DANKA BUSINESS SYSTEMS PLC, PRE 14A, 1997-05-21

DANKA BUSINESS SYSTEMS PLC
PRE 14A, 1997-05-21
PROFESSIONAL & COMMERCIAL EQUIPMENT & SUPPLIES

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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE
ACT OF 1934
[AMENDMENT NO................]

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:

/X/ Preliminary Proxy Statement
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
/ / Confidential, For Use of the Commission Only (as Permitted by Rule 14a-
6(e)(2))

Danka Business Systems PLC
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(Name of Registrant as Specified in Its Charter)

------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

/X/ No Fee Required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

1) Title of each class of securities to which transaction
applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined:

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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

--------------------------------------------------------------

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:
---------------------------------------
2) Form Schedule or Registration Statement No.:
------------------
3) Filing Party:
-------------------------------------------------
4) Date Filed:
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DANKA BUSINESS SYSTEMS PLC
33 CAVENDISH SQUARE
LONDON W1M ODE ENGLAND

June 25, 1997

TO HOLDERS OF ORDINARY SHARES AND AMERICAN DEPOSITARY SHARES OF DANKA
BUSINESS SYSTEMS PLC (THE "COMPANY") AND, FOR INFORMATIONAL PURPOSES ONLY,
HOLDERS OF OPTIONS TO ACQUIRE ORDINARY SHARES.

Holders of Ordinary Shares are cordially invited to attend the
Company's 1997 Annual General Meeting (the "Meeting"). The Meeting will be held
Friday, July 25, 1997 at 11:00 a.m. (local time) at the Lanesborough Hotel,
located at Lanesborough Place, London, England SW1X 7LY.

The Notice of the Annual General Meeting and the Proxy Statement on the
following pages cover the formal business of the Meeting, which includes
resolutions proposing (1) approval of a final dividend; (2, 3 and 4) retirement,
re-election and election of Directors; (5) appointment of the Company's
Auditors; (6) authorizations for the Directors to allot Ordinary Shares; (7)
authorizations to disapply pre-emption rights; and (8) authorization for
purchase by the Company of its own shares. We will also report on the progress
of the Company and comment on matters of current interest. Your Directors
believe that the above proposals are in the best interests of the Company and
its shareholders and unanimously recommend that holders vote in favor of all of
the resolutions. You will notice that the proxy materials are very comprehensive
due to the necessity of the Company complying with securities law requirements
in both the United Kingdom and United States.

It is important that Ordinary Shares be represented at the Meeting. We
ask that Ordinary Shareholders promptly sign, date and return the enclosed proxy
card (not later than 48 hours before the time fixed for the holding of the
Meeting) to the Company's registrars, Royal Bank of Scotland plc, even if you
plan to attend the Meeting. Returning your proxy card will not prevent a holder
of Ordinary Shares from voting in person at the Meeting if they are present and
choose to do so. Holders of American Depositary Shares should follow the special
voting instructions provided by The Bank of New York as Depositary.

Your Board of Directors and management look forward to greeting you at
the Meeting.

Sincerely,

MARK A. VAUGHAN-LEE
Chairman

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DANKA BUSINESS SYSTEMS PLC

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NOTICE OF THE ANNUAL GENERAL MEETING
FRIDAY, JULY 25, 1997

--------------------------------------

Notice is hereby given that the 1997 Annual General Meeting (the
"Meeting") of Danka Business Systems PLC (the "Company") will be held at the
Lanesborough Hotel, located at Lanesborough Place, London, England SW1X 7LY, on
Friday, July 25, 1997 at 11:00 a.m. (local time) for the following purposes:

AGENDA

To consider and, if thought fit, approve the following ordinary resolutions:

1. THAT the Directors of the Company be and hereby are authorized to pay a
final dividend for fiscal 1997 in the amount of 1.30 pence per Ordinary
Share (net) directly to all holders of Ordinary Shares and to all holders
of American Depositary Shares through the Depositary, The Bank of New
York.

2. THAT in accordance with the Company's Articles of Association, it is
hereby resolved not to fill the office of director vacated by the
retirement of David S. Hooker who wishes to retire as from the
dissolution of the Meeting and not to offer himself for re-election.1

3. THAT David W. Kendall, whose term as Director expires at the 1997 Annual
General Meeting, be and hereby is re-elected to serve as Director of the
Company in accordance with the Company's Articles of Association.

4. THAT Keith J. Merrifield, who was appointed as Director by the Board of
Directors in fiscal 1997 and whose appointment expires at the 1997 Annual
General Meeting, be and hereby is elected to serve as Director of the
Company in accordance with the Company's Articles of Association.

5. THAT KPMG Audit Plc, Chartered Accountants and Registered Auditors, be
and hereby are appointed to serve as the Company's Auditors until the
conclusion of the 1998 Annual General Meeting, and that the Board of
Directors of the Company or a duly appointed committee thereof be and
hereby is authorized to fix the Auditors' remuneration.

6. SPECIAL BUSINESS: To consider and, if thought fit, approve the following
ordinary resolution:

THAT the Directors be and hereby are generally and unconditionally
authorized for purposes desired at their discretion, in place of all
existing authorities under Section 80 of the Companies Act 1985, as
amended by the Companies Act 1989 (the "Companies Act"), to exercise all
powers of the Company to allot relevant securities (within the meaning of
Section 80 of the Companies Act) up to an aggregate nominal amount of
(pound)945,112 (representing approximately thirty-three and one third
percent (33 1/3%) of the issued share capital of the Company), provided
that this authority shall expire on the earlier of the date of the 1998
Annual General Meeting of the Company or October 24, 1998, save that the
Company may before such expiry make an offer or agreement which would or
might require relevant securities to be allotted after such expiry, and

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(1) Pursuant to Article 107 of the Company's Articles of Association, the
retirement of David S. Hooker shall be taken into account when considering the
number of directors retiring by rotation.

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the Board of Directors may allot relevant securities in pursuance of such
an offer or agreement as if the authority conferred hereby had not
expired.

7. SPECIAL BUSINESS: To consider and, if thought fit, approve the following
special resolution:

THAT, subject to the passing of Resolution 6, the Directors be and hereby
are generally and unconditionally authorized to exercise all powers of
the Company to allot equity securities (within the meaning of Section
94(2) of the Companies Act 1985, as amended by the Companies Act 1989
(the "Companies Act")), as if Section 89(1) of the Companies Act did not
apply to such allotment, provided that this authority shall:

i) expire on the earlier of the date of the 1998 Annual General
Meeting of the Company or October 24, 1998, save that the
Directors may allot equity securities under this authority after
the expiry thereof pursuant to any offer or agreement made by the
Company on or before such expiry date pursuant to this authority
as if such authority had not expired; and

ii) be limited to the allotment of equity securities:

(a) in connection with a rights issue or any other
pre-emptive offer concerning equity securities in the Company
where it is, in the opinion of the Directors, necessary or
expedient to allot equity securities otherwise than in accordance
with Section 89 of the Companies Act by reason of the rights
attached to any shares or securities of the Company or in relation
to fractional entitlements or legal or practical problems under
the laws of or the requirements of any recognized regulatory body
or stock exchange in any territory;

(b) pursuant to the terms of any stock option plan or share
option scheme or other plan for employees and/or executive or non-
executive Directors approved by the Company in a general meeting,
up to an aggregate nominal value of (pound)283,534; or

(c) otherwise than pursuant to sub-paragraphs (a) and (b)
above, up to an aggregate nominal value not exceeding
(pound)567,068.

8. SPECIAL BUSINESS: To consider, and, if thought fit, approve the following
ordinary resolution:

THAT the Company is hereby generally and unconditionally authorized to
make market purchases (within the meaning of Section 163 of the Companies
Act 1985) of Ordinary Shares of 1.25p each in the capital of the Company
with effect from the conclusion of this meeting provided that:

(a) the maximum aggregate number of Ordinary Shares
authorized to be purchased is 22,682,000 representing
approximately 10% of the issued share capital of the Company as of
March 31, 1997;

(b) the minimum price which may be paid for each such
Ordinary Share is 1.25p;

(c) the maximum price (inclusive of expenses) which may be
paid for each such Ordinary Share is an amount equal to 105
percent of the average of the middle market quotations as derived
from The London Stock Exchange Daily Official List for the ten
business days immediately preceding the day on which such Ordinary
Share is purchased;

(d) the Company may make a contract to purchase its
Ordinary Shares under this authority prior to the expiry thereof,
which will or may be executed wholly or partly after the expiry of
such authority, and may make a purchase of its Ordinary Shares
pursuant to any such contract; and

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(e) the purchase is made in compliance with all applicable
governmental laws, rules, and regulations.

The authority herein will expire at the conclusion of the next Annual
General Meeting of the Company, or, if earlier, October 24, 1998.

