<>Datatec

Value creation at a glance

Corporate governance and how it links to the value creation

• Compliance with applicable laws, regulations and governance practices
• Collective responsibility or primary governance structures and roles
• Custodians of corporate governance
• Cultivation and exhibition of ethical characteristics

ACTIVITIES

Leadership, ethics and corporate citizenship

Strategy, performance and reporting

Risk, oversight, compliance and assurance

Remuneration

Stakeholder relations

Corporate governance

VALUE CREATION

• 1
• Achievement and benefits realised through good governance outcomes

• Ethical culture
• Effective control
• Solid financial performance
• Legitimacy

• 2
• Delivery on strategic objectives

• Operate efficiently
• Invest strategically
• Engage and nurture talent
• Grow reputation
• Optimise capital

• 3
• Achievement of stakeholder goals

• Ethical culture
• Effective control
• Solid financial performance
• Legitimacy

Governance creating and protecting value

The Board contributes to strategic delivery and value creation by focusing on responsible and ethical leadership to ensure a sustainable business. The Board periodically reviews opportunities and threats it believes could have the most significant impact on the Group's ability to have sustainable value for its stakeholders.

Datatec's view on corporate governance is to approach it as more than just a compliance exercise, but rather, as a tool that contributes to improved operational decision-making and business performance.

The Board is confident that the improved corporate governance achieved through the Group's governance structures has created value in the form of improved financial performance, sustainable business model, transparent shareholder relationships and high reputational integrity.

Corporate governance practices

Datatec believes that good corporate governance contributes to enhanced accountability, fairness and transparency.

The Board is ultimately accountable and responsible for the performance of and affairs of the Company and is committed to upholding the King IV™ principles. The Board sets the tone for the Company through ethical leadership and is committed to maintaining the highest standards of ethics and business conduct.

The Board appreciates that these principles are essential for good governance and are important to successful stakeholder engagement.

The standards of disclosure are regulated by the Companies Act, the JSE Listings Requirements and the King IV™ Code.

The Board appreciates that effective corporate governance is a key driver of sustainability and acknowledges its responsibility in this regard, including to report openly thereon to stakeholders. Throughout the year (and up to the date of approval of this Integrated Report and annual financial statements) the principles articulated in the King IV™ Code have been applied or, if not applied, explained.

The Board

The Board is responsible for the leadership and guidance of the Group and exercises control over all divisions and subsidiaries by monitoring executive management. The Board is at the head of the Group's corporate governance structure and ensures that the Group is a responsible corporate citizen, cognisant of the impact its operations may have on the environment and society in which it operates, while acting in accordance with Datatec's Code of Conduct.

The Board is governed by a formal Board Charter that regulates the parameters within which it operates and defines its roles and responsibilities in accordance with legislation and global best practice with particular reference to the King IV™ Code and the Companies Act. The directors are of the opinion that they have adhered to the terms of reference set out in the Board Charter for the year.

A copy of the Board Charter is available on the website: www.datatec.com.

The Board ensures that the governance of risk, technology and information through the Board committees support the organisation in setting and achieving its strategic objectives. The assurance services, in the form of external and internal audit functions, further enable an effective control environment which supports the Board's decision-making.

The responsibilities of the Chairman and CEO, and those of other non-executive and executive directors, are clearly separated to ensure a balance of authority which precludes any one director from exercising unfettered powers of decision-making.

The non-executive directors draw on their experience, skills and business acumen to ensure impartial and objective viewpoints in decision-making processes and standards of conduct. The mix of technical, entrepreneurial, financial and business skills of the directors is considered to be balanced, thus enhancing the effectiveness of the Board.

To fulfil their responsibilities adequately, directors have unrestricted access to timely financial and other information, records and documents relating to the Group. The Board receives presentations from the management teams of its major subsidiaries, enabling it to explore specific issues and developments in greater depth.

Directors are provided with guidelines regarding their duties and responsibilities and a formal orientation programme has been established to familiarise incoming directors with the Group's business, competitive position, strategic plans and objectives.

The directors' attendance at Board meetings during FY19 and subsequently to the date of this report:

Board representation and contribution to value creation

Diversity is enshrined in Datatec's Code of Conduct and the Board strongly supports the principle of diversity at Board level as an essential element of good corporate governance. A diverse Board includes differences in the skills, industry experience, cultural background, race, gender and other distinctions between members of the Board. These differences will be considered in determining the optimum composition of the Board and when possible will be balanced appropriately. This diversity facilitates an environment for constructive dialogue and enables the Board to consider the needs of a wide range of stakeholder interests.

During the year under review, there were some changes to the composition of the Board. The Board is of the view that the most recent changes to the Board will result in greater diversity in terms of skills and experience, race and gender. The Board believes that these governance qualities enable the Group to create value for stakeholders in a sustainable manner as described in the strategy section of this report.

The policy on promotion of diversity at Board level is available on the website: www.datatec.com.

VALUE UNLOCKED IN FY19

• Total
  10 130
  employees

• 
  7 million
  CSI spend at head office

• Revenue
  US$4.3
  billion

• US$648
  million
  Invested in wages and benefits

• 
  5 946
  Individuals given access to computer technology

• EBITDA
  US$86.8
  million

• 4 532
  Individuals benefiting from ICT skill training

• US$37
  million
  in capital expenditure

• 
  Strong
  partner and vendor relationships

• Westcon SA
  BBBEE
  status Level 1

• US$50.8
  million
  share repurchases (US$43.9 million in FY19; US$6.9 million subsequently)

• UEPS
  6.6 US
  cents

VALUE ADDED STATEMENT

for the year ended 28 February 2019