –
Westcon Group Inc.                            W     46 448 296     92.5          85.3    674              423    (44)             (27)
Westcon.net Inc.                              W             10     92.5          85.3      –                –      –                –
Logical e-Business solutions Inc
(Formerly Pudget Sound Systems
Group, Inc.)                                   L       36 554     100.0         100.0       –               –      –                –
Logical Networks Inc.                          L           54     100.0         100.0       –               –      –                –
Logical US Holdings Inc.                       L          100     100.0         100.0       –               –      –              382
Network I US Inc.                              L        1 000     100.0         100.0       –               –      –                –




                                                                                                                        Dat at ec Annual R epor t 2002   91
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                           Annexure 1                     continued
                           Subsidiary Companies and Joint Venture




                                                                                    Effective holding       Unlisted shares          Indebtedness
                                                                          Issued
                                                          Nature of     ordinary     2002          2001     2002          2001      2002        2001
                                                          business        capital      %             %      R’000        R'000      R’000      R'000

                 Active Subsidiaries (continued)
                 INCORPORATED IN SOUTH
                 AMERICA
                 Westcon Brazil                                  W      987 748       92.5         85.3         –               –      –              –
                 Softnet- Logical SA
                 (formerly Softnet SA)                           L      400 000       75.0         75.0         –               –      –            30
                 Softnet - Logical Uruguay SA
                 (formerly Softnet Uruguay SA)                   L      130 000       75.0         75.0         –               –      –              –
                 X-Net Cuyo SA                                   L    2 000 000       75.0         75.0         –               –      –              –

                 INCORPORATED IN
                 AUSTRALIA
                 LAN Systems (Pty) Ltd                           W      100 000       92.5         85.3         –               –      –              –
                 Westcon Australia (Pty) Ltd                     W            1       92.5         85.3         –               –      –              –
                 Westcon Australia, Inc.                         W          100       92.5         85.3         –               –      –              –
                 Logical Australia (Pty) Ltd
                 (formerly Logical Systems
                 (Pty) Ltd)                                      L       10 000      100.0        100.0         –               –      –              –
                 Logical Networks Ltd                            L    7 762 280      100.0        100.0         –               –      –              –

                 INCORPORATED IN
                 NEW ZEALAND
                 Logical Networks Ltd                            L      500 000      100.0        100.0         –               –      –              –
                 Logical Secure Ltd                              L          100      100.0        100.0         –               –      –              –
                 Mentum Secure Ltd                               L          100      100.0        100.0         –               –      –              –

                 INCORPORATED IN SINGAPORE
                 RBR Networks Pte Ltd                            W      100 000       92.5         85.3         –               –      –            24

                 INCORPORATED IN BRITISH
                 VIRGIN ISLANDS
                 Datatec International Holdings Ltd              O       50 000      100.0        100.0         –               –     38            35

                 Dormant Subsidiaries                                          –          –             –       –              2       6             3

                 Joint Venture
                 Affinity Logic Holdings (Pty) Ltd               O    10 017 570      47.5         47.5         2              2      65            65

                 Companies disposed of
                 Logical France SA (formerly
                 Datatec France SA)                              L    5 520 800           –       100.0         –               –      –              –
                 Logical Procurement Management
                 Services (Pty) Ltd (Australia)                  L            12          –       100.0         –               –      –              –
                 Logical Solutions (formerly Conexus
                 Logical AG) (Switzerland)                       L          650           –       100.0         –               –      –              –
                 Logical Systems (WA)
                 (Pty) Ltd (Australia)                           L            12          –       100.0         –               –      –              –
                 Logical Systems SA (France)                     L    55 208 000          –       100.0         –               –      –              –
                 Network I Australia
                 (Pty) Ltd (Australia)                           L            12          –       100.0         –               –      –              –
                 Destiny Electronic Commerce
                 (Pty) Ltd                                       O          300           –        61.0         –               –      –              –