Copies of contracts of service of the Directors and a register of
Directors' interests kept by the Company are available for inspection at the
registered office of the Company during normal working hours and will be
available for inspection at the place of the Meeting during the Meeting and for
at least fifteen (15) minutes prior to the Meeting.

Holders of Ordinary Shares entitled to attend and vote at the Meeting may
appoint a proxy to attend and, on a poll of such holders, to vote in their
place. A proxy need not be a holder of Ordinary Shares of the Company. Voting
shall be by a poll. Every holder of Ordinary Shares who is entitled to vote and
who is present or is represented by a proxy will have one (1) vote for each
Ordinary Share owned.

To be entitled to attend and vote at the Meeting (and for the purpose of
the determination by the Company of the number of votes they may cast), Holders
of Ordinary Shares must be entered on the Company's register of members by 11:00
a.m. on Wednesday, July 23, 1997.

By order of the Board of Directors

London, England Paul G. Dumond
June 25, 1997 Secretary

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THIS PROXY STATEMENT IS FOR HOLDERS OF ORDINARY SHARES, HOLDERS OF
AMERICAN DEPOSITARY SHARES ("ADSS") REPRESENTED BY AMERICAN DEPOSITARY RECEIPTS,
AND, FOR INFORMATIONAL PURPOSES ONLY, HOLDERS OF OPTIONS TO ACQUIRE ORDINARY
SHARES OF DANKA BUSINESS SYSTEMS PLC. THE PROXY STATEMENT CONTAINS INFORMATION
REQUIRED UNDER THE FINANCIAL SERVICES ACT 1986 OF THE UNITED KINGDOM AND
REGULATION 14A UNDER THE SECURITIES EXCHANGE ACT OF 1934 OF THE UNITED STATES.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU
HAVE ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD IMMEDIATELY CONSULT
YOUR STOCKBROKER, BANK MANAGER, SOLICITOR/ATTORNEY, ACCOUNTANT OR OTHER
PROFESSIONAL ADVISER AUTHORIZED UNDER THE FINANCIAL SERVICES ACT 1986 OF THE
UNITED KINGDOM.

IF YOU HAVE SOLD ANY OF YOUR ORDINARY SHARES IN DANKA BUSINESS SYSTEMS
PLC, PLEASE SEND A COPY OF THIS DOCUMENT TO THE STOCKBROKER OR OTHER AGENT
THROUGH WHOM THE SALE WAS EFFECTED FOR TRANSMISSION TO THE PURCHASER.

DANKA BUSINESS SYSTEMS PLC
33 CAVENDISH SQUARE
LONDON W1M ODE ENGLAND
(REGISTERED IN ENGLAND NO. 1101386)

PRELIMINARY PRELIMINARY
PROXY STATEMENT

INTRODUCTION

GENERAL

This Proxy Statement is furnished by the Board of Directors of Danka
Business Systems PLC (the "Company") in connection with the solicitation of
specific voting instructions ("voting instructions") from holders of ADSs
("Holders of ADSs") and proxies ("proxies") from holders of Ordinary Shares
("Holders of Ordinary Shares") for voting at the Company's 1997 Annual General
Meeting (the "Meeting"), which will be held at 11:00 a.m. (local time) on July
25, 1997 at the Lanesborough Hotel, located at Lanesborough Place, London,
England SW1X 7LY. For purposes of this Proxy Statement and related materials,
the term "Shareholders" shall mean Holders of Ordinary Shares and Holders of
ADSs. The approximate date on which this Proxy Statement and related materials
has been first mailed to Shareholders is June 25, 1997.

As of March 31, 1997, 226,827,049 Ordinary Shares of 1.25 pence each were
issued and outstanding ("Ordinary Shares"), of which approximately seventy-six
percent (76%) were held in the form of ADSs. Each ADS represents four Ordinary
Shares.

The cost of soliciting proxies and voting instructions will be borne by
the Company. In addition to the use of the mails, proxies and voting
instructions may be solicited personally or by telephone by employees of the
Company. The Company does not expect to pay any compensation for the
solicitation of proxies or voting instructions, but may reimburse brokers, The
Bank of New York (the "Depositary") and other persons holding stock in their
names, or in the names of nominees, for their expenses in sending proxy
materials to their principals and obtaining their proxies and/or voting
instructions.

Prior to 1994, Holders of Ordinary Shares had adopted a resolution at
each Annual General Meeting to receive and adopt the Directors' Report and
Accounts (financial information of the Company) prepared according

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to Generally Accepted Accounting Principles of the United Kingdom ("U.K. GAAP"),
for that year and the report of the auditors thereon ("Report and Accounts").
Pursuant to the Companies Act 1985, as amended by the Companies Act 1989 (the
"Companies Act"), it is no longer necessary for Holders of Ordinary Shares to
approve the Report and Accounts. Because of the unnecessary cost and
inconvenience to the Company that would be associated with such a vote due to
the need for the Company to comply with various disclosure requirements pursuant
to United States securities laws, the Company determined in 1994 not to propose
such a resolution in conjunction with its annual meeting. However, as required
by the Companies Act, the 1997 Annual Report and Accounts prepared in accordance
with the U.K. GAAP will be presented at the Meeting. Additionally, the U.K.
Shareholders have received a copy of the Report and Accounts. U.S. Shareholders
have received the Company's financial information prepared in accordance with
United States Generally Accepted Accounting Principles ("U.S. GAAP") in their
copy of the Company's 1997 Annual Report. U.S. Shareholders who would like a
copy of the Report and Accounts may contact the Company's registered office.
Additionally, copies of relevant contracts of service of the Directors and a
register of Directors' interests kept by the Company are available for
inspection at the registered office of the Company during normal working hours
and will be available for inspection at the place of the Meeting during the
Meeting and for at least fifteen (15) minutes prior to the Meeting.

In this Proxy Statement, references to "pounds," "pence" or "(pound)" are
to United Kingdom currency, and references to "U.S. dollars" or "$" are to
United States currency. Amounts that have been paid in currency of the United
States are generally denominated herein in United States currency, and amounts
that have been paid in currency of the United Kingdom are generally denominated
herein in United Kingdom currency. Merely for convenience of the reader, the
pound equivalent of the dollar at the Noon Buying Rate (as defined below) on
March 31, 1997 was (pound)1.00 = $1.645 and on May 16, 1997 was (pound)1.00 =
$1.6335. The noon buying rate is the exchange rate in New York City for cable
transfers in pounds sterling as certified for customs purposes by the Federal
Reserve Bank of New York (the "Noon Buying Rate").

VOTING INSTRUCTIONS/HOLDERS OF ORDINARY SHARES

Holders of Ordinary Shares entitled to attend and vote at the Meeting may
appoint a proxy to attend and, on a poll of such holders, to vote in their
place. A proxy need not be a Holder of Ordinary Shares of the Company. Voting
shall be by a poll. Every Holder of Ordinary Shares who is entitled to vote and
who is present in person or by a proxy will have one (1) vote for each Ordinary
Share owned. An ordinary resolution requires the affirmative vote of a majority
of the votes cast at the Meeting. A special resolution requires an affirmative
vote of at least seventy-five percent (75%) of the votes cast at the Meeting. A
form of proxy is enclosed which, to be effective, must be deposited with the
Company's registrars, Royal Bank of Scotland plc, P.O. Box 82, Caxton House,
Redcliffe Way, Bristol BS99 7YA England, not later than forty-eight (48) hours
before the time appointed for the holding of the Meeting.

Any proxy delivered pursuant to this solicitation may be revoked, at the
option of the person executing the proxy, at any time before it is exercised by
delivering a signed revocation in no specifically required form to the Company
at least 48 hours before the Meeting, by submitting a later-dated proxy, or by
attending the Meeting in person and casting a ballot. If proxies are signed and
returned without voting instructions, the Ordinary Shares represented by the
proxies will be voted as the proxy deems fit. Ordinary Shares that are not voted
by the Holders of Ordinary Shares or brokers entitled to vote them, due to
abstention or failure to cast a ballot in person or by returning a signed proxy,
will not be considered in the final tabulation.

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VOTING INSTRUCTIONS/HOLDERS OF AMERICAN DEPOSITARY SHARES

Holders of ADSs should complete and return the voting instructional form
provided to them in their proxy materials by the Depositary in accordance with
the terms provided thereon not later than July 18, 1997. The close of business
on June 18, 1997 has been fixed as the record date for the determination of the
Holders of ADSs entitled to provide voting instructions to the Depositary. The
proxy committee, which consists of Paul G. Dumond and David C. Snell, has the
right to instruct the Depositary on how to vote all Ordinary Shares represented
by Holders of ADSs that have failed to timely file their voting instructional
form with the Depositary.

For purposes of the remainder of this document, the term "vote" shall
mean either a vote by a Holder of Ordinary Shares or instructions to the
Depositary by a Holder of ADSs, unless the context requires otherwise.

