Annual General Meeting
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Notice is hereby given that the Annual General Meeting of shareholders of Datatec Limited will be held at the Sandton Sun Intercontinental, 5th Street, Sandhurst, Republic of South Africa at 14:00 on 15 August 2006 for the purpose of transacting the following business:

1. CONSIDERATION OF ANNUAL FINANCIAL STATEMENTS

Ordinary Resolution Number 1

“Resolved that the audited Annual Financial Statements and Group Annual Financial Statements for the year ended 28 February 2006
be and are hereby accepted.”

2. RE-ELECTION OF DIRECTORS

Ordinary Resolution Number 2

“Resolved that Mr J Montanana who retires in terms of the Company’s Articles of Association ("the Articles") and who offers himself for re-election, be and is hereby re-elected as a director of the Company.”
Please refer to Mr Montanana’s brief Curriculum Vitae.

3. RE-ELECTION OF DIRECTORS

Ordinary Resolution Number 3

“Resolved that Mr D Pfaff who retires in terms of the Articles and who offers himself for re-election, be and is hereby re-elected as a director of the Company.”
Please refer to Mr Pfaff’s brief Curriculum Vitae.

4. RE-ELECTION OF DIRECTORS

Ordinary Resolution Number 4

“Resolved that Mr N Temple who retires in terms of the Articles and who offers himself for re-election, be and is hereby re-elected as a director of the Company.”

Please refer to Mr Temple’s brief Curriculum Vitae.

5. APPROVAL OF AUDITORS’ REMUNERATION

Ordinary Resolution Number 5

“Resolved that the directors of the Company be and are hereby authorised to fix and pay the auditors’ remuneration for the year ended 28 February 2006.”

6. RATIFICATION OF DIRECTORS’ REMUNERATION

Ordinary Resolution Number 6

“Resolved that the remuneration of the directors of the Company for the past financial year as reflected on page 57 of the Annual Report of which this notice forms part be and is hereby ratified.”

7. INCREASE TO NON-EXECUTIVE DIRECTORS’ FEES

Ordinary Resolution Number 7

“Resolved that the non-executive directors’ fees be increased with effect from 1 March 2006 as follows:

  • Chairman of the Board – $90 000
  • Non-executive directors’ fee – $45 000
  • Chairman of the Audit, Compliance and Risk Committee – $25 000
  • Chairman of the Remuneration and Nomination Committee – $12 500
  • Members of the Audit, Compliance and Risk Committee – $12 500
  • Members of the Remuneration and Nomination Committee – $10 000
  • Trustees of Datatec trusts – $5 000”

8. PLACE UNISSUED SHARES UNDER THE CONTROL OF THE DIRECTORS

Ordinary Resolution Number 8

“Resolved that the authorised but unissued ordinary shares in the Company be and are hereby placed under the control of the Board
of Directors of the Company in terms of section 221 of the Companies Act, Act 61 of 1973 (“the Act”) until the next Annual General Meeting and that the directors of the Company be and are hereby authorised and empowered to allot, issue and otherwise dispose of such unissued ordinary shares as they may deem fit, subject always to:

  • the Act, the Articles and the JSE Limited (“JSE”) Listings Requirements where applicable; and
  • such directors’ authority pursuant to this Ordinary Resolution Number 8 to allot, issue and otherwise dispose of unissued ordinary shares in the Company being limited to a maximum number of unissued ordinary shares equal to 10% of the issued share capital of the Company from time to time;”

9. GENERAL AUTHORITY TO ISSUE SHARES FOR CASH

Ordinary Resolution Number 9

“Resolved that in terms of the JSE Listings Requirements, the Board of Directors of the Company be and are hereby given the general authority to issue all or any of the authorised, but unissued ordinary shares of one cent each in the share capital of the Company for cash as and when they in their discretion deem fit, subject to the Act, the Articles and the following limitations:

  • that the securities which are the subject of the issue for cash must be of a class already in issue, or where this is not the case, must be limited to such securities or rights that are convertible into a class already in issue;
  • that this authority shall not extend beyond 15 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 4.25 to 4.27 of the Listings Requirements of the JSE and not to related parties;
  • that a paid press announcement giving full details, including the impact on net tangible asset value and earnings per share, will be published at the time of any issue representing, on a cumulative basis within one financial year, 5% or more of the number of ordinary shares of that class in issue prior to the issue;
  • that issues in the aggregate in any one financial year may not exceed 5% 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;
  • that, in determining the price at which an issue of shares will be made in terms of this authority, the maximum discount permitted be 10% of the weighted average traded price on the JSE 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 to by the directors of Datatec; and
  • any other conditions that the JSE may stipulate.”

The approval of 75% of votes cast by shareholders present or represented by proxy at this Annual General Meeting is required for this ordinary resolution to become effective. Shares held by the Share Trust and by subsidiaries will not have their votes taken account of for the above Ordinary Resolution Number 9.