                                                                                                            1 316             735    869            843

                 W: Westcon           L: Logical      M: Mason        O: Other Holdings




92   Dat at ec Annual R epor t 2002
                              268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 93




                                                                                            Annexure 2
                                                                             Associated Companies




                                                                   Group                          Company

                                                               2002            2001            2002             2001
                                                            R million      R million        R million       R million

Listed:

Siltek Limited:

Percentage holding                                              23%            23%                 –                –
Carrying value                                                    –              –                 –                –
Market value                                                      –              4                 –                4

Siltek, through its subsidiaries and associated
companies, distributed IT hardware, software and
networking products and provides integrated IT
software, networking and telecommunication
related service and solutions.

The company’s year-end is 30 June.

Unlisted:

Dotcom Trading 118 (Pty) Limited:
(Held via Affinity Logic)

Percentage holding                                              40%            40%                 –                –
Carrying value                                                    1              4                 –                –
Directors' valuation of interest in associated company            1              4                 –                –

The nature of the company's business is desktop
and in-store system support.

The company's year-end is 31 December.

Network I Limited:

Percentage holding                                                 –           50%                 –                –
Carrying value                                                     –             5                 –                –
Directors' valuation of interest in associated company             –             5                 –                –

Network I provides on-line industrial strength
services and products, by providing value added
network intelligent solutions.

The company's year-end is 31 March.

                                                                   1               9               –                –




                                                                                                                  Dat at ec Annual R epor t 2002   93
                                                          268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 94




                            Annexure 3
                            Investments




                                                                                                Group                         Company

                                                                                           2002             2001           2002             2001
                                                                                        R million       R million       R million       R million

                            Listed:

                            Cisco Systems, Inc.
                            39 709 shares of $0.01 each                                         6              7               –               –
                            Market value at 31 March 2002: $672 273

                            African Lakes Corporation plc                                       5              –               5               –
                            4 409 171 shares of 5 pence each
                            Market value at 31 March 2002: £297 619

                            Unlisted:

                            NetActive Limited                                                   3              5               –               –
                            (Held via Affinity Logic)
                            10 294 010 shares of 2 cents each
                            Directors' valuation: R3 million

                            The Mason Group Employee Benefit Trust                             15              9               –               –
                            1 104 500 shares of 10p each
                            Directors' valuation: R15 million

                            Metropolis* Transactive Holdings Limited                            –              4               –               2
                            31 652 664 shares of 1 cent each
                            (2001: 21 804 530 shares)

                            Hertiq 2118 (Pty) Limited                                           –              2               –               –
                            (Held via Affinity Logic)                                                                          –               –

                            Logical Secure Investments (NZ)                                     –              3               –               –

                            Korbitec Holdings (Pty) Limited                                     –              4               –               4

                                                                                              29              34               5               6




94 Dat at ec   Annual R epor t 2002
                             268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 95




                                                          Shares and Shareholders




Listed below are analyses of holdings extracted from the register of ordinary shareholders at 31 March 2002:

                                                            1 April 2001 to         1 April 2000 to       1 April 1999 to
                                                            31 March 2002           31 March 2001         31 March 2000

Stock exchange performance
Total number of shares traded ('000)                               130 566                 127 537                79 297
Total number of shares traded as a percentage
of total shares                                                      95.0%                  99.1%                 66.7%
Total value of shares traded (R million)                              2 199                  6 212                 7 405

Prices (cents)
Closing                                                               1 650                  1 650                11 600
High                                                                  2 500                 11 700                14 500
Low                                                                     880                  1 450                 5 530

Percentage of shares held by non-public shareholders                  4.8%                 57.6%*                65.3%*
Percentage of shares held by public shareholders                     95.2%                 42.4%*                34.7%*

The following are the principal shareholders whose
holding directly or indirectly, including asset
managers' investment funds, in the company total
more than 5% of the issued share capital as at
31 March 2002:

Old Mutual Asset Management (Pty) Limited                       45 801 940                 33.34%
Stanlib Limited                                                 10 635 250                  7.74%
Prudential Asset Management (Pty) Limited                        6 872 976                  5.00%
Sanlam Investment Managers (Pty) Limited                         6 759 730                  4.92%