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RESOLUTIONS

RESOLUTION 1 (ORDINARY): DIVIDEND FOR ORDINARY SHARES

The Company's net earnings for fiscal 1997 were (pound)20,571,000 under
U.K. GAAP and $41,777,000 under U.S. GAAP. The Board of Directors recommends
that a final dividend for fiscal 1997 in the amount of 1.30 pence per Ordinary
Share (net) be paid directly to all Holders of Ordinary Shares and, through the
Depositary, to all Holders of ADSs. To accomplish the foregoing, the Board of
Directors proposes adoption of the following resolution:

THAT the Directors of the Company be and hereby are authorized to pay a
final dividend for fiscal 1997 in the amount of 1.30 pence per Ordinary
Share (net) directly to all Holders of Ordinary Shares and to all Holders
of American Depositary Shares through the Depositary, The Bank of New
York.

The Board of Directors has unanimously approved proposed Resolution 1
and recommends that you vote "FOR" its adoption. An affirmative vote of a
majority of the votes cast at the Meeting will be required for adoption of the
proposed resolution.

RESOLUTIONS 2 (ORDINARY) AND 3 (ORDINARY) AND 4 (ORDINARY): RETIREMENT, RE-
ELECTION AND ELECTION OF DIRECTORS

The Articles of Association of the Company set the size of the Board of
Directors at not less than two members. The Board of Directors currently
consists of eight members who serve pursuant to the Company's Articles of
Association. A minimum of one third (1/3) of the Directors is to retire at each
Annual General Meeting.

Pursuant to the Company's Articles of Association, two of the Company's
current Directors, David S. Hooker and David W. Kendall will retire at the
Meeting. David S. Hooker does not wish to offer himself for re-election and his
appointment as a director will terminate from the dissolution of the Meeting.

The Board of Directors recommends in Resolution 2 that the vacancy
created by the retirement of Mr. Hooker should not be filled at the time of this
Meeting. To accomplish the foregoing, the Board of Directors proposes adoption
of the following resolution:

Resolution 2:

THAT in accordance with the Company's Articles of Association it is
hereby resolved not to fill the office of director vacated by the
retirement of David S. Hooker who wishes to retire as from the
dissolution of the Meeting and not to offer himself for re-election.

The Board of Directors has unanimously approved proposed Resolution 2 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution.

The Board of Directors recommends in Resolution 3 that Mr. Kendall be
re-elected at the Meeting to serve as a Director. To accomplish the foregoing,
the Board of Directors proposes adoption of the following resolution:

Resolution 3:

THAT David W. Kendall, whose term as Director expires at the 1997 Annual
General Meeting, be and hereby is re-elected to serve as Director of the
Company in accordance with the Company's Articles of Association.

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The Board of Directors has unanimously approved proposed Resolution 3 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution.

The term of one of the Company's current Directors, Keith J. Merrifield,
who was appointed by the Board of Directors in fiscal 1997, expires at the
Meeting. The Board of Directors recommends in Resolution 4 that Mr. Merrifield
be elected at the Meeting to serve as a Director. To accomplish the foregoing,
the Board of Directors proposes adoption of the following resolution:

Resolution 4:

THAT Keith J. Merrifield, who was appointed as Director by the Board of
Directors in fiscal 1997 and whose appointment expires at the 1997 Annual
General Meeting, be and hereby is elected to serve as Director of the
Company in accordance with the Company's Articles of Association.

The Board of Directors has unanimously approved proposed Resolution 4 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution.

RESOLUTION 5 (ORDINARY): APPOINTMENT OF AUDITORS

At the Meeting, the Company is required, pursuant to Sections 384 and 385
of the Companies Act, to appoint auditors to serve until the conclusion of the
Company's next Annual General Meeting and to set their remuneration. KPMG Audit
Plc, Chartered Accountants and Registered Auditors ("KPMG") have served as the
Company's Auditors for more than twenty (20) years. The Board of Directors
recommends in Resolution 5 that KPMG be appointed to serve as the Company's
Auditors until the conclusion of the next Annual General Meeting and that the
Board of Directors be authorized to fix the Auditors' remuneration. To
accomplish the foregoing, the Board of Directors proposes adoption of the
following resolution:

THAT KPMG Audit Plc, Chartered Accountants and Registered Auditors, be
and hereby are appointed to serve as the Company's Auditors until the
conclusion of the 1998 Annual General Meeting, and that the Board of
Directors of the Company, or a duly appointed Committee thereof, be and
hereby is authorized to fix the Auditors' remuneration.

The Board of Directors has unanimously approved proposed Resolution 5 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution. The Company expects representatives of KPMG to be present at the
Meeting, have an opportunity to make a statement if they desire to do so and to
be available to respond to appropriate questions at the Meeting.

RESOLUTIONS 6 (ORDINARY) AND 7 (SPECIAL): AUTHORITY TO ALLOT SHARES/PRE-EMPTIVE
RIGHTS WAIVER

The Board of Directors recognizes that there may be instances where it is
desirable for the Company to be able to issue (allot) securities in connection
with various matters without the prior consent of Holders of Ordinary Shares.
Before the Board of Directors may exercise any such power to allot relevant
securities, however, Section 80 of the Companies Act requires (with certain
exceptions) that the Company authorize such power at a general meeting. The
Board of Directors, therefore, is seeking authority in Resolution 6 to allot
securities up to an aggregate nominal amount of (pound)945,112 (representing
approximately thirty-three and one third percent (33 1/3%) of the Company's
present issued share capital) before the earlier of the date of its next Annual
General Meeting or October 24, 1998 (subject to extensions upon the occurrence
of the events set forth below) for such purposes as desired in the discretion of
the Directors. To accomplish the foregoing, the Board of Directors proposes
adoption of the following resolution:

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Resolution 6:

The Board of Directors has unanimously approved proposed Resolution 6 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution.

Subject to the passing of proposed Resolution 6, the Board of Directors
is seeking authority in Resolution 7 to issue Ordinary Shares for cash, other
than effecting such issuance only after first offering the Ordinary Shares to
existing Holders of Ordinary Shares pro-rata to their holdings ("pre-emptive
rights"). Pursuant to Section 95 of the Companies Act, a special resolution of
the Company is generally necessary (with some exceptions) to permit an allotment
by Directors without providing the pre-emptive rights provided by Section 89 of
the Companies Act. Apart from other authority to the Directors permitting
allotments, the power would be limited to issuance of Ordinary Shares up to a
maximum aggregate nominal amount of (pound)567,068 (representing approximately
twenty percent (20%) of the Company's present issued share capital). This level
of authority is consistent with the limitations placed on NASDAQ Stock Market's
National Market companies to issue shares without further approval. The power
that is sought by Resolution 7 would expire on the earlier of the date of the
next Annual General Meeting or October 24, 1998, (subject to extensions upon the
occurrence of the events set forth below). To accomplish the foregoing, the
Board of Directors proposes adoption of the following resolution:

Resolution 7:

ii) be limited to the allotment of equity securities:

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(c) otherwise then pursuant to sub-paragraphs (a) and (b)
above, up to an aggregate nominal value not exceeding
(pound)567,068.

The Board of Directors has unanimously approved proposed Resolution 7 and
recommends that you vote "FOR" its adoption. An affirmative vote of at least
seventy-five percent (75%) of the votes cast at the Meeting will be required for
adoption of the proposed resolution.

RESOLUTION 8 (SPECIAL): PURCHASE OF OWN SHARES

Under Section 166 of the Companies Act, a company is required to obtain
shareholder approval before it is able to buy back its own shares. The
resolution must be subject to certain restrictions. The resolution as set out
will enable the Company to buy back up to 22,682,000 Ordinary Shares
representing approximately 10% of its issued share capital at the higher of the
nominal value or the market value of the shares, as calculated from The London
Stock Exchange Daily Official List of mid-market prices for the ten days prior
to the purchase. If this resolution is passed, the authority shall continue
until the earlier of the date of the 1998 Annual General Meeting or October 24,
1998 (subject to extensions upon the occurrence of the events set forth below).

While there is no current plan to repurchase any shares, the Board
believes maintaining such flexibility is beneficial to the Company. To
accomplish the foregoing, the Board of Directors proposes adoption of the
following resolution:

(a) the maximum aggregate number of Ordinary Shares authorized to
be purchased is 22,682,000 representing approximately 10% of the issued
share capital of the Company as of March 31, 1997;

(b) the minimum price which may be paid for each such Ordinary
Share is 1.25p;

(c) the maximum price (inclusive of expenses) which may be paid
for each such Ordinary Share is an amount equal to 105 percent of the
average of the middle market quotations as derived from The London Stock
Exchange Daily Official List for the ten business days immediately
preceding the day on which such Ordinary Share is purchased;

(d) the Company may make a contract to purchase its Ordinary
Shares under this authority prior to the expiry thereof, which will or
may be executed wholly or partly after the expiry of such authority, and
may make a purchase of its Ordinary Shares pursuant to any such contract;
and

(e) the purchase is made in compliance with all applicable
governmental laws, rules and regulations.

