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NATURE OF THE BUSINESS PROFILE AND GROUP STRUCTURE The Group also has other interests which are included with the Group Head Office under Other Holdings. These encompass the Group's distribution and integration businesses in the Middle East and Africa. GROUP FINANCIAL RESULTS SHARE CAPITAL Issued share capital SHARE CAPITAL CHANGES DURING THE YEAR A further 7 200 000 shares were issued in an institutional placement on the Alternative Investment Market ("AIM") of the London Stock Exchange. In February 2008 Datatec executed a share buy-back where it repurchased and subsequently cancelled 624 670 shares. A further 1 068 489 shares were repurchased by the Company share trust during the year ended 29 February 2008 and are held as treasury shares. Financial details of the movement in share capital have been reflected in the statement of changes in equity, and in Note 16 in the annual financial statements. DIRECTORS Subsequent to the year-end Mr Leslie Boyd, the Group's Chairman, passed away suddenly after a short illness. Mr Stephen Davidson, who was Deputy Chairman, has succeeded to the role of Chairman. Mr Boyd had indicated his intention to retire from the Board after the Group's AGM in August at which time the Board had intended to appoint Mr Davidson as Chairman. All directors, including non-executive directors, are required, in terms of the Company's articles of association, to retire at least every three years and may offer themselves for re-election. 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. Brief curricula vitae of directors are included and further information on the directors, including their interests in the shares of the Company and share-based remuneration schemes, are provided in the remuneration report. GOING CONCERN The Group is solvent and has access to sufficient cash resources. Shareholders' funds are $655 million (2007: $538 million). Working capital remains well controlled. Receivables and inventory are of sound quality and adequate provisions are held against both. The Group has sufficient liquidity and borrowing capacity to meet its ongoing operating needs, including approved capital expenditure. At 29 February 2008 the Group had cash balances on hand of $245 million, bank overdrafts of $211 million and unused borrowing facilities of $334 million of which $177 million was available for draw down against existing collateral at that date. The Group has no need to undertake a capital restructuring and key executive management is in place. The Board is not aware of any new material changes that may adversely impact the Group relative to customers, suppliers, services or markets. The Board is not aware of any material non-compliance with statutory or regulatory requirements and there are no pending legal proceedings other than in the normal course of business. The Board is not aware of any pending changes in legislation in any of the major countries in which it operates that may affect the Group. INVESTMENTS AND SUBSIDIARIES ACQUISITIONS On 24 April 2007, Westcon Group, Inc. acquired NOXS Europe BV and NOXS Ireland Ltd from Unit 4 Agresso NV for a maximum cash consideration of $74 million. NOXS is a leading European distributor of security products and services with offices in France, Belgium, The Netherlands, Germany, the United Kingdom, Ireland and Italy. NOXS' primary vendors include Juniper Networks, Checkpoint Systems, Trend Micro, Nokia and McAfee. On 3 May 2007, Datatec Ltd acquired Crane Telecommunications Group Ltd, a leading UK-based European value-added distributor of voice, data and converged communications solutions for $42 million in cash and Datatec shares. Datatec subsequently transferred these shares in Crane to Westcon Group, Inc. On 31 May 2007, Logicalis US Holdings, Inc. acquired Carotek's Information Technology Division, based in North Carolina for $7 million in cash and shares. On 16 July 2007, Westcon Group, Inc. acquired the assets of ReView Video LLC, a leading US distributor of audio, network, videoconferencing and voice over IP ("VoIP") solutions, for a cash consideration of $25 million. On 2 October 2007, Logicalis Group Ltd purchased the 20% minority interest in its South American operations for $6 million, and on 30 September 2007, increased its stake in a German services business to 75% for $2 million. On 1 September 2007, Westcon Africa Middle East acquired 51% of International Technology Distributors FZCo which has since been renamed Westcon Africa FZCo ("Westcon Africa") for a net $4,2 million (note that part of the consideration included the transfer of the investment in Jet Distribution Ltd and Resolv Computers Ltd). On 19 February 2008, Analysys Mason completed the acquisition of Redbox Consulting Services Ltd for $3,6 million. This acquisition will further enhance the range of services that can be offered to clients. Investments increased to $3,7 million, as a result of the joint venture transaction in respect of Neteks in Turkey. Comprehensive financial details of the acquisitions made during the year can be found in Note 34 in the annual financial statements. SPECIAL RESOLUTIONS OF THE GROUP On 30 August 2007 the Company registered a special resolution after receiving shareholder approval at the AGM held on 6 August 2007 to change its articles of association to:
CORPORATE GOVERNANCE COMPLIANCE STATEMENTS SHARE OPTION AND MANAGEMENT INCENTIVE SCHEMES EVENTS OCCURRING SUBSEQUENT TO THE YEAR-END CAPITAL DISTRIBUTION
Share certificates may not be dematerialised or rematerialised between Monday, 7 July 2008 and Friday, 11 July 2008, both days inclusive. The Company has instituted a policy of making an annual distribution to shareholders subject to annual review which will be influenced by business growth, acquisition activity, or changes in reported earnings resulting from applying fair value accounting principles. ANNUAL GENERAL MEETING |
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