                              No of shareholders              No of shareholders
Shareholder type               in South Africa             other than in South Africa            Total shareholders

                            Nominal                         Nominal                            Nominal
                            number       Percentage         number         Percentage          number        Percentage

Public                          6 863              83.4           243               11.8          7 013               95.2
Directors                           3               0.6             3                4.2              6                4.8

Total                           6 866              84.0           246               16.0          7 019            100.0

*Per the certificated share register, prior to the introduction of STRATE and amendments to Companies Act
(Act 61 of 1973), as amended



                                                                   Shareholders’ Diary

Annual General Meeting                                                                                30 September 2002


Reports
Interim half-year to September 2002                                     Published                         November 2002
Preliminary announcement of 2003 annual results                         Published                                May 2003
2003 annual report                                                      Published                                July 2003




                                                                                                                       Dat at ec Annual R epor t 2002   95
                                                           268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 96




                            Notice to Members




                            Notice is hereby given that the Annual General Meeting of members of Datatec Limited will be held in the auditorium
                            on Monday, 30 September 2002 at Building 8, Harrowdene Office Park, Western Service Road, Woodmead, Republic
                            South Africa at 14h00 for the purpose of transacting the following business:

                            1. To receive and consider the annual financial statements and Group annual financial statements for the year ended
                               31 March 2002.

                            2. 2.1 To re-elect the directors retiring in accordance with the Articles of Association in one bulk resolution.

                                 2.2 To re-elect the directors retiring in accordance with the Articles of Association. Please refer to the Curriculum
                                     Vitae of the directors being re-elected on pages 6 to 7.

                            3. To grant the directors the power, until the next Annual General Meeting, to allot and issue, at their discretion, the
                               unissued ordinary shares of the company subject to the Listings Requirements of the JSE Securities Exchange
                               South Africa and the relevant sections of the Companies Act (Act 61 of 1973), as amended.

                            4. To confirm the re-appointment of Deloitte & Touche as auditors for the ensuing financial year.

                            5. To ratify the directors’ remuneration for the past financial year.

                            6. To consider and, if deemed fit, pass with or without modification the following ordinary resolutions:

                                 6.1 “That in terms of the Listings Requirements of the JSE Securities Exchange South Africa, the directors be
                                     given the general authority to issue ordinary shares of one cent each (being a class already in issue) for cash
                                     as and when suitable situations arise, subject to the following conditions:

                                      •  that this authority shall not extend beyond 15 (fifteen) months from the date of this Annual General
                                         Meeting or the date of the next Annual General Meeting, whichever is the earlier date;
                                      • that the issue may only be made to public shareholders as defined in paragraphs 4.26 to 4.27 of the
                                         Listings Requirements of the JSE Securities Exchange South Africa and not to related parties;
                                      • that a paid press announcement giving full details, including the impact on net asset value and earnings
                                         per share, will be published at the time of any issue representing, on a cumulative basis within one year,
                                         5% or more of the number of shares of that class in issue prior to the issue;
                                      • that issues in the aggregate in any one financial year may not exceed 15% of the number of shares of that
                                         class of the company's issued share capital, including instruments which are compulsorily convertible into
                                         shares of that class; and
                                      • that, in determining the price at which an issue of shares will be made in terms of this authority, the
                                         maximum discount permitted will be 10% of the average ruling price of the shares in question, as
                                         determined over the 30 business days prior to the date that the price of the issue is determined or agreed
                                         by the directors of Datatec.”
                                      The approval of 75% of the votes cast by shareholders present or represented by proxy at this meeting is
                                      required for this ordinary resolution to become effective.