The authority herein will expire at the conclusion of the next Annual
General Meeting of the Company, or, if earlier, October 24, 1998.

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The Board of Directors has unanimously approved proposed Resolution 8 and
recommends that you vote "FOR" its adoption. An affirmative vote of at least
seventy-five percent (75%) of the votes cast at the Meeting will be required for
adoption of the proposed resolution.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information regarding the
Directors and executive officers of the Company and its primary operating
subsidiaries. The executive officers serve at the pleasure of the respective
Boards of Directors.

<TABLE>
<CAPTION>
NAME AGE POSITION(S) DIRECTOR'S ROTATION
- ---- --- ----------- --------------------
<S> <C> <C> <C>
Mark A. Vaughan-Lee 51 Chairman 1999
Daniel M. Doyle 56 Chief Executive and Director 2000
David C. Snell 49 Chief Operating Officer and Finance 1999
Director
David S. Hooker 54 Director (1)(2)(3) 1997
David W. Kendall 62 Director (1)(2)(3) 1997
James F. White, Jr. 57 Director (2)(3) 1998
Pierson M. Grieve 69 Director (1)(3) 1998
Keith J. Merrifield 55 Director (1)(2)(3) 1997
Paul G. Dumond 42 Secretary --
Michel Amblard 50 Corporate Controller --
William T. Freeman 36 Chief Financial Officer --
Edward J. Marino 46 President, Danka Imaging Services --
Peter G. Meier 54 President, Danka Office Imaging --
Paul M. Natale 49 Executive Vice President, Corporate --
Integration
Martin G. St. Quinton 39 Chief Executive, Danka International --
Debra A. Taylor 38 Assistant Chief Operating Officer --
R. Paul Umberg 57 President, North American Retail --
Operations
</TABLE>

- ---------------------

(1) Member of the Human Resources Committee.
(2) Member of the Audit Committee.
(3) Member of the Nominations Committee.

MARK A. VAUGHAN-LEE. Mr. Vaughan-Lee has served the Company as Chairman
since July 1986. In addition to his duties as Chairman, he is involved in the
Company's acquisition, finance, retail, wholesale and European activities. Mr.
Vaughan-Lee was previously a director of Samuel Montagu & Co., Ltd., an
investment banking firm, and is the chairman of Mark A. Vaughan-Lee Ltd., a
consulting company.

DANIEL M. DOYLE. Mr. Doyle is a co-founder of Danka Industries, Inc., now
known as Danka Holding Company and is its President and Chief Executive. He has
served the Company as Chief Executive and as a Director since Danka Holding
Company was acquired by the Company in December 1986. Prior to founding Danka
Industries, Mr. Doyle was employed by Litton Industries, Inc.'s Royal Business
Machines division in various capacities, including Vice President and National
Sales Manager. Since June 1994, Mr. Doyle has served as a director of Tech Data
Corporation, a publicly owned Florida based company engaged in the distribution
of personal computer products.

-9-

<PAGE> 15

DAVID C. SNELL. Mr. Snell serves as Finance Director, a position he has
held since 1988, and was in addition named Chief Operating Officer in October
1996, a new position. Mr. Snell previously also served as Chief Financial
Officer for the Company from 1988 to his appointment as Chief Operating Officer.
Mr. Snell became a certified public accountant in 1969 and has primarily served
Danka Holding Company as Chief Financial Officer and Vice President-Finance from
August 1978. Prior to joining the Company, Mr. Snell was with Peat Marwick.

DAVID S. HOOKER. Mr. Hooker has served the Company as a Director since
November 1985. Mr. Hooker is a non-executive director of Oceaneering
International, Inc., a publicly owned U.S. company which provides offshore
services to oil and gas businesses, and Chairman of Goshawk Insurance Holdings
Plc, a marine insurance company. Mr. Hooker was Managing Director of Aberdeen
Petroleum PLC, formerly a publicly owned U.K. petroleum company, from January
1987 until June 1993, and Chairman of Bakyrchik Gold PLC, a publicly owned U.K.
mining company until December 1995.

DAVID W. KENDALL. Mr. Kendall has served the Company as a Director since
July 1993. He is Chairman of Whitecroft PLC, a conglomerate, Ruberoid PLC, a
manufacturer and supplier of building products, Celtic Energy Ltd., a Welsh coal
mining company, Blagden Industries PLC, a packaging company, Wagon Industrial
Holdings PLC, an engineering company, and a non-executive director of Gowrings
PLC, a motor distributor, all of which are publicly owned U.K. companies.
Previously, Mr. Kendall has served as executive deputy chairman of British Coal,
a coal mining company, chairman of Bunzl PLC, a U.K. conglomerate, and chief
executive of BP Oil Ltd., an oil refining and marketing company.

JAMES F. WHITE, JR. Mr. White has served the Company as a Director since
July 1993. Since January 1996, he has served as counsel to the law firm of
Shumaker, Loop & Kendrick, Toledo, Ohio. Mr. White served as an executive
officer and director of Checkers Drive-In Restaurants, Inc. from January 1993
through December 1995, most recently as vice chairman of the board. For more
than 20 years prior to January 1993, Mr. White was a partner in the law firm of
Shumaker, Loop & Kendrick. Mr. White is a director of numerous private companies
and Arbor Health Care Company, a publicly owned Ohio based company which
specializes in providing subacute health care services.

PIERSON M. GRIEVE. Mr. Grieve was elected as a Director in July 1996.
From January 1983 through December 1995, Mr. Grieve served as chairman and chief
executive officer of Ecolab, Inc. Ecolab, Inc. is the leading worldwide
developer and marketer of premium cleaning and sanitizing products, systems and
services, for the hospitality, foodservice, healthcare, dairy and food and
beverage processing markets. Mr. Grieve is also a director of the following
publicly held companies: Norwest Corporation, a Minnesota based bank; U S WEST,
Inc., a telecommunications and information services company based in Colorado;
St. Paul Companies, Inc., a Minnesota based insurance company; and Meredith
Corporation, a publishing company and owner of several broadcast stations based
in Iowa.

KEITH J. MERRIFIELD. Mr. Merrifield was appointed as a Director in
January 1997 and is a candidate for election to the Board of Directors for the
first time. From 1975 through 1990, Mr. Merrifield was the Managing Director of
Wellcome International, a division of the United Kingdom pharmaceutical company
Wellcome plc. During this time Mr. Merrifield significantly developed Wellcome's
pharmaceutical business in Asia, Africa and Eastern Europe. In 1990 Mr.
Merrifield was appointed to Director of International Operations and in
addition, Director of Group Marketing worldwide in 1994. Mr. Merrifield also
played a key role in the integration process following Glaxo's acquisition of
Wellcome plc. Since resigning in June 1995, Mr. Merrifield has served as a
director of British Biotech plc, an innovative pharmaceutical company based in
Oxford, England, and also Coats Viyella plc, the U.K.'s biggest textile company.

PAUL G. DUMOND. Mr. Dumond, who is a Chartered Accountant, has been the
Secretary of the Company since March 1986. Mr. Dumond is also the owner and
director of Nautilus Management Limited, a management services company, and a
non- executive director of Horace Small Apparel PLC, a publicly owned U.K.
company which manufactures and distributes uniforms. He was previously with
Thomson McLintock, Chartered Accountants,

-10-

<PAGE> 16

now part of KPMG, following which he held the positions of finance manager and
later finance director in the oil and gas industry.

MICHEL AMBLARD. Mr. Amblard joined the Company in November 1995 upon the
acquisition of Infotec Europe B.V., and currently serves as the Company's
Corporate Controller. Prior to its acquisition, Mr. Amblard served as the chief
financial officer of Infotec since 1991. Prior to joining Infotec, Mr. Amblard
served as International Controller for Nashua Corporation and held various
finance positions for the International Paper Company in Europe, the United
States and Canada. He had previously been associated with Arthur Andersen in
Paris, France.

WILLIAM T. FREEMAN. Mr. Freeman joined the Company in March 1988 and has
been a Director of Danka Holding Company since April 1990. Mr. Freeman was named
Chief Financial Officer of the Company in October 1996, after serving as the
Treasurer since October 1989 where he was actively involved in the Company's
acquisition and financing activities. Prior to joining the Company, Mr. Freeman
worked for Arthur Andersen & Co.