10. AUTHORITY TO MAKE GENERAL PAYMENT TO SECURITIES HOLDERS

Ordinary Resolution Number 10

"Resolved that as contemplated in section 90 of the Act the Board of Directors of the Company shall, be entitled to make a pro-rata payment to shareholders of the Company by way of a general payment from the Company’s share capital or share premium, subject to the provisions of the Act, the Listings Requirements and the following limitations:

  • that this authority shall not extend beyond 15 months from the date of this meeting or the date of the next Annual General Meeting, whichever is the earlier date;
  • that the maximum amount by which the share capital or share premium shall be reduced in terms of this authority, shall not exceed the Rand value of 20% of the Company’s issued share capital including reserves, but excluding minority interests and re-valuations of assets and intangible assets that are not supported by a valuation by an independent professional expert acceptable to the JSE prepared within the last six months, in any one financial year, measured as at the beginning of such financial year; and
  • that any general payment be made pro-rata to all shareholders.” :

The directors of the Company undertake that they shall not implement the proposed general payment, unless for a period of 12 months following the date of the Annual General Meeting

    • the Company and the subsidiaries of the Company ("the Group") are able to repay their debts as such debts become due in the
      ordinary course of business;
    • the consolidated assets of the Company and the Group, fairly valued according to International Financial Reporting Standards and on a basis consistent with the last financial year of the Company, exceed the consolidated liabilities of the Company and the Group;
    • the Company and the Group have adequate share capital and reserves for ordinary business purposes;
    • the Company and the Group have sufficient working capital for ordinary business purposes; and
    • the Sponsor of the Company provides a letter to the JSE on the adequacy of working capital in terms of section 2.12 of the Listings Requirements.

The directors of the Company intend to utilise the authority in terms of this Ordinary Resolution Number 10 in order to make a general payment to the shareholders of the Company, by way of a general payment from the Company’s share capital or share premium.

Announcements will be published on SENS and in the press setting out the terms and date of the general payment, the financial effects of the general payment prior to such payment being effected and complying with Schedule 24 of the JSE Listings Requirements.

In compliance with section 11.28 of the JSE Listings Requirements the following information is furnished:

      • Directors’ details: refer page 10 and 11 of this report;
      • Major shareholders: refer page 118 of this report;
      • Material changes: refer material changes statement per paragraph 12 below;
      • Directors’ interests in shares: refer page 59 of this report;
      • Share capital: refer page 114 of this report;
      • Directors’ responsibility statement: refer statement per paragraph 12 below; and
      • Litigation statement: refer litigation statement per paragraph 12 below.

Shares held by the Share Trust and by subsidiaries will not have thier votes taken account of for the above Ordinary Resolution Number 10.


11. AUTHORITY TO SIGN ALL DOCUMENTS REQUIRED

Ordinary Resolution Number 11

“Resolved that subject to the passing of terms of the Ordinary Resolutions 1 to 10, any director of the Company or the Company Secretary shall be and is hereby authorised to sign all documents and perform all acts which may be required to give effect to such Ordinary Resolutions number 1 to 10 passed at the Annual General Meeting."

To consider and if deemed fit, to pass the following special resolution:

12. GENERAL AUTHORITY TO REPURCHASE SHARES

Special Resolution Number 1

“Resolved that the Board of Directors of the Company be authorised by way of a general authority to facilitate the acquisition by the Company or a subsidiary of the Company of the issued ordinary shares of the Company, upon such terms and conditions and in such amounts as the directors of the Company may from time to time determine, but subject to the Articles, the provisions of the Act and the JSE Listings Requirements, when applicable and provided 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 cumulatively repurchased 3% of the initial number of the shares of the Company in issue as at the time the general authority was granted and for each 3% in aggregate of the initial number of shares acquired thereafter;
  • the authorisation granted above shall remain in force from the date of passing of this special resolution for a period of 15 months or until the next Annual General Meeting, whichever period is shorter;
  • the Company will only appoint one agent to effect any repurchase(s) on its behalf;
  • after such repurchase the Company will still comply with paragraphs 3.37 to 3.41 of the Listings Requirements concerning shareholder spread requirements;
  • the Company or its subsidiary shall not repurchase securities during a prohibited period as defined in paragraph 3.67 of the Listings Requirements;
  • the repurchase of securities will be effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the Company and the counter party;
  • 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 an 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;
  • in determining the price at which the Company's ordinary shares are acquired by the Company or a subsidiary of the Company in terms of this general authority, the maximum premium at which such ordinary shares may be acquired will be 10% of the weighted average of the market price at which such ordinary shares are traded on the JSE, as determined over the 5 trading days immediately preceding the date of the repurchase of such ordinary shares by the Company or a subsidiary of the Company; and
  • the sponsor to the Company provides a letter of confirmation on the adequacy of working capital in terms of section 2.12 of the JSE Listings Requirements prior to any repurchases being implemented on the open market of the JSE.
    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 or for the period of the general authority, whichever is the longer, unless:
    • the Company and the Group would, after payment for such maximum repurchase, be able to repay its debts as they become due
      in the ordinary course of business for the following year;
    • the Company’s and the Group’s consolidated assets, fairly valued according to International Financial Reporting Standards and on a basis consistent with the last financial year of the Company, would, after such payment, exceed their consolidated liabilities for the following year;
    • the Company’s and the Group’s ordinary share capital and reserves would, after such payment, be sufficient to meet their needs in
      the following year; and
    • the Company and the Group would, after such payment, have sufficient working capital to meet its needs in the following year.”