                                 6.2 “That the directors be and are hereby authorised to amend the Datatec Share Option Scheme (“Option
                                     Scheme”) as follows:

                                      •   CLAUSE 1.2.13
                                          By deleting the words ‘less a 15% (fifteen per cent) discount’.
                                      •   CLAUSE 3.1
                                          By deleting the existing clause and substituting the following:
                                          ‘That the directors be and are hereby authorised to increase the maximum number of shares available in
                                          terms of the Option Scheme to 15% (fifteen per cent) of the issued share capital from time to time’.




96 Dat at ec   Annual R epor t 2002
                              268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 97




                                                       Notice to Members                                   continued




        •   CLAUSE 5.8
            By inserting the following words after the word “exercised” in the first line of clause 5.8:
            ‘whether or not the beneficiary has retired’
        •   CLAUSE 5.8.3.1
            By rewording this clause to read as follows:
            ‘within 12 (twelve) months after becoming a retrenched employee subject to clause 5.8.3.3. If the
            beneficiary does not exercise the option within such period, it shall lapse;’
        •   CLAUSE 3.2
            By deleting the words ‘1 000 000 (one million) shares, being 0.9% (nought decimal nine per cent) of the
            issued share capital as at 18 August 1999’ and the substitution in place thereof of the following: ‘shares
            aggregating at the time of the granting of such options not more than 1.5% (one decimal five per cent)
            of the issued share capital of the company’.

        •   CLAUSE 5.9.4
            By deleting the existing clause and substituting the following:

            ‘If not duly exercised by the tenth anniversary of the option date.’”

   6.3 “That subject to the passing of the ordinary resolutions, any director of the company be and is hereby
        authorised to sign all documents and perform all acts which may be required to give effect to the resolutions
        passed at the meeting.”

7. To consider and, if deemed fit, pass with or without modification, the following special resolutions:

   7.1 Repurchase by the company of its own securities

        •   “That the directors of the company be authorised from time to time to acquire issued shares in the
            ordinary share capital of the company on the JSE Securities Exchange South Africa (“JSE”) “open market”
            at a price no greater than 10% above the weighted average of the market value for the securities for the
            five previous business days immediately preceding the date on which the transaction was agreed; and the
            purchase by any of the company’s subsidiaries of shares in the company in the manner contemplated by,
            and in accordance with, the provisions of section 89 of the Companies Act (Act 61 of 1973), as amended,
            and provisions of the Listings Requirements of the JSE that may be applicable;”
        •   “that a paid press release giving such details as may be required in terms of the Listings Requirements of
            the JSE be published when the company or its subsidiaries have repurchased 3% of the shares in issue;”
        •   “that the authorisation granted above shall remain in force from the date of registration of these special
            resolutions by the Registrar of Companies until the conclusion of the next Annual General Meeting of the
            company and, in any event, no later than 15 months from the date on which they were passed;”
        •   “that the repurchase by the company of its own securities above may not exceed 20% of the company's
            issued ordinary share capital in the aggregate in any one financial year or, in the case of acquisition by any
            of the company's subsidiaries, 10% of such issued ordinary share capital in the aggregate if such shares
            are to be held as treasury stock;”

        •   “that the sponsor to the company provides a letter on the adequacy of working capital in terms of section
            2.14 of the JSE Listings Requirements prior to any repurchases being implemented on the open market
            of the JSE.”




                                                                                                                     Dat at ec Annual R epor t 2002   97
                                                            268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 98




                            Notice to Members                                   continued




                                      As at the date of this report, the company’s directors undertake that they will not implement any such
                                      repurchase in the 12 months following the date of this Annual General Meeting, unless:
                                      •   the company and the group would, after payment for such maximum repurchase, be able to repay its
                                          debts in the ordinary course of business;
                                      •   the company’s and the group’s consolidated assets, fairly valued according to generally accepted
                                          accounting practice and on a basis consistent with the last financial year of the company, would, after such
                                          payment, exceed their consolidated liabilities;
                                      •   the company’s and the group’s ordinary share capital and reserves would, after such payment, be
                                          sufficient to meet their needs; and
                                      •   the company and the group would, after such payment, have sufficient working capital to meet its needs.