EDWARD J. MARINO. Mr. Marino joined the Company in January 1997 upon the
acquisition of Eastman Kodak's facilities management business where he served as
the President of Kodak Imaging Services now renamed Danka Imaging Services. Mr.
Marino presently serves as the President of Danka Imaging Services and manages
the Company's outsourcing business worldwide. While at Kodak, Mr. Marino had
also held the position of Vice President and National Sales Manager of Kodak's
Professional Imaging division. Prior to joining Eastman Kodak in 1990, Mr.
Marino was Vice President Marketing and Sales at Howtek, Inc., a designer and
manufacturer of scanners for the graphic arts and desktop publishing markets.

PETER G. MEIER. Mr. Meier joined the Company in January 1997 upon the
acquisition of Eastman Kodak's Office Imaging division and serves as the
President of Danka Office Imaging. Mr. Meier manages the acquired Kodak sales
and services business worldwide. Prior to joining the Company, Mr. Meier was the
Regional Business General Manager and Vice President of Office Imaging for
Kodak's Europe, Africa and Middle East Region since 1994. Mr. Meier began his
career with Kodak in 1973.

PAUL M. NATALE. Mr. Natale joined the Company in 1986 and presently
serves as the Company's Executive Vice President of Corporate Integration.
Previously, Mr. Natale was President of Danka's North American Retail
Operations. Mr. Natale was previously President of Automated Office Systems, a
computer typewriter and word processor dealership. Mr. Natale also held various
management positions with RCA Corporation, Burroughs Corporation, Honeywell
Information Systems and the Olivetti Corporation of America.

MARTIN G. ST. QUINTON. Mr. St. Quinton joined the Company in June 1993
upon the acquisition of Saint Group plc, the Company's first acquisition in
Europe. Mr. St. Quinton, as Chief Executive of Danka International, has
supervised the acquisition and development of the Company's European network,
and manages its expanding operations. Mr. St. Quinton was chief executive of
Saint Group plc prior to its acquisition.

DEBRA A. TAYLOR. Ms. Taylor joined the Company in September 1987, and was
recently named Assistant Chief Operating Officer, a new position. Ms. Taylor
served as Controller from 1989 until her recent appointment, and currently
serves as a Director of Danka Holding Company. Before joining the Company, Ms.
Taylor was a Business Manager with Storer Communications, Inc.

R. PAUL UMBERG. Mr. Umberg is the President of Danka's North American
Retail Operations. Mr. Umberg joined the Company in 1994 as President of
Omnidex, responsible for Danka's fax division, and was promoted to his current
position in September 1996. Prior to joining the Company, Mr. Umberg served as
President, Chief Executive Officer and Board Chairman of Bay Bankshares, a
multi-bank holding company headquartered in Florida.

-11-

<PAGE> 17

The Articles of Association of the Company set the size of the Board of
Directors at not less than two persons. The Board of Directors currently
consists of eight members who serve pursuant to the Company's Articles of
Association. A minimum of one third (1/3) of the Directors is to retire and be
re-elected at each Annual General Meeting. In addition, Directors may be
appointed by the Board of Directors, but Directors so appointed hold office only
until the next Annual General Meeting of the Company, when they are eligible for
election. In accordance with new guidelines in the U.K. on corporate governance
concerning the length of service of non-executive directors, Mr. Hooker who has
served as a Director of the Company since 1985 has decided to retire from the
Board of Directors at the conclusion of the 1997 Annual General Meeting.
Pursuant to Article 107 of the Company's Articles of Association, the retirement
of Mr. Hooker shall be taken into account when calculating the one-third of the
Directors to retire and be re-elected. With the appointment of Keith J.
Merrifield, the Board of Directors will have a total of seven members. Other
than the employment agreements that the Company has entered into with Daniel M.
Doyle and David C. Snell, and a consulting agreement between the Company and
Mark A. Vaughan-Lee Ltd., as described in the "Named Executive Officer
Employment and Consulting Arrangements" section of this Proxy Statement, there
is no understanding regarding any executive officer or Director and the Company
or any other person pursuant to which any executive officer or Director was, or
is, to be elected or appointed to such position. No executive officer is related
to any other executive officer or Director. The Board of Directors held sixteen
meetings during fiscal 1997.

The Nominations Committee, as it deems appropriate, makes recommendations
to the full Board of Directors with respect to the size and composition of the
Board and its committees and with respect to nominees for election as directors.
The current members of the Nominations Committee are Messrs. White, Grieve,
Hooker, Kendall and Merrifield. The Nominations Committee met once in fiscal
1997. The Nominations Committee will consider suggestions regarding candidates
for election to the Board submitted by Shareholders in writing to the Secretary
of the Company. With regard to the 1998 annual general meeting, any such
suggestion must be received by the Secretary no later than the date by which
Shareholder proposals for such annual general meeting must be received as
described below under the heading "Shareholders Proposals for Presentation at
the 1998 Annual General Meeting."

The Company has an audit committee (the "Audit Committee") which is
composed of Messrs. Hooker, White, Kendall and Merrifield. The functions of the
Audit Committee are to recommend annually to the Board of Directors the
appointment of the independent public accountants (Chartered Accountants and
Registered Auditors) of the Company, discuss and review the scope and the fees
of the prospective annual audit, review the results thereof with the independent
public accountants, review and approve nonaudit services of the independent
public accountants, review compliance with existing major accounting and
financial policies of the Company, review the adequacy of the financial
organization of the Company, review management's procedures and policies
relative to the adequacy of the Company's internal accounting control, monitor
compliance with relevant laws relating to accounting practices and review and
approve transactions, if any, with affiliated parties. The Audit Committee met
four times in fiscal 1997.

The function of the Human Resources Committee, which is composed of
Messrs. Grieve, Hooker, Kendall and Merrifield, independent outside Directors,
is to review and approve annual salaries and bonuses for executive Directors and
certain officers and to review, approve and/or generally recommend to the Board
of Directors the terms and conditions of employee benefit plans or changes
thereto. The Human Resources Committee met six times in fiscal 1997.

In fiscal 1997, each incumbent Director attended in excess of
seventy-five percent (75%), collectively, of the meetings of the Board of
Directors and of each committee of which he was a member.

-12-

<PAGE> 18

SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS

The following table sets forth, as of March 31, 1997, information as to
the beneficial ownership of the Company's Ordinary Shares (whether held in
Ordinary Shares or ADSs), by (i) each person known to the Company as having
beneficial ownership of more than five percent (5%) of the Company's equity
securities, (ii) each Director, (iii) each "named executive officer" (as defined
in Item 402(a) (3) of Regulation S-K under the Securities Exchange Act of 1934
(the "1934 Act") ("Named Executive Officer")), and (iv) all Directors and
Executive Officers of the Company as a group.
<TABLE>
<CAPTION>

Shares Beneficially Owned
NAME OF BENEFICIAL OWNER (1) As of March 31, 1997 (2)
-------------------------------------------------------- --------------------------------------------------
Number of ADS
Ordinary Shares Equivalent Percent
--------------- ---------- -------
<S> <C> <C> <C>
HOLDINGS OF GREATER THAN 5 PERCENT
--------------------------------------------------------
Janus Capital Corporation (3) 20,306,756 5,076,689 9.0%
Massachusetts Financial Services (4) 13,322,580 3,330,645 5.9%
AIM Management Group Inc. (5) 13,123,200 3,280,000 5.8%
--------------------------------------------------------
HOLDINGS BY DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------------------------------
Daniel M. Doyle (6) 7,397,510 1,849,378 3.3%
Mark A. Vaughan-Lee (7) 1,112,000 278,000 *
David C. Snell 1,040,000 260,000 *
David S. Hooker (8) 80,000 20,000 *
David W. Kendall 10,000 2,500 *
James F. White, Jr. 0 0 *
Pierson M. Grieve 4,000 1,000 *
Keith J. Merrifield 0 0
William T. Freeman (9) 76,000 19,000 *
Martin G. St. Quinton (10) 2,544,000 636,000 1.1%
All Directors and Executive Officers as a group (20 Persons) 12,654,286 3,163,572 5.6%
</TABLE>

- ------------------
(*) Represents less than one percent (1%) of the share capital.
(1) Except for Messrs. Freeman and St. Quinton, all of the listed individuals
are currently Directors of the Company. Messrs. Doyle, Vaughan-Lee and
Snell are executive officers of the Company.
(2) Except as otherwise indicated, all Ordinary Shares are held of record
with sole voting and investment power.
(3) Janus Capital Corporation is a registered investment advisor. Includes
3,118,825 ADSs (equivalent of 12,475,300 Ordinary Shares) held on behalf
of Janus Twenty Fund, a managed portfolio. The address of Janus Capital
Corporation is 100 Filmore Street, Suite 300, Denver, Colorado
80206-4923.
(4) Massachusetts Financial Services is a mutual fund organization. The
address of Massachusetts Financial Services is 500 Boylston Street,
Boston, Massachusetts 02116.
(5) AIM Management Group Inc. is affiliated with AIM Advisors, Inc. and AIM
Capital Management, Inc. The address of AIM Management Group Inc. is 11
Greenway Plaza, Suite 1919, Houston, Texas 77046-1172.
(6) Includes 229,850 Ordinary Shares (equivalent of approximately 57,463
ADSs) held of record by Mr. Doyle's wife. Includes options held by Mr.
Doyle to purchase 2,800,000 Ordinary Shares (the equivalent of 700,000
ADSs), all of which are currently exercisable.
(7) Includes 33,000 Ordinary Shares (equivalent of 8,250 ADSs) held of record
by Mr. Vaughan-Lee's wife. Includes options held by Mr. Vaughan-Lee to
purchase 572,000 Ordinary Shares (equivalent of 143,000 ADSs), all of
which are currently exercisable, and held in a pension fund.
(8) Includes options held by Mr. Hooker to purchase 75,000 Ordinary Shares
(equivalent of 18,750 ADSs), all of which are currently exercisable.
(9) Includes options held by Mr. Freeman to purchase 20,000 Ordinary Shares
(equivalent of 5,000 ADSs), all of which are currently exercisable.
(10) Includes options held by Mr. St. Quinton to purchase 44,000 Ordinary
Shares (equivalent of 11,000 ADSs), all of which are currently
exercisable.