Reason for and effect of the Special Resolution

The reason for and the effect of the special resolution is to grant to the directors of the Company a general authority, up to and including the date of the next Annual General Meeting of the Company or the expiration date of the period commencing on the date of passing of the special resolution and expiring on the date 15 months thereafter, to approve the Company's purchase of shares in itself, or to permit a subsidiary of the Company to purchase shares in the Company.

The Board is of the opinion that this authority should be in place should it become appropriate to undertake a share repurchase.

For purposes of considering the special resolution for the Company or a subsidiary of the Company to repurchase shares issued by the Company, the information below has been included in the Annual Report, in which this notice of Annual General Meeting is included, at the places indicated:

  • Directors’ details (refer pages 10 and 11 or this report);
  • Major shareholders (refer page 118 of this report);
  • Directors’ interest in securities (refer page 59 of this report);
  • Share capital of the Company (refer page 114 of this report);
  • Litigation statement

The directors, whose names are given on pages 10 and 11 of the Annual Report, of which this notice forms part, are not aware of any legal or arbitration proceedings, other than such proceedings disclosed on page 96, including proceedings that are pending or threatened of which the issuer is aware, that may have or have had in the recent past, being at least the previous 12 months, a material effect on the Group’s financial position.

  • Directors’ responsibility statement

    The directors, whose names are given on pages 10 and 11 of the Annual Report, collectively and individually accept full responsibility for the accuracy of the information pertaining to this resolution and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this resolution contains all information required by the JSE Listings Requirements; and

  • Material changes

Other than the facts and developments reported on in the Annual Report, there have been no material changes in the financial or tradng position of the Company and/or the Group since the date of signature of the Audit Report and the date of this notice.

Shares held by the Share Trust and by subsidiaries will not have their votes taken account of for the above Special Resolution Number 1

13. INCREASE OF AUTHORISED SHARE CAPITAL

Special Resolution Number 2

“Resolved that the Board of Directors of the Company be authorised to increase the Company’s authorised share capital from R2 000 000, divided into 200 000 000 ordinary shares of a nominal value of 1 cent each, to R4 000 000 divided into 400 000 000 ordinary shares of 1 cent each, by the creation of an additional 200 000 000 ordinary shares of a nominal value of 1 cent each.”

Reason for and effect of the Special Resolution

The reason for such a resolution is that the Company has insufficient authorised ordinary share capital to facilitate future equity issues to fund acquisitions or raise capital, and the effect thereof will be to increase the authorised share capital of the Company by creating 200 000 000 new ordinary shares of a nominal value of 1 cent each.

Shares held by the Share Trust and by subsidiaries will not have their votes taken account of for the above Special Resolution Number 2.

14. TO TRANSACT SUCH OTHER BUSINESS AS MAY BE TRANSACTED AT AN ANNUAL GENERAL MEETING.

Voting and proxies

Members who have not dematerialised their shares or who have dematerialised their shares with “own name” registration are entitled to attend and vote at the Annual General Meeting and are entitled to appoint a proxy or proxies to attend, speak and vote in their stead. The person so appointed need not be a member. Proxy forms must be forwarded to reach the registered office of the Company or the Company’s transfer secretaries, Computershare Investor Services 2004 (Proprietary) Limited, 70 Marshall Street, Johannesburg 2001, or posted to the transfer secretaries at PO Box 61051, Marshalltown 2107, South Africa so as to be received by them by no later than 14:00 on 11 August 2006.

Proxy forms must only be completed by members who have dematerialised their shares with “own name” registration or who have not dematerialised their shares.

On a show of hands, every member of the Company present in person or represented by proxy shall have one vote only. On a poll, every member of the Company present in person or represented by proxy shall have one vote for every share held in the Company by such member.

Members who have dematerialised their shares, other than those members who have dematerialised their shares with “own name” registration, who are unable to attend the Annual General Meeting (“AGM”) but wish to be represented thereat, should contact their Central Securities Depository Participant (“CSDP”) or broker (as the case may be) in the manner and time stipulated in their agreement entered into by such member and the CSDP or broker (as the case may be) to furnish the CSDP or broker (as the case may be) with their voting instructions and in the event that such members wish to attend the meeting, to obtain the necessary authority to do so. Such members who wish to attend the AGM in person must obtain the necessary letter of representation from their CSDP or broker.

By order of the Board


I P Dittrich
Company Secretary
Sandton
June 2006