                                      The Board has no immediate intention to use this authority to repurchase company shares. However, the
                                      Board is of the opinion that this authority should be in place should it become appropriate to undertake a
                                      share repurchase in the future.

                                      Reason for and effect of the Special Resolution

                                      The reason for and the effect of the special resolution are 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 of shares in its holding company, or to permit a subsidiary of
                                      the company to purchase shares in the company.

                                 7.2 Ratification and approval of share options to non-executive directors, which are proposed to be granted
                                      without discount.

                                      That the company ratify, confirm and approve, in terms of section 223 of the Companies Act (Act 61 of 1973),
                                      as amended, the grant of the following share options to non-executive directors, which are proposed to be
                                      granted without discount:

                                      Non-executive director                    Number of options       Option price per share       Date of grant

                                      J F McCartney                             125 000                 R18.06                       14 March 2002
                                      C S Seabrooke                             80 000                  R18.06                       14 March 2002


                                 7.3 Electronic notification to and from shareholders
                                      •   “That in terms of section 62 of the Companies Act (Act 61 of 1973), as amended (“the Act”) the Articles
                                          of Association of the company be amended as follows:
                                          •   the deletion of article 10.6 and the insertion of the following new sub-articles in place thereof:
                                              10.6.1 “The form appointing a proxy which is not an electronic communication and the power of
                                                      attorney and other authority, if any, under which it is signed or a notarially certified copy of
                                                      such power or authority shall be deposited at the registered office of the company not less than
                                                      48 (forty-eight) hours (or such lesser period as the directors may determine in relation to any
                                                      particular meeting) at which the person named in the form proposes to vote, or in the case of
                                                      a poll not less than 24 (twenty-four) hours (or such lesser period as the directors may
                                                      determine in relation to the particular poll) before the time appointed for the taking of the
                                                      poll, and in default the form of proxy shall not be treated as valid.




98 Dat at ec   Annual R epor t 2002
                   268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 99




                                           Notice to Members                                 continued




    10.6.2 The form appointing a proxy which is an electronic communication, where an address has
           been specified for the purpose of receiving electronic communications in the notice of
           meeting or in the form itself, and the power of attorney or other authority, if any, under which
           it is signed or a notarially certified copy of such power or authority shall be received at that
           specified address not less than 48 (forty-eight) hours (or such lesser period as the directors
           may determine in relation to any particular meeting) before the time for holding the meeting
           (including an adjourned meeting) at which the person named in the form proposes to vote,
           or in the case of a poll not less than 24 (twenty-four) hours (or such lesser period determined
           as aforesaid in relation to the particular poll) before the time appointed for the taking of the
           poll, and in default the form of proxy shall not be treated as valid.

    10.6.3 No form appointing a proxy shall be valid after the expiration of 6 (six) months from the date
           when it was signed, which shall include signature in any form which the directors may require
           for the purpose of establishing the authenticity or integrity of an electronic communication,
           except at an adjourned meeting or on a poll demanded at a meeting or adjourned meeting
           in cases where the meeting was originally held within 6 (six) months from the said date,
           unless so specifically stated in the proxy itself. A vote given in accordance with the terms of
           an instrument of proxy shall be valid notwithstanding the previous death or mental disorder
           of the principal or revocation of the proxy or of the authority under which the proxy was
           executed, or the transfer of the share in respect of which the proxy is given, provided that no
           intimation in writing of such death, insanity, revocation or transfer as aforesaid shall have
           been received by the company at the office before the commencement of the meeting or
           adjourned meeting at which the proxy is used. In this Article reference to “in writing” shall
           include the use of electronic communication, subject to any terms and conditions decided by
           the directors.”

•   the deletion of the terms of article 10.7 and the insertion of the following new article in place thereof:
    “Subject to the provisions of the Act, a form appointing a proxy shall be in writing, or may be by
    electronic means including without limitation, electronic mail or facsimile.”