On March 31, 1997, The Bank of New York, as depositary for the Company's
ADS program, held 171,566,107 Ordinary Shares representing 75.6% of the issued
share capital.

-13-

<PAGE> 19

COMPENSATION OF NAMED EXECUTIVE OFFICERS AND DIRECTORS

The following table provides information concerning the annual
compensation and long-term compensation for services rendered in all
capacities to the Company for the last three (3) fiscal years for each of
the following Named Executive Officers. The Company did not grant any
restricted stock awards or stock appreciation rights during the last
three (3) fiscal years.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------------------------------- ------------ ----------------
FISCAL OTHER ANNUAL NUMBER OF ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) OPTIONS(3) COMPENSATION
- ------------------------------------------- ------ --------------- ------------- ----------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Mark A. Vaughan-Lee, Chairman.............. 1997 (pound)181,500 -- (pound) 7,500 37,243 (pound) 15,570(4)
1996 (pound)170,000(4) (pound)65,000(4) (pound) 7,500 48,000 --
1995 (pound)142,500(4) (pound)65,000(4) (pound) 7,500 -- --

Daniel M. Doyle, Chief Executive .......... 1997 $630,000 -- $11,900 180,000 $121,846(5)
1996 $600,000 $540,000 $11,740 124,000 $53,817(5)
1995 $500,000 $700,000 $11,600 -- $46,475(5)
David C. Snell, Chief Operating Officer and
Finance Director.......................... 1997 $460,000 $200,000 $11,900 126,000 $48,982(6)
1996 $420,000 $378,000 $11,740 88,000 $ 3,440(6)
1995 $350,000 $490,000 11,600 -- --
William T. Freeman, Chief Financial
Officer(7)................................ 1997 $161,000 $110,000 -- 23,332 $19,200(8)

Martin G. St. Quinton, Chief Executive,
Danka International(7)................... 1997 (pound)210,500 (pound)325,000 -- 80,000 (pound) 41,422(9)
1996 (pound)150,000 (pound)100,000 -- 66,666 (pound) 14,480(9)
</TABLE>

- ----------------------
(1) Includes deferred compensation under the Company's Deferred Compensation
Plan as follows: $200,000 for Mr. Snell in 1997 and $21,145 for Mr.
Freeman in 1997.
(2) The amounts listed represent sums received as Director fees.
(3) The options granted are for Ordinary Shares or the equivalent number of
American Depositary Shares ("ADS"), and were granted at the fair market
value of the underlying Ordinary Shares or ADSs on the date of the grant.
(4) All sums paid were pursuant to a consulting arrangement between the
Company and Mark A. Vaughan-Lee Ltd.
(5) Includes net premiums of $41,855 in each year paid by the Company as
advances under a $3,000,000 split-dollar term life insurance agreement on
behalf of Daniel M. Doyle for the benefit of beneficiaries designated by
Mr. Doyle. The advances are secured by an interest in the policy which
has been assigned to the Company and are repayable upon (i) the death of
Mr. Doyle, (ii) the surrender of the policy, or (iii) termination of the
split-dollar life insurance agreement prior to the death of Mr. Doyle.
Also includes Company matching contribution to 401(k) plan of $6,296,
$5,082 and $4,620 in fiscal 1997, 1996 and 1995, respectively. Fiscal
1997 and 1996 also includes $13,695 and $6,880 of above-market interest
earned on deferred compensation arrangement. Fiscal 1997 also includes
Company contribution of $60,000 to the Supplemental Executive Retirement
Plan.
(6) Represents above-market interest earned on deferred compensation
arrangement of $6,982 and Company contribution of $42,000 to the
Supplemental Executive Retirement Plan in fiscal 1997 and above-market
interest earned on deferred compensation arrangement of $3,440 in fiscal
1996.
(7) Mr. Freeman and Mr. St. Quinton became Named Executive Officers in fiscal
1997 and 1996, respectively.
(8) Consists of Company matching contribution to 401(k) plan of $5,200 and
Company contribution of $14,000 to the Supplemental Executive Retirement
Plan.
(9) Consists of Company pension contributions and automobile allowance.

NAMED EXECUTIVE OFFICER EMPLOYMENT AND CONSULTANT ARRANGEMENTS

After the Human Resources Committee's review and analysis of a
report prepared by Towers Perrin (an independent consultant) on executive
compensation, the Company entered into written employment agreements
(collectively, the "employment agreements") effective April 1, 1994, with
Daniel M. Doyle and David C. Snell with respect to their employment as
Chief Executive and Finance Director, respectively. Additionally, the
Company has an ongoing consulting agreement with Mark A. Vaughan-Lee
Ltd., a company which is solely owned by the Company's Chairman, with
respect to consulting services. The employment agreements provide for
initial three (3) year terms with automatic

-14-

<PAGE> 20

renewals for three (3) year periods and a compensation package consisting of a
base annual salary (subject to annual review) as well as other miscellaneous
benefits (including expense reimbursement, health insurance and potential cash
bonuses). The employment agreements may be terminated by either the Company or
the executive upon one (1) year's written notice. The executives may terminate
their employment without one (1) year's notice for "good reason" (as defined in
the employment agreements) which includes reasons such as removal from their
respective positions, the Company's breach of the employment agreement, or a
change in control of the Company. In the event that the Company terminates the
executive's employment or the executive voluntarily terminates his employment
for good reason, the Company will be obligated to continue to pay the executive
all of the compensation provided for in the agreement for a one (1) year period.
The consulting agreement, while contemplating different compensation levels,
provides for similar terms as the employment agreement. For additional
information regarding Messrs. Vaughan-Lee, Doyle and Snell, see "Management."

SHARE OPTION PLANS

The Company has options outstanding under its Share Option Plans. Options
granted are for the right to acquire Ordinary Shares or ADSs. The following
table provides information concerning options granted, under the Company's Share
Option Plans, to the Named Executive Officers during fiscal 1997. The Company
did not grant any stock appreciation rights during fiscal 1997.

<TABLE>
<CAPTION>
OPTIONS GRANTED IN FISCAL 1997
INDIVIDUAL GRANTS
---------------------------------------------------------------------------------------------------------------------
% of Total Potential Realizable Value
Options at Assumed Annual Rates
Granted to of Share Price Appreciation
Number of Employees Exercise for Option Term (3)
Options in Price Expiration -------------------
NAME Granted (1) Fiscal 1997 ($/share) (2) Date 5% 10%
-------------------------- ----------- ------------ ------------- ------------ -------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mark A. Vaughan-Lee...... 37,243 1.0% $ 12.83 05/14/2006 $ 300,527 $ 761,594

Daniel M. Doyle.......... 180,000 4.7% $ 12.83 05/14/2006 $ 1,452,482 $ 3,680,876

David C. Snell........... 126,000 3.3% $ 12.83 05/14/2006 $ 1,016,738 $ 2,576,613

William T. Freeman....... 23,332 0.6% $ 7.32 08/01/2006 $ 107,413 $ 272,205

Martin G. St. Quinton.... 80,000 2.1% $ 7.32 08/01/2006 $ 368,293 $ 933,327
</TABLE>

- ------------
(1) The options granted are for Ordinary Shares, or the Ordinary Share
equivalent number in the case of ADSs.
(2) The exercise price is reflected in U.S. dollars using the Noon Buying
Rate conversion rate of (pound)1.00=$1.645 on March 31, 1997.
(3) The U.S. dollar amounts under these columns are the result of
calculations at 5% and 10% which reflect rates of potential appreciation
set by the Securities and Exchange Commission and therefore are not
intended to forecast possible future appreciation, if any, of the
Company's Ordinary Share or ADS price. The Company's stock options are
granted with a pence per Ordinary Share exercise price. The U.S. dollar
appreciation is calculated using the March 31, 1997 Noon Buying Rate of
(pound)1.00=$1.645.

