Datatec issued the announcement below to the market through SENS.

Issued by Datatec
Johannesburg, 12 Oct 2001

Further to the announcement dated 10th October 2001, and subsequent discussions with major shareholders, the Board and Remuneration Committee of Datatec, excluding the affected Directors, advise as follows.

1 Future policy

* All future remuneration, bonuses and share incentive schemes for head office executives will be based solely on the overall performance of the Group, as reviewed and approved by the Remuneration Committee.

* The existing share schemes in subsidiaries have been revised and amendments have been made to the UUNet SA (Pty) Limited ("UUNet") bonus.

2 The UUNet bonus

The following issues were taken into consideration:

* The Board and Remuneration Committee are responsible for evaluating executives on their performance and on the performance of the company. In the year to March 2001 Datatec achieved record sales of R20.1 billion, 95% of which originated outside of Africa, resulting in a record EBITDA of R1.1 billion. Each of the major subsidiaries, with the exception of Logical, had a record year.

* The decision to sell its 76% interest in UUNet was consistent with Datatec`s stated strategy to dispose of non-core businesses and the need to strengthen the balance sheet.

* The realisation by the Group`s executives of a sale price of US$138.5 million for the group`s interest in UUNet resulted in a capital gain in excess of R900 million to Datatec.

* The decision of the Board and Remuneration Committee, related to the UUNet incentive scheme from its conception in May 2000, followed due process and proper corporate governance procedures. The independent Remuneration Committee comprises US and SA non-executive Directors who were guided by local and international executive remuneration practices in the IT sector prevailing at the time.

* The decision to pay incentive bonuses to those executives directly responsible for the growth and development of UUNet and its subsequent sale was a proper one, as the implementation of Datatec`s subsidiary share participation scheme had not been implemented in UUNet where WorldCom, Inc. was a 24% minority shareholder.

* When determining the balance of their total remuneration, the Board and Remuneration Committee took into account the quantum of the bonus paid to Messrs Montanana and Rindel from the UUNet proceeds.

* This approach, and the decision to remunerate Messrs Montanana and Rindel for their specific role in founding the original operations of UUNet in 1995, facilitating its growth, and structuring, negotiating and closing the sale transaction, is at odds with the recently expressed desire of certain shareholders that the remuneration of head office executives be based only on overall Group performance.

Based on the above the Board and Remuneration Committee have decided as follows:

* The R24 million bonus paid to the 21 executives directly employed by UUNet (including Mr M Karpul, a Datatec director whose only executive role was as Chairman of UUNet) will stand.

* The aggregate UUNet bonus of R11.8 million paid to Messrs Montanana and Rindel in March 2001, will be reduced by R4.0 million. In order to demonstrate their confidence in the Group and an alignment of their interests with those of all shareholders, JP Montanana has already invested in 250,000 Datatec shares at an average price of R17. RS Rindel has elected to invest the remainder, after deduction of tax and contributions to retirement annuities, in Datatec shares. They have elected not to sell such shares for a period of three years or until the share price reaches R28 and holds that level for ten trading days, whichever comes sooner.

3 Share schemes in subsidiaries

* The participation of head office executives in subsidiary share schemes as outlined in the annual report for 2000 has been replaced by Datatec options. The quantum of the Datatec options issued approximates the value of the participations at the subsidiary level that have been replaced. These options will be issued in terms of the existing share option scheme, as follows:

JP Montanana
700,000
RS Rindel

The process followed by the Board and Remuneration Committee has met with the approval of all the institutional shareholders with which the issues were discussed, representing 55% of the shares in issue.

Sandton
18 October 2001

For further information, please visit our website on www.datatec.co.za or contact:

Datatec

Datatec is an international networking and IT services company with operations in many of the world`s leading economies. The Group provides active management support in the strategic direction and operation of its subsidiaries and has three international networking focused lines of business:

* Westcon is a global channel provider of advanced networking and Internet access products;
* Logical is focused on the provision of professional services and IT network integration; and
* Mason is a strategic telecommunications consultancy.

By operating in the different stages of the networking supply chain through these individually branded businesses, the Group believes it can leverage its industry and technology position, deal more effectively with vendors, focus its management and harness its skills base as a sector specialist.

In addition, the group has a number of other operations in South Africa with similar focused business areas. These are Westcon AME, Affinity Logic and Rangegate.

The Group operates on six continents and generates more than 95% of its revenue and profits outside South Africa.

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