•   the deletion of article 29 and the insertion of the following new sub-articles in place thereof:
    29.1 “Notices shall be served by the company upon each member personally or by transmission
         through the post in a prepaid letter, envelope or wrapper addressed to such member at his
         registered address or transmitted by electronic mail or facsimile to such registered address.

    29.2 Any member may notify in writing to the company an address, electronic mail address or
         facsimile number. Such address shall be deemed to be his registered place of address within the
         meaning of Article 29.1, and if he has not notified such address, he shall be deemed to have
         waived his right to be served with notices.”

•   the deletion of the words “as the directors may determine” in Article 29.3 and the insertion of the
    words “as the directors may determine, and in accordance with the requirements of the JSE Securities
    Exchange South Africa.” in place thereof;
•   the insertion of the words “Any notice sent by the company using electronic communication or
    publication on a website shall be deemed to have been served on the day after it was sent. Proof that
    a notice contained in an electronic communication was sent in accordance with guidelines determined
    from time to time by the directors shall be conclusive evidence that the notice was given.” at the end
    of Article 29.5;
•   the deletion of article 29.7 and the insertion of the following new article in place thereof:




                                                                                                         Dat at ec Annual R epor t 2002   99
                                                          268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 100




                             Notice to Members                                 continued




                                            29.7 “Any notice or document delivered using electronic communication or publication on a website or
                                                 sent by post to any member or beneficial holder in pursuance of these articles shall, notwithstanding
                                                 that such member or beneficial holder be then deceased, and whether or not the company has
                                                 intimation of his death, be deemed to have been duly served in respect of any registered shares or
                                                 securities in respect of which such beneficial holder has or is deemed to have a beneficial interest,
                                                 whether held solely or jointly with other persons, until some other person be registered or disclosed
                                                 in his stead as the holder or joint holder thereof, and such service shall, for all purposes of these
                                                 articles, be deemed a sufficient service of such notice or document on his heirs, executors or
                                                 administrators, and all persons (if any) jointly interested with him in any such shares or securities.””


                             8. To transact such other business as may be transacted at an Annual General Meeting.

                             Members who have not dematerialised their ordinary shares or who have dematerialised their ordinary shares and
                             registered them in their own name are entitled to attend and to vote at the meeting. Such members are entitled to
                             appoint one or more proxies to attend, speak and vote in their stead. A proxy need not be a member of the company.
                             Proxies must be lodged at the registered office of the company not less than 48 (forty-eight) hours before the time
                             allotted for the meeting.

                             Members who have dematerialised their ordinary shares and registered them in the name of a CSDP or broker should
                             contact their CSDP or broker to make the relevant arrangements to attend/vote at the meeting.

                             By order of the board




                             I P Dittrich
                             Company Secretary
                             17 July 2002




100 Dat at ec   Annual R epor t 2002
                            268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 101




                                                                               Administration




DIRECTORATE
Name                           Date of appointment       Date of resignation   Position held at 31 March 2002

Executive Directors
J P Montanana (British) †      October 6, 1994                                 Chief Executive Officer
S F Lawrence (British) †       November 7, 2000                                Chief Executive Officer: Logical
D B Pfaff †                    July 1, 2001                                    Executive Director
R S Rindel †                   September 1, 1995                               Group Finance Director
A M Smith (American) †         July 17, 2001                                   Chief Executive Officer: Westcon

Non-executive Directors
L Boyd ‡                       December 6, 2001                                Chairman
C B Brayshaw *                 December 6, 2001                                Director
M Karpul                       August 30, 1996                                 Director
J F McCartney (American) ‡†    May 11, 1998                                    Deputy Chairman
C M L Savage *†                December 6, 2001                                Director
C S Seabrooke *‡               October 6, 1994                                 Director

Resignations
J S James                      September 1, 1998         December 6, 2001
M J Lamberti                   October 23, 1997          October 22, 2001

*Audit and Compliance Committee    ‡Remuneration and Nomination Committee        †Business Risk Committee