-15-

<PAGE> 21

The following table provides detailed information concerning aggregate
share option exercises in fiscal 1997 and share option values at the end of
fiscal 1997 for unexercised share options held by each of the Named Executive
Officers.

<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL 1997
AND FISCAL YEAR-END OPTION VALUES
--------------------------------------------------------------------------------------------------------------------

NUMBER OF VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END
NAME EXERCISE (1) REALIZED (2) EXERCISABLE/UNEXERCISABLE (1) EXERCISABLE/UNEXERCISABLE (3)
------------------------ ------------ ------------ ----------------------------- ----------------------------
<S> <C> <C> <C> <C>
Mark A. Vaughan-Lee.... -- -- 572,000/85,243 $4,529,403/--

Daniel M. Doyle........ 100,000 $ 920,190 2,800,000/304,000 $19,955,495/--

David C. Snell......... -- -- --/214,000 --/--

William T. Freeman..... -- -- 20,000/58,332 $95,025/$108,773

Martin G. St. Quinton.. -- -- 44,000/456,666 $205,986/$1,364,567
</TABLE>

- ------------

(1) The options granted are for Ordinary Shares or ADSs and were granted at
the fair market value underlying the Ordinary Shares or ADSs on the
date of the grant.
(2) Fair market value of the Company's Ordinary Shares on the date of
exercise, minus the exercise price, multiplied by the Noon Buying Rate
on the date of exercise.
(3) Based upon the March 27, 1997 closing price of 508 pence per Ordinary
Share on the London Stock Exchange, multiplied by the Noon Buying Rate
on March 31, 1997 of (pound)1.00=$1.645.

COMPENSATION OF DIRECTORS

Each non-employee Director of the Company was paid the equivalent of an
annual sum of (pound)7,500 for fiscal 1997. In addition, non-employee directors
are eligible to receive a further (pound)10,000 remuneration if they are members
of sub-committees of the Board of Directors. Each non-employee Director of the
Company will be paid the same equivalent of an annual sum for fiscal 1998. Each
Director also serving as an executive officer received the equivalent of
(pound)7,500 in Director's fees for fiscal 1997 and will receive the equivalent
of (pound)7,500 for fiscal 1998. Additionally, each non-employee Director
receives the equivalent of (pound)750 for each day in which a Board of Directors
or committee meeting is attended and is reimbursed for expenses in connection
with such attendance. However, in the case of the chairman of a committee, a
daily allowance of (pound)1,000 is given. Executive and non-employee Directors
are eligible for share options under the Company's Share Option Plans.

HUMAN RESOURCES COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Company's Human Resources Committee in fiscal 1997
were Messrs. Grieve, Hooker, Kendall and Merrifield. Neither Mr. Grieve, Mr.
Hooker, Mr. Kendall nor Mr. Merrifield has at any time been an executive officer
of the Company. There were no Human Resources Committee interlocks or insider
participation in compensation decisions in fiscal 1997.

The information contained in the following sections "Report of the Human
Resources Committee" and "Performance Graph" is not deemed to be "Soliciting
Material" or to be "Filed" with the SEC or subject to Regulation "A" under the
1934 Act, or to the liabilities of Section 18 of the 1934 Act.

REPORT OF THE HUMAN RESOURCES COMMITTEE

The fiscal 1997 annual compensation for the Named Executive Officers,
including the Chief Executive, was determined by the Human Resources Committee
of the Company and consisted of a base salary; in one instance a bonus;

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<PAGE> 22

a share option grant; certain perquisites; and in some instances a contribution
to the Company's Supplemental Executive Retirement Plan. The objective of the
Company's executive compensation program is to enhance Shareholder value by
attracting and retaining the talent needed to achieve the Company's objectives
and goals in a rapidly changing and technology based industry.

The base salaries of the Chief Executive and the Named Executive
Officers, and the bonuses of certain Named Executive Officers were determined by
the Human Resources Committee based on a subjective evaluation of several
factors, specifically the executive's assigned responsibilities, individual
performance, growth and financial performance of the Company, years of service,
and increases in the cost of living. To assist in this evaluation, the Human
Resources Committee reviewed data regarding compensation for officers of
companies deemed to be similar to the Company, particularly in terms of growth
and size. The Committee did not give any particular weight to any specific
factor or use any formula in determining base salary to the individuals.

In fiscal 1997, the Chief Executive received a base salary of $630,000
(see the table captioned "Summary Compensation Table"). No awards were made to
the Executive Officers covered under the Company's 1994 Executive Performance
Plan (the "Performance Plan") under the objective quantitative performance
established by the Committee prior to the beginning of fiscal 1997. In fiscal
1997, the Chief Operating Officer received a base salary of $460,000 together
with a discretionary bonus of $200,000 in recognition of his efforts on the
successful acquisition of Eastman Kodak's Office Imaging Business.

The Chief Executive and the other Named Executive Officers were granted
share options for Ordinary Shares and ADSs in amounts and upon such terms
determined by the Human Resources Committee administering the Company's Share
Option Plans as part of their compensation in fiscal 1997. In granting such
share options, the Committee considered the amount and terms of the share
options already held by the Chief Executive and the other Named Executive
Officers. As employees of the Company, they continue to be eligible to receive
option grants in the future. In fiscal 1997, the Committee granted the Chief
Executive options to acquire 180,000 Ordinary Shares (see the table captioned
"Options Granted in Fiscal 1997").

Certain of the Named Executive Officers receive automobile allowances
reflective of the position and responsibility of the individual. The Chief
Executive participates in the Company's general health insurance and 401(k)
plans. Additionally, the Company has advanced premiums (which may ultimately be
repaid to the Company) for a split-dollar $3,000,000 term life insurance policy
in respect of the Chief Executive which provides for benefits to be paid
primarily to the Chief Executive's beneficiaries upon his death. Certain of the
Named Executive Officers, including the Chief Executive, also receive Director's
fees.

In fiscal 1997, the Company established a Supplemental Executive
Retirement Plan (the "SERP") to attract and retain executives whose skills and
talents are important to the Company's operations. The SERP, which is not
tax-qualified, provides an annual retirement benefit, payable over 15 years, to
participants who attain a retirement age of 60. The SERP benefit phases in until
100% accrual is attained after four years of participation. At March 31, 1997,
participants were 20% vested. Contributions to the SERP are at the discretion of
the Company. The annual contribution to the SERP for fiscal 1997 for the Chief
Executive was $60,000. (See the table captioned "Summary Compensation Table")

The Company also established a Deferred Compensation Plan in fiscal 1997,
which allows participants to defer all or a portion of their annual salary
and/or bonus until the retirement age of 60. Upon retirement, each participant
will receive their deferred balances in either a lump sum, or in annual
installments over 5, 10 or 15 years. (See the table captioned "Summary
Compensation Table").

Both the SERP and the Deferred Compensation Plan are funded by life
insurance contracts which are purchased and owned by the Company.

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<PAGE> 23

The Human Resources Committee believes that Named Executive Officer
compensation including that of the Chief Executive is appropriately structured
and administered so that a substantial part of total compensation is dependent
upon the financial performance of the Company. The Human Resources Committee's
policy is to arrange for executive compensation which is principally deductible
under Section 162(m) of the Internal Revenue Code.

The primary use of base salary, bonuses and stock option grants in
accordance with the above described policies has resulted in a compensation
program which the Human Resources Committee believes is fair, competitive and in
the best interests of Shareholders.

By the Human Resources Committee,

Pierson M. Grieve
David S. Hooker
David W. Kendall
Keith J. Merrifield

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<PAGE> 24

PERFORMANCE GRAPH

COMPARISON OF FOUR (4) YEAR CUMULATIVE TOTAL RETURN* AMONG DANKA BUSINESS
SYSTEMS PLC,** S&P 500 INDEX AND S&P OFFICE EQUIPMENT AND SUPPLIES INDEX

[GRAPH]

================================================================================
1993 1994 1995 1996 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DANKA BUSINESS SYSTEMS PLC $100 $196 $261 $430 $322
- --------------------------------------------------------------------------------
S&P 500 $100 $101 $110 $155 $186
- --------------------------------------------------------------------------------
S&P OFFICE EQUIPMENT AND SUPPLIES $100 $106 $114 $157 $211
================================================================================
</TABLE>

- ---------------------
Assumes $100 invested on April 1, 1993 in Danka Business Systems PLC, S&P
500 Index and S&P Office Equipment and Supplies Index. Comparison is made
for the four (4) year period from March 31, 1993 to March 31, 1997, with
the base measurement point fixed at the close of trading on March 31,
1993, since the Company's stock has only been registered under the 1934
Act and trading reported by the Nasdaq Stock Market's National Market
since December 17, 1992. The Company's fiscal year ends March 31.

* Total return assumes reinvestment of any dividends for all companies
considered within the comparison and is based on the current four-to-one
ratio of Ordinary Shares to each ADS.

** Assumes investment in the Company's ADSs traded on the NASDAQ National
Market.

Note: The performance shown on the graph above is not necessarily indicative of
future Ordinary Share or ADS price performance.

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<PAGE> 25

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information set forth herein briefly describes certain relationships
and transactions between the Company and affiliated parties. Management of the
Company believes that such relationships and transactions have been established
on terms no less favorable to the Company than those that could have been
obtained from unaffiliated parties. These relationships and transactions have
been approved by a majority of the Company's independent outside Directors (and
the Audit Committee since its creation). Future relationships and transactions,
if any, with affiliated parties will be approved by a majority of the Company's
independent outside Directors and the Audit Committee and will be on terms no
less favorable to the Company than those that could be obtained from
unaffiliated parties.

The Company occupies its principal business headquarters in St.
Petersburg, Florida under a lease dated December 22, 1986 between Danka
Industries, Inc., now known as Danka Holding Company and Daniel M. Doyle, a
Director and Chief Executive of the Company, and Frances J. McPeak, Jr., a
previous shareholder of Danka Holding Company. The lease was assigned from the
individuals on March 1, 1987, to Mid-County Investments, Inc., a Florida
corporation of which Mr. Doyle is a fifty percent (50%) shareholder. An Addendum
to the Lease Agreement was entered into on September 1, 1992, extending the
lease term until December 31, 2003 and providing for a rental of $580,000 per
annum. Danka Holding Company's payments made under the lease for fiscal 1997
amounted to $580,000. The aggregate sum owed for the remainder of the lease was
approximately $3,912,000 as of March 31, 1997. An amount of $36,000 has been
deposited with the landlord as security for the performance by Danka Holding
Company of its obligations under the lease. Additionally, since 1987, the
Company has had contingent liability for a guarantee by Danka Holding Company
for the financing of the building by Mr. Doyle and Mr. McPeak. Danka Holding
Company's contingent liability for repayment in the event of a default of the
obligation totalled $958,000 as of March 31, 1997. Further, Danka Holding
Company leases three other offices from Mr. Doyle and Mr. McPeak. The aggregate
rent (including tax) paid by Danka Holding Company on all three leases during
fiscal 1997 was $169,000.

On January 1, 1996, Director James F. White, Jr. became counsel to the
law firm of Shumaker, Loop & Kendrick, LLP which has served as General Counsel
to the Company since 1993. In fiscal 1997, the Company paid the firm $3,233,000
for services rendered during such period.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the 1934 Act requires the Company's Directors, officers
and holders of more than ten percent (10%) of the Company's Ordinary Shares to
file with the SEC initial reports of ownership and reports of changes in
ownership of Ordinary Shares and any other equity securities of the Company. To
the Company's knowledge, based solely upon a review of the forms, reports and
certificates filed with the Company by such persons, all such Section 16(a)
filing requirements were complied with by such persons in fiscal 1997.

-20-

<PAGE> 26

SHAREHOLDERS PROPOSALS FOR
PRESENTATION AT THE 1998 ANNUAL GENERAL MEETING

If a Shareholder desires to present a proposal for action at the Annual
General Meeting to be held in 1998, and such proposal conforms to the rules and
regulations of the SEC and is in accordance with other U.S. federal laws as well
as the laws of the United Kingdom, such proposal must be received by the Company
by February 25, 1998 to be included in the Company's Proxy Statement and proxy
for such 1998 meeting.

By Order of the Board of Directors
Paul G. Dumond, Secretary

Dated: June 25, 1997

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<PAGE> 27
APPENDIX

DANKA BUSINESS SYSTEMS PLC
33 CAVENDISH SQUARE
LONDON W1M ODE ENGLAND

PROXY FOR THE ANNUAL GENERAL MEETING TO BE HELD JULY 25, 1997.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.

The undersigned, having received notice of the Annual General Meeting of
Danka Business Systems PLC (the "Company") to be held at 11:00 a.m. (local time)
on Friday, July 25, 1997 (the "Meeting"), hereby designates and appoints Paul G.
Dumond and David C. Snell, and each of them with authority to act without the
others, or ________________________________, as attorneys and proxies for the
undersigned (the "proxies"), with full power of substitution, to vote all
Ordinary Shares of 1.25 pence each (net) of Danka Business Systems PLC that the
undersigned is entitled to vote at such Meeting or at any adjournment thereof,
such proxies being directed to vote as specified on the reverse side.

THIS PROXY WILL BE VOTED: (1) AS DIRECTED ON THE MATTERS LISTED ON THE REVERSE
SIDE; AND (2) WHERE A CHOICE IS NOT SPECIFIED, AS THE PROXIES DEEM FIT.

(Continued on the reverse side)

<PAGE> 28

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING MATTERS.
PLEASE MAKE AN "X" IN ONE SPACE FOR EACH ITEM. TO BE EFFECTIVE, THIS PROXY MUST
BE DEPOSITED AT THE COMPANY'S REGISTRARS NOT LATER THAN 48 HOURS BEFORE THE TIME
APPOINTED FOR THE MEETING. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.

<TABLE>
<S> <C> <C> <C>
1. To approve the final 2. To approve not to fill the 3. To re-elect Mr. David W. 4. To elect Mr. Keith J.
dividend of 1.30p per share office of director vacated by Kendall as a Director. Merrifield as a Director.
(net). Mr. David S. Hooker.

FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]

5. To reappoint the auditors 6. To empower the Board of 7. SPECIAL RESOLUTION. To 8. SPECIAL RESOLUTION. To
and authorize the Board of Directors to allot securities up empower the Board of Directors authorize the Company to buy
Directors to fix their to an aggregate nominal amount to allot securities subject to back up to 10% of its issued
remuneration. of (pound) 945,112. certain limitations without share capital.
providing certain pre-emptive
rights.

FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
</TABLE>

The undersigned reserves the right to revoke this Proxy at any time prior to the
Proxy being voted at the Meeting. The Proxy may be revoked by delivering a
signed revocation to the Company at any time prior to the Meeting, by submitting
a later-dated Proxy, or by attending the Meeting in person and casting a ballot.
The undersigned hereby revokes any proxy previously given to vote such Ordinary
Shares at the Meeting.

Signature(s) Date
------------------------------------- ---------------------
(Please sign exactly as your name appears on your
share certificate(s). In the case of joint owners,
the signature of any one of them will suffice. When
signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give
your full title as such).

<PAGE> 29

DANKA BUSINESS SYSTEMS PLC

NOTICE TO OWNERS OF AMERICAN DEPOSITARY RECEIPTS

Owners of Record on June 18, 1997, of American Depositary Receipts (each
representing four Ordinary Shares of Danka Business Systems PLC of 1.25 pence
each) issued under any existing Deposit Agreements among Danka Business Systems
PLC (the "Company" or the "Issuer"), The Bank of New York, as Depositary, and
the Owners from time to time of the American Depositary Receipts issued
thereunder, are hereby notified that The Bank of New York, as Depositary, has
received Notice of an Annual General Meeting of the members of Danka Business
Systems PLC, to be held on July 25, 1997.

By provision of Section 4.7 of the aforementioned Deposit Agreement, Owners of
American Depositary Shares are entitled, subject to applicable law and the
provisions of the Articles of Association of the Issuer and the provisions of or
governing Deposited Securities, to instruct The Bank of New York, as Depositary,
as to the exercise of the voting rights, if any, pertaining to the Deposited
Securities represented by the American Depositary Shares evidenced by such
Owner's Receipts. Upon the written request of an Owner on such record date,
received on or before July 18, 1997, The Bank of New York, as Depositary, shall
endeavor in so far as practicable and permitted under applicable law and the
provision of the Articles of Association of the Issuer and the provisions of or
governing the Deposited Securities to vote or cause to be voted the Deposited
Securities represented by such Owner's Receipts in accordance with the
instructions set forth in such request. If after complying with the procedures
set forth in this Section, the Depositary does not receive instructions from the
Owner of a Receipt, the Depositary shall give a discretionary proxy for the
Shares evidenced by such Receipt to a person designated by the Issuer. The Bank
of New York, as Depositary, shall not vote or attempt to exercise the right to
vote that attaches to the Deposited Securities, other than in accordance with
such instructions.

In view of the fact that requests from Owners must be received prior to the
close of business on July 18, 1997, there is a pre-addressed envelope enclosed
for your use.

The Bank of New York, as Depositary

Dated: June 25, 1997