Registered Office                      Sponsors                                  Auditors
Building 8                             Rand Merchant Bank                        Deloitte & Touche
Harrowdene Office Park                 1 Merchant Place                          The Woodlands
Western Service Road                   Corner Fredman Drive and                  Woodlands Drive
Woodmead, 2148                         Rivonia Road                              Woodmead
South Africa                           Sandton, 2196                             Sandton, 2148
Telephone +27 (0)11 233 1000           South Africa                              South Africa
Telefax +27 (0) 11 233 3300
                                       Transfer Secretaries                      Principal Bankers – SA
Registration Number                    Computershare Investor Services           The Standard Bank of South
1994/005004/06                         Limited (previously Mercantile            Africa Limited
                                       Registrars Limited)                       Commercial Banking Centre
Secretary                              10th Floor                                78 Fox Street
I P Dittrich                           11 Diagonal Street                        Johannesburg, 2001
                                       Johannesburg, 2000
Office – UK                                                                      Principal Bankers – UK
                                       South Africa
110 Buckingham Avenue                                                            Royal Bank of Scotland plc
Slough                                 Corporate law advisors and                Abbey Gardens
Berkshire                              consultants                               Reading
SL14PF                                 Edward Nathan & Friedland (Pty)           Berkshire
United Kingdom                         Limited
Telephone +44 (0) 1753 797 100                                                   Principal Bankers – US
                                       4th Floor
Telefax +44 (0) 1753 819 284           The Forum                                 IBM Global Financing
                                       Maude Street                              North Castle Drive
Office – US
                                       Sandton, 2196                             Armont
520 White Plains Road                  South Africa                              New York, 10504
Tarrytown
New York 10591                                                                   Internet Address
USA                                                                              www.datatec.co.za
Telephone +1 914 829 7170                                                        www.westcon.com
Telefax +1 914 829 7184                                                          www.logical.com
                                                                                 www.masoncom.com




                                                                                                                Dat at ec Annual R epor t 2002   101
                                       268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 102




102 Dat at ec   Annual R epor t 2002
                                                        Printed by Ince (Pty) Ltd
                               268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 103




                                                                                        Form of Proxy




I/We

of

being a member/members of the above-mentioned company, hereby appoint:

or failing him/her,

or failing him/her, the chairperson of the Annual General Meeting as my/our proxy to vote for me/us on my/our
behalf at the Annual General Meeting of the company to be held at 14h00 on 30 September 2002 and at any
adjournment of that meeting.

Signed at                                               this           day of                                      2002

Signature

Please indicate with an “X” in the appropriate space on the right how you wish your votes to be cast. If you return this
form duly signed, without any specific directions, the proxy shall be entitled to vote as he/she thinks fit.
                                                                         In favour of     Against          Abstain
                                                                          resolution     resolution      from voting
 1.    Adoption of annual financial statements
 2.    Re-election of directors
 2.1 Re-election of directors in one bulk resolution
 2.2 Re-election of directors
 3.    Placing the unissued shares under the directors’
       control
 4.    Confirming the re-appointment of the auditors
 5.    Ratifying directors’ remuneration for the past financial year
 6.    ORDINARY RESOLUTIONS
 6.1 General authority to issue shares for cash
 6.2 Amendment of Datatec Share Option Scheme
 6.3 Authorise directors to give effect to the resolution
 7.    SPECIAL RESOLUTIONS
 7.1 Repurchase by company of its own securities
 7.2 Ratification and approval of share options to
     non-executive directors
 7.3 Electronic notification to and from shareholders
A member entitled to attend and vote at this meeting is entitled to appoint one or more proxies to attend, speak and
vote in his/her stead. A proxy need not be a member of the company. Proxies must be lodged at the registered office
of the company no less than 48 (forty-eight) hours before the time scheduled.
Please note that this proxy form is only for use by members who have not dematerialised their ordinary shares or who
have dematerialised their ordinary shares and registered them in their own name.




                                                                                                                   Dat at ec Annual R epor t 2002
268014 – (DATT) – DATATEC – 29/7/02 – Proof No 12 – Page 104